These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
Your subscription will be on a month to month basis and automatically renew every month. You may terminate your subscription at any time through your account.
We will provide you with advance notice of any change in fees.
You represent that you are of legal age to form a binding contract. You are responsible for any
activity associated with your account. The account can be logged in at only one computer at a
time.
The Services are intended for your own individual use. You shall only use the Services in a
manner that complies with all laws. You may not use any automated software, spider or system to
scrape data from Alphaminr.
Alphaminr is not a financial advisor and does not provide financial advice of any kind. The service is provided “As is”. The materials and information accessible through the Service are solely for informational purposes. While we strive to provide good information and data, we make no guarantee or warranty as to its accuracy.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES SHALL ALPHAMINR BE LIABLE TO YOU FOR DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR INVESTMENT LOSSES, LOSS OF DATA, OR ACCURACY OF DATA, OR FOR ANY AMOUNT, IN THE AGGREGATE, IN EXCESS OF THE GREATER OF (1) FIFTY DOLLARS OR (2) THE AMOUNTS PAID BY YOU TO ALPHAMINR IN THE SIX MONTH PERIOD PRECEDING THIS APPLICABLE CLAIM. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL OR CERTAIN OTHER DAMAGES, SO THE ABOVE LIMITATION AND EXCLUSIONS MAY NOT APPLY TO YOU.
If any provision of these Terms is found to be invalid under any applicable law, such provision shall not affect the validity or enforceability of the remaining provisions herein.
This privacy policy describes how we (“Alphaminr”) collect, use, share and protect your personal information when we provide our service (“Service”). This Privacy Policy explains how information is collected about you either directly or indirectly. By using our service, you acknowledge the terms of this Privacy Notice. If you do not agree to the terms of this Privacy Policy, please do not use our Service. You should contact us if you have questions about it. We may modify this Privacy Policy periodically.
When you register for our Service, we collect information from you such as your name, email address and credit card information.
Like many other websites we use “cookies”, which are small text files that are stored on your computer or other device that record your preferences and actions, including how you use the website. You can set your browser or device to refuse all cookies or to alert you when a cookie is being sent. If you delete your cookies, if you opt-out from cookies, some Services may not function properly. We collect information when you use our Service. This includes which pages you visit.
We use Google Analytics and we use Stripe for payment processing. We will not share the information we collect with third parties for promotional purposes. We may share personal information with law enforcement as required or permitted by law.
|
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
Louisiana
(State or other jurisdiction of
incorporation or organization)
|
72-0651161
(I.R.S. Employer
Identification No.)
|
100 CenturyLink Drive,
Monroe, Louisiana
(Address of principal executive offices)
|
71203
(Zip Code)
|
|
Large accelerated filer
ý
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
* All references to "Notes" in this quarterly report refer to these Notes to Consolidated Financial Statements.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions except per share amounts
and shares in thousands)
|
|||||||||||
OPERATING REVENUES
|
$
|
4,554
|
|
|
4,514
|
|
|
13,424
|
|
|
13,593
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|||||
Cost of services and products (exclusive of depreciation and amortization)
|
1,993
|
|
|
1,975
|
|
|
5,863
|
|
|
5,872
|
|
|
Selling, general and administrative
|
857
|
|
|
823
|
|
|
2,571
|
|
|
2,497
|
|
|
Depreciation and amortization
|
1,048
|
|
|
1,097
|
|
|
3,136
|
|
|
3,297
|
|
|
Total operating expenses
|
3,898
|
|
|
3,895
|
|
|
11,570
|
|
|
11,666
|
|
|
OPERATING INCOME
|
656
|
|
|
619
|
|
|
1,854
|
|
|
1,927
|
|
|
OTHER (EXPENSE) INCOME
|
|
|
|
|
|
|
|
|||||
Interest expense
|
(329
|
)
|
|
(325
|
)
|
|
(984
|
)
|
|
(981
|
)
|
|
Other income, net
|
2
|
|
|
5
|
|
|
16
|
|
|
7
|
|
|
Total other expense, net
|
(327
|
)
|
|
(320
|
)
|
|
(968
|
)
|
|
(974
|
)
|
|
INCOME BEFORE INCOME TAX EXPENSE
|
329
|
|
|
299
|
|
|
886
|
|
|
953
|
|
|
Income tax expense
|
124
|
|
|
111
|
|
|
346
|
|
|
369
|
|
|
NET INCOME
|
$
|
205
|
|
|
188
|
|
|
540
|
|
|
584
|
|
BASIC AND DILUTED EARNINGS PER COMMON SHARE
|
|
|
|
|
|
|
|
|||||
BASIC
|
$
|
0.37
|
|
|
0.33
|
|
|
0.97
|
|
|
1.03
|
|
DILUTED
|
$
|
0.37
|
|
|
0.33
|
|
|
0.97
|
|
|
1.02
|
|
DIVIDENDS DECLARED PER COMMON SHARE
|
$
|
0.54
|
|
|
0.54
|
|
|
1.62
|
|
|
1.62
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|||||
BASIC
|
554,897
|
|
|
565,965
|
|
|
558,502
|
|
|
569,472
|
|
|
DILUTED
|
555,156
|
|
|
567,432
|
|
|
559,293
|
|
|
570,640
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions)
|
|||||||||||
NET INCOME
|
$
|
205
|
|
|
188
|
|
|
540
|
|
|
584
|
|
OTHER COMPREHENSIVE INCOME:
|
|
|
|
|
|
|
|
|||||
Items related to employee benefit plans:
|
|
|
|
|
|
|
|
|||||
Change in net actuarial loss, net of $(16), $(2), $(46) and $(6) tax
|
24
|
|
|
3
|
|
|
74
|
|
|
9
|
|
|
Change in net prior service costs, net of $(3), $(2), $(8) and $(7) tax
|
4
|
|
|
3
|
|
|
12
|
|
|
11
|
|
|
Foreign currency translation adjustment and other
|
(10
|
)
|
|
(16
|
)
|
|
(10
|
)
|
|
(7
|
)
|
|
Other comprehensive income
|
18
|
|
|
(10
|
)
|
|
76
|
|
|
13
|
|
|
COMPREHENSIVE INCOME
|
$
|
223
|
|
|
178
|
|
|
616
|
|
|
597
|
|
|
September 30, 2015
|
|
December 31, 2014
|
|||
|
(Dollars in millions
and shares in thousands)
|
|||||
ASSETS
|
|
|
|
|||
CURRENT ASSETS
|
|
|
|
|||
Cash and cash equivalents
|
$
|
355
|
|
|
128
|
|
Accounts receivable, less allowance of $160 and $162
|
1,951
|
|
|
1,988
|
|
|
Deferred income taxes, net
|
450
|
|
|
880
|
|
|
Other
|
594
|
|
|
580
|
|
|
Total current assets
|
3,350
|
|
|
3,576
|
|
|
NET PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|||
Property, plant and equipment
|
38,250
|
|
|
36,718
|
|
|
Accumulated depreciation
|
(20,182
|
)
|
|
(18,285
|
)
|
|
Net property, plant and equipment
|
18,068
|
|
|
18,433
|
|
|
GOODWILL AND OTHER ASSETS
|
|
|
|
|||
Goodwill
|
20,757
|
|
|
20,755
|
|
|
Customer relationships, less accumulated amortization of $5,414 and $4,682
|
4,162
|
|
|
4,893
|
|
|
Other intangible assets, less accumulated amortization of $1,767 and $1,729
|
1,568
|
|
|
1,647
|
|
|
Other, net
|
849
|
|
|
843
|
|
|
Total goodwill and other assets
|
27,336
|
|
|
28,138
|
|
|
TOTAL ASSETS
|
$
|
48,754
|
|
|
50,147
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|||
CURRENT LIABILITIES
|
|
|
|
|||
Current maturities of long-term debt
|
$
|
1,910
|
|
|
550
|
|
Accounts payable
|
1,087
|
|
|
1,226
|
|
|
Accrued expenses and other liabilities
|
|
|
|
|||
Salaries and benefits
|
682
|
|
|
641
|
|
|
Income and other taxes
|
535
|
|
|
309
|
|
|
Interest
|
329
|
|
|
256
|
|
|
Other
|
268
|
|
|
210
|
|
|
Advance billings and customer deposits
|
736
|
|
|
726
|
|
|
Total current liabilities
|
5,547
|
|
|
3,918
|
|
|
LONG-TERM DEBT
|
18,504
|
|
|
20,121
|
|
|
DEFERRED CREDITS AND OTHER LIABILITIES
|
|
|
|
|||
Deferred income taxes, net
|
3,742
|
|
|
4,030
|
|
|
Benefit plan obligations, net
|
5,534
|
|
|
5,808
|
|
|
Other
|
1,177
|
|
|
1,247
|
|
|
Total deferred credits and other liabilities
|
10,453
|
|
|
11,085
|
|
|
COMMITMENTS AND CONTINGENCIES (Note 8)
|
|
|
|
|||
STOCKHOLDERS' EQUITY
|
|
|
|
|||
Preferred stock—non-redeemable, $25.00 par value, authorized 2,000 shares, issued and outstanding 7 and 7 shares
|
—
|
|
|
—
|
|
|
Common stock, $1.00 par value, authorized 1,600,000 and 1,600,000 shares, issued and outstanding 554,090 and 568,517 shares
|
554
|
|
|
569
|
|
|
Additional paid-in capital
|
15,460
|
|
|
16,324
|
|
|
Accumulated other comprehensive loss
|
(1,941
|
)
|
|
(2,017
|
)
|
|
Retained earnings
|
177
|
|
|
147
|
|
|
Total stockholders' equity
|
14,250
|
|
|
15,023
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
48,754
|
|
|
50,147
|
|
|
Nine Months Ended September 30,
|
|||||
|
2015
|
|
2014
|
|||
|
(Dollars in millions)
|
|||||
OPERATING ACTIVITIES
|
|
|
|
|||
Net income
|
$
|
540
|
|
|
584
|
|
Adjustments to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|||
Depreciation and amortization
|
3,136
|
|
|
3,297
|
|
|
Impairment of assets
|
9
|
|
|
32
|
|
|
Deferred income taxes
|
93
|
|
|
301
|
|
|
Provision for uncollectible accounts
|
128
|
|
|
110
|
|
|
Net long-term debt premium amortization
|
(10
|
)
|
|
(30
|
)
|
|
Share-based compensation
|
57
|
|
|
62
|
|
|
Changes in current assets and liabilities:
|
|
|
|
|||
Accounts receivable
|
(91
|
)
|
|
(111
|
)
|
|
Accounts payable
|
(84
|
)
|
|
(21
|
)
|
|
Accrued income and other taxes
|
250
|
|
|
38
|
|
|
Other current assets and liabilities, net
|
123
|
|
|
(130
|
)
|
|
Retirement benefits
|
(134
|
)
|
|
(255
|
)
|
|
Changes in other noncurrent assets and liabilities, net
|
(54
|
)
|
|
66
|
|
|
Other, net
|
(7
|
)
|
|
(6
|
)
|
|
Net cash provided by operating activities
|
3,956
|
|
|
3,937
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|||
Payments for property, plant and equipment and capitalized software
|
(2,039
|
)
|
|
(2,113
|
)
|
|
Proceeds from sale of property
|
29
|
|
|
—
|
|
|
Other, net
|
(12
|
)
|
|
—
|
|
|
Net cash used in investing activities
|
(2,022
|
)
|
|
(2,113
|
)
|
|
FINANCING ACTIVITIES
|
|
|
|
|||
Net proceeds from issuance of long-term debt
|
990
|
|
|
483
|
|
|
Payments of long-term debt
|
(535
|
)
|
|
(162
|
)
|
|
Net payments on credit facility and revolving line of credit
|
(725
|
)
|
|
(140
|
)
|
|
Dividends paid
|
(905
|
)
|
|
(924
|
)
|
|
Net proceeds from issuance of common stock
|
11
|
|
|
45
|
|
|
Repurchase of common stock
|
(541
|
)
|
|
(558
|
)
|
|
Other, net
|
(2
|
)
|
|
(2
|
)
|
|
Net cash used in financing activities
|
(1,707
|
)
|
|
(1,258
|
)
|
|
Net increase in cash and cash equivalents
|
227
|
|
|
566
|
|
|
Cash and cash equivalents at beginning of period
|
128
|
|
|
168
|
|
|
Cash and cash equivalents at end of period
|
$
|
355
|
|
|
734
|
|
Supplemental cash flow information:
|
|
|
|
|||
Income taxes paid, net
|
$
|
(54
|
)
|
|
(21
|
)
|
Interest paid (net of capitalized interest of $41 and $34)
|
$
|
(914
|
)
|
|
(934
|
)
|
|
Nine Months Ended September 30,
|
|||||
|
2015
|
|
2014
|
|||
|
(Dollars in millions)
|
|||||
COMMON STOCK
|
|
|
|
|||
Balance at beginning of period
|
$
|
569
|
|
|
584
|
|
Issuance of common stock through dividend reinvestment, incentive and benefit plans
|
2
|
|
|
4
|
|
|
Repurchase of common stock
|
(17
|
)
|
|
(17
|
)
|
|
Balance at end of period
|
554
|
|
|
571
|
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|||
Balance at beginning of period
|
16,324
|
|
|
17,343
|
|
|
Issuance of common stock through dividend reinvestment, incentive and benefit plans
|
9
|
|
|
43
|
|
|
Repurchase of common stock
|
(518
|
)
|
|
(497
|
)
|
|
Shares withheld to satisfy tax withholdings
|
(18
|
)
|
|
(15
|
)
|
|
Dividends declared
|
(395
|
)
|
|
(405
|
)
|
|
Share-based compensation and other, net
|
58
|
|
|
63
|
|
|
Balance at end of period
|
15,460
|
|
|
16,532
|
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
|||
Balance at beginning of period
|
(2,017
|
)
|
|
(802
|
)
|
|
Other comprehensive income
|
76
|
|
|
13
|
|
|
Balance at end of period
|
(1,941
|
)
|
|
(789
|
)
|
|
RETAINED EARNINGS
|
|
|
|
|||
Balance at beginning of period
|
147
|
|
|
66
|
|
|
Net income
|
540
|
|
|
584
|
|
|
Dividends declared
|
(510
|
)
|
|
(519
|
)
|
|
Balance at end of period
|
177
|
|
|
131
|
|
|
TOTAL STOCKHOLDERS' EQUITY
|
$
|
14,250
|
|
|
16,445
|
|
|
Interest Rates
|
|
Maturities
|
|
As of September 30, 2015
|
|
As of December 31, 2014
|
|||
|
|
|
|
|
(Dollars in millions)
|
|||||
CenturyLink, Inc.
|
|
|
|
|
|
|
|
|||
Senior notes
|
5.150% - 7.650%
|
|
2017 - 2042
|
|
$
|
7,975
|
|
|
7,825
|
|
Credit facility and revolving line of credit
(1)
|
—%
|
|
2019
|
|
—
|
|
|
725
|
|
|
Term loan
|
1.950%
|
|
2019
|
|
363
|
|
|
380
|
|
|
Subsidiaries
|
|
|
|
|
|
|
|
|||
Qwest Corporation
|
|
|
|
|
|
|
|
|||
Senior notes
|
6.125% - 8.375%
|
|
2016 - 2055
|
|
7,629
|
|
|
7,311
|
|
|
Term loan
|
1.950%
|
|
2025
|
|
100
|
|
|
—
|
|
|
Qwest Capital Funding, Inc.
|
|
|
|
|
|
|
|
|||
Senior notes
|
6.500% - 7.750%
|
|
2018 - 2031
|
|
981
|
|
|
981
|
|
|
Embarq Corporation and subsidiaries
|
|
|
|
|
|
|
|
|||
Senior notes
|
7.082% - 7.995%
|
|
2016 - 2036
|
|
2,669
|
|
|
2,669
|
|
|
First mortgage bonds
|
7.125% - 8.770%
|
|
2017 - 2025
|
|
232
|
|
|
232
|
|
|
Other
|
9.000%
|
|
2019
|
|
150
|
|
|
150
|
|
|
Capital lease and other obligations
|
Various
|
|
Various
|
|
436
|
|
|
509
|
|
|
Unamortized discounts, net
|
|
|
|
|
(121
|
)
|
|
(111
|
)
|
|
Total long-term debt
|
|
|
|
|
20,414
|
|
|
20,671
|
|
|
Less current maturities
|
|
|
|
|
(1,910
|
)
|
|
(550
|
)
|
|
Long-term debt, excluding current maturities
|
|
|
|
|
$
|
18,504
|
|
|
20,121
|
|
(1)
|
The total outstanding amount of our credit facility ("Credit Facility") and revolving line of credit borrowings at
December 31, 2014
, was
$725 million
with a weighted average interest rate of
2.270%
. At September 30, 2015, we had
no
borrowing outstanding under our Credit Facility and revolving line of credit. These amounts change on a regular basis.
|
|
Severance
|
|
Real Estate
|
|||
|
(Dollars in millions)
|
|||||
Balance at December 31, 2014
|
$
|
26
|
|
|
96
|
|
Accrued to expense
|
88
|
|
|
—
|
|
|
Payments, net
|
(77
|
)
|
|
(10
|
)
|
|
Reversals and adjustments
|
—
|
|
|
(3
|
)
|
|
Balance at September 30, 2015
|
$
|
37
|
|
|
83
|
|
|
Pension Plans
|
|||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions)
|
|||||||||||
Service cost
|
$
|
20
|
|
|
19
|
|
|
62
|
|
|
58
|
|
Interest cost
|
142
|
|
|
151
|
|
|
425
|
|
|
453
|
|
|
Expected return on plan assets
|
(224
|
)
|
|
(223
|
)
|
|
(673
|
)
|
|
(669
|
)
|
|
Recognition of prior service cost
|
1
|
|
|
1
|
|
|
4
|
|
|
5
|
|
|
Recognition of actuarial loss
|
40
|
|
|
5
|
|
|
120
|
|
|
15
|
|
|
Net periodic pension benefit income
|
$
|
(21
|
)
|
|
(47
|
)
|
|
(62
|
)
|
|
(138
|
)
|
|
Post-Retirement Benefit Plans
|
|||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions)
|
|||||||||||
Service cost
|
$
|
6
|
|
|
5
|
|
|
18
|
|
|
16
|
|
Interest cost
|
35
|
|
|
40
|
|
|
105
|
|
|
119
|
|
|
Expected return on plan assets
|
(6
|
)
|
|
(8
|
)
|
|
(16
|
)
|
|
(24
|
)
|
|
Recognition of prior service cost
|
6
|
|
|
4
|
|
|
16
|
|
|
13
|
|
|
Net periodic post-retirement benefit expense
|
$
|
41
|
|
|
41
|
|
|
123
|
|
|
124
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions, except per share amounts, shares in thousands)
|
|||||||||||
Income (Numerator):
|
|
|
|
|
|
|
|
|||||
Net income
|
$
|
205
|
|
|
188
|
|
|
540
|
|
|
584
|
|
Earnings applicable to non-vested restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net income applicable to common stock for computing basic earnings per common share
|
205
|
|
|
188
|
|
|
540
|
|
|
584
|
|
|
Net income as adjusted for purposes of computing diluted earnings per common share
|
$
|
205
|
|
|
188
|
|
|
540
|
|
|
584
|
|
Shares (Denominator):
|
|
|
|
|
|
|
|
|||||
Weighted average number of shares:
|
|
|
|
|
|
|
|
|||||
Outstanding during period
|
559,991
|
|
|
570,545
|
|
|
563,391
|
|
|
573,661
|
|
|
Non-vested restricted stock
|
(5,094
|
)
|
|
(4,580
|
)
|
|
(4,889
|
)
|
|
(4,189
|
)
|
|
Weighted average shares outstanding for computing basic earnings per common share
|
554,897
|
|
|
565,965
|
|
|
558,502
|
|
|
569,472
|
|
|
Incremental common shares attributable to dilutive securities:
|
|
|
|
|
|
|
|
|||||
Shares issuable under convertible securities
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
Shares issuable under incentive compensation plans
|
249
|
|
|
1,457
|
|
|
781
|
|
|
1,158
|
|
|
Number of shares as adjusted for purposes of computing diluted earnings per common share
|
555,156
|
|
|
567,432
|
|
|
559,293
|
|
|
570,640
|
|
|
Basic earnings per common share
|
$
|
0.37
|
|
|
0.33
|
|
|
0.97
|
|
|
1.03
|
|
Diluted earnings per common share
|
$
|
0.37
|
|
|
0.33
|
|
|
0.97
|
|
|
1.02
|
|
Input Level
|
|
Description of Input
|
Level 1
|
|
Observable inputs such as quoted market prices in active markets.
|
Level 2
|
|
Inputs other than quoted prices in active markets that are either directly or indirectly observable.
|
Level 3
|
|
Unobservable inputs in which little or no market data exists.
|
|
|
|
As of September 30, 2015
|
|
As of December 31, 2014
|
|||||||||
|
Input
Level
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|||||
|
|
|
(Dollars in millions)
|
|||||||||||
Liabilities—Long-term debt, excluding capital lease and other obligations
|
2
|
|
$
|
19,978
|
|
|
19,303
|
|
|
20,162
|
|
|
21,255
|
|
•
|
Business.
Consists generally of providing strategic, legacy and data integration products and services to enterprise, wholesale and governmental customers, including other communication providers. Our strategic products and services offered to these customers include our MPLS, private line (including special access), Ethernet, high-speed Internet, colocation, managed hosting, cloud hosting and other ancillary services. Our legacy services offered to these customers primarily include switched access and local and long-distance voice services, including the sale of unbundled network elements ("UNEs") which allow our wholesale customers to use our network or a combination of our network and their own networks to provide voice and data services to their customers. Our data integration offerings include the sale of telecommunications equipment located on customers' premises and related professional services. These services include network management, installation and maintenance of data equipment and the building of proprietary fiber-optic broadband networks for our governmental and business customers; and
|
•
|
Consumer.
Consists generally of providing strategic and legacy products and services to residential customers. Our strategic products and services offered to these customers include our high-speed Internet, wireless and video services, including our Prism TV services. Our legacy services offered to these customers include local and long-distance voice services.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
(1)
|
|
2015
|
|
2014
(1)
|
|||||
|
(Dollars in millions)
|
|||||||||||
Total segment revenues
|
$
|
4,145
|
|
|
4,264
|
|
|
12,500
|
|
|
12,836
|
|
Total segment expenses
|
2,163
|
|
|
2,161
|
|
|
6,378
|
|
|
6,374
|
|
|
Total segment income
|
$
|
1,982
|
|
|
2,103
|
|
|
6,122
|
|
|
6,462
|
|
Total margin percentage
|
48
|
%
|
|
49
|
%
|
|
49
|
%
|
|
50
|
%
|
|
Business:
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
2,636
|
|
|
2,773
|
|
|
7,992
|
|
|
8,336
|
|
Expenses
|
1,541
|
|
|
1,549
|
|
|
4,550
|
|
|
4,568
|
|
|
Income
|
$
|
1,095
|
|
|
1,224
|
|
|
3,442
|
|
|
3,768
|
|
Income margin percentage
|
42
|
%
|
|
44
|
%
|
|
43
|
%
|
|
45
|
%
|
|
Consumer:
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
1,509
|
|
|
1,491
|
|
|
4,508
|
|
|
4,500
|
|
Expenses
|
622
|
|
|
612
|
|
|
1,828
|
|
|
1,806
|
|
|
Income
|
$
|
887
|
|
|
879
|
|
|
2,680
|
|
|
2,694
|
|
Income margin percentage
|
59
|
%
|
|
59
|
%
|
|
59
|
%
|
|
60
|
%
|
(1)
|
Reflects the recasting of segment results discussed in the next section entitled "Recent Changes in Segment Reporting."
|
•
|
Certain business segment expenses were reassigned to consumer segment expense; and
|
•
|
Certain business segment expenses were reassigned to corporate overhead.
|
•
|
Strategic services
, which include primarily high-speed Internet, MPLS (which is a data networking technology that can deliver the quality of service required to support real-time voice and video), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), video (including our facilities-based video services, which we now offer in
sixteen
markets), VoIP and Verizon Wireless services;
|
•
|
Legacy services
, which include primarily local and long-distance services, including the sale of UNEs, switched access and Integrated Services Digital Network ("ISDN") services (which uses regular telephone lines to support voice, video and data applications);
|
•
|
Data integration
, which includes the sale of telecommunications equipment located on customers' premises and related professional services, such as network management, installation and maintenance of data equipment and building of proprietary fiber-optic broadband networks for our governmental and business customers; and
|
•
|
Other revenues,
which consist primarily of CAF support, USF support and USF surcharges. We receive federal support from both CAF Phase 1 and CAF Phase 2 programs, and support from both federal and state USF programs, which are government subsidies designed to reimburse us for various costs related to certain telecommunications services, including the costs of voice and high-speed internet capable infrastructure and the costs of network deployment, maintenance and operations in high-cost rural areas where we are not able to recover our costs from our customers. USF surcharges are the amounts we collect based on specific items we list on our customers' invoices to fund the FCC's universal service programs. We also generate other operating revenues from leasing and subleasing of space in our office buildings, warehouses and other properties. Because we centrally manage the activities that generate these other operating revenues, these revenues are not included in our segment revenues.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions)
|
|||||||||||
Strategic services
|
|
|
|
|
|
|
|
|||||
Business high-bandwidth data services (1)
|
$
|
699
|
|
|
655
|
|
|
2,083
|
|
|
1,904
|
|
Business low-bandwidth data services (2)
|
506
|
|
|
574
|
|
|
1,555
|
|
|
1,792
|
|
|
Business hosting services (3)
|
324
|
|
|
331
|
|
|
961
|
|
|
988
|
|
|
Other business strategic services (4)
|
27
|
|
|
30
|
|
|
113
|
|
|
55
|
|
|
Consumer high-speed Internet services (5)
|
658
|
|
|
616
|
|
|
1,945
|
|
|
1,847
|
|
|
Other consumer strategic services (6)
|
105
|
|
|
96
|
|
|
314
|
|
|
276
|
|
|
Total strategic services revenues
|
2,319
|
|
|
2,302
|
|
|
6,971
|
|
|
6,862
|
|
|
|
|
|
|
|
|
|
|
|||||
Legacy services
|
|
|
|
|
|
|
|
|||||
Business legacy voice services (7)
|
638
|
|
|
692
|
|
|
1,958
|
|
|
2,103
|
|
|
Other business legacy services (8)
|
290
|
|
|
307
|
|
|
890
|
|
|
951
|
|
|
Consumer legacy voice services (7)
|
664
|
|
|
707
|
|
|
2,027
|
|
|
2,170
|
|
|
Other consumer legacy services (9)
|
81
|
|
|
71
|
|
|
220
|
|
|
204
|
|
|
Total legacy services revenues
|
1,673
|
|
|
1,777
|
|
|
5,095
|
|
|
5,428
|
|
|
|
|
|
|
|
|
|
|
|||||
Data integration
|
|
|
|
|
|
|
|
|||||
Business data integration
|
152
|
|
|
184
|
|
|
432
|
|
|
543
|
|
|
Consumer data integration
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
Total data integration revenues
|
153
|
|
|
185
|
|
|
434
|
|
|
546
|
|
|
|
|
|
|
|
|
|
|
|||||
Other revenues
|
|
|
|
|
|
|
|
|||||
High cost support revenue (10)
|
284
|
|
|
134
|
|
|
550
|
|
|
400
|
|
|
Other revenue (11)
|
125
|
|
|
116
|
|
|
374
|
|
|
357
|
|
|
Total other revenues
|
409
|
|
|
250
|
|
|
924
|
|
|
757
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues
|
$
|
4,554
|
|
|
4,514
|
|
|
13,424
|
|
|
13,593
|
|
(1)
|
Includes MPLS and Ethernet revenue
|
(2)
|
Includes private line and high-speed Internet revenue
|
(3)
|
Includes colocation, hosting (including cloud hosting and managed hosting) and hosting area network revenue
|
(4)
|
Includes primarily VoIP, video and IT services revenue
|
(5)
|
Includes high-speed Internet and related services revenue
|
(6)
|
Includes video and Verizon wireless revenue
|
(7)
|
Includes local and long-distance voice revenue
|
(8)
|
Includes UNEs, public access and other ancillary revenue
|
(9)
|
Includes switched access and other ancillary revenue
|
(10)
|
Includes CAF Phase 1, CAF Phase 2 and federal and state USF support revenue
|
(11)
|
Includes USF surcharges
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions)
|
|||||||||||
Total segment income
|
$
|
1,982
|
|
|
2,103
|
|
|
6,122
|
|
|
6,462
|
|
Other operating revenues
|
409
|
|
|
250
|
|
|
924
|
|
|
757
|
|
|
Depreciation and amortization
|
(1,048
|
)
|
|
(1,097
|
)
|
|
(3,136
|
)
|
|
(3,297
|
)
|
|
Other unassigned operating expenses
|
(687
|
)
|
|
(637
|
)
|
|
(2,056
|
)
|
|
(1,995
|
)
|
|
Other expense, net
|
(327
|
)
|
|
(320
|
)
|
|
(968
|
)
|
|
(974
|
)
|
|
Income tax expense
|
(124
|
)
|
|
(111
|
)
|
|
(346
|
)
|
|
(369
|
)
|
|
Net income
|
$
|
205
|
|
|
188
|
|
|
540
|
|
|
584
|
|
|
As of September 30, 2015
|
|
As of December 31, 2014
|
|||
|
(Dollars in millions)
|
|||||
Prepaid expenses
|
$
|
273
|
|
|
260
|
|
Materials, supplies and inventory
|
136
|
|
|
132
|
|
|
Assets held for sale
|
9
|
|
|
14
|
|
|
Deferred activation and installation charges
|
105
|
|
|
103
|
|
|
Other
|
71
|
|
|
71
|
|
|
Total other current assets
|
$
|
594
|
|
|
580
|
|
|
As of September 30, 2015
|
|
As of December 31, 2014
|
|||
|
(Dollars in millions)
|
|||||
Accounts payable
|
$
|
1,087
|
|
|
1,226
|
|
Other current liabilities:
|
|
|
|
|||
Accrued rent
|
$
|
29
|
|
|
34
|
|
Legal contingencies
|
24
|
|
|
27
|
|
|
Other
|
215
|
|
|
149
|
|
|
Total other current liabilities
|
$
|
268
|
|
|
210
|
|
|
Pension Plans
|
|
Post-Retirement
Benefit Plans
|
|
Foreign Currency
Translation
Adjustment
and Other
|
|
Total
|
|||||
|
(Dollars in millions)
|
|||||||||||
Balance at June 30, 2015
|
$
|
(1,668
|
)
|
|
(266
|
)
|
|
(25
|
)
|
|
(1,959
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
24
|
|
|
4
|
|
|
—
|
|
|
28
|
|
|
Net current-period other comprehensive income
|
24
|
|
|
4
|
|
|
(10
|
)
|
|
18
|
|
|
Balance at September 30, 2015
|
$
|
(1,644
|
)
|
|
(262
|
)
|
|
(35
|
)
|
|
(1,941
|
)
|
|
Pension Plans
|
|
Post-Retirement
Benefit Plans |
|
Foreign Currency
Translation Adjustment and Other |
|
Total
|
|||||
|
(Dollars in millions)
|
|||||||||||
Balance at December 31, 2014
|
$
|
(1,720
|
)
|
|
(272
|
)
|
|
(25
|
)
|
|
(2,017
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
76
|
|
|
10
|
|
|
—
|
|
|
86
|
|
|
Net current-period other comprehensive income
|
76
|
|
|
10
|
|
|
(10
|
)
|
|
76
|
|
|
Balance at September 30, 2015
|
$
|
(1,644
|
)
|
|
(262
|
)
|
|
(35
|
)
|
|
(1,941
|
)
|
Three Months Ended September 30, 2015
|
|
(Decrease) Increase
in Net Income |
|
Affected Line Item in Consolidated Statement of
Operations or Footnote Where Additional
Information is Presented If The Amount is not
Recognized in Net Income in Total
|
||
|
|
(Dollars in millions)
|
|
|
||
Amortization of pension & post-retirement plans
|
|
|
|
|
||
Net actuarial loss
|
|
$
|
(40
|
)
|
|
See Note 4-Employee Benefits
|
Prior service cost
|
|
(7
|
)
|
|
See Note 4-Employee Benefits
|
|
Total before tax
|
|
(47
|
)
|
|
|
|
Income tax expense
|
|
19
|
|
|
Income tax expense
|
|
Net of tax
|
|
$
|
(28
|
)
|
|
|
Nine Months Ended September 30, 2015
|
|
(Decrease) Increase
in Net Income |
|
Affected Line Item in Consolidated Statement of
Operations or Footnote Where Additional Information is Presented If The Amount is not Recognized in Net Income in Total |
||
|
|
(Dollars in millions)
|
|
|
||
Amortization of pension & post-retirement plans
|
|
|
|
|
||
Net actuarial loss
|
|
$
|
(120
|
)
|
|
See Note 4-Employee Benefits
|
Prior service cost
|
|
(20
|
)
|
|
See Note 4-Employee Benefits
|
|
Total before tax
|
|
(140
|
)
|
|
|
|
Income tax expense
|
|
54
|
|
|
Income tax expense
|
|
Net of tax
|
|
$
|
(86
|
)
|
|
|
|
Pension Plans
|
|
Post-Retirement
Benefit Plans
|
|
Foreign Currency
Translation
Adjustment
and Other
|
|
Total
|
|||||
|
(Dollars in millions)
|
|||||||||||
Balance at June 30, 2014
|
$
|
(661
|
)
|
|
(116
|
)
|
|
(2
|
)
|
|
(779
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
4
|
|
|
2
|
|
|
—
|
|
|
6
|
|
|
Net current-period other comprehensive income
|
4
|
|
|
2
|
|
|
(16
|
)
|
|
(10
|
)
|
|
Balance at September 30, 2014
|
$
|
(657
|
)
|
|
(114
|
)
|
|
(18
|
)
|
|
(789
|
)
|
|
Pension Plans
|
|
Post-Retirement
Benefit Plans
|
|
Foreign Currency
Translation
Adjustment
and Other
|
|
Total
|
|||||
|
(Dollars in millions)
|
|||||||||||
Balance at December 31, 2013
|
$
|
(669
|
)
|
|
(122
|
)
|
|
(11
|
)
|
|
(802
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
12
|
|
|
8
|
|
|
—
|
|
|
20
|
|
|
Net current-period other comprehensive income
|
12
|
|
|
8
|
|
|
(7
|
)
|
|
13
|
|
|
Balance at September 30, 2014
|
$
|
(657
|
)
|
|
(114
|
)
|
|
(18
|
)
|
|
(789
|
)
|
Three Months Ended September 30, 2014
|
|
(Decrease) Increase
in Net Income |
|
Affected Line Item in Consolidated Statement of
Operations or Footnote Where Additional
Information is Presented If The Amount is not
Recognized in Net Income in Total
|
||
|
|
(Dollars in millions)
|
|
|
||
Amortization of pension & post-retirement plans
|
|
|
|
|
||
Net actuarial loss
|
|
$
|
(5
|
)
|
|
See Note 4-Employee Benefits
|
Prior service cost
|
|
(5
|
)
|
|
See Note 4-Employee Benefits
|
|
Total before tax
|
|
(10
|
)
|
|
|
|
Income tax expense
|
|
4
|
|
|
Income tax expense
|
|
Net of tax
|
|
$
|
(6
|
)
|
|
|
Nine Months Ended September 30, 2014
|
|
(Decrease) Increase
in Net Income
|
|
Affected Line Item in Consolidated Statement of
Operations or Footnote Where Additional
Information is Presented If The Amount is not
Recognized in Net Income in Total
|
||
|
|
(Dollars in millions)
|
|
|
||
Amortization of pension & post-retirement plans
|
|
|
|
|
||
Net actuarial loss
|
|
$
|
(15
|
)
|
|
See Note 4-Employee Benefits
|
Prior service cost
|
|
(18
|
)
|
|
See Note 4-Employee Benefits
|
|
Total before tax
|
|
(33
|
)
|
|
|
|
Income tax expense
|
|
13
|
|
|
Income tax expense
|
|
Net of tax
|
|
$
|
(20
|
)
|
|
|
•
|
Business.
Consists generally of providing strategic, legacy and data integration products and services to enterprise, wholesale and governmental customers, including other communication providers. Our strategic products and services offered to these customers include our MPLS, private line (including special access), Ethernet, high-speed Internet, colocation, managed hosting, cloud hosting and other ancillary services. Our legacy services offered to these customers primarily include switched access and local and long-distance voice services, including the sale of unbundled network elements ("UNEs") which allow our wholesale customers to use our network or a combination of our network and their own networks to provide voice and data services to their customers. Our data integration offerings include the sale of telecommunications equipment located on customers' premises and related professional services. These services include network management, installation and maintenance of data equipment and the building of proprietary fiber-optic broadband networks for our governmental and business customers; and
|
•
|
Consumer.
Consists generally of providing strategic and legacy products and services to residential customers. Our strategic products and services offered to these customers include our high-speed Internet, wireless and video services, including our Prism TV services. Our legacy services offered to these customers include local and long-distance voice services.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions except per share amounts)
|
|||||||||||
Operating revenues
|
$
|
4,554
|
|
|
4,514
|
|
|
13,424
|
|
|
13,593
|
|
Operating expenses
|
3,898
|
|
|
3,895
|
|
|
11,570
|
|
|
11,666
|
|
|
Operating income
|
656
|
|
|
619
|
|
|
1,854
|
|
|
1,927
|
|
|
Other expense, net
|
(327
|
)
|
|
(320
|
)
|
|
(968
|
)
|
|
(974
|
)
|
|
Income tax expense
|
124
|
|
|
111
|
|
|
346
|
|
|
369
|
|
|
Net income
|
$
|
205
|
|
|
188
|
|
|
540
|
|
|
584
|
|
Basic earnings per common share
|
$
|
0.37
|
|
|
0.33
|
|
|
0.97
|
|
|
1.03
|
|
Diluted earnings per common share
|
$
|
0.37
|
|
|
0.33
|
|
|
0.97
|
|
|
1.02
|
|
|
As of September 30,
|
|
Increase /
(Decrease)
|
|
% Change
|
||||||
|
2015
|
|
2014
|
|
|||||||
|
(in thousands except for data centers, which are actual amounts)
|
|
|
||||||||
Operational metrics:
|
|
|
|
|
|
|
|
||||
Total high-speed Internet subscribers
(1)
|
6,071
|
|
|
6,063
|
|
|
8
|
|
|
0.1
|
%
|
Total access lines
(1)
|
11,915
|
|
|
12,537
|
|
|
(622
|
)
|
|
(5.0
|
)%
|
Total Prism subscribers
|
269
|
|
|
229
|
|
|
40
|
|
|
17.5
|
%
|
Total data centers
(2)
|
59
|
|
|
58
|
|
|
1
|
|
|
1.7
|
%
|
Total employees
|
43.1
|
|
|
45.1
|
|
|
(2.0
|
)
|
|
(4.4
|
)%
|
(1)
|
High-speed Internet subscribers are customers that purchase high-speed Internet connection service through their existing telephone lines, stand-alone telephone lines, or fiber-optic cables, and access lines are lines reaching from the customers' premises to a connection with the public network. Our methodology for counting our high-speed Internet subscribers and access lines includes only those lines that we use to provide services to external customers and excludes lines used solely by us and our affiliates. It also excludes unbundled loops and includes stand-alone high-speed Internet subscribers. We count lines when we install the service.
|
(2)
|
We define a data center as any facility where we market, sell and deliver colocation services, managed hosting (including cloud hosting) services, multi-tenant managed services, or any combination thereof. Our data centers are located throughout North America, Europe and Asia.
|
•
|
promote long-term relationships with our customers through bundling of integrated services;
|
•
|
provide a wide array of diverse services, including additional services that may become available in the future due to, among other things, advances in technology or improvements in our infrastructure;
|
•
|
provide our high-speed Internet and premium services to a higher percentage of our customers;
|
•
|
pursue acquisitions of additional assets if available at attractive prices;
|
•
|
increase prices on our products and services if and when practicable;
|
•
|
increase usage of our networks; and
|
•
|
market our products and services to new customers.
|
•
|
Strategic services
, which include primarily high-speed Internet, MPLS (which is a data networking technology that can deliver the quality of service required to support real-time voice and video), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), video (including our facilities-based video services, which we now offer in sixteen markets), VoIP and Verizon Wireless services;
|
•
|
Legacy services
, which include primarily local and long-distance services, including the sale UNEs, switched access, and Integrated Services Digital Network ("ISDN") services (which uses regular telephone lines to support voice, video and data applications);
|
•
|
Data integration
, which includes the sale of telecommunications equipment located on customers' premises and related professional services, such as network management, installation and maintenance of data equipment and building of proprietary fiber-optic broadband networks for our governmental and business customers; and
|
•
|
Other revenues,
which consists primarily of Connect America Fund ("CAF") support, Universal Service Fund ("USF") support and USF surcharges. We receive federal support from both CAF Phase 1 and CAF Phase 2 programs, and support from both federal and state USF programs, which are government subsidies designed to reimburse us for various costs related to certain telecommunications services, including the costs of voice and high-speed internet capable infrastructure and the costs of network deployment, maintenance and operations in high-cost rural areas where we are not able to recover our costs from our customers. USF surcharges are the amounts we collect based on specific items we list on our customers' invoices to fund the Federal Communications Commission's ("FCC") universal service programs. We also generate other operating revenues from leasing and subleasing of space in our office buildings, warehouses and other properties. Because we centrally manage the activities that generate these other operating revenues, these revenues are not included in our segment revenues.
|
|
Three Months Ended September 30,
|
|
Increase /
(Decrease) |
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Strategic services
|
$
|
2,319
|
|
|
2,302
|
|
|
17
|
|
|
1
|
%
|
Legacy services
|
1,673
|
|
|
1,777
|
|
|
(104
|
)
|
|
(6
|
)%
|
|
Data integration
|
153
|
|
|
185
|
|
|
(32
|
)
|
|
(17
|
)%
|
|
Other
|
409
|
|
|
250
|
|
|
159
|
|
|
64
|
%
|
|
Total operating revenues
|
$
|
4,554
|
|
|
4,514
|
|
|
40
|
|
|
1
|
%
|
|
Nine Months Ended September 30,
|
|
Increase /
(Decrease) |
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Strategic services
|
$
|
6,971
|
|
|
6,862
|
|
|
109
|
|
|
2
|
%
|
Legacy services
|
5,095
|
|
|
5,428
|
|
|
(333
|
)
|
|
(6
|
)%
|
|
Data integration
|
434
|
|
|
546
|
|
|
(112
|
)
|
|
(21
|
)%
|
|
Other
|
924
|
|
|
757
|
|
|
167
|
|
|
22
|
%
|
|
Total operating revenues
|
$
|
13,424
|
|
|
13,593
|
|
|
(169
|
)
|
|
(1
|
)%
|
|
Three Months Ended September 30,
|
|
Increase /
(Decrease) |
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Cost of services and products (exclusive of depreciation and amortization)
|
$
|
1,993
|
|
|
1,975
|
|
|
18
|
|
|
1
|
%
|
Selling, general and administrative
|
857
|
|
|
823
|
|
|
34
|
|
|
4
|
%
|
|
Depreciation and amortization
|
1,048
|
|
|
1,097
|
|
|
(49
|
)
|
|
(4
|
)%
|
|
Total operating expenses
|
$
|
3,898
|
|
|
3,895
|
|
|
3
|
|
|
—
|
%
|
|
Nine Months Ended September 30,
|
|
Increase /
(Decrease) |
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Cost of services and products (exclusive of depreciation and amortization)
|
$
|
5,863
|
|
|
5,872
|
|
|
(9
|
)
|
|
—
|
%
|
Selling, general and administrative
|
2,571
|
|
|
2,497
|
|
|
74
|
|
|
3
|
%
|
|
Depreciation and amortization
|
3,136
|
|
|
3,297
|
|
|
(161
|
)
|
|
(5
|
)%
|
|
Total operating expenses
|
$
|
11,570
|
|
|
11,666
|
|
|
(96
|
)
|
|
(1
|
)%
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Depreciation
|
$
|
713
|
|
|
736
|
|
|
(23
|
)
|
|
(3
|
)%
|
Amortization
|
335
|
|
|
361
|
|
|
(26
|
)
|
|
(7
|
)%
|
|
Total depreciation and amortization
|
$
|
1,048
|
|
|
1,097
|
|
|
(49
|
)
|
|
(4
|
)%
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Depreciation
|
$
|
2,113
|
|
|
2,181
|
|
|
(68
|
)
|
|
(3
|
)%
|
Amortization
|
1,023
|
|
|
1,116
|
|
|
(93
|
)
|
|
(8
|
)%
|
|
Total depreciation and amortization
|
$
|
3,136
|
|
|
3,297
|
|
|
(161
|
)
|
|
(5
|
)%
|
|
Three Months Ended September 30,
|
|
Increase /
(Decrease) |
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Interest expense
|
$
|
(329
|
)
|
|
(325
|
)
|
|
4
|
|
|
1
|
%
|
Other income, net
|
2
|
|
|
5
|
|
|
(3
|
)
|
|
60
|
%
|
|
Total other expense, net
|
$
|
(327
|
)
|
|
(320
|
)
|
|
7
|
|
|
2
|
%
|
Income tax expense
|
$
|
124
|
|
|
111
|
|
|
13
|
|
|
12
|
%
|
|
Nine Months Ended September 30,
|
|
Increase /
(Decrease) |
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
|
|||||||
|
(Dollars in millions)
|
|
|
|||||||||
Interest expense
|
$
|
(984
|
)
|
|
(981
|
)
|
|
3
|
|
|
—
|
%
|
Other income, net
|
16
|
|
|
7
|
|
|
9
|
|
|
(129
|
)%
|
|
Total other expense, net
|
$
|
(968
|
)
|
|
(974
|
)
|
|
(6
|
)
|
|
(1
|
)%
|
Income tax expense
|
$
|
346
|
|
|
369
|
|
|
(23
|
)
|
|
(6
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||
|
(Dollars in millions)
|
|
|
|||||||||
Total segment revenues
|
$
|
4,145
|
|
|
4,264
|
|
|
12,500
|
|
|
12,836
|
|
Total segment expenses
|
2,163
|
|
|
2,161
|
|
|
6,378
|
|
|
6,374
|
|
|
Total segment income
|
$
|
1,982
|
|
|
2,103
|
|
|
6,122
|
|
|
6,462
|
|
Total margin percentage
|
48
|
%
|
|
49
|
%
|
|
49
|
%
|
|
50
|
%
|
|
Business:
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
2,636
|
|
|
2,773
|
|
|
7,992
|
|
|
8,336
|
|
Expenses
|
1,541
|
|
|
1,549
|
|
|
4,550
|
|
|
4,568
|
|
|
Income
|
$
|
1,095
|
|
|
1,224
|
|
|
3,442
|
|
|
3,768
|
|
Income margin percentage
|
42
|
%
|
|
44
|
%
|
|
43
|
%
|
|
45
|
%
|
|
Consumer:
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
1,509
|
|
|
1,491
|
|
|
4,508
|
|
|
4,500
|
|
Expenses
|
622
|
|
|
612
|
|
|
1,828
|
|
|
1,806
|
|
|
Income
|
$
|
887
|
|
|
879
|
|
|
2,680
|
|
|
2,694
|
|
Income margin percentage
|
59
|
%
|
|
59
|
%
|
|
59
|
%
|
|
60
|
%
|
•
|
Strategic services.
Our mix of total business segment revenues continues to migrate from legacy services to strategic services as our enterprise, wholesale and governmental customers increasingly demand integrated data, Internet, hosting and voice services. Thus far during 2015, competitive pressures and transitioning to our new management structure have negatively impacted the growth of our strategic revenues. Demand for our private line services (including special access) from our wholesale customers continues to decline due to our customers' optimization of their networks, industry consolidation and technological migration to higher-speed services. While we expect that these factors will continue to negatively impact our wholesale customers, we believe our fiber-based special access services provided to wireless carriers for backhaul will partially offset the decline in copper-based special access services provided to wireless carriers as they migrate to Ethernet services, although the timing and magnitude of this technological migration remains uncertain. We anticipate continued pricing pressure for our colocation services as wholesale vendors continue to expand their enterprise colocation operations. We believe, however, that our hybrid service capabilities, which offer multiple products and services (including colocation, managed hosting, cloud and network services), will help differentiate our products and services from those offered by competitors with a narrower range of products and services. We have remained focused on expanding our managed hosting services, specifically our cloud services offerings, by endeavoring to add differentiating features to our cloud products and acquiring additional companies that we believe have strengthened our cloud products. In recent years, our competitors, as well as several large, diversified technology companies, have made substantial investments in cloud computing, which has intensified competitive pressures. This expansion in competitive cloud computing offerings has led to increased pricing pressure and competition for enterprise customers, and we expect these trends to continue. Price compression from these competitive pressures has negatively impacted the operating margins of our strategic services and we expect this trend to continue. The demand for new technology has also increased the number of competitors offering similar services in the markets in which we compete for the strategic services. Operating costs also impact the operating margins of our strategic services, but to a lesser extent than price compression and customer disconnects caused by competition. These operating costs include sales commissions, modem costs, software costs on selected services, installation costs and third-party facility costs. We believe increases in operating costs have generally had a greater impact on the operating margins of our strategic services as compared to our legacy services, principally because our strategic services rely more heavily upon the above listed costs;
|
•
|
Legacy services.
We face intense competition with respect to our higher margin legacy services and continue to see customers migrating away from these services and into lower margin strategic services. In addition, our legacy services revenues have been, and we expect they will continue to be, adversely affected by access line losses and price compression. Our access, local services and long-distance revenues have been, and we expect will continue to be, adversely affected by customer migration to more technologically advanced services, declining demand for traditional voice services, industry consolidation and price compression caused by regulation and rate reductions. For example, many wholesale customers are substituting cable, wireless and VoIP services for traditional voice telecommunications services, resulting in continued access revenue loss. Beginning in 2016, we expect that a separate recent FCC order will also reduce our revenue that we collect for local voice and long-distance services provided to prisons and jails. Although our legacy services generally face fewer direct competitors than certain of our strategic services, customer migration and, to a lesser degree, price compression from competitive pressures have negatively impacted our legacy revenues and the operating margins of our legacy services. We expect this trend to continue. Operating costs, such as installation costs and third-party facility costs, have also negatively impacted the operating margins of our legacy services, but to a lesser extent than customer migration and price compression. Operating costs also tend to impact our strategic services to a greater extent than legacy services as noted above;
|
•
|
Data integration.
We expect both data integration revenue and the related costs will fluctuate from year to year as this offering tends to be more sensitive than others to changes in the economy and in spending trends of our federal, state and local governmental customers, many of whom have recently experienced substantial budget cuts with the possibility of additional future budget cuts; and
|
•
|
Operating efficiencies.
We continue to evaluate our segment operating structure and focus. This involves balancing our workforce in response to our workload requirements, productivity improvements and changes in industry, competitive, technological and regulatory conditions, while achieving operational efficiencies and improving our processes through automation. However, our ongoing efforts to increase revenue will continue to require that we incur higher costs in some areas. We also expect our business segment to benefit indirectly from enhanced efficiencies in our company-wide network operations.
|
|
Business Segment
|
|||||||||||
|
Three Months Ended September 30,
|
|
Increase /
(Decrease) |
|
%Change
|
|||||||
|
2015
|
|
2014
|
|
||||||||
|
(Dollars in millions)
|
|
|
|||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|||||
Strategic services
|
|
|
|
|
|
|
|
|||||
High-bandwidth data services (1)
|
$
|
699
|
|
|
655
|
|
|
44
|
|
|
7
|
%
|
Low-bandwidth data services (2)
|
506
|
|
|
574
|
|
|
(68
|
)
|
|
(12
|
)%
|
|
Hosting services (3)
|
324
|
|
|
331
|
|
|
(7
|
)
|
|
(2
|
)%
|
|
Other strategic services (4)
|
27
|
|
|
30
|
|
|
(3
|
)
|
|
(10
|
)%
|
|
Total strategic services revenues
|
1,556
|
|
|
1,590
|
|
|
(34
|
)
|
|
(2
|
)%
|
|
Legacy services
|
|
|
|
|
|
|
|
|||||
Voice services (5)
|
638
|
|
|
692
|
|
|
(54
|
)
|
|
(8
|
)%
|
|
Other legacy services (6)
|
290
|
|
|
307
|
|
|
(17
|
)
|
|
(6
|
)%
|
|
Total legacy services revenues
|
928
|
|
|
999
|
|
|
(71
|
)
|
|
(7
|
)%
|
|
Data integration
|
152
|
|
|
184
|
|
|
(32
|
)
|
|
(17
|
)%
|
|
Total revenues
|
2,636
|
|
|
2,773
|
|
|
(137
|
)
|
|
(5
|
)%
|
|
Segment expenses:
|
|
|
|
|
|
|
|
|||||
Total expenses
|
1,541
|
|
|
1,549
|
|
|
(8
|
)
|
|
(1
|
)%
|
|
Segment income
|
$
|
1,095
|
|
|
1,224
|
|
|
(129
|
)
|
|
(11
|
)%
|
Segment income margin percentage
|
42
|
%
|
|
44
|
%
|
|
|
|
|
|
|
|
Business Segment
|
|||||||||||
|
Nine Months Ended September 30,
|
|
Increase /
(Decrease) |
|
%Change
|
|||||||
|
2015
|
|
2014
|
|
||||||||
|
(Dollars in millions)
|
|
|
|||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|||||
Strategic services
|
|
|
|
|
|
|
|
|||||
High-bandwidth data services (1)
|
$
|
2,083
|
|
|
1,904
|
|
|
179
|
|
|
9
|
%
|
Low-bandwidth data services (2)
|
1,555
|
|
|
1,792
|
|
|
(237
|
)
|
|
(13
|
)%
|
|
Hosting services (3)
|
961
|
|
|
988
|
|
|
(27
|
)
|
|
(3
|
)%
|
|
Other strategic services (4)
|
113
|
|
|
55
|
|
|
58
|
|
|
105
|
%
|
|
Total strategic services revenues
|
4,712
|
|
|
4,739
|
|
|
(27
|
)
|
|
(1
|
)%
|
|
Legacy services
|
|
|
|
|
|
|
|
|||||
Voice services (5)
|
1,958
|
|
|
2,103
|
|
|
(145
|
)
|
|
(7
|
)%
|
|
Other legacy services (6)
|
890
|
|
|
951
|
|
|
(61
|
)
|
|
(6
|
)%
|
|
Total legacy services revenues
|
2,848
|
|
|
3,054
|
|
|
(206
|
)
|
|
(7
|
)%
|
|
Data integration
|
432
|
|
|
543
|
|
|
(111
|
)
|
|
(20
|
)%
|
|
Total revenues
|
7,992
|
|
|
8,336
|
|
|
(344
|
)
|
|
(4
|
)%
|
|
Segment expenses:
|
|
|
|
|
|
|
|
|||||
Total expenses
|
4,550
|
|
|
4,568
|
|
|
(18
|
)
|
|
—
|
%
|
|
Segment income
|
$
|
3,442
|
|
|
3,768
|
|
|
(326
|
)
|
|
(9
|
)%
|
Segment income margin percentage
|
43
|
%
|
|
45
|
%
|
|
|
|
|
|
|
(1)
|
Includes MPLS and Ethernet revenue
|
(2)
|
Includes private line and high-speed Internet revenue
|
(3)
|
Includes colocation, hosting (including cloud hosting and managed hosting) and hosting area network revenue
|
(4)
|
Includes primarily VoIP, video and IT services revenue
|
(5)
|
Includes local and long-distance voice revenue
|
(6)
|
Includes UNEs, public access and other ancillary revenue
|
•
|
Strategic services.
In order to remain competitive and attract additional residential high-speed Internet subscribers, we believe it is important to continually increase our broadband network's scope and connection speeds. As a result, we continue to invest in our broadband network, which allows for the delivery of higher-speed broadband services to a greater number of customers. We compete in a maturing broadband market in which most consumers already have broadband services and growth rates in new subscribers have slowed. Moreover, as described further in Item 1A of Part II of this report, demand for our high-speed Internet services could be adversely affected by competitors continuing to provide services at higher average broadband speed than ours or expanding their advanced wireless data service offerings. We also continue to expand our other strategic product offerings, including facilities-based video services. The expansion of our facilities-based video service infrastructure requires us to incur substantial content and start-up expenses in advance of marketing and selling the service. Although, over time, we expect that our facilities-based video services will be profitable, our associated content costs continue to increase and the video business is growing increasingly competitive. We nonetheless believe these efforts to expand our offerings will ultimately improve our ability to compete and increase our strategic revenues. Price compression from these competitors has negatively impacted the operating margins of our strategic services and we expect this trend to continue. The demand for new technology has also increased the number of competitors offering similar services in the markets in which we compete for the strategic services. Operating costs also impact the operating margins of our strategic services, but to a lesser extent than price compression and customer disconnects caused by competition. These operating costs include sales commissions, modem costs, Prism TV programming expenses, software costs on selected services, installation costs and third-party facility costs. We believe increases in operating costs have generally had a greater impact on our operating margins of our strategic services as compared to our legacy services, principally because our strategic services rely more heavily upon the above listed costs;
|
•
|
Legacy services.
Our voice revenues have been, and we expect they will continue to be, adversely affected by access line losses. Intense competition and product substitution continue to drive our access line losses. For example, many consumers are substituting cable and wireless voice services and electronic mail, texting and social networking non-voice services for traditional voice telecommunications services. We expect that these factors will continue to negatively impact our business. As a result of the expected loss of higher margin services associated with access lines, we continue to offer our customers service bundling and other product promotions to help mitigate this trend, as described below. Customer migration and price compression from competitive pressures have not only negatively impacted our legacy revenues, but they have also negatively impacted the operating margins of our legacy services and we expect this trend to continue. Operating costs, such as installation costs and third-party facility costs, have also negatively impacted the operating margins of our legacy services, but to a lesser extent than customer migration and price compression. The operating costs also tend to impact our strategic services to a greater extent than legacy services as noted above;
|
•
|
Service bundling and product promotions.
We offer our customers the ability to bundle multiple products and services. These customers can bundle local services with other services such as high-speed Internet, video, long-distance and wireless. While we believe our bundled service offerings can help retain customers, they also tend to lower our profit margins in the consumer segment; and
|
•
|
Operating efficiencies.
We continue to evaluate our segment operating structure and focus. This involves balancing our workforce in response to our workload requirements, productivity improvements and changes in industry, competitive, technological and regulatory conditions. We also expect our consumer segment to benefit indirectly from enhanced efficiencies in our company-wide network operations.
|
|
Consumer Segment
|
|||||||||||
|
Three Months Ended September 30,
|
|
Increase /
(Decrease)
|
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
||||||||
|
(Dollars in millions)
|
|
|
|||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|||||
Strategic services
|
|
|
|
|
|
|
|
|||||
High-speed Internet services (1)
|
658
|
|
|
616
|
|
|
42
|
|
|
7
|
%
|
|
Other strategic services (2)
|
105
|
|
|
96
|
|
|
9
|
|
|
9
|
%
|
|
Total strategic services revenues
|
763
|
|
|
712
|
|
|
51
|
|
|
7
|
%
|
|
Legacy services
|
|
|
|
|
|
|
|
|||||
Voice services (3)
|
664
|
|
|
707
|
|
|
(43
|
)
|
|
(6
|
)%
|
|
Other legacy services (4)
|
81
|
|
|
71
|
|
|
10
|
|
|
14
|
%
|
|
Total legacy services revenues
|
745
|
|
|
778
|
|
|
(33
|
)
|
|
(4
|
)%
|
|
Data integration
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|
Total revenues
|
1,509
|
|
|
1,491
|
|
|
18
|
|
|
1
|
%
|
|
Segment expenses:
|
|
|
|
|
|
|
|
|||||
Total expenses
|
622
|
|
|
612
|
|
|
10
|
|
|
2
|
%
|
|
Segment income
|
$
|
887
|
|
|
879
|
|
|
8
|
|
|
1
|
%
|
Segment income margin percentage
|
59
|
%
|
|
59
|
%
|
|
|
|
|
|
|
|
Consumer Segment
|
|||||||||||
|
Nine Months Ended September 30,
|
|
Increase /
(Decrease)
|
|
% Change
|
|||||||
|
2015
|
|
2014
|
|
||||||||
|
(Dollars in millions)
|
|
|
|||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|||||
Strategic services
|
|
|
|
|
|
|
|
|||||
High-speed Internet services (1)
|
1,945
|
|
|
1,847
|
|
|
98
|
|
|
5
|
%
|
|
Other strategic services (2)
|
314
|
|
|
276
|
|
|
38
|
|
|
14
|
%
|
|
Total strategic services revenues
|
2,259
|
|
|
2,123
|
|
|
136
|
|
|
6
|
%
|
|
Legacy services
|
|
|
|
|
|
|
|
|||||
Voice services (3)
|
2,027
|
|
|
2,170
|
|
|
(143
|
)
|
|
(7
|
)%
|
|
Other legacy services (4)
|
220
|
|
|
204
|
|
|
16
|
|
|
8
|
%
|
|
Total legacy services revenues
|
2,247
|
|
|
2,374
|
|
|
(127
|
)
|
|
(5
|
)%
|
|
Data integration
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(33
|
)%
|
|
Total revenues
|
4,508
|
|
|
4,500
|
|
|
8
|
|
|
—
|
%
|
|
Segment expenses:
|
|
|
|
|
|
|
|
|||||
Total expenses
|
1,828
|
|
|
1,806
|
|
|
22
|
|
|
1
|
%
|
|
Segment income
|
$
|
2,680
|
|
|
2,694
|
|
|
(14
|
)
|
|
(1
|
)%
|
Segment income margin percentage
|
59
|
%
|
|
60
|
%
|
|
|
|
|
|
|
(1
|
)
|
Includes high-speed Internet and related services revenue
|
(2
|
)
|
Includes video and Verizon wireless revenue
|
(3
|
)
|
Includes local and long-distance voice revenue
|
(4
|
)
|
Includes switched access and other ancillary revenue
|
Agency
|
|
CenturyLink, Inc.
|
|
Qwest Corporation
|
Standard & Poor's
|
|
BB
|
|
BBB-
|
Moody's Investors Service, Inc.
|
|
Ba2
|
|
Baa3
|
Fitch Ratings
|
|
BB+
|
|
BBB-
|
|
Nine Months Ended September 30,
|
|
Increase /
(Decrease) |
||||||
|
2015
|
|
2014
|
|
|||||
|
(Dollars in millions)
|
||||||||
Net cash provided by operating activities
|
$
|
3,956
|
|
|
3,937
|
|
|
19
|
|
Net cash used in investing activities
|
(2,022
|
)
|
|
(2,113
|
)
|
|
(91
|
)
|
|
Net cash used in financing activities
|
(1,707
|
)
|
|
(1,258
|
)
|
|
449
|
|
|
Nine Months Ended
September 30, 2015 |
|
From April 1, 2011
through
December 31, 2014
|
|
Total Since
Acquisition
|
||||
|
(Dollars in millions)
|
||||||||
Amortized
|
$
|
17
|
|
|
344
|
|
|
361
|
|
Extinguished
(1)
|
—
|
|
|
276
|
|
|
276
|
|
|
Total
|
$
|
17
|
|
|
620
|
|
|
637
|
|
(1)
|
Extinguished in connection with the payment of Qwest debt securities prior to maturity.
|
•
|
an increased focus on selling a broader range of higher-growth strategic services, which are described in detail elsewhere in this report;
|
•
|
an increased focus on serving a broader range of business, governmental and wholesale customers;
|
•
|
greater use of service bundles; and
|
•
|
acquisitions to increase our scale and strengthen our product offerings, including new products and services provided by our hosting operations and IT services.
|
•
|
power losses or physical damage, whether caused by fire, adverse weather conditions, terrorism or otherwise;
|
•
|
capacity or system configuration limitations, including those resulting from certain incompatibilities between our newer and older systems;
|
•
|
software or hardware obsolescence, defects or malfunctions;
|
•
|
programming, processing and other human error; and
|
•
|
other disruptions that are beyond our control.
|
•
|
disrupt the proper functioning of these networks and systems and therefore our operations or those of certain of our customers;
|
•
|
result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive 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;
|
•
|
require significant management attention or financial resources to remedy the damages that result or to change our systems, including expenses to repair systems, add new personnel or develop additional protective systems;
|
•
|
require us to notify customers, regulatory agencies or the public of data breaches;
|
•
|
require us to offer expensive incentives to retain existing customers or subject us to claims for contract breach, damages, credits, fines, penalties, termination or other remedies, particularly with respect to service standards set by state regulatory commissions; or
|
•
|
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 litigation and fines.
|
•
|
become bankrupt or experience substantial financial difficulties;
|
•
|
suffer work stoppages or other labor strife;
|
•
|
challenge our right to receive payments or services under applicable regulations or the terms of our existing contract arrangements; or
|
•
|
are otherwise unable or unwilling to make payments or provide services to us.
|
•
|
tax, licensing, political or other business restrictions or requirements;
|
•
|
import and export restrictions, including the risk of fines or penalties assessed for violations;
|
•
|
longer payment cycles and problems collecting accounts receivable;
|
•
|
additional U.S. and other regulation of non-domestic operations, including regulation under the Foreign Corrupt Practices Act, or FCPA, as well as other anti-corruption laws;
|
•
|
economic, social and political instability, with the attendant risks of terrorism, kidnapping, extortion, civic unrest and potential seizure or nationalization of assets;
|
•
|
currency restrictions and exchange rate fluctuations;
|
•
|
the ability to secure and maintain the necessary physical and telecommunications infrastructure;
|
•
|
the inability in certain jurisdictions to enforce contract rights either due to underdeveloped legal systems or government actions that result in a deprivation of contract rights;
|
•
|
the inability in certain jurisdictions to adequately protect intellectual property rights;
|
•
|
laws, policies or practices that restrict with whom we can contract or otherwise limit the scope of operations that can legally or practicably be conducted within any particular country;
|
•
|
potential submission of disputes to the jurisdiction of a foreign court or arbitration panel;
|
•
|
limitations in the availability, amount or terms of insurance coverage;
|
•
|
the imposition of unanticipated or increased taxes, increased communications or privacy regulations or other forms of public or governmental regulation that increase our operating expenses; and
|
•
|
challenges in staffing and managing foreign operations.
|
•
|
the inability to successfully combine our businesses in the manner contemplated, either due to technological or staffing challenges or otherwise, any of which could increase our acquisition integration costs or result in the anticipated benefits of the acquisitions not being realized partly or wholly in the time frame anticipated or at all;
|
•
|
the inability to successfully integrate the separate product development and service delivery processes of each of the companies, including delays or limitations in connection with offering existing or new products or services arising out of the multiplicity of different legacy systems, networks and processes used by each of the companies;
|
•
|
the complexities associated with managing the combined businesses out of several different locations and integrating personnel from multiple companies, while at the same time attempting to provide consistent, high-quality products and services under a unified culture;
|
•
|
the difficulties of producing combined financial information concerning a larger, more complex organization using dispersed personnel with different past practices and disparate billing systems, including the attendant risk of errors;
|
•
|
the complexities of combining companies with different histories, regulatory restrictions, cost structures, products, sales forces, markets, marketing strategies, and customer bases;
|
•
|
the failure to retain key employees, some of whom could be critical to integrating, operating or expanding the companies;
|
•
|
potential unknown liabilities and unforeseen increased expenses or regulatory conditions associated with the acquisitions; and
|
•
|
performance shortfalls at one or all of the companies as a result of the diversion of management’s attention caused by integrating the companies’ operations.
|
•
|
limiting the ability of CenturyLink and its subsidiaries to access the capital markets;
|
•
|
exposing CenturyLink and its subsidiaries to the risk of credit rating downgrades, as described further below;
|
•
|
hindering our flexibility to plan for or react to changing market, industry or economic conditions;
|
•
|
limiting the amount of cash flow available for future operations, capital expenditures, acquisitions, strategic initiatives, dividends, stock repurchases or other uses;
|
•
|
increasing our future borrowing costs;
|
•
|
increasing the risk that third parties will be unwilling or unable to engage in hedging or other financial or commercial arrangement with us;
|
•
|
making us more vulnerable to economic or industry downturns, including interest rate increases;
|
•
|
placing us at a competitive disadvantage compared to less leveraged competitors;
|
•
|
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; or
|
•
|
increasing the risk that we may not meet the financial covenants contained in our debt agreements or timely make all required debt payments.
|
•
|
revenues and cash provided by operations decline;
|
•
|
economic conditions weaken, competitive pressures increase or regulatory requirements change;
|
•
|
we engage in any acquisitions or undertake substantial capital projects or other initiatives that increase our cash requirements;
|
•
|
we are required to contribute a material amount of cash to our pension plans;
|
•
|
we are required to begin to pay other post-retirement benefits earlier than anticipated;
|
•
|
our payments of federal taxes increase faster or in greater amounts than currently anticipated; or
|
•
|
we become subject to significant judgments or settlements, including in connection with one or more of the matters discussed in Note 8—Commitments and Contingencies to our consolidated financial statements included elsewhere in this report.
|
•
|
adversely affect the market price of some or all of our outstanding debt or equity securities;
|
•
|
limit our access to the capital markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all;
|
•
|
trigger the application of restrictive covenants in certain of our debt agreements or result in new or more restrictive covenants in agreements governing the terms of any future indebtedness that we may incur;
|
•
|
increase our cost of borrowing; and
|
•
|
impair our business, financial condition and results of operations.
|
•
|
our supply of cash or other liquid assets is anticipated to decrease due to our projected payment of higher cash taxes and might decrease further for any of the reasons or potential adverse events or developments described in this report, including (i) changes in competition, regulation, federal and state support, technology, taxes, capital markets, operating costs or litigation costs, or (ii) the impact of any liquidity shortfalls caused by the below-described restrictions on the ability of our subsidiaries to lawfully transfer cash to us;
|
•
|
our cash requirements or plans might change for a wide variety of reasons, including changes in our capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans (including a desire to maintain or improve credit ratings on our debt securities), pension funding payments, or financial position;
|
•
|
our ability to service and refinance our current and future indebtedness and our ability to borrow or raise additional capital to satisfy our capital needs;
|
•
|
the amount of dividends that we may distribute to our shareholders is subject to restrictions under Louisiana law and restrictions imposed by our existing or future credit facilities, debt securities, outstanding preferred stock securities, leases and other agreements, including restricted payment and leverage covenants; and
|
•
|
the amount of cash that our subsidiaries may make available to us, whether by dividends, loans or other payments, may be subject to the legal, regulatory and contractual restrictions described in the immediately preceding risk factor.
|
•
|
decreases in investment returns on funds held by our pension and other benefit plan trusts;
|
•
|
changes in prevailing interest rates and discount rates used to calculate the funding status of our pension and other post-retirement plans;
|
•
|
increases in healthcare costs generally or claims submitted under our healthcare plans specifically;
|
•
|
increasing longevity of our employees and retirees;
|
•
|
the continuing implementation of the Patient Protection and Affordable Care Act, and the related reconciliation act and regulations promulgated thereunder;
|
•
|
increases in the number of retirees who elect to receive lump sum benefit payments;
|
•
|
increases in insurance premiums we are required to pay to the Pension Benefit Guaranty Corporation, an independent agency of the United States government that must cover its own underfunded status by collecting premiums from an ever shrinking population of pension plans that are qualified under the U.S. tax code;
|
•
|
changes in plan benefits; and
|
•
|
changes in funding laws or regulations.
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid Per
Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the Plans or
Programs
|
||||||
Period
|
|
|
|
|
|
|
|
||||||
July 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
540,482,777
|
|
August 2015
|
4,446,461
|
|
|
27.70
|
|
|
4,446,461
|
|
|
417,316,709
|
|
||
September 2015
|
5,318,469
|
|
|
26.28
|
|
|
5,318,469
|
|
|
277,542,557
|
|
||
Total
|
9,764,930
|
|
|
26.93
|
|
|
9,764,930
|
|
|
|
|
|
Total Number of
Shares Withheld
for Taxes
|
|
Average Price Paid
Per Share
|
|||
Period
|
|
|
|
|||
July 2015
|
5,968
|
|
|
$
|
31.03
|
|
August 2015
|
8,315
|
|
|
28.58
|
|
|
September 2015
|
26,256
|
|
|
26.97
|
|
|
Total
|
40,539
|
|
|
|
Exhibit
Number
|
Description
|
||
2.1
|
Agreement and Plan of Merger, dated as of October 26, 2008, by and among CenturyLink, Inc., Embarq Corporation and Cajun Acquisition Company (incorporated by reference to Exhibit 99.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on October 30, 2008).
|
||
2.2
|
Agreement and Plan of Merger, dated as of April 21, 2010, by and among CenturyLink, Inc., its subsidiary SB44 Acquisition Company, and Qwest Communications International Inc. (incorporated by reference to Exhibit 2.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on April 27, 2010).
|
||
2.3
|
Agreement and Plan of Merger, dated as of April 26, 2011, by and among CenturyLink, Inc., SAVVIS, Inc. and Mimi Acquisition Company (incorporated by reference to Exhibit 2.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on April 27, 2011).
|
||
3.1
|
Amended and Restated Articles of Incorporation of CenturyLink, Inc., as amended through May 23, 2012 (incorporated by reference to Exhibit 3.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on May 30, 2012).
|
||
3.2
|
Bylaws of CenturyLink, Inc., as amended and restated through May 28, 2014 (incorporated by reference to Exhibit 3.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on June 2, 2014).
|
||
4.1
|
Form of common stock certificate (incorporated by reference to Exhibit 4.10 of CenturyLink, Inc.'s Registration Statement on Form S-3 filed with the Securities and Exchange Commission on March 2, 2012 (Registration No. 333-179888)).
|
||
4.2
|
Instruments relating to CenturyLink, Inc.'s Revolving Credit Facility.
|
||
|
a.
|
Amended and Restated Credit Agreement, dated as of April 6, 2012, by and among CenturyLink, Inc. and the lenders and agents named therein (incorporated by reference to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on April 11, 2012, as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of December 3, 2014, among CenturyLink, Inc. and the lenders and agents named therein (incorporated by reference to Exhibit 4.3 of CenturyLink's Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on December 5, 2014).
|
|
|
b.
|
Guarantee Agreement, dated as of April 6, 2012, by and among the original guarantors named therein (incorporated by reference to Exhibit 4.2 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on April 11, 2012), as assumed by two additional guarantors under an assumption agreement, dated as of May 23, 2013 (incorporated by reference to Exhibit 4.2(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2013 (File No. 001-07784) filed with the Securities and Exchange Commission on August 8, 2013), as amended by the Amendment to Guarantee Agreement and Reaffirmation Agreement, dated as of December 3, 2014, among CenturyLink, Inc. and the affiliated guarantors named therein (incorporated by reference to Exhibit 4.4 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on December 5, 2014).
|
|
4.3
|
Instruments relating to CenturyLink, Inc.'s Term Loan.
|
||
|
a.
|
Credit Agreement, dated as of April 18, 2012, by and among CenturyLink, Inc., the several banks and other financial institutions or entities from time to time parties thereto, and CoBank, ACB, as administrative agent (incorporated by reference to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on April 20, 2012), as amended by the amendment dated as of March 13, 2015.
|
|
|
b.
|
Guarantee Agreement, dated as of April 18, 2012, by and among the original guarantors named therein (incorporated by reference to Exhibit 4.2 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on April 20, 2012), as assumed by two additional guarantors under an assumption agreement, dated as of May 23, 2013 (incorporated by reference to Exhibit 4.3(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2013 (File No. 001-07784) filed with the Securities and Exchange Commission on August 8, 2013), as amended by the amendment dated as of March 13, 2015 (incorporated by reference to Exhibit 4.3(b) of CenturyLink's Quarterly Report on Form 10-Q for the period ended March 31, 2015 (File No. 001-07784) filed with the Securities and Exchange Commission on May 6, 2015).
|
Exhibit
Number
|
Description
|
||
4.4
|
Instruments relating to CenturyLink, Inc.'s public senior debt.
(1)
|
||
|
a.
|
Indenture, dated as of March 31, 1994, by and between Century Telephone Enterprises, Inc. (currently named CenturyLink, Inc.) and Regions Bank (successor-in-interest to First American Bank & Trust of Louisiana), as Trustee.
|
|
|
|
(i).
|
Form of 7.2% Senior Notes, Series D, due 2025 (incorporated by reference to Exhibit 4.27 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 001-07784) filed with the Securities and Exchange Commission on March 18, 1996).
|
|
|
(ii).
|
Form of 6.875% Debentures, Series G, due 2028, (incorporated by reference to Exhibit 4.9 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 001-07784) filed with the Securities and Exchange Commission on March 16, 1998).
|
|
b.
|
Fourth Supplemental Indenture, dated as of March 26, 2007, by and between CenturyTel, Inc. (currently named CenturyLink, Inc.) and Regions Bank, as Trustee, designating and outlining the terms and conditions of CenturyLink's 6.0% Senior Notes, Series N, due 2017 and 5.5% Senior Notes, Series O, due 2013 (incorporated by reference to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 29, 2007).
|
|
|
|
(i).
|
Form of 6.0% Senior Notes, Series N, due 2017 and 5.5% Senior Notes, Series O, due 2013 (incorporated by reference to Exhibit A to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 29, 2007).
|
|
c.
|
Fifth Supplemental Indenture, dated as of September 21, 2009, by and between CenturyTel, Inc. (currently named CenturyLink, Inc.) and Regions Bank, as Trustee, designating and outlining the terms and conditions of CenturyLink's 7.60% Senior Notes, Series P, due 2039 and 6.15% Senior Notes, Series Q, due 2019 (incorporated by reference to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on September 22, 2009).
|
|
|
|
(i).
|
Form of 7.60% Senior Notes, Series P, due 2039 and 6.15% Senior Notes, Series Q, due 2019 (incorporated by reference to Exhibit A to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on September 22, 2009).
|
|
d.
|
Sixth Supplemental Indenture, dated as of June 16, 2011, by and between CenturyLink, Inc. and Regions Bank, as Trustee, designating and outlining the terms and conditions of CenturyLink's 5.15% Senior Notes, Series R, due 2017 and 6.45% Senior Notes, Series S, due 2021 (incorporated by reference to Exhibit 4.2 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on June 16, 2011).
|
|
|
|
(i).
|
Form of 5.15% Senior Notes, Series R, due 2017 and 6.45% Senior Notes, Series S, due 2021 (incorporated by reference to Exhibit A to Exhibit 4.2 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on June 16, 2011).
|
|
e.
|
Seventh Supplemental Indenture, dated as of March 12, 2012, by and between CenturyLink, Inc. and Regions Bank, as Trustee, designating and outlining the terms and conditions of CenturyLink's 5.80% Senior Notes, Series T, due 2022 and 7.65% Senior Notes, Series U, due 2042 (incorporated by reference to Exhibit 4.1 of CenturyLink's Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 12, 2012).
|
|
|
|
(i).
|
Form of 5.80% Senior Notes, Series T, due 2022 and 7.65% Senior Notes, Series U, due 2042 (incorporated by reference to Exhibit A to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 12, 2012).
|
_______________________________________________________________________________
(1)
Certain of the items in Sections 4.4, 4.5 and 4.6 (i) omit supplemental indentures or other instruments governing debt that has been retired, or (ii) refer to trustees who may have been replaced, acquired or affected by similar changes. In accordance with Item 601(b) (4) (iii) (A) of Regulation S-K, copies of certain instruments defining the rights of holders of certain of our long-term debt are not filed herewith. Pursuant to this regulation, we hereby agree to furnish a copy of any such instrument to the SEC upon request.
|
Exhibit
Number
|
Description
|
||
|
f.
|
Eighth Supplemental Indenture, dated as of March 21, 2013, by and between CenturyLink, Inc. and Regions Bank, as Trustee, designating and outlining the terms and conditions of CenturyLink's 5.625% Senior Notes, Series V, due 2020 (incorporated by reference to Exhibit 4.1 of CenturyLink's Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 21, 2013).
|
|
|
|
(i).
|
Form of 5.625% Senior Notes, Series V, due 2020 (incorporated by reference to Exhibit A to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 21, 2013).
|
|
g.
|
Ninth Supplemental Indenture, dated as of November 27, 2013, by and between CenturyLink, Inc. and Regions Bank, as Trustee, designating and outlining the terms and conditions of CenturyLink's 6.75% Senior Notes, Series W, due 2023 (incorporated by reference to Exhibit 4.1 of CenturyLink's Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on November 27, 2013).
|
|
|
|
(i)
|
Form of 6.75% Senior Notes, Series W, due 2023 (incorporated by reference to Exhibit A to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on November 27, 2013).
|
|
h.
|
Tenth Supplemental Indenture, dated as of March 19, 2015, by and between CenturyLink, Inc. and Regions Bank, as Trustee, designating and outlining the terms and conditions of CenturyLink's 5.625% Senior Notes, Series X, due 2025 (incorporated by reference to Exhibit 4.1 of CenturyLink's Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 19, 2015).
|
|
|
|
(i)
|
Form of 5.625% Senior Notes, Series X, due 2025 (incorporated by reference to Exhibit A to Exhibit 4.1 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) filed with the Securities and Exchange Commission on March 19, 2015).
|
4.5
|
Instruments relating to indebtedness of Qwest Communications International, Inc. and its subsidiaries.
(1)
|
||
|
a.
|
Indenture, dated as of April 15, 1990, by and between The Mountain States Telephone and Telegraph Company (currently named Qwest Corporation) and The First National Bank of Chicago (incorporated by reference to Exhibit 4.2 of Qwest Corporation's Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 001-03040) filed with the Securities and Exchange Commission on January 13, 2004).
|
|
|
|
(i).
|
First Supplemental Indenture, dated as of April 16, 1991, by and between U S WEST Communications, Inc. (currently named Qwest Corporation) and The First National Bank of Chicago (incorporated by reference to Exhibit 4.3 of Qwest Corporation's Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 001-03040) filed with the Securities and Exchange Commission on January 13, 2004).
|
|
b.
|
Indenture, dated as of April 15, 1990, by and between Northwestern Bell Telephone Company (predecessor to Qwest Corporation) and The First National Bank of Chicago (incorporated by reference to Exhibit 4.5(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2012 (File No. 001-07784) filed with the Securities and Exchange Commission on May 10, 2012).
|
|
|
|
(i).
|
First Supplemental Indenture, dated as of April 16, 1991, by and between U S WEST Communications, Inc. (currently named Qwest Corporation) and The First National Bank of Chicago (incorporated by reference to Exhibit 4.3 of Qwest Corporation's Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 001-03040) filed with the Securities and Exchange Commission on January 13, 2004).
|
|
c.
|
Indenture, dated as of June 29, 1998, by and among U S WEST Capital Funding, Inc. (currently named Qwest Capital Funding, Inc.), U S WEST, Inc. (predecessor to Qwest Communications International Inc.) and The First National Bank of Chicago, as trustee (incorporated by reference to Exhibit 4(a) of U S WEST, Inc.'s Current Report on Form 8-K (File No. 001-14087) filed with the Securities and Exchange Commission on November 18, 1998).
|
|
|
|
(i).
|
First Supplemental Indenture, dated as of June 30, 2000, by and among U S WEST Capital Funding, Inc. (currently named Qwest Capital Funding, Inc.), U S WEST, Inc. (predecessor to Qwest Communications International Inc.) and Bank One Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.10 of Qwest Communications International Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2000 (File No. 001-15577) filed with the Securities and Exchange Commission on August 11, 2000).
|
|
d.
|
Indenture, dated as of October 15, 1999, by and between US West Communications, Inc. (currently named Qwest Corporation) and Bank One Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4(b) of Qwest Corporation's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-03040) filed with the Securities and Exchange Commission on March 3, 2000).
|
Exhibit
Number
|
Description
|
||
|
|
(i).
|
First Supplemental Indenture, dated as of August 19, 2004, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.22 of Qwest Communications International Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2004 (File No. 001-15577) filed with the Securities and Exchange Commission on November 5, 2004).
|
|
|
(ii).
|
Third Supplemental Indenture, dated as of June 17, 2005, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 of Qwest Communications International Inc.'s Current Report on Form 8-K (File No. 001-15577) filed with the Securities and Exchange Commission on June 23, 2005).
|
|
|
(iii).
|
Fourth Supplemental Indenture, dated as of August 8, 2006, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of Qwest Communications International Inc.'s Current Report on Form 8-K (File No. 001-15577) filed with the Securities and Exchange Commission on August 8, 2006).
|
|
|
(iv).
|
Fifth Supplemental Indenture, dated as of May 16, 2007, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of Qwest Communications International Inc.'s Current Report on Form 8-K (File No. 001-15577) filed with the Securities and Exchange Commission on May 18, 2007).
|
|
|
(v).
|
Sixth Supplemental Indenture, dated as of April 13, 2009, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of Qwest Communications International Inc.'s Current Report on Form 8-K (File No. 001-15577) filed with the Securities and Exchange Commission on April 13, 2009).
|
|
|
(vi).
|
Seventh Supplemental Indenture, dated as of June 8, 2011, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.8 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on June 7, 2011).
|
|
|
(vii).
|
Eighth Supplemental Indenture, dated as of September 21, 2011, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.9 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on September 20, 2011).
|
|
|
(viii).
|
Ninth Supplemental Indenture, dated as of October 4, 2011, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of Qwest Corporation's Current Report on Form 8-K (File No. 001-03040) filed with the Securities and Exchange Commission on October 4, 2011).
|
|
|
(ix)
|
Tenth Supplemental Indenture, dated as of April 2, 2012, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.11 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on March 30, 2012).
|
|
|
(x)
|
Eleventh Supplemental Indenture, dated as of June 25, 2012, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.12 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on June 22, 2012).
|
|
|
(xi)
|
Twelfth Supplemental Indenture, dated as of May 23, 2013, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.13 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on May 22, 2013).
|
|
|
(xii)
|
Thirteenth Supplemental Indenture, dated as of September 29, 2014, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.14 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on September 26, 2014).
|
|
|
(xiii)
|
Fourteenth Supplemental Indenture, dated as of September 21, 2015, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.15 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on September 21, 2015).
|
|
e.
|
Credit Agreement, dated as of February 20, 2015, by and among Qwest Corporation, the several lenders from time to time parties thereto, and CoBank, ACB, as administrative agent.
|
|
4.6
|
Instruments relating to indebtedness of Embarq Corporation.
(1)
|
Exhibit
Number
|
Description
|
||
|
a.
|
Indenture, dated as of May 17, 2006, by and between Embarq Corporation and J.P. Morgan Trust Company, National Association, a national banking association, as trustee (incorporated by reference to Exhibit 4.1 of Embarq Corporation's Current Report on Form 8-K (File No. 001-32732) filed with the Securities and Exchange Commission on May 18, 2006).
|
|
|
b.
|
7.082% Global Note due 2016 of Embarq Corporation (incorporated by reference to Exhibit 4.3 to Embarq Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-32372) filed with the Securities and Exchange Commission on March 9, 2007).
|
|
|
c.
|
7.995% Global Note due 2036 of Embarq Corporation (incorporated by reference to Exhibit 4.4 to Embarq Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-32372) filed with the Securities and Exchange Commission on March 9, 2007).
|
|
4.7
|
Intercompany debt instruments.
|
||
|
a.
|
Revolving Promissory Note, dated as of April 2, 2012 pursuant to which Embarq Corporation may borrow from an affiliate of CenturyLink, Inc. up to $2.5 billion on a revolving basis (incorporated by reference to Exhibit 4.7(a) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2012 (File No. 001-07784) filed with the Securities and Exchange Commission on November 8, 2012).
|
|
|
b.
|
Revolving Promissory Note, dated as of April 18, 2012, pursuant to which Qwest Corporation may borrow from an affiliate of CenturyLink, Inc. up to $1.0 billion on a revolving basis (incorporated by reference to Exhibit 4.7(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2012 (File No. 001-07784) filed with the Securities and Exchange Commission on November 8, 2012).
|
|
|
c.
|
Revolving Promissory Note, dated as of September 27, 2012, pursuant to which Qwest Communications International, Inc. may borrow from an affiliate of CenturyLink, Inc. up to $3.0 billion on a revolving basis (incorporated by reference to Exhibit 4.7(c) of CenturyLink Inc.'s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 001-07844) filed with the Securities and Exchange Commission on March 1, 2013).
|
|
10.1
|
Qualified Employee Benefit Plans of CenturyLink, Inc. (excluding several narrow-based qualified plans that cover union employees or other limited groups of employees).
|
||
|
a.
|
CenturyLink Dollars & Sense 401(k) Plan and Trust, as amended and restated through December 31, 2006 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2007), as amended by the First Amendment and the Second Amendment thereto, each dated as of December 31, 2007 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 001-07784) filed with the Securities and Exchange Commission on February 29, 2008), as amended by the Third Amendment thereto dated as of November 20, 2008 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on February 27, 2009), as amended by the Fourth Amendment thereto dated as of June 30, 2009 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009), as amended by the Fifth Amendment thereto dated as of September 15, 2009 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010), as amended by the Sixth Amendment thereto, dated as of December 30, 2009 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010), as amended by the Seventh Amendment thereto, effective May 20, 2010 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on November 5, 2010) and as amended by the Eighth Amendment thereto, effective January 1, 2011 (incorporated by reference to Exhibit 10.1(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2011).
|
Exhibit
Number
|
Description
|
||
|
b.
|
CenturyLink Union 401(k) Plan and Trust, as amended and restated through December 31, 2006 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2007), as amended by the First Amendment thereto dated as of May 29, 2007 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on May 7, 2008), as amended by the Second Amendment thereto dated as of December 31, 2007 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 001-07784) filed with the Securities and Exchange Commission on February 29, 2008), as amended by the Third Amendment thereto dated as of November 20, 2008 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on February 27, 2009), as amended by the Fourth Amendment thereto dated as of June 30, 2009 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009), as amended by the Fifth Amendment thereto dated as of September 15, 2009 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010), as amended by the Sixth Amendment thereto, dated as of December 30, 2009 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010), as amended by the Seventh Amendment thereto, effective May 20, 2010 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on November 5, 2010) and as amended by the Eighth Amendment thereto, effective January 1, 2011 (incorporated by reference to Exhibit 10.1(b) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2011).
|
|
|
c.
|
CenturyLink Retirement Plan, as amended and restated through December 31, 2006 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2007), as amended by Amendment No. 1 thereto dated as of April 2, 2007 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on May 7, 2008), as amended by Amendment No. 2 thereto dated as of December 31, 2007 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 001-07784) filed with the Securities and Exchange Commission on February 29, 2008), as amended by Amendment No. 3 thereto dated as of October 24, 2008 (incorporated by reference to Exhibit 10.1(c) CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on February 27, 2009), as amended by Amendment No. 4 dated as of June 30, 2009 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009), as amended by Amendment No. 5 thereto dated as of September 15, 2009 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010), as amended by Amendment No. 6 thereto, dated as of December 30, 2009 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010), as amended by Amendment No. 7 thereto, effective at various dates during 2010 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on November 5, 2010) and as amended by Amendment No. 8 thereto, effective January 1, 2011 (incorporated by reference to Exhibit 10.1(c) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2011).
|
|
10.2
|
Stock-based Incentive Plans and Agreements of CenturyLink
|
||
|
a.
|
Amended and Restated 1983 Restricted Stock Plan, as amended and restated through February 23, 2010 (incorporated by reference to Exhibit 10.2(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010).
|
Exhibit
Number
|
Description
|
||
|
b.
|
Amended and Restated 2000 Incentive Compensation Plan, as amended through May 23, 2000 (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2000 (File No. 001-07784) filed with the Securities and Exchange Commission on August 11, 2000) and amendment thereto dated as of May 29, 2003 (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 001-7784) filed with the Securities and Exchange Commission on August 14, 2003).
|
|
|
|
(i)
|
Form of Stock Option Agreement, pursuant to the 2000 Incentive Compensation Plan and dated as of May 21, 2001, entered into between CenturyLink, Inc. and its officers (incorporated by reference to Exhibit 10.2(e) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 001-07784) filed with the Securities and Exchange Commission on March 15, 2002).
|
|
|
(ii)
|
Form of Stock Option Agreement, pursuant to the 2000 Incentive Compensation Plan and dated as of February 25, 2002, entered into between CenturyLink, Inc. and its officers (incorporated by reference to Exhibit 10.2(d) (ii) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 001-07784) filed with the Securities and Exchange Commission on March 27, 2003).
|
|
c.
|
Amended and Restated 2002 Directors Stock Option Plan, dated as of February 25, 2004 (incorporated by reference to Exhibit 10.2(e) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 001-07784) filed with the Securities and Exchange Commission on March 12, 2004) and amendment thereto dated as of October 24, 2008 (incorporated by reference to Exhibit 10.2(d) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on February 27, 2009).
|
|
|
|
(i)
|
Form of Stock Option Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. in connection with options granted to the outside directors as of May 10, 2002 (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2002 (File No. 001-07784) filed with the Securities and Exchange Commission on November 14, 2002).
|
|
|
(ii)
|
Form of Stock Option Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. in connection with options granted to the outside directors as of May 9, 2003 (incorporated by reference to Exhibit 10.2(e) (ii) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 001-07784) filed with the Securities and Exchange Commission on March 12, 2004).
|
|
|
(iii)
|
Form of Stock Option Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. in connection with options granted to the outside directors as of May 7, 2004 (incorporated by reference to Exhibit 10.2(d) (iii) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 001-07784) filed with the Securities and Exchange Commission on March 16, 2006).
|
|
d.
|
Amended and Restated 2002 Management Incentive Compensation Plan, dated as of February 25, 2004 (incorporated by reference to Exhibit 10.2(f) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 001-07784) filed with the Securities and Exchange Commission on March 12, 2004) and amendment thereto dated as of October 24, 2008 (incorporated by reference to Exhibit 10.2(e) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on February 27, 2009).
|
|
|
|
(i)
|
Form of Stock Option Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. and certain of its officers and key employees at various dates during 2002 following May 9, 2002 (incorporated by reference to Exhibit 10.4 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2002 (File No. 001-07784) filed with the Securities and Exchange Commission on November 14, 2002).
|
|
|
(ii)
|
Form of Stock Option Agreement, pursuant to foregoing plan and dated as of February 24, 2003, entered into between CenturyLink, Inc. and its officers (incorporated by reference to Exhibit 10.2(f) (ii) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 001-07784) filed with the Securities and Exchange Commission on March 27, 2003).
|
|
|
(iii)
|
Form of Stock Option Agreement, pursuant to foregoing plan and dated as of February 25, 2004, entered into between CenturyLink, Inc. and its officers (incorporated by reference to Exhibit 10.2(f) (iii) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 001-07784) filed with the Securities and Exchange Commission on March 12, 2004).
|
|
|
(iv)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of February 24, 2003, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.1 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2003 (File No. 001-07784) filed with the Securities and Exchange Commission on May 14, 2003).
|
Exhibit
Number
|
Description
|
||
|
|
(v)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of February 25, 2004, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.2(f) (v) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2004 (File No. 000-50260) filed with the Securities and Exchange Commission on May 7, 2004).
|
|
|
(vi)
|
Form of Stock Option Agreement, pursuant to foregoing plan and dated as of February 17, 2005, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.2(e) (v) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 000-50260) filed with the Securities and Exchange Commission on March 16, 2005).
|
|
|
(vii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of February 17, 2005, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.2(e) (vi) of CenturyLink, Inc.'s Annual Report on Form 10-K for the period ended December 31, 2004 (File No. 000-50260) filed with the Securities and Exchange Commission on March 16, 2005).
|
|
e.
|
Amended and Restated 2005 Directors Stock Plan, as amended and restated through February 23, 2010 (incorporated by reference to Exhibit 10.2(f) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010).
|
|
|
|
(i)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. and each of its outside directors as of May 13, 2005 (incorporated by reference to Exhibit 10.4 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 000-50260) filed with the Securities and Exchange Commission on May 13, 2005).
|
|
|
(ii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. and each of its outside directors as of May 12, 2006 (incorporated by reference to Exhibit 10.1 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2006 (File No. 001-07784) filed with the Securities and Exchange Commission on August 3, 2006).
|
|
|
(iii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. and each of its outside directors as of May 11, 2007 (incorporated by reference to Exhibit 10.2(f) (iii) of CenturyLink, Inc.'s Annual Report on Form 10-K for the period ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on February 27, 2009).
|
|
|
(iv)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. and each of its outside directors as of May 9, 2008 (incorporated by reference to Exhibit 10.2 (f) (iv) of CenturyLink, Inc.'s Annual Report on Form 10-K for the period ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on February 27, 2009).
|
|
|
(v)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of May 8, 2009, entered into between CenturyLink, Inc. and each of its outside directors on such date who remained on the Board following July 1, 2009 (incorporated by reference to Exhibit 10.2(b) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009).
|
|
|
(vi)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of May 8, 2009, entered into between CenturyLink, Inc. and each of its outside directors who retired on July 1, 2009 (incorporated by reference to Exhibit 10.2(c) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009).
|
|
|
(vii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of July 2, 2009, entered into between CenturyLink, Inc. and each of its outside directors named to the Board on July 1, 2009 (incorporated by reference to Exhibit 10.1(d) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009).
|
|
|
(viii)
|
Restricted Stock Agreement, pursuant to the foregoing plan and dated as of July 2, 2009, entered into between CenturyLink, Inc. and William A. Owens in payment of Mr. Owens' 2009 supplemental chairman's fees (incorporated by reference to Exhibit 10.2(e) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009).
|
Exhibit
Number
|
Description
|
||
|
|
(ix)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of May 21, 2010, entered into between CenturyLink, Inc. and seven of its outside directors on such date (incorporated by reference to Exhibit 10.1 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on August 6, 2010).
|
|
f.
|
Amended and Restated 2005 Management Incentive Compensation Plan, as amended and restated through February 23, 2010 (incorporated by reference to Exhibit 10.2(g) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010).
|
|
|
|
(i)
|
Form of Stock Option Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. and certain officers and key employees at various dates since May 12, 2005 (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 001-07784) filed with the Securities and Exchange Commission on November 9, 2005).
|
|
|
(ii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan, entered into between CenturyLink, Inc. and certain officers and key employees at various dates since May 12, 2005 (incorporated by reference to Exhibit 10.3 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2005 (File No. 001-07784) filed with the Securities and Exchange Commission on November 9, 2005).
|
|
|
(iii)
|
Form of Stock Option Agreement, pursuant to the foregoing plan and dated as of February 21, 2006, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.2(g) (iii) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 001-07784) filed with the Securities and Exchange Commission on March 16, 2006).
|
|
|
(iv)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of February 21, 2006, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.2(g) (iv) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 001-07784) filed with the Securities and Exchange Commission on March 16, 2006).
|
|
|
(v)
|
Form of Stock Option Agreement, pursuant to the foregoing plan and dated as of February 26, 2007, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.1 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2007 (File No. 001-07784) filed with the Securities and Exchange Commission on May 9, 2007).
|
|
|
(vi)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of February 26, 2007, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2007 (File No. 001-07784) filed with the Securities and Exchange Commission on May 9, 2007).
|
|
|
(vii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of February 21, 2008, entered into between CenturyLink, Inc. and its executive officers (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on May 7, 2008).
|
|
|
(viii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of February 26, 2009 (incorporated by reference to Exhibit 10.2(g) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on May 1, 2009).
|
|
|
(ix)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of March 8, 2010 (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on May 7, 2010).
|
|
g.
|
Amended and Restated CenturyLink Legacy Embarq 2008 Equity Incentive Plan, as amended and restated through February 23, 2010 (incorporated by reference to Exhibit 10.2(h) of CenturyLink, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2010).
|
|
|
|
(i)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of May 21, 2010, entered into between CenturyLink, Inc. and four of its outside directors as of such date (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on August 6, 2010).
|
Exhibit
Number
|
Description
|
||
|
|
(ii)
|
Form of Restricted Stock Agreement, pursuant to the foregoing plan and dated as of May 21, 2010, entered into between CenturyLink, Inc. and William A. Owens in payment of Mr. Owens' 2010 supplemental chairman's fees (incorporated by reference to Exhibit 10.3 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on August 6, 2010).
|
|
|
(iii)
|
Form of Restricted Stock Agreement, dated as of September 7, 2010, entered into between CenturyLink, Inc. and Dennis G. Huber (incorporated by reference to Exhibit 10.16 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on November 5, 2010).
|
|
h.
|
Form of Retention Award Agreement, pursuant to the equity incentive plans of CenturyLink or Embarq and dated as of August 23, 2010, entered into between CenturyLink, Inc. and certain officers and key employees as of such date (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on November 5, 2010).
|
|
|
i.
|
CenturyLink 2011 Equity Incentive Plan (incorporated by reference to Appendix B of CenturyLink, Inc.'s Proxy Statement for its 2011 Annual Meeting of Shareholders (File No. 001-07784) filed with the Securities and Exchange Commission on April 6, 2011).
|
|
|
|
(i)
|
Form of Restricted Stock Agreement for executive officers used in 2011 and 2012 (incorporated by reference to Exhibit 10.2(a) (i) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2011 (File No. 001-07784) filed with the Securities and Exchange Commission on August 9, 2011).
|
|
|
(ii)
|
Form of Restricted Stock Agreement for non-management directors used since 2011 (incorporated by reference to Exhibit 10.2(a) (ii) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2011 (File No. 001-07784) filed with the Securities and Exchange Commission on August 9, 2011).
|
|
|
(iii)
|
Form of Restricted Stock Agreement for executive officers used since May 2013.
|
10.3
|
Key Employee Incentive Compensation Plan, dated as of January 1, 1984, as amended and restated as of November 16, 1995 (incorporated by reference to Exhibit 10.1(f) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 001-07784) filed with the Securities and Exchange Commission on March 18, 1996) and amendment thereto dated as of November 21, 1996 (incorporated by reference to Exhibit 10.1(f) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 001-07784) filed with the Securities and Exchange Commission on March 17, 1997), amendment thereto dated as of February 25, 1997 (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 1997 (File No. 001-07784) filed with the Securities and Exchange Commission on May 8, 1997), amendment thereto dated as of April 25, 2001 (incorporated by reference to Exhibit 10.2 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2001 (File No. 001-07784) filed with the Securities and Exchange Commission on May 15, 2001), amendment thereto dated as of April 17, 2000 (incorporated by reference to Exhibit 10.3(a) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 001-07784) filed with the Securities and Exchange Commission on March 15, 2002) and amendment thereto dated as of February 27, 2007 (incorporated by reference to Exhibit 10.1 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2007 (File No. 001-07784) filed with the Securities and Exchange Commission on August 8, 2007).
|
||
10.4
|
Supplemental Dollars & Sense Plan, 2008 Restatement, effective January 1, 2008, (incorporated by reference to Exhibit 10.3(c) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 001-07784) filed with the Securities and Exchange Commission on February 29, 2009) and amendment thereto dated as of October 24, 2008 (incorporated by reference to Exhibit 10.3(c) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on March 27, 2009) and amendment thereto dated as of December 27, 2010 (incorporated by reference to Exhibit 10.4 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2011).
|
||
10.5
|
Supplemental Defined Benefit Pension Plan, effective as of January 1, 2012 (incorporated by reference to Exhibit 10.5 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 001-07784) filed with the Securities and Exchange Commission on February 28, 2012).
|
||
10.6
|
Amended and Restated Salary Continuation (Disability) Plan for Officers, dated as of November 26, 1991 (incorporated by reference to Exhibit 10.16 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991).
|
||
10.7
|
2015 Executive Officer Short-Term Incentive Program (incorporated by reference to Exhibit A of CenturyLink's 2015 Proxy Statement on Form 14A (File No. 001-07784) filed with the Securities and Exchange Commission on April 8, 2015).
|
Exhibit
Number
|
Description
|
||
10.8
|
Form of Indemnification Agreement entered into between CenturyLink, Inc. and each of its directors as of July 1, 2009 (incorporated by reference to Exhibit 99.3 of CenturyLink, Inc.'s Current Report on Form 8-K (File No. 001-07784) with the Securities and Exchange Commission on July 1, 2009).
|
||
10.9
|
Form of Indemnification Agreement entered into between CenturyLink, Inc. and each of its officers as of July 1, 2009 (incorporated by reference to Exhibit 10.5 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009).
|
||
10.10
|
Change of Control Agreement, effective January 1, 2011, by and between Glen F. Post, III and CenturyLink, Inc. (incorporated by reference to Exhibit 10.11 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2011).
|
||
10.11
|
Form of Change of Control Agreement, effective January 1, 2011 between CenturyLink, Inc. and each of its other executive officers (incorporated by reference to Exhibit 10.12 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2011).
|
||
10.12
|
CenturyLink Executive Severance Plan (incorporated by reference to Exhibit 10.13 of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 001-07784) filed with the Securities and Exchange Commission on February 24, 2015.)
|
||
10.13
|
Amended and Restated CenturyLink, Inc. Bonus Life Insurance Plan for Executive Officers, dated as of April 3, 2008 (incorporated by reference to Exhibit 10.4 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2008 (File No. 001-07784) filed with the Securities and Exchange Commission on May 7, 2008) and First Amendment thereto (incorporated by reference to Exhibit 10.13 of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on November 5, 2010).
|
||
10.14
|
Certain Material Agreements and Plans of Embarq Corporation.
|
||
|
a.
|
Embarq Corporation 2006 Equity Incentive Plan, as amended and restated (incorporated by reference to Exhibit 99.1 of the Registration Statement on Form S-8 filed by CenturyLink, Inc. (File No. 001-07784) with the Securities and Exchange Commission on July 1, 2009).
|
|
|
b.
|
Form of 2007 Award Agreement for executive officers of Embarq Corporation (incorporated by reference to Exhibit 10.1 of Embarq Corporation's Current Report on Form 8-K (File No. 001-32372) filed with the Securities and Exchange Commission on February 27, 2007).
|
|
|
c.
|
Form of 2008 Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 of Embarq Corporation's Current Report on Form 8-K (File No. 001-32372) filed with the Securities and Exchange Commission on March 4, 2008).
|
|
|
d.
|
Form of 2009 Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 of Embarq Corporation's Current Report on Form 8-K (File No. 001-32732) filed with the Securities and Exchange Commission on March 5, 2009).
|
|
|
e.
|
Form of Stock Option Award Agreement (incorporated by reference to Exhibit 10.3 of Embarq Corporation's Current Report on Form 8-K (File No. 001-32372) filed with the Securities and Exchange Commission on March 4, 2008).
|
|
|
f.
|
Amendment to Outstanding RSUs granted in 2007 and 2008 under the Embarq Corporation 2006 Equity Incentive Plan (incorporated by reference to Exhibit 10.16 of Embarq Corporation's Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-32372) filed with the Securities and Exchange Commission on February 13, 2009).
|
|
|
g.
|
Form of 2006 Award Agreement, entered into between Embarq Corporation and Richard A. Gephardt (incorporated by reference to Exhibit 10.3 of Embarq Corporation's Current Report on Form 8-K (File No. 001-32372) filed with the Securities and Exchange Commission on August 1, 2006), as amended by the amendment thereto dated as of June 26, 2009 (incorporated by reference to Exhibit 10.6 (m) of CenturyLink, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2009 (File No. 001-07784) filed with the Securities and Exchange Commission on August 7, 2009).
|
|
|
h.
|
Amended and Restated Executive Severance Plan, including Form of Participation Agreement entered into between Embarq Corporation and William E. Cheek (incorporated by reference to Exhibit 10.4 of Embarq Corporation's Quarterly Report on Form 10-Q for the period ended September 30, 2008 (File No. 001-32372) filed with the Securities and Exchange Commission on October 30, 2008).
|
Exhibit
Number
|
Description
|
||
|
i.
|
Embarq Supplemental Executive Retirement Plan, as amended and restated as of January 1, 2009 (incorporated by reference to Exhibit 10.27 of Embarq Corporation's Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-32372) filed with the Securities and Exchange Commission on February 13, 2009), amendment thereto dated as of December 27, 2010 (incorporated by reference to Exhibit 10.14(o) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-07784) filed with the Securities and Exchange Commission on March 1, 2011) and second amendment thereto as of dated as of November 15, 2011 (incorporated by reference to Exhibit 10.14(k) of CenturyLink, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 001-07784) filed with the Securities and Exchange Commission on February 28, 2012).
|
|
10.15
|
Certain Material Agreements and Plans of Qwest Communications International Inc. or Savvis, Inc.
|
||
|
a.
|
Equity Incentive Plan, as amended and restated (incorporated by reference to Annex A of Qwest Communications International Inc.'s Proxy Statement for the 2007 Annual Meeting of Stockholders (File No. 001-15577) filed with the Securities and Exchange Commission on March 29, 2007).
|
|
|
b.
|
Forms of restricted stock, performance share and option agreements used under Equity Incentive Plan, as amended and restated (incorporated by reference to Exhibit 10.2 of Qwest Communications International Inc.'s Current Report on Form 8-K (File No. 001-15577) filed with the Securities and Exchange Commission on October 24, 2005; Exhibit 10.2 of Qwest Communication International Inc.'s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 001-15577) filed with the Securities and Exchange Commission on February 16, 2006; Exhibit 10.2 of Qwest Communication International Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2006 (File No. 001-15577) filed with the Securities and Exchange Commission on May 3, 2006; Exhibit 10.2 of Qwest Communication International Inc.'s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-15577) filed with the Securities and Exchange Commission on February 8, 2007; Exhibit 10.3 of Qwest Communication International Inc.'s Current Report on Form 8-K (File No. 001-15577) filed with the Securities and Exchange Commission on September 15, 2008; Exhibit 10.2 of Qwest Communication International Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2009 (File No. 001-15577) filed with the Securities and Exchange Commission on April 30, 2009; and Exhibit 10.2 of Qwest Communication International Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-15577) filed with the Securities and Exchange Commission on February 15, 2011).
|
|
|
c.
|
Deferred Compensation Plan for Nonemployee Directors, as amended and restated, Amendment to Deferred Compensation Plan for Nonemployee Directors (incorporated by reference to Exhibit 10.2 of Qwest Communications International Inc.'s Current Report on Form 8-K (File No. 001-15577) filed with the Securities and Exchange Commission on December 16, 2005 and Exhibit 10.8 to Qwest Communication International Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2008 (File No. 001-15577) filed with the Securities and Exchange Commission on October 29, 2008) and Amendment No. 2011-1 to Deferred Compensation Plan for Nonemployee Directors (incorporated by reference to Exhibit 10.15(c) of CenturyLink, Inc.'s Annual Report for the year ended December 31, 2011 (File No. 001-07784) filed with the Securities and Exchange Commission on February 28, 2012).
|
|
|
d.
|
Qwest Nonqualified Pension Plan (incorporated by reference to Exhibit 10.9 of Qwest Communications International Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-15577) filed with the Securities and Exchange Commission on February 16, 2010).
|
|
|
e.
|
SAVVIS, Inc. Amended and Restated 2003 Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 of SAVVIS, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2006 (File No. 000-29375) filed with the Securities and Exchange Commission on May 5, 2006), as amended by Amendment No. 1 (incorporated by reference to Exhibit 10.6 of SAVVIS, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 000-29375) filed with the Securities and Exchange Commission on February 26, 2007); Amendment No. 2 (incorporated by reference to Exhibit 10.1 of SAVVIS, Inc.'s Current Report on Form 8-K (File No. 000-29375) filed with the Securities and Exchange Commission on May 15, 2007); Amendment No. 3 (incorporated by reference to Exhibit 10.3 of SAVVIS, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2007 (File No. 000-29375) filed with the Securities and Exchange Commission on July 31,
|
|
|
|
2007); Amendment No. 4 (incorporated by reference to Exhibit 10.2 of SAVVIS, Inc.'s Current Report on Form 8-K (File No. 000-29375) filed with the Securities and Exchange Commission on May 22, 2009); and Amendment No. 5 (incorporated by reference to Exhibit 10.2 of SAVVIS, Inc.'s Current Report on Form 8-K (File No. 000-29375) filed with the Securities and Exchange Commission on May 22, 2009).
|
|
12*
|
Ratio of Earnings to Fixed Charges
|
||
31.1*
|
Certification of the Chief Executive Officer of CenturyLink, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
31.2*
|
Certification of the Chief Financial Officer of CenturyLink, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Exhibit
Number
|
Description
|
||
32*
|
Certification of the Chief Executive Officer and Chief Financial Officer of CenturyLink, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101*
|
Financial statements from the Quarterly Report on Form 10-Q of CenturyLink, Inc. for the period ended September 30, 2015, formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders' Equity and (vi) the Notes to Consolidated Financial Statements.
|
*
|
Exhibit filed herewith.
|
Note:
|
Our Corporate Governance Guidelines and Charters of our Board of Director Committees are located on our website at www.centurylink.com.
|
|
CENTURYLINK, INC.
|
|
|
By:
|
/s/ DAVID D. COLE
|
|
David D. Cole
Executive Vice President, Controller and Operations Support
(Chief Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
No Customers Found
Suppliers
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|