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&lt;p style="margin-top: 12px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;(12) Commitments and Contingencies &lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 6px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;CenturyLink is involved in several legal proceedings to which we are not a party that, if resolved against CenturyLink, could have a material adverse effect on its business and financial condition. As a wholly owned subsidiary of CenturyLink, our business and financial condition could be similarly affected. You can find descriptions of these legal proceedings in CenturyLink's quarterly and annual reports filed with the SEC. Because we are not a party to any of these matters, we have not accrued any liabilities for these matters. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 6px; margin-bottom: 0px; font-size: 1px;"&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style="margin-top: 0px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;In this section, when we refer to a class action as "putative" it is because a class has been alleged, but not certified in that matter. Until and unless a class has been certified by the court, it has not been established that the named plaintiffs represent the class of plaintiffs they purport to represent. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;To the extent appropriate, we have accrued liabilities for the matters described below. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;The terms and conditions of applicable bylaws, certificates or articles of incorporation, agreements or applicable law may obligate us to indemnify our former directors, officers or employees with respect to certain of the matters described below, and we have been advancing legal fees and costs to certain former directors, officers or employees in connection with certain matters described below. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;&lt;i&gt;KPNQwest Litigation/Investigation &lt;/i&gt;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 6px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;On September&amp;nbsp;29, 2010, the trustees in the Dutch bankruptcy proceeding for KPNQwest, N.V. (of which we were a major shareholder) filed a lawsuit in district court in Haarlem, the Netherlands, alleging tort and mismanagement claims under Dutch law. We and Koninklijke KPN N.V. ("KPN") are defendants in this lawsuit along with a number of former KPNQwest supervisory board members and a former officer of KPNQwest, some of whom were formerly affiliated with us. Plaintiffs allege, among other things, that defendants' actions were a cause of the bankruptcy of KPNQwest, and they seek damages for the bankruptcy deficit of KPNQwest, which is claimed to be approximately &amp;euro;&lt;font class="_mt"&gt;4.2&lt;/font&gt;&amp;nbsp;billion (or approximately $&lt;font class="_mt"&gt;6.0&lt;/font&gt; billion based on the exchange rate on March&amp;nbsp;31, 2011), plus statutory interest. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;On September&amp;nbsp;13, 2006, Cargill Financial Markets, Plc and Citibank, N.A. filed a lawsuit in the District Court of Amsterdam, the Netherlands, against us, KPN, KPN Telecom B.V., and other former officers, employees or supervisory board members of KPNQwest, some of whom were formerly affiliated with us. The lawsuit alleges that defendants misrepresented KPNQwest's financial and business condition in connection with the origination of a credit facility and wrongfully allowed KPNQwest to borrow funds under that facility. Plaintiffs allege damages of approximately &amp;euro;&lt;font class="_mt"&gt;219&lt;/font&gt;&amp;nbsp;million (or approximately $&lt;font class="_mt"&gt;310&lt;/font&gt; million based on the exchange rate on March&amp;nbsp;31, 2011). &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;On August&amp;nbsp;23, 2005, the Dutch Shareholders Association (Vereniging van Effectenbezitters, or VEB) filed a petition for inquiry with the Enterprise Chamber of the Amsterdam Court of Appeals, the Netherlands, with regard to KPNQwest. VEB sought an inquiry into the policies and course of business at KPNQwest that are alleged to have caused the bankruptcy of KPNQwest in May&amp;nbsp;2002, and an investigation into alleged mismanagement of KPNQwest by its executive management, supervisory board members, joint venture entities (us and KPN), and KPNQwest's outside auditors and accountants. On December&amp;nbsp;28, 2006, the Enterprise Chamber ordered an inquiry into the management and conduct of affairs of KPNQwest for the period January&amp;nbsp;1 through May&amp;nbsp;23, 2002. On December&amp;nbsp;5, 2008, the Enterprise Chamber appointed investigators to conduct the inquiry. VEB claims that certain individuals have assigned to it their claims for losses totaling approximately &amp;euro;&lt;font class="_mt"&gt;40&lt;/font&gt;&amp;nbsp;million (or approximately $&lt;font class="_mt"&gt;60&lt;/font&gt; million based on the exchange rate on March&amp;nbsp;31, 2011), which those individuals allegedly incurred on investments in KPNQwest securities. VEB has not yet filed any adjudicative action to assert those claims. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;On June&amp;nbsp;7, 2010, a number of parties, including us and KPN, reached a settlement with VEB for &amp;euro;&lt;font class="_mt"&gt;19&lt;/font&gt;&amp;nbsp;million (or approximately $&lt;font class="_mt"&gt;30&lt;/font&gt;&amp;nbsp;million based on the exchange rate on March&amp;nbsp;31, 2011), conditioned in part on the termination of the investigation by the Enterprise Chamber. Pursuant to the terms of the settlement,&amp;nbsp;VEB formally requested that the Enterprise Chamber terminate the investigation.&amp;nbsp;The Enterprise Chamber denied that request and directed the investigation to proceed.&amp;nbsp;On an appeal of that decision, the Dutch Supreme Court reversed the Enterprise Chamber's decision and, among other things, referred the case back to the Enterprise Chamber to terminate the investigation. On March&amp;nbsp;30, 2011, the Enterprise Chamber terminated the investigation. We anticipate the settlement amount will not be paid before the third quarter of this year. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;We will continue to defend against the pending KPNQwest litigation matters vigorously. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; margin-bottom: 0px; font-size: 1px;"&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style="margin-top: 0px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;&lt;i&gt;Stockholder Litigation &lt;/i&gt;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 6px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;In the weeks following the April&amp;nbsp;22, 2010 announcement of CenturyLink's acquisition of us, purported Qwest stockholders filed&amp;nbsp;&lt;font class="_mt"&gt;17&lt;/font&gt; lawsuits against us, our directors, certain of our officers, CenturyLink and SB44 Acquisition Company. The purported stockholder plaintiffs commenced these actions in three jurisdictions: the District Court for the City and County of Denver, the United States District Court for the District of Colorado, and the Delaware Court of Chancery. The plaintiffs generally alleged that our directors breached their fiduciary duties in approving the acquisition and sought to enjoin the acquisition and, in some cases, damages if the acquisition completed.&amp;nbsp;Many of the lawsuits also challenged the sufficiency of the disclosures in the preliminary joint proxy statement-prospectus relating to the acquisition, which was filed with the SEC on June&amp;nbsp;4, 2010. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 10px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;We, and our directors, believe that all of these actions are without merit. The defendants nevertheless negotiated with the purported stockholder plaintiffs regarding a settlement of the claims asserted in all of these actions, including the claims that challenge the sufficiency of the disclosures in the preliminary joint proxy statement-prospectus. On July&amp;nbsp;16, 2010, the parties entered into a memorandum of understanding reflecting the terms of their agreement-in-principle for a settlement of all of the claims asserted in these actions. Pursuant to this agreement, defendants included additional disclosures in the final joint proxy statement-prospectus filed with the SEC on July&amp;nbsp;19,&amp;nbsp;2010. On December&amp;nbsp;17, 2010, the United States District Court for the District of Colorado preliminarily approved the settlement, and notice was subsequently provided to stockholders of the proposed final resolution. A final fairness hearing concluded on February&amp;nbsp;25, 2011. The settlement was approved and, effective on March&amp;nbsp;17, 2011, all of these actions were dismissed, with prejudice. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;&lt;i&gt;Other Matters &lt;/i&gt;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 6px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;Several putative class actions relating to the installation of fiber-optic cable in certain rights-of-way were filed against us on behalf of landowners on various dates and in various courts in Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois (where there is a federal and a state court case), Indiana, Kansas, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Mexico, New York, Oregon, South Carolina, Tennessee, Texas, Utah and Washington. For the most part, the complaints challenge our right to install our fiber-optic cable in railroad rights-of-way. The complaints allege that the railroads own the right-of-way as an easement that did not include the right to permit us to install our fiber-optic cable in the right-of-way without the plaintiffs' consent. Most of the actions purport to be brought on behalf of state-wide classes in the named plaintiffs' respective states, although two of the currently pending actions purport to be brought on behalf of multi-state classes. Specifically, the Illinois state court action purports to be on behalf of landowners in Illinois, Iowa, Kentucky, Michigan, Minnesota, Nebraska, Ohio and Wisconsin, and the Indiana state court action purports to be on behalf of a national class of landowners. In general, the complaints seek damages on theories of trespass and unjust enrichment, as well as punitive damages. On July&amp;nbsp;18, 2008, a federal district court in Massachusetts entered an order preliminarily approving a settlement of all of the actions described above, except the action pending in Tennessee. On September&amp;nbsp;10,&amp;nbsp;2009, the court denied final approval of the settlement on grounds that it lacked subject matter jurisdiction. On December&amp;nbsp;9,&amp;nbsp;2009, the court issued a revised ruling that, among other things, denied a motion for approval as moot and dismissed the matter for lack of subject matter jurisdiction. The parties are now engaged in negotiating settlements on a state-by-state basis, and have filed and received preliminary approval of a settlement in Illinois federal court. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 10px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;One of our subsidiaries, Qwest Communications Company, LLC ("QCC"), is a defendant in litigation filed by several billing agents for the owners of payphones seeking compensation for coinless calls made from payphones. The matter is pending in the United States District Court for the District of Columbia. Generally, the payphone owners claim that QCC underpaid the amount of compensation due to them under Federal Communications Commission regulations for coinless calls placed from their phones onto QCC's network. The claim seeks compensation for calls, as well as interest and attorneys' fees. In March 2011, the parties agreed to a settlement, pursuant to which the parties agreed to dismiss the case with prejudice. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 10px; text-indent: 40px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;A putative class action filed on behalf of certain of our retirees was brought against us, the Qwest Group Life Insurance Plan and other related entities in federal district court in&amp;nbsp;Colorado in connection with our decision to reduce the life insurance benefit for these retirees to a $&lt;font class="_mt"&gt;10,000&lt;/font&gt; benefit. The action was filed on March&amp;nbsp;30,&amp;nbsp;2007. The plaintiffs allege, among other things, that we and other defendants were obligated to continue their life insurance benefit at the levels in place before we decided to reduce them. Plaintiffs seek restoration of the life insurance benefit to previous levels and certain equitable relief. The district court ruled in our favor on the central issue of whether we properly reserved our right to reduce the life insurance benefit under applicable law and plan documents. The plaintiffs subsequently amended their complaint to assert additional claims. In 2009, the court dismissed or granted summary judgment to us on all of the plaintiffs' claims. The plaintiffs have appealed the court's decision to the Tenth Circuit Court of Appeals. &lt;/font&gt;&lt;/p&gt; &lt;/div&gt;</NonNumbericText><NonNumericTextHeader>(12) Commitments and Contingencies

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