10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                to                               

Commission File No. 001-7784

CENTURYLINK, INC.

(Exact name of registrant as specified in its charter)

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)

(318) 388-9000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $1.00	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: Stock Options

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý        No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o        No ý

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ý        No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý        No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o  (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o        No ý

On February 17, 2016, 543,852,862 shares of common stock were outstanding. The aggregate market value of the voting stock held by non-affiliates as of June 30, 2015 was $16.4 billion.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Registrant's Proxy Statement to be furnished in connection with the 2016 annual meeting of shareholders are incorporated by reference in Part III of this Annual Report.

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TABLE OF CONTENTS

PART I
Item 1. Business	3
Item 1A. Risk Factors	17
Item 1B. Unresolved Staff Comments	36
Item 2. Properties	37
Item 3. Legal Proceedings	37
Item 4. Mine Safety Disclosures	37
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	38
Item 6. Selected Financial Data	40
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	42
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	69
Item 8. Consolidated Financial Statements and Supplementary Data	70
Consolidated Statements of Operations	72
Consolidated Statements of Comprehensive Income (Loss)	73
Consolidated Balance Sheets	74
Consolidated Statements of Cash Flows	75
Consolidated Statements of Stockholders' Equity	76
Notes to Consolidated Financial Statements	77
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	122
Item 9A. Controls and Procedures	122
Item 9B. Other Information	123
PART III
Item 10. Directors, Executive Officers and Corporate Governance	123
Item 11. Executive Compensation	123
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	124
Item 13. Certain Relationships and Related Transactions and Director Independence	124
Item 14. Principal Accountant Fees and Services	124
PART IV
Item 15. Exhibits and Financial Statement Schedules	125
Signatures	138

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Unless the context requires otherwise, references in this Annual Report to "CenturyLink," "we," "us" and "our" refer to CenturyLink, Inc. and its consolidated subsidiaries.

PART I

ITEM 1. BUSINESS

Overview

We are an integrated communications company engaged primarily in providing an array of communications services to our residential and business customers. Our communications services include local and long-distance voice, high-speed Internet, Multi-Protocol Label Switching ("MPLS"), private line (including special access), data integration, Ethernet, colocation, managed hosting (including cloud hosting), network, public access, video, wireless and other ancillary services. We strive to maintain our customer relationships by, among other things, bundling our service offerings to provide our customers with a complete offering of integrated communications services.

Based on our approximately 11.7 million total access lines at December 31, 2015, we believe we are the third largest wireline telecommunications company in the United States. We operate 74% of our total access lines in portions of Colorado, Arizona, Washington, Minnesota, Florida, North Carolina, Oregon, Iowa, Utah, New Mexico, Missouri, and Nevada. We also provide local service in portions of Idaho, Ohio, Wisconsin, Virginia, Texas, Nebraska, Pennsylvania, Montana, Alabama, Indiana, Arkansas, Wyoming, Tennessee, New Jersey, South Dakota, North Dakota, Kansas, Louisiana, South Carolina, Michigan, Illinois, Georgia, Mississippi, Oklahoma, and California. In the portion of these 37 states where we have access lines, which we refer to as our local service area, we are the incumbent local telephone company.

At December 31, 2015, we served approximately 6.0 million high-speed Internet subscribers and 285 thousand Prism TV subscribers. We also operate 59 data centers throughout North America, Europe and Asia.

We were incorporated under the laws of the State of Louisiana in 1968. Our principal executive offices are located at 100 CenturyLink Drive, Monroe, Louisiana 71203 and our telephone number is (318) 388-9000.

For a discussion of certain risks applicable to our business, see "Risk Factors" in Item 1A of Part I of this Annual Report. The summary financial information in this section should be read in conjunction with, and is qualified by reference to, our consolidated financial statements and notes thereto in Item 8 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this Annual Report.

Financial and Operational Highlights

The following table summarizes the results of our consolidated operations:

	Years Ended December 31,
	2015(1)		2014(2)	2013(3)
	(Dollars in millions)
Consolidated statements of operations summary results:
Operating revenues	$	17,900	18,031	18,095
Operating expenses	15,295		15,621	16,642
Operating income	$	2,605	2,410	1,453
Net income (loss)	$	878	772	(239	)

_______________________________________________________________________________

⁽¹⁾  During 2015, we recognized an incremental $215 million of revenue associated with the Federal Communications Commission ("FCC") Connect America Fund Phase 2 support program. For additional information, see Note 1—Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report.

⁽²⁾  During 2014, we recognized a $60 million tax benefit associated with a deduction for the tax basis for worthless stock in a wholly-owned foreign subsidiary and a $63 million pension settlement charge. For additional information, see Note 13—Quarterly Financial Data (Unaudited) to our consolidated financial statements included in Item 8 of Part II of this Annual Report.

⁽³⁾  During 2013, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $1.092 billion for goodwill attributed to one of our previous operating segments and a litigation settlement charge of $235 million.

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The following table summarizes certain selected financial information from our consolidated balance sheets:

	As of December 31,
	2015		2014
	(Dollars in millions)
Consolidated balance sheets summary information:
Total assets (1)	$	47,604	49,103
Total long-term debt (1) (2)	20,225		20,503
Total stockholders' equity	14,060		15,023

_______________________________________________________________________________

⁽¹⁾  We adopted both ASU 2015-03 "Simplifying the Presentation of Debt Issuance Costs" and ASU 2015-17 "Balance Sheet Classification of Deferred Taxes" by retrospectively applying the requirements of the ASUs to our previously issued consolidated financial statements. See further discussion in Note 1—Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report.

⁽²⁾  Total long-term debt is the sum of current maturities of long-term debt and long-term debt on our consolidated balance sheets. For additional information on our total long-term debt, see Note 3—Long-Term Debt and Credit Facilities to our consolidated financial statements in Item 8 of Part II of this Annual Report. For information on our total obligations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Future Contractual Obligations" in Item 7 of Part II of this Annual Report.

The following table summarizes certain of our operational metrics:

	As of December 31,
	2015	2014	2013
	(in thousands except for data centers, which are actuals)
Operational metrics:
Total access lines (1)	11,748	12,394	13,002
Total high-speed Internet subscribers (1)	6,048	6,082	5,991
Total Prism TV subscribers	285	242	175
Total data centers (2)	59	58	55

_______________________________________________________________________________

⁽¹⁾  Access lines are lines reaching from the customers' premises to a connection with the public network and 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. Our methodology for counting our access lines and high-speed Internet subscribers 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 either colocation services, multi-tenant managed services, or both. Our data centers are located in North America, Europe and Asia.

Our methodology for counting access lines, high-speed Internet subscribers, Prism TV subscribers and data centers may not be comparable to those of other companies.

Substantially all of our long-lived assets are located in the United States and substantially all of our total consolidated operating revenues are from customers located in the United States. We estimate that approximately 2% of our consolidated revenues is derived from providing telecommunications, colocation and hosting services outside the United States.

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Operations

Segments

We are organized into operating segments based on customer type, business and consumer. These operating segments are our two reportable segments in our consolidated financial statements:

• Business Segment. Consists generally of providing strategic, legacy and data integration products and services to small, medium and enterprise business, 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, local and long-distance voice services, including the sale of unbundled network elements ("UNEs") which allow our wholesale customers to use all or part of our network 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; and

• Consumer Segment. 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, video (including our Prism TV services) and wireless services. Our legacy services offered to these customers include local and long-distance voice service.

The following table shows the composition of our revenues by segment under our current segment categorization for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,						Percent Change
	2015		2014		2013		2015 vs 2014		2014 vs 2013
Percentage of revenues:
Business segment	59	%	61	%	61	%	(2	)%	—	%
Consumer segment	34	%	33	%	33	%	1	%	—	%
Other operating revenues	7	%	6	%	6	%	1	%	—	%
Total operating revenues	100	%	100	%	100	%

For additional information on our segment data, including information on certain centrally-managed assets and expenses not reflected in our segment results, see Note 12—Segment Information to our consolidated financial statements in Item 8 of Part II of this Annual Report and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this Annual Report.

Products and Services

Our products and services include local and long-distance voice, high-speed Internet, MPLS, private line (including special access), data integration, Ethernet, colocation, managed hosting (including cloud hosting), network, public access, video, wireless and other ancillary services.

We offer our customers the ability to bundle together several products and services. For example, we offer integrated and unlimited local and long-distance voice services. Our customers can also bundle two or more services such as high-speed Internet, video (including DIRECTV through our strategic partnership), voice and Verizon Wireless (through our strategic partnership) services. We believe our customers value the convenience and price discounts associated with receiving multiple services through a single company.

Most of our products and services are provided using our telecommunications network, which consists of voice and data switches, copper cables, fiber-optic cables and other equipment. Our network serves approximately 11.7 million access lines and forms a portion of the public switched telephone network, or PSTN. For more information on our network, see “Business—Network Architecture” below.

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Described in greater detail below are our key products and services.

Strategic Services

We primarily focus our marketing and sales efforts on our “strategic” services, which are those services for which demand generally remains strong and that we believe are most important to our future performance. Generally speaking, our strategic services enable our customers to access the Internet, connect to private networks and transmit data, and enhance the security, reliability and efficiency of our customers’ communications. Our strategic services are comprised of the following:

• High-speed Internet. Our high-speed Internet services allow customers to connect to the Internet through their existing telephone lines or fiber-optic cables at high speeds. Substantially all of our high-speed Internet subscribers are located within the local service area of our wireline telephone operations;

• MPLS. Multi-Protocol Label Switching is standards-approved data networking technology that we provide to support real-time voice and video. This technology allows network operators flexibility to divert and route traffic around link failures, congestion and bottlenecks;

• Private Line. A private line (including special access) is a direct circuit or channel specifically dedicated for the purpose of directly connecting two or more sites. Private line service offers a high-speed, secure solution for frequent transmission of large amounts of data between sites, including wireless backhaul transmissions;

• Ethernet. Ethernet services include point-to-point and multi-point equipment configurations that facilitate data transmissions across metropolitan areas and wide area networks. Ethernet services are also used to provide transmission services to wireless service providers that use our fiber-optic cables connected to their towers;

• Colocation. Colocation services enable our customers to install their own information technology ("IT") equipment in our data centers;

• Managed Hosting. Managed hosting includes provision of centralized IT infrastructure and a variety of managed services including cloud and traditional computing, application management, back-up, storage, and other advanced services including planning, design, implementation and support services;

• Video. Our video services include our facilities-based video, marketed as CenturyLink Prism TV, which is a premium entertainment service that allows our customers to watch hundreds of television or cable channels and record up to four shows on one home digital video recorder. We also offer satellite digital television under an arrangement with DIRECTV that allows us to market, sell and bill for its services under its brand name;

• VoIP. Voice over Internet Protocol, or VoIP, is a real-time, two-way voice communication service (similar to our traditional voice services) that originates over a broadband connection and often terminates on the PSTN; and

• Managed Services. Managed services represents a blend of network, hosting, cloud, and IT services that typically require ongoing support from our staff. These services frequently involve equipment or networks owned, acquired or controlled by the customer and often include consulting or software development.

Legacy Services

Our "legacy" services represent our traditional voice, data and network services, which include the following:

• Local Voice Services. We offer local calling services for our residential and business customers within the local service area of our wireline markets, generally for a fixed monthly charge. These services include a number of enhanced calling features and other services, such as call forwarding, caller identification, conference calling, voice mail, selective call ringing and call waiting, for which we generally charge an additional monthly fee. We also generate revenues from non-recurring services, such as inside wire installation, maintenance services, service activation and reactivation. For our wholesale customers, our local calling service offerings include primarily the resale of our voice services and the sale of UNEs, which allow our wholesale customers to use all or part of our network to provide voice and data services to their customers. Local calling services provided to our wholesale customers allow other telecommunications companies the ability to originate or terminate telecommunications services on our network;

• Long-distance Voice Services. We offer our residential and business customers domestic and international long-distance services and toll-free services. Our international long-distance services include voice calls that either terminate or originate with our customers in the United States;

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• Switched Access Services. As part of our wholesale services, we provide various forms of switched access services to wireline and wireless service providers for the use of our facilities to originate and terminate their interstate and intrastate voice transmissions;

• ISDN. We offer integrated services digital network ("ISDN") services, which use regular telephone lines to support voice, video and data applications; and

• WAN. We offer wide area network ("WAN") services, which allow a local communications network to link to networks in remote locations.

Data Integration

Data integration includes 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 business customers.

Other Operating Revenues

Other operating revenues consist primarily of Connect America Fund ("CAF") support payments, Universal Service Fund ("USF") support payments and USF surcharges. We receive federal support payments from both CAF Phase 1 and CAF Phase 2 programs, and support payments from both federal and state USF programs. These support payments are government subsidies designed to reimburse us for various costs related to certain telecommunications services, including the costs of deploying, maintaining and operating voice and high-speed Internet infrastructure 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.

Additional Information

From time to time, we also make investments in other communications or technology companies.

For further information on regulatory, technological and competitive changes that could impact our revenues, see "Regulation" and "Competition" under this Item 1 below and "Risk Factors" under Item 1A below. For more information on the financial contributions of our various services, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this Annual Report.

Patents, Trade Names, Trademarks and Copyrights

Either directly or through our subsidiaries, we have rights in various patents, trade names, trademarks, copyrights and other intellectual property necessary to conduct our business, such as our CenturyLink^® and Prism^® brand names. Our services often use the intellectual property of others, including licensed software. We also occasionally license our intellectual property to others as we deem appropriate.

We periodically receive offers from third parties to purchase or obtain licenses for patents and other intellectual property rights in exchange for royalties or other payments. We also periodically receive notices, or are named in lawsuits, alleging that our products or services infringe on patents or other intellectual property rights of third parties. In certain instances, these matters can potentially adversely impact our operations, operating results or financial position. For additional information, see “Risk Factors—Risks Impacting Our Business” in Item 1A of Part I of this Annual Report, and Note 14—Commitments and Contingencies to our consolidated financial statements in Item 8 of Part II of this Annual Report.

Sales and Marketing

We maintain local offices in most of the larger population centers within our local service area. These offices provide sales and customer support services in the community. We also rely on our call center personnel and a variety of channel partners to promote sales of services that meet the needs of our customers. Our sales and marketing strategy is to enhance our sales by offering solutions tailored to the needs of our various customers and promoting our brands. Our offerings include both stand-alone services and bundled services designed to meet the needs of different customer segments.

We conduct most of our operations under the brand name "CenturyLink." Our satellite television service is offered on a co-branded basis under the "DIRECTV" name. Our switched digital television service offering is branded under the name "Prism TV." The wireless service that we offer under our agency agreement with Verizon Wireless is marketed under the "Verizon Wireless" brand name.

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Our sales and marketing approach to our residential customers emphasizes customer-oriented sales, marketing and service with a local presence. Our marketing plans include marketing our products and services primarily through direct sales representatives, inbound call centers, local retail stores, telemarketing and third parties, including retailers, satellite television providers, door to door sales agents and digital marketing firms. We support our distribution with digital marketing, direct mail, bill inserts, newspaper and television advertising, website promotions, public relations activities and sponsorship of community events and sports venues.

Similarly, our sales and marketing approach to our business customers includes a commitment to provide comprehensive communications and IT solutions for business, wholesale and governmental customers of all sizes, ranging from small offices to select enterprise customers. Our marketing plans include marketing our products and services primarily through digital advertising, direct sales representatives, inbound call centers, telemarketing and third parties, including telecommunications agents, system integrators, value-added resellers and other telecommunications firms. We support our distribution through digital advertising, events, television advertising, website promotions and public relations.

Network Architecture

Most of our products and services are provided using our telecommunications network, which consists of voice switches, data switches and routers, high-speed transport equipment, fiber-optic and copper cables and other equipment. Our local exchange carrier networks also include central offices and remote site assets. A substantial portion of our equipment operates with licensed software. As of December 31, 2015, we maintained approximately 1.0 million miles of copper plant and approximately 259 thousand miles of domestic fiber-optic plant.

We continue to enhance and expand our network by deploying broadband-enabled technologies to provide additional capacity to our customers. Rapid and significant changes in technology are expected to continue in the telecommunications industry. Our future success will depend, in part, on our ability to anticipate and adapt to changes in customer demands and technology. In particular, we anticipate that continued increases in broadband usage by our customers will require us to make significant capital expenditures to increase network capacity or to implement network management practices to alleviate network capacity shortages. The Federal Communications Commission has defined "broadband service" as Internet access service with a minimum transmission speed of 25 megabits per second, which could create additional requirements for higher capital spending to address marketing and competitive issues. Any such additional expenditures could adversely impact our results of operations and financial condition.

Similarly, we continue to take steps to simplify and modernize our network. To attain our objectives, we plan to continue to undertake several complex projects that we expect will be costly and take several years to complete. The costs of these projects could increase materially if we conclude that we need to replace any or all of our legacy systems.

Like other large telecommunications companies, we are a constant target of cyber-attacks of varying degrees, which has caused us to spend increasingly more time and money to deal with increasingly sophisticated attacks. Although none of our resulting security breaches to date have materially adversely affected our business, results of operations or financial condition, we periodically notify our customers, our employees or the public of select breaches.

We rely on several other communications companies to provide our offerings. We lease a significant portion of our core fiber network from our competitors and other third parties. Many of these leases will lapse in future years. All of our satellite television and wireless voice services are provided by other carriers under agency agreements, and some of our other services are reliant upon reselling arrangements with other carriers. Our future ability to provide services on the terms of our current offerings will depend in part upon our ability to renew or replace these leases, agreements and arrangements on terms substantially similar to those currently in effect.

For additional information regarding our systems, network, cyber risks, capital expenditure requirements and reliance upon third parties, see "Risk Factors", generally, in Item 1A of Part I of this Annual Report, and, in particular, "Risk Factors—Risks Affecting Our Business" and "Risk Factors—Risks Affecting Our Liquidity and Capital Resources." For more information on our properties, see Item 2 of Part I of this Annual Report.

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Regulation

Overview

As discussed further below, our operations are subject to significant local, state, federal and foreign laws and regulations.

We are subject to significant regulation by the Federal Communications Commission ("FCC"), which regulates interstate communications, and state utility commissions, which regulate intrastate communications. These agencies (i) issue rules to protect consumers and promote competition, (ii) set the rates that telecommunication companies charge each other for exchanging traffic, and (iii) have traditionally developed and administered support programs designed to subsidize the provision of services to high-cost rural areas. In most states, local voice service, switched and special access services and interconnection services are subject to price regulation, although the extent of regulation varies by type of service and geographic region. In addition, we are required to maintain licenses with the FCC and with state utility commissions. Laws and regulations in many states restrict the manner in which a licensed entity can interact with affiliates, transfer assets, issue debt and engage in other business activities. Many acquisitions and divestitures require approval by the FCC and some state commissions. These agencies typically have the authority to withhold their approval, or to request or impose substantial conditions upon the transacting parties in connection with granting their approvals.

Our telephone operating companies are considered incumbent local exchange carriers ("ILECs"). Historically, ILECs operated as regulated monopolies having the exclusive right and responsibility to provide local telephone services in their franchised service territories. As we discuss in greater detail below, passage of the Telecommunications Act of 1996, coupled with state legislative and regulatory initiatives and technological change, fundamentally altered the telephone industry by generally reducing the regulation of ILECs and creating a substantial increase in the number of competitors. The following description discusses some of the major industry regulations that affect our traditional telephone operations, but numerous other regulations not discussed below could also impact us. Some legislation and regulations are currently the subject of judicial, legislative and administrative proceedings which could substantially change the manner in which the telecommunications industry operates and the amount of revenues we receive for our services. Neither the outcome of these proceedings, nor their potential impact on us, can be predicted at this time. For additional information, see "Risk Factors" in Item 1A of Part I of this Annual Report.

The laws and regulations governing our affairs are quite complex and occasionally in conflict with each other. From time to time, we are fined for failing to meet applicable regulations or service requirements.

Federal Regulation

General

We are required to comply with the Communications Act of 1934. Among other things, this law requires our ILECs to offer various of our legacy services at just and reasonable rates and on non-discriminatory terms. The Telecommunications Act of 1996 materially amended the Communications Act of 1934, primarily to promote competition.

The FCC regulates interstate services we provide, including the special access charges we bill for wholesale network transmission and the interstate access charges that we bill to long-distance companies and other communications companies in connection with the origination and termination of interstate phone calls. Additionally, the FCC regulates a number of aspects of our business related to privacy, homeland security and network infrastructure, including our access to and use of local telephone numbers and our provision of emergency 911 services. The FCC has responsibility for maintaining and administering support programs designed to expand nationwide access to communications services (which are described further below), as well as other programs supporting service to low-income households, schools and libraries, and rural health care providers.

In recent years, our operations and those of other telecommunications carriers have been further impacted by legislation and regulation imposing additional obligations on us, particularly with regards to providing voice and high-speed Internet service, bolstering homeland security, increasing disaster recovery requirements, minimizing environmental impacts and enhancing privacy. These laws include the Communications Assistance for Law Enforcement Act, and laws governing local telephone number portability and customer proprietary network information requirements. In addition, the FCC has heightened its focus on 911 reliability. The FCC has imposed fines on us and other companies for 911 outages and has adopted new compliance requirements for 911 service. We are making investments to protect against future 911 outages as well as incurring compliance-related costs to meet the FCC's 911 reliability standards. All of these laws and regulations may cause us to incur additional costs and could impact our ability to compete effectively.

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In 2012, the FCC initiated a special access proceeding and requested data, information and documents to allow it to conduct a comprehensive evaluation of competition in the special access market. In late 2015, the FCC initiated a special access tariff investigation in order to review specific terms and conditions related to long-term special access contracts and discount plans. As part of its evaluations, the FCC is reviewing special access rates, terms and conditions. The ultimate impact of these proceedings on us is currently unknown. However, if the FCC were to adopt significant changes in regulations affecting special access services, this could adversely impact our operations or financial results.

In 2015, the FCC issued an order regulating the manner in which ILECs can discontinue or reduce certain copper-based services. This order requires ILECs to provide prior notice to certain customers of their proposed change in services, and in certain cases to provide replacement offerings on reasonably comparable terms and conditions. We expect that this order will limit our flexibility to react to changing conditions in the communications industry.

Intercarrier Compensation and Universal Service

For decades, the FCC has regularly considered various intercarrier compensation reforms, generally with a goal to create a uniform mechanism to be used by the entire telecommunications industry for payments between carriers originating, terminating, or carrying telecommunications traffic. The FCC has also traditionally administered support programs designed to promote the deployment of voice and high-speed Internet services in high-cost rural areas of the country.

In October 2011, the FCC adopted the Connect America and Intercarrier Compensation Reform order ("the 2011 order"), intended to reform the existing regulatory regime to recognize ongoing shifts to new technologies, including VoIP, and to re-direct universal service funding to foster nationwide broadband coverage. The 2011 order provides for a multi-year transition as terminating intercarrier compensation charges are reduced, universal service funding is explicitly targeted to broadband deployment, and line charges paid by end user customers are increased. These changes have increased the pace of reductions in the amount of switched access revenues related to our wholesale services, while creating opportunities for increased federal USF support and retail revenue funding.

In late 2011, numerous parties filed a petition for reconsideration with the FCC seeking numerous revisions to the 2011 order. Future judicial challenges to the 2011 order are also possible, which could alter or delay the FCC's proposed changes. In addition, based on the outcome of the FCC proceedings, various state commissions may consider changes to their universal service funds or intrastate access rates. Rulemaking designed to implement the order is not complete, and several FCC proceedings relating to the 2011 order remain pending. For these and other reasons, we cannot predict the ultimate impact of these proceedings at this time.

As a result of the 2011 order, a new Universal Service program was created to deploy broadband to unserved and underserved rural areas utilizing the Connect America Fund or "CAF". The CAF substantially replaces interstate USF funding previously utilized to support voice service in high-cost rural markets. There are two phases to the CAF program, CAF Phase 1 is a one-time broadband grant program while CAF Phase 2 is a multi-year recurring subsidy program for more extensive broadband deployment in price-cap ILEC territories.

In August 2015, we agreed to accept from the FCC CAF Phase 2 funding of approximately $500 million per year for six years to fund the deployment of voice and high-speed Internet infrastructure for approximately 1.2 million rural households and businesses in 33 states. The funding from the CAF Phase 2 support program is expected to substantially supplant the funding we previously received from the interstate USF program that we previously utilized to support voice services in high-cost rural markets in these 33 states. In September of 2015, we began receiving payments from the FCC under the new CAF Phase 2 support program, which included (i) monthly payments at a higher rate than under the interstate USF support and (ii) a substantial one-time cumulative catch-up payment designed to address program transitioning issues.

We declined annual funding of approximately $10 million in four states, and we expect the funding from the CAF Phase 2 support program for these four states will be auctioned by the FCC, perhaps in the latter part of 2016. In these four states, the interstate USF support we have historically received is expected to continue until the CAF Phase 2 auctions are completed.

As a result of accepting CAF Phase 2 support payments for 33 states, we will be obligated to make substantial capital expenditures to build infrastructure by certain specified milestone deadlines. Future funding is contingent upon our compliance with these infrastructure buildout commitments and certain other service requirements, including certain minimum transmission speed requirements (broadband service with download speeds of 10 megabits per second and upload speeds of 1 megabit per second). In addition, if we are not in compliance with FCC measures at the end of the six-year CAF Phase 2 period, we will have 12 months to attain full compliance. If we are not in full compliance after the additional 12 months, we would incur a penalty equal to 1.89 times the average amount of support per location received in the state over the six-year term, plus a potential penalty of 10% of the total CAF Phase 2 support over the six-year term for the state. For information on the risks associated with participating in this program, see Item 1A of Part I in this Annual Report.

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For additional information about the potential financial impact of the CAF Phase 2 program, see Item 7 of Part II of this Annual Report.

Broadband Regulation

In February 2015, the FCC adopted new regulations that regulate Internet services as a public utility under Title II of the Communications Act of 1934. We anticipate that these regulations and any related rules will be reviewed by both the courts and Congress. At this time, we cannot estimate the impact this may have on our business.

The FCC recently adopted a new broadband standard of 25 Mbps download speed and 3 Mbps of upload speed. At this time, we are not aware of any regulatory mandates requiring us to deploy this target speed. The new target is simply a benchmark by which the FCC will evaluate broadband deployment progress in the future. However, the FCC could attempt to utilize this broadband speed target in future regulatory proceedings.

State Regulation

In recent years, most states have reduced their regulation of ILECs. Nonetheless, state regulatory commissions generally continue to regulate local service rates, intrastate access charges, state universal service funds and in some cases service quality. We are generally regulated under various forms of alternative regulation that typically limit our ability to increase rates for stand-alone, basic local voice service, but relieve us from the requirement to meet certain earnings tests. In a number of states, we have gained pricing freedom for the majority of retail services other than stand-alone basic consumer voice service. In most of the states in which we operate, we have gained pricing flexibility for certain enhanced calling services, such as caller identification and for bundled services that also include local voice service.

Under state law, our telephone operating subsidiaries are typically governed by laws and regulations that (i) regulate the purchase and sale of ILECs, (ii) prescribe certain reporting requirements, (iii) require ILECs to provide service under publicly-filed tariffs setting forth the terms, conditions and prices of regulated services, (iv) limit ILECs' ability to borrow and pledge their assets, (v) regulate transactions between ILECs and their affiliates and (vi) impose various other service standards.

Unlike many of our competitors, as an ILEC we generally face "carrier of last resort" obligations which include an ongoing requirement to provide service to all prospective and current customers in our service area who request service and are willing to pay rates prescribed in our tariffs. In certain situations, this may constitute a competitive disadvantage to us if competitors can choose to focus on low-cost profitable customers and withhold service from high-cost unprofitable customers. In addition, strict adherence to carrier-of-last-resort requirements may force us to construct facilities with a low likelihood of attractive economic return.

We operate in states where traditional cost recovery mechanisms, including rate structures, are under evaluation or have been modified. As laws and regulations change, there can be no assurance that these mechanisms will continue to provide us with any cost recovery.

For several years, we have faced various carrier complaints, legislation or other investigations regarding our intrastate switched access rates in several of our states. The FCC's 2011 order preempted state regulatory commissions’ jurisdiction over all terminating access charges, including intrastate access charges that have historically been subject to exclusive state jurisdiction. Excluding the rate implications contemplated on a prospective basis by this FCC order, we will continue to vigorously defend and seek to collect our intrastate switched access revenues subject to outstanding disputes. The outcomes of these disputes cannot be determined at this time. If we are required to reduce our intrastate switched access rates as a result of any of these disputes or state initiatives, we will seek to recover displaced switched access revenues from state universal service funds or other services. However, the amount of such recovery, particularly from residential customers, is not assured.

Other Regulations

We are subject to federal and state regulations of customer service standards related to Prism TV. The metrics that are followed are generally the federal rules, but local franchise authorities have the ability to adopt more stringent standards. The FCC has largely delegated its enforcement powers to the individual local franchise authorities. We are subject to penalties in many of our local franchise agreements if we miss customer service standards.

Certain of our telecommunications, colocation and hosting services conducted in foreign countries are or may become subject to various foreign laws. Some of the legal requirements governing our foreign operations are more restrictive than or conflict with those governing our domestic operations, which raises our compliance costs and regulatory risks.

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Various foreign, federal and state laws govern our storage, maintenance and use of customer data, including a wide range of consumer protection, data protection, privacy, intellectual property and similar laws. The application, interpretation and enforcement of these laws are often uncertain, and may be interpreted and applied inconsistently from jurisdiction to jurisdiction. Various foreign, federal and state legislative or regulatory bodies have recently adopted increasingly restrictive laws or regulations governing the protection or retention of data, and others are contemplating similar actions.

For additional information about these matters, see “Risk Factors—Risks Affecting Our Business” and “Risk Factors—Risks Relating to Legal and Regulatory Matters.”

Competition

General

We compete in a rapidly evolving and highly competitive market and we expect intense competition to continue. In addition to competition from larger national telecommunications providers, we are facing increasing competition from several other sources, including cable and satellite companies, wireless providers, technology companies, cloud companies, broadband providers, device providers, resellers, sales agents and facilities-based providers using their own networks as well as those leasing parts of our network. Technological advances and regulatory and legislative changes have increased opportunities for a wide range of alternative communications service providers, which in turn have increased competitive pressures on our business. These alternate providers often face fewer regulations and have lower cost structures than we do. In addition, the communications industry has, in recent years, experienced substantial consolidation; and some of our competitors in one or more lines of our business are generally larger, have stronger brand names, have more financial and business resources and have broader service offerings than we currently do.

Wireless telephone services are a significant source of competition with our ILEC services. It is increasingly common for customers to completely forego use of traditional wireline phone service and instead rely solely on wireless service for voice services. We anticipate this trend will continue, particularly as our older customers are replaced over time with younger customers who are less accustomed to using traditional wireline voice services. Technological and regulatory developments in wireless services, Wi-Fi, and other wired and wireless technologies have contributed to the development of alternatives to traditional landline voice services. Moreover, the growing prevalence of electronic mail, text messaging, social networking and similar digital non-voice communications services continues to reduce the demand for traditional landline voice services. These factors have led to a long-term systemic decline in the number of our wireline voice service customers.

The Telecommunications Act of 1996, which obligates ILECs to permit competitors to interconnect their facilities to the ILEC's network and to take various other steps that are designed to promote competition, imposes several duties on an ILEC if it receives a specific request from another entity which seeks to connect with or provide services using the ILEC's network. In addition, each ILEC is obligated to (i) negotiate interconnection agreements in good faith, (ii) provide nondiscriminatory "unbundled" access to all aspects of the ILEC's network, (iii) offer resale of its telecommunications services at wholesale rates and (iv) permit competitors, on terms and conditions (including rates) that are just, reasonable and nondiscriminatory, to colocate their physical plant on the ILEC's property, or provide virtual colocation if physical colocation is not practicable. Current FCC rules require ILECs to lease a network element only in those situations where competing carriers genuinely would be impaired without access to such network elements, and where the unbundling would not interfere with the development of facilities-based competition.

As a result of these regulatory, consumer and technological developments, ILECs also face competition from competitive local exchange carriers, or CLECs, particularly in densely populated areas. CLECs provide competing services through reselling an ILEC's local services, through use of an ILEC's unbundled network elements or through their own facilities.

Technological developments have led to the development of new products and services that have reduced the demand for our traditional services, as noted above, or that compete with traditional ILEC services. Technological improvements have enabled cable television companies to provide traditional circuit-switched telephone service over their cable networks, and several national cable companies have aggressively marketed these services. Similarly, companies providing VoIP services provide voice communication services over the Internet which compete with our traditional telephone service and our own VoIP services. In addition, demand for our broadband services could be adversely affected by advanced wireless data transmission technologies being deployed by wireless providers and by certain technologies permitting cable companies and other competitors to deliver faster average broadband transmission speeds than ours.

Similar to us, many cable, technology or other communications companies that previously offered a limited range of services are now offering diversified bundles of services, either through their own networks, reselling arrangements or joint ventures. As such, a growing number of companies are competing to serve the communications needs of the same customer base. Such activities will continue to place downward pressure on the demand for and pricing of our services.

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As both residential and business customers increasingly demand high-speed connections for entertainment, communications and productivity, we expect the demands on our network will continue to increase over the next several years. To succeed, we and other network-based providers must ensure that our networks can deliver competitive services that meet these increasing bandwidth and speed requirements. We plan to continue to invest in our network to be able to meet this future demand and to compete effectively. In addition, network reliability and security are increasingly important competitive factors in our business.

In addition to facing direct competition from those providers described above, ILECs increasingly face competition from alternate communication systems constructed by long distance carriers, large customers, municipalities or alternative access vendors. These systems are capable of originating or terminating calls without use of an ILEC's networks or switching services. Other potential sources of competition include non-carrier systems that are capable of bypassing ILECs' local networks, either partially or completely, through various means, including the provision of special access or independent switching services and the concentration of telecommunications traffic on a few of an ILEC's access lines. We anticipate that all these trends will continue and lead to decreased billable use of our networks.

Additional information about competitive pressures is located (i) under the heading "Risk Factors—Risks Affecting Our Business" in Item 1A of Part I of this Annual Report and (ii) in the discussion immediately below, which contains more specific information on how these trends in competition have impacted our segments.

Business Segment

Strategic Services

In connection with providing strategic services to our business customers, which includes our small, medium and enterprise business, wholesale and governmental customers, we compete against other telecommunication providers, as well as other regional and national carriers, other fiber providers, cable companies, CLECs and other enterprises, some of whom are substantially larger than us. Competition is based on price, bandwidth, quality and speed of service, promotions and bundled offerings. In providing broadband services, we compete primarily with cable companies, wireless providers, technology companies and other broadband service providers. Competition for private line services is based on price, network reach and reliability, service, promotions and bundled offerings. We face competition in Ethernet based services in the wholesale market from cable companies and fiber based CLEC providers.

Our competitors for providing integrated data, Internet, voice services and other IT services to our business customers range from mid-sized businesses to large enterprises. Due to the size and capacity of some of these companies, our competitors may be able to offer more inexpensive solutions to our customers. To compete, we focus on providing sophisticated, secure and performance-driven services to our business customers through our global infrastructure.

The number of companies providing business services has grown and increased competition for these services, particularly with respect to smaller business customers. Many of our competitors for strategic services are not subject to the same regulatory requirements as we are and therefore they are able to avoid significant regulatory costs and obligations.

Our competitors for cloud, hosting, colocation and other IT services include telecommunications companies, technology companies, cloud companies, colocation companies, hardware manufacturers and system integrators that support the in-house IT operations for a business or offer outsourcing solutions. Due to the size, capacity and strategically low pricing tactics of some of these companies, our competitors may be able to offer more inexpensive solutions to our customers. The increase in recent years in the number of companies providing these services has placed substantial downward pressure on pricing for a wide range of cloud, hosting, colocation and other IT services. We believe, however, that our hybrid IT services capabilities, which offer multiple products and services (including colocation, managed hosting, cloud and network services), could 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 hybrid cloud portfolio by adding differentiating features across the cloud spectrum, to include private and public services, and acquiring additional companies that we believe have strengthened our cloud products.

Legacy Services

We face intense competition with respect to our legacy services and continue to see customers migrating away from these services and into strategic services. In addition, our legacy services revenues have been, and we expect they will continue to be, adversely affected by product substitution, technological migration and price competition. For our wholesale customers, we will continue to be adversely affected by product substitution, technological migration, industry consolidation and mandated rate reductions. We face significant competition for access services from CLECs, cable companies, resellers and wireless service providers as well as some of our own wholesale markets customers, many of which are deploying their own networks to provide customers with local services. By doing so, these competitors reduce revenue producing traffic on our network.

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Data Integration

In providing data integration to our business customers, we compete primarily with large integrators, equipment providers and national telecommunication providers. Competition is based on package offerings, and as such we focus on providing these customers individualized and customizable packages. Our strategy is to provide our data integration through packages that include other strategic and legacy services. As such, in providing data integration we often face many of the same competitive pressures as we face in providing strategic and legacy services, as discussed above.

We expect data integration revenues to continue to fluctuate from quarter to quarter as this offering tends to be more sensitive than others to changes in the economy and in spending trends of our governmental customers. We further expect the profit margins on our data integration offerings to continue to be lower than those of our strategic and legacy services.

Consumer Segment

Strategic Services

With respect to providing our strategic services to residential customers, competition is based on price, bandwidth, quality and speed of service, promotions and bundled offerings. Wireless carriers' fourth generation, or 4G, services are allowing them to more directly compete with our strategic services. The manner in which we compete for high-speed Internet customers in this segment is substantially similar to the manner in which we compete for business customers, as described in the above section. In reselling DIRECTV video services, we compete primarily with cable and other satellite companies as well as other sales agents and resellers. Our Prism TV residential video service faces substantial competition from a variety of competitors, including well-established cable companies, satellite companies and several national companies that deliver content over the Internet and on mobile devices. Many of our competitors for these strategic services are not subject to the same regulatory requirements as we are, and therefore are able to avoid significant regulatory costs and obligations.

Our strategy for maintaining and increasing our base of broadband customers is based on pricing, packaging of services and features, quality of service and meeting customer care needs. In order to remain competitive, we believe continually increasing connection speeds is important. As a result, we continue to invest in our network, which allows for the delivery of higher speed broadband services. We also continue to expand our marketing and product bundling efforts by offering a variety of bundled products and services with various pricing discounts, as we compete in a maturing market in which a significant portion of consumers already have broadband services. We offer these bundled products and services through various sales and marketing opportunities as further described above under the heading "Sales and Marketing."

Legacy Services

Although our status as an ILEC continues to provide us advantages in providing local services in our local service area, as noted above, we increasingly face significant competition as an increasing number of consumers are willing to substitute cable, wireless and electronic communications for traditional voice telecommunications services. This has led to an increase in the number and type of competitors within our industry, price compression and a decrease in our market share. As a result of this product substitution, we face greater competition in providing local and long-distance voice services from wireless providers, resellers and sales agents (including ourselves), social media hosts and broadband service providers, including cable companies. We also continue to compete with traditional telecommunications providers, such as national carriers, smaller regional providers, CLECs and independent telephone companies.

Our strategy to manage access line loss is based primarily on our pricing, packaging of services and features, quality of service and meeting customer care needs. While bundle price discounts have resulted in lower average revenues for our individual services, we believe service bundles continue to positively impact our customer retention.

Acquisitions

During the fourth quarter of 2014, we acquired all of the outstanding stock of two companies for total consideration of $95 million, net of $2 million acquired cash and including immaterial future cash payments. During the year ended December 31, 2013, we acquired all of the outstanding stock of two companies for total cash consideration of $160 million. In each case, the acquisitions were designed to augment our hosting services or our emerging IT services.

We regularly evaluate the possibility of acquiring additional assets in exchange for cash, securities or other properties, and at any given time may be engaged in discussions or negotiations regarding additional acquisitions. We generally do not announce our acquisitions or dispositions until we have entered into a preliminary or definitive agreement.

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Environmental Compliance

From time to time we may incur environmental compliance and remediation expenses, mainly resulting from owning or operating prior industrial sites or operating vehicle fleets or power supplies for our communications equipment. Although we cannot assess with certainty the impact of any future compliance and remediation obligations or provide you with any assurances regarding the ultimate impact thereof, we do not currently believe that future environmental compliance and remediation expenditures will have a material adverse effect on our financial condition or results of operations. For additional information, see Item 1A of Part II of this Annual Report and Note 14—Commitments and Contingencies included in Item 8 of Part II of this Annual Report.

Seasonality

Overall, our business is not materially impacted by seasonality. Our network-related operating expenses are, however, generally higher in the second and third quarters of the year. From time to time, weather related problems have resulted in increased costs to repair our network and respond to service calls in some of our markets. The amount and timing of these costs are subject to the weather patterns of any given year, but have generally been highest during the third quarter and have been related to damage from severe storms, including hurricanes, tropical storms and tornadoes in our markets along the Atlantic and Gulf of Mexico coastlines.

Employees

At December 31, 2015, we had approximately 43,000 employees, of which approximately 16,000 are members of either the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). See the discussion of risks relating to our labor relations in "Risk Factors—Risks Affecting Our Business" in Item 1A of Part I of this Annual Report.

Over the last several years, we have reduced our workforce primarily due to (i) integration efforts from our acquisitions, (ii) increased competitive pressures, and (iii) the loss of access lines and related legacy revenues.

Website Access and Important Investor Information

Our website is www.centurylink.com. The information contained on, or that may be accessed through, our website is not part of this Annual Report. You may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports in the "Investor Relations" section of our website (ir.centurylink.com) under the heading "SEC Filings." These reports are available on our website as soon as reasonably practicable after we electronically file them with the Securities and Exchange Commission ("SEC"). From time to time we also use our website to webcast our earnings calls and certain of our meetings with investors or other members of the investment community.

We have adopted a written code of conduct that serves as the code of ethics applicable to our directors, officers and employees, in accordance with applicable laws and rules promulgated by the SEC and the New York Stock Exchange. In the event that we make any changes (other than by a technical, administrative or non-substantive amendment) to, or provide any waivers from, the provisions of our code of conduct applicable to our directors or executive officers, we intend to disclose these events on our website or in a report on Form 8-K filed with the SEC. The code of conduct, as well as copies of our guidelines on significant governance issues and the charters of our audit committee, compensation committee, nominating and corporate governance committee and risk evaluation committee, are also available in the "Corporate Governance" section of our website at www.centurylink.com/Pages/AboutUs/Governance/ or in print to any shareholder who requests them by sending a written request to our Corporate Secretary at CenturyLink, Inc., 100 CenturyLink Drive, Monroe, Louisiana, 71203.

Investors may also read and copy any materials filed with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. For information on the operation of the Public Reference Room, you are encouraged to call the SEC at 1-800-SEC-0330. For all of our electronic filings, the SEC maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC.

In connection with filing this Annual Report, our chief executive officer and chief financial officer made the certifications regarding our financial disclosures required under the Sarbanes-Oxley Act of 2002, and its related regulations. In addition, during 2015, our chief executive officer certified to the New York Stock Exchange that he was unaware of any violations by us of the New York Stock Exchange's corporate governance listing standards.

We typically disclose material non-public information by disseminating press releases, making public filings with the SEC, or disclosing information during publicly accessible meetings or conference calls. Nonetheless, from time to time we have used, and intend to continue to use, our website and social media accounts to augment our disclosures.

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Special Note Regarding Forward-Looking Statements and Related Matters

This Annual Report and other documents filed by us under the federal securities law include, and future oral or written statements or press releases by us and our management may include, forward-looking statements about our business, financial condition, operating results and prospects. These statements constitute "forward-looking" statements as defined by, and are subject to the "safe harbor" protections under, the federal securities laws. These statements include, among others:

• forecasts of our anticipated future results of operations or financial position;

• statements concerning the impact of our transactions, investments and other initiatives, including our participation in government programs;

• statements about our liquidity, tax position, tax rates, asset values, contingent liabilities, growth opportunities and growth rates, acquisition and divestiture opportunities, business prospects, regulatory and competitive outlook, investment and expenditure plans, business strategies, dividend and stock repurchase plans, capital allocation plans, financing alternatives and sources, and pricing plans; and

• other similar statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts, many of which are highlighted by words such as “may,” “would,” “could,” “should,” “plan,” “believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “likely,” “seeks,” “hopes,” or variations or similar expressions.

These forward-looking statements are based upon our judgment and assumptions as of the date such statements are made concerning future developments and events, many of which are beyond our control. These forward-looking statements, and the assumptions upon which they are based, (i) are not guarantees of future results, (ii) are inherently speculative and (iii) are subject to a number of risks and uncertainties. Actual events and results may differ materially from those anticipated, estimated, projected or implied by us in those statements if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to:

• the effects of competition from a wide variety of competitive providers, including lower demand for our legacy offerings;

• the effects of new, emerging or competing technologies, including those that could make our products less desirable or obsolete;

• the effects of ongoing changes in the regulation of the communications industry, including the outcome of regulatory or judicial proceedings relating to intercarrier compensation, interconnection obligations, access charges, universal service, broadband deployment, data protection and net neutrality;

• our ability to effectively adjust to changes in the communications industry, and changes in the composition of our markets and product mix;

• possible changes in the demand for, or pricing of, our products and services, including our ability to effectively respond to increased demand for high-speed broadband service;

• our ability to successfully maintain the quality and profitability of our existing product and service offerings and to introduce new offerings on a timely and cost-effective basis;

• the adverse impact on our business and network from possible equipment failures, service outages, security breaches or similar events impacting our network;

• our ability to generate cash flows sufficient to fund our financial commitments and objectives, including our capital expenditures, operating costs, share repurchases, dividends, pension contributions and debt payments;

• changes in our operating plans, corporate strategies, dividend payment plans or other capital allocation plans, whether based upon changes in our cash flows, cash requirements, financial performance, financial position, or otherwise;

• our ability to effectively retain and hire key personnel and to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages;

• increases in the costs of our pension, health, post-employment or other benefits, including those caused by changes in markets, interest rates, mortality rates, demographics or regulations;

• adverse changes in our access to credit markets on favorable terms, whether caused by changes in our financial position, lower debt credit ratings, unstable markets or otherwise;

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• our ability to maintain favorable relations with our key business partners, suppliers, vendors, landlords and financial institutions;

• our ability to effectively manage our network buildout project and other expansion opportunities;

• our ability to collect our receivables from financially troubled customers;

• any adverse developments in legal or regulatory proceedings involving us;

• changes in tax, communications, pension, healthcare or other laws or regulations, in governmental support programs, or in general government funding levels;

• the effects of changes in accounting policies or practices, including potential future impairment charges;

• the effects of adverse weather or other natural or man-made disasters;

• the effects of more general factors such as changes in interest rates, in operating costs, in general market, labor, economic or geo-political conditions, or in public policy; and

• other risks referenced in Item 1A or elsewhere in this Annual Report or other of our filings with the SEC.

Additional factors or risks that we currently deem immaterial, that are not presently known to us or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned not to unduly rely upon our forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise. Furthermore, any information about our intentions contained in any of our forward-looking statements reflects our intentions as of the date of such forward-looking statement, and is based upon, among other things, existing regulatory, technological, industry, competitive, economic and market conditions, and our assumptions as of such date. We may change our intentions, strategies or plans (including our dividend or stock repurchase plans) at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.

Investors should also be aware that while we do, at various times, communicate with securities analysts, it is against our policy to disclose to them selectively any material non-public information or other confidential information. Accordingly, investors should not assume that we agree with any statement or report issued by an analyst with respect to our past or projected performance. To the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

Unless otherwise indicated, information contained in this Annual Report and other documents filed by us under the federal securities laws concerning our views and expectations regarding the communications industry are based on estimates made by us using data from industry sources, and on assumptions made by us based on our management’s knowledge and experience in the markets in which we operate and the communications industry generally. You should be aware that we have not independently verified data from industry or other third-party sources and cannot guarantee its accuracy or completeness.

ITEM 1A. RISK FACTORS

The following discussion of “risk factors” identifies the most significant risks or uncertainties that could (i) materially and adversely affect our business, financial condition, results of operations, liquidity or prospects or (ii) cause our actual results to differ materially from our anticipated results or other expectations. You should carefully consider these factors, in addition to the other information set forth in this Annual Report and our subsequent filings with the SEC, when evaluating our business and whether to purchase, sell or hold our securities. Please note that the following discussion is not intended to comprehensively list all risks or uncertainties faced by us. Our operations or actual results could also be similarly impacted by additional risks and uncertainties that are not currently known to us, that we currently deem to be immaterial, that arise in the future or that are not specific to us, such as general economic conditions.

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Risks Affecting Our Business

We may not be able to compete successfully against current or future competitors.

Each of our offerings to our residential and business customers face increasingly intense competition from a variety of sources under evolving market conditions. We expect these trends will continue. In addition to competition from larger national telecommunications providers, we are facing increasing competition from several other sources, including cable and satellite companies, wireless providers, technology companies, broadband providers, device providers, resellers, sales agents and facilities-based providers using their own networks as well as those leasing parts of our network. In particular, (i) intense competition from wireless and other communications providers has led to a long-term systemic decline in the number of our customers for wireline voice services, (ii) strong competition from cable companies and others has limited the growth of our broadband operations and (iii) aggressive competition from a wide range of technology companies and other market entrants has limited the prospects for our cloud computing operations. For more detailed information, see "Competition" under Item 1 of this Annual Report.

Some of our current and potential competitors (i) offer products or services that are substitutes for our wireline voice services, including wireless voice and non-voice communication services, (ii) offer a more comprehensive range of communications products and services, (iii) offer products or services with features that we cannot readily match in some or all of our markets, including faster average broadband transmission speeds and greater content, (iv) have market presence, engineering and technical capabilities, and financial and other resources greater than ours, (v) have larger or more diverse networks with greater transmission capacity or more or larger data centers, (vi) conduct operations or raise capital at a lower cost than us, (vii) are subject to less regulation, which we believe enables such competitors to operate more flexibly than us with respect to certain offerings, (viii) offer services nationally or internationally to a larger geographic area or larger base of customers, (ix) have substantially stronger brand names, which may provide them with greater pricing power than ours, or (x) have larger operations than ours, which may enable them to offer higher compensation packages in connection with recruiting and retaining top technological, managerial and operational talent. Consequently, these competitors may be better equipped to provide more attractive offerings, to charge lower prices for their products and services, to develop and expand their communications and network infrastructure more quickly, to adapt more swiftly to new or emerging technologies and changes in customer requirements, to devote greater resources to the marketing and sale of their products and services, to provide more comprehensive customer service, to provide greater resources to research and development initiatives and to take advantage of acquisition or other opportunities more readily. In the past, several of our competitors and their operations have grown through acquisitions and aggressive product development. The continued growth of our competitors could further enhance their competitive positions.

Competition could adversely impact us in several ways, including (i) the loss of customers and market share, (ii) the possibility of customers reducing their usage of our services or shifting to less profitable services, (iii) reduced traffic on our networks, (iv) our need to expend substantial time or money on new capital improvement projects, (v) our need to lower prices or increase marketing expenses to remain competitive and (vi) our inability to diversify by successfully offering new products or services.

We are continually taking steps to respond to these competitive pressures, but these efforts may not be successful. Our operating results and financial condition would be adversely affected if these initiatives are unsuccessful or insufficient and if we otherwise are unable to sufficiently stem our continuing access line losses and our legacy revenue declines. If this occurred, our ability to pay our debt and other obligations and to re-invest in the business would also be adversely affected.

Rapid technological changes could significantly impact our competitive and financial position.

The communications industry has been and continues to be impacted by significant technological changes, which in general are enhancing non-voice communications and enabling a broader array of companies to offer services competitive with ours. Many of those technological changes are (i) displacing or reducing demand for our wireline voice services, (ii) enabling the development of competitive products or services, or (iii) enabling our current customers to reduce or bypass use of our networks. Rapid changes in technology are increasing the competitiveness of the cloud, hosting, colocation and other IT services industries. In addition, demand for our broadband services has been constrained by certain technologies permitting cable companies and other competitors to deliver faster average broadband transmission speeds than ours. Demand for our broadband services could be further reduced by advanced wireless data transmission technologies being deployed by wireless providers, including “long-term evolution” or “LTE” technologies, especially if these wireless providers continue to increase their broadband transmission speed and decrease their service rates. To enhance the competitiveness of our broadband services, we may be required to expend additional capital to augment the capabilities of our copper-based services or to install more fiber optic cable.

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We may not be able to accurately predict or respond to changes in technology or industry standards, or to the introduction of newly-offered services. Any of these developments could make some or all of our offerings less desirable or even obsolete. These developments could also require us to (i) expend capital or other resources in excess of currently contemplated levels, (ii) forego the development or provision of products or services that others can provide more efficiently, or (iii) make other changes to our operating plans, corporate strategies or capital allocation plans, any of which could be contrary to the expectations of our security holders or could adversely impact our operations. If we are not able to develop new products and services to keep pace with technological advances, or if those products and services are not widely accepted by customers, our ability to compete could be adversely affected and our market share could decline. Any inability to effectively respond to technological changes could also adversely affect our operating results and financial condition, as well as our ability to service debt and fund other commitments or initiatives.

Even if we succeed in adapting to changes in technology or industry standards by developing new products or services, there is no assurance that the new products or services would have a positive impact on our profit margins or financial performance.

In addition to introducing new technologies and offerings, we may need, from time to time, to phase out outdated and unprofitable technologies and services. If we are unable to do so, on a cost-effective basis, we could experience reduced profits.

For additional information on the risks of increased expenditures, see “Risk Factors—Risks Affecting our Liquidity and Capital Resources—Our business requires us to incur substantial capital and operating expenses, which reduces our available free cash flow.”

Our legacy and private line services continue to experience declining revenues, and our efforts to offset these declines may not be successful.

Primarily as a result of the competitive and technological changes discussed above, we have experienced a prolonged systemic decline in our access lines, long-distance revenues and network access revenues, which continue to decrease revenues generated from our legacy services. We have also experienced a decline in our private line revenues due to our customers' optimization of their networks, industry consolidation, price compression and technological migration to higher-speed services. The loss of private line services has placed downward pressure on our strategic revenues.

We have taken a variety of steps to counter these declines, including:

• an increased focus on selling a broader range of higher-growth strategic services, which are described in detail elsewhere in this Annual 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.

However, for the reasons described elsewhere in this Annual Report, most of these strategic services generate lower profit margins than our legacy and private line services, and some can be expected to experience slowing growth as increasing numbers of our existing or potential customers subscribe to these newer products. Moreover, we cannot assure you that the revenues generated from our new offerings will offset revenue losses associated with our legacy and private line services. In addition, our reliance on third parties to provide certain of these strategic services could constrain our flexibility, as described further below.

Our ability to successfully introduce new product or service offerings on a timely and cost-effective basis could be constrained by a range of factors, including network limitations, limited capital, an inability to attract key personnel with the necessary skills, intellectual property constraints, testing delays, or an inability to act as quickly as smaller, more nimble start-up competitors. Similarly, our ability to grow through acquisitions could be limited by several factors, including our leverage and inability to identify attractively-priced target companies. For these reasons, we cannot assure you that our new product or service offerings will be as successful as anticipated, or that we will be able to continue to grow through acquisitions.

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We may not be able to successfully adjust to changes in our industry, our markets and our product mix.

Ongoing changes in the communications industry have fundamentally changed consumers’ communications expectations and requirements. In response to these changes, we have substantially altered our product and service offerings through acquisitions and internal product development. Many of these changes have placed a higher premium on sales, marketing and product development functions, and necessitated ongoing changes in our processes and operating protocols, as well as periodic reorganizations of our sales and leadership teams. In addition, we now offer a more complex range of products and services, operate larger and more complex networks and serve a much larger and more diverse set of customers. Consequently, we now face greater challenges in effectively managing and administering our operations and allocating capital and other resources to our various offerings. For all these reasons, we cannot assure you that our efforts to adjust to these changes will be timely or successful.

Our revenues and cash flows may not be adequate to fund all of our current objectives.

As noted in the risk factor disclosures appearing above and below, changes in competition, technology, regulation and demand for our legacy services continue to place downward pressure on our consolidated revenues and cash flows. During each of 2015, 2014 and 2013, we experienced declines in revenues and net cash provided by operating activities as compared to prior years. Our cash flows will be further reduced as a result of anticipated increases in our cash tax payments due to our depletion of substantially all of our net operating loss carryforwards.

We rely upon our consolidated revenues and cash flows to fund our commitments and business objectives, including without limitation, funding our capital expenditures, operating costs, share repurchases, dividends, pension funding payments and debt repayments. We cannot assure you that our future cash flows will be sufficient to fund all of our cash requirements in the manner currently contemplated. Our inability to fund certain of these payments could have an adverse impact on our business, operations or competitive position or on the value of our securities.

We could be harmed by security breaches, damages or other significant disruptions or failures of our networks, information technology infrastructure or related systems, or of those we operate for certain of our customers.

We are materially reliant upon our networks, information technology infrastructure (including data centers) and related technology systems (including our billing systems) to provide products and services to our customers and to manage our operations and affairs. We face the risk, as does any company, of a security breach or significant disruption of our information technology infrastructure and related systems. As a communications company that transmits large amounts of sensitive and proprietary information over communications networks, we face an added risk that a security breach or other significant disruption of our public networks or information technology infrastructure and related systems that we develop, install, operate and maintain for certain of our business customers (which includes our wholesale and governmental customers) could lead to material interruptions or curtailments of service. Moreover, in connection with processing and storing confidential customer data, we face a heightened risk that a security breach or disruption could result in unauthorized access to our customers’ proprietary information on our public networks or internal systems or the systems that we operate and maintain for certain of our customers.

We make significant efforts to maintain the security and integrity of information and systems under our control, and maintain contingency plans in the event of security breaches or other system disruptions. Nonetheless, we cannot assure you that our security efforts and measures will prevent unauthorized access to our systems, loss or destruction of data (including confidential customer information), account takeovers, unavailability of service, computer viruses, malware, distributed denial-of-service attacks, or other forms of cyber-attacks or similar events. These threats may derive from human error, hardware or software vulnerabilities, fraud, malice or sabotage on the part of employees, third parties or other nations, or could result from aging equipment or other accidental technological failure. These threats may also arise from failure or breaches of systems owned, operated or controlled by other unaffiliated operators to the extent we rely on such other operations to deliver services to our customers.

Similar to other large telecommunications companies, we are a constant target of cyber-attacks of varying degrees. Although some of these attacks have resulted in security breaches, to date none of these breaches have resulted in a material adverse effect on our operating results or financial condition. You should be aware, however, that defenses against cyber-attacks currently available to U.S. companies are unlikely to prevent intrusions by a highly-determined, highly-sophisticated hacker. Consequently, you should assume that we will be unable to implement security barriers or other preventative measures that repel all future cyber-attacks. Any such future security breaches or disruptions could materially adversely affect our business, results of operations or financial condition, especially in light of the growing frequency, scope and well-documented sophistication of cyber-attacks and intrusions.

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Although we maintain insurance coverage that may, subject to policy terms and conditions (including self-insured deductibles, coverage restrictions and monetary coverage caps), cover certain aspects of our cyber risks, such insurance coverage may be unavailable or insufficient to cover our losses.

Additional risks to our network, infrastructure and related systems include:

• power losses or physical damage, whether caused by fire, adverse weather conditions, terrorism, sabotage, vandalism or otherwise;

• capacity or system configuration limitations, including those resulting from changes in our customer's usage patterns, the introduction of new technologies or products, or incompatibilities between our newer and older systems;

• theft or failure of our equipment;

• software or hardware obsolescence, defects or malfunctions;

• deficiencies in our processes or controls;

• programming, processing and other human error; and

• service failures of our third-party vendors and other disruptions that are beyond our control.

Due to these factors, we experience from time to time in the ordinary course of our business short disruptions in our service, and could experience more significant disruptions in the future.

Disruptions, security breaches and other significant failures of the above-described networks and systems could:

• disrupt the proper functioning of these networks and systems, which could in turn disrupt (i) our operations or (ii) the operations of certain of our customers who rely upon us to provide services critical to their operations;

• 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;

• result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive, classified or otherwise valuable information of ours, our customers or our customers’ end users, including trade secrets, which others could use for competitive, disruptive, destructive or otherwise harmful purposes and outcomes;

• require us to notify customers, regulatory agencies or the public of data breaches;

• require us to provide credits for future service under certain service level commitments we have provided contractually to our customers or to offer expensive incentives to retain customers;

• subject us to claims for damages, fines, penalties, termination or other remedies under our customer contracts or service standards set by state regulatory commissions, which in certain cases could exceed our insurance coverage; 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 prolonged litigation.

We could experience difficulties in expanding and updating our technical infrastructure.

Our ability to expand and update our systems and information technology infrastructure in response to our growth and changing business needs is important to our ability to maintain and develop attractive product and service offerings. As discussed further under “Business—Network Architecture” in Item 1 of Part I of this Annual Report, we are currently undertaking several complex, costly and time-consuming projects to simplify and modernize our network, which combines our legacy network and the networks of companies we have acquired in the past. Unanticipated delays in the completion of these projects may lead to increased project costs or operational inefficiencies. In addition, there may be issues related to our expanded or updated infrastructure that are not identified by our testing processes, and which may only become evident after we have started to fully utilize the redesigned systems. Our failure to modernize and upgrade our technology infrastructure could have adverse consequences, including the delayed implementation of new service offerings, decreased competitiveness of existing service offerings, network instabilities, increased operating or acquisition integration costs, service or billing interruptions, and the diversion of development resources.

Any or all of the foregoing developments could have a negative impact on our business, results of operations, financial condition and cash flows.

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Negative publicity may adversely impact us.

Outages or other service failures of networks operated by us or other operators could cause substantial adverse publicity affecting us specifically or our industry generally. In either case, media coverage and public statements that insinuate improper actions by us or other operators, regardless of their factual accuracy or truthfulness, may result in negative publicity, litigation, governmental investigations or additional regulations. Addressing negative publicity and any resulting litigation or investigations may distract management, increase costs and divert resources. Negative publicity may have an adverse impact on our reputation and the morale of our employees, which could adversely affect our business, results of operations, financial condition and cash flows.

If we fail to hire and retain qualified executives, managers and employees, our operating results could be harmed.

Our future success depends on our ability to identify, hire, train and retain executives, managers and employees with technological, engineering, product development, operational, provisioning, marketing, sales, administrative and managerial skills. There is a shortage of qualified personnel in several of these fields nationally and in our headquarters city of Monroe, Louisiana, in particular. We compete with several other companies for this limited pool of potential employees. As our industry increasingly becomes more competitive, it could become especially difficult to attract and retain top personnel with skills in high demand. In addition, subject to limited exceptions, none of our executives or domestic employees have long-term employment agreements. For all these reasons, there is no assurance that our efforts to recruit and retain qualified personnel will be successful.

Increases in broadband usage may cause network capacity limitations, resulting in service disruptions, reduced capacity or slower transmission speeds for our customers.

Video streaming services, gaming and peer-to-peer file sharing applications use significantly more bandwidth than other Internet activity such as web browsing and email. As use of these newer services continues to grow, our high-speed Internet customers will likely use much more bandwidth than in the past. If this occurs, we could be required to make significant capital expenditures to increase network capacity in order to avoid service disruptions, service degradation or slower transmission speeds for our customers. Alternatively, we could choose to implement network management practices to reduce the network capacity available to bandwidth-intensive activities during certain times in market areas experiencing congestion, which could negatively affect our ability to retain and attract customers in affected markets. While we believe demand for these services may drive high-speed Internet customers to pay for faster broadband speeds, competitive or regulatory constraints may preclude us from recovering the costs of the necessary network investments. This could result in an adverse impact to our operating margins, results of operations, financial condition and cash flows.

We have been accused of infringing the intellectual property rights of others and will likely face similar accusations in the future, which could subject us to costly and time-consuming litigation or require us to seek third-party licenses.

From time to time, we receive notices from third parties or are named in lawsuits filed by third parties claiming we have infringed or are infringing upon their intellectual property rights. We are currently responding to several of these notices and claims. Like other communications companies, we have received an increasing number of these notices and claims in the past several years, and expect this industry-wide trend will continue. Responding to these claims may require us to expend significant time and money defending our use of the applicable technology, and divert management’s time and resources away from other business. In certain instances, we may be required to enter into licensing agreements requiring royalty payments or, in the case of litigation, to pay damages. If we are required to take one or more of these actions, our profit margins may decline. In addition, in responding to these claims, we may be required to stop selling or redesign one or more of our products or services, which could significantly and adversely affect our business, results of operations, financial condition and cash flows.

Similarly, from time to time, we may need to obtain the right to use certain patents or other intellectual property from third parties to be able to offer new products and services. If we cannot license or otherwise obtain rights to use any required technology from a third party on reasonable terms, our ability to offer new products and services may be prohibited, restricted, made more costly or delayed.

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We may not be successful in protecting and enforcing our intellectual property rights.

We rely on various patents, copyright, trade names, trademark, service mark, trade secret and other similar laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights. The steps we have taken, however, may not prevent unauthorized use or the reverse engineering of our technology. Others may independently develop technologies that are substantially equivalent, superior to, or otherwise competitive to the technologies we employ in our services or that infringe on our intellectual property. We may be unable to prevent competitors from acquiring proprietary rights that are similar to or infringe upon our proprietary rights, or to prevent our current or former employees from using or disclosing to others our proprietary information. Enforcement of our intellectual property rights may depend on initiating legal actions against parties who infringe or misappropriate our proprietary information, but these actions may not be successful, even when our rights have been infringed. If we are unsuccessful in protecting or enforcing our intellectual property rights, our business, competitive position, results of operations and financial condition could be adversely affected.

Our operations, financial performance and liquidity are materially reliant on various third parties.

Reliance on other communications providers. To offer voice or data services in certain of our markets, we must either lease network capacity from, or interconnect our network with the infrastructure of, other communications companies who typically compete against us in those markets. Our reliance on these lease or interconnection arrangements limits our control over the quality of our services and exposes us to the risk that our ability to market our services could be adversely impacted by changes in the plans or properties of the carriers upon which we are reliant. In addition, we are exposed to the risk that the other carriers may be unwilling to continue or renew these arrangements in the future on terms favorable to us, or at all. This risk is heightened when the other carrier is a competitor of ours and may benefit from terminating the agreement. If we lose these arrangements and cannot timely replace them, our ability to provide services to our customers and conduct our business could be materially adversely affected.

Conversely, certain of our operations carry a significant amount of voice or data traffic for other communications providers. Their reliance on our services exposes us to the risk that they may transfer all or a portion of this traffic from our network to networks built, owned or leased by them, thereby reducing our revenues. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Trends” included in Item 7 of Part II of this Annual Report.

We also rely on reseller and sales agency arrangements with other communications companies to provide some of the services that we offer to our customers, including video services and wireless products and services. As a reseller or sales agent, we do not control the availability, retail price, design, function, quality, reliability, customer service or branding of these products and services, nor do we directly control all of the marketing and promotion of these products and services. Similar to the risks described above regarding our reliance upon other carriers, we could be adversely affected if these communication companies fail to maintain competitive products or services, or fail to continue to make them available to us on attractive terms, or at all.

Our operations and financial performance could be adversely affected if our relationships with any of these other communications companies are disrupted or terminated for any other reason, including if such other companies:

• 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.

Reliance on other key suppliers and vendors. We depend on a limited number of suppliers and vendors for equipment and services relating to our network infrastructure. Our local exchange carrier networks consist of central office and remote sites, all with advanced digital switches. If any of these suppliers experience interruptions or other problems delivering or servicing these network components on a timely basis, our operations could suffer significantly. To the extent that proprietary technology of a supplier is an integral component of our network, we may have limited flexibility to purchase key network components from alternative suppliers and may be adversely affected if third parties assert patent infringement claims against our suppliers or us. We also rely on a limited number of (i) software vendors to support our business management systems, (ii) content suppliers to provide programming to our video operations, and (iii) contractors to assist us in connection with our network construction and maintenance activities. In the event it becomes necessary to seek alternative suppliers and vendors, we may be unable to obtain satisfactory replacement supplies, services, utilities or programming on economically attractive terms, on a timely basis, or at all, which could increase costs or cause disruptions in our services.

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Reliance on utility providers and landlords. We operate a substantial number of data center facilities, which are susceptible to electrical power shortages or outages. Our energy costs can fluctuate significantly or increase for a variety of reasons, including changes in legislation and regulation. Several pending proposals designed to reduce greenhouse emissions could substantially increase our energy costs, which we may not be able to pass on to our customers. Due to the increasing sophistication of equipment and our products, our demand or our customers’ demand for power may exceed the power capacity in older data centers, which may limit our ability to fully utilize these data centers.

We lease most of our data centers. Although the majority of these leases provide us with the opportunity to renew the lease, many of these renewal options provide that rent for the renewal period will be equal to the fair market rental rate at the time of renewal. If the fair market rental rates are significantly higher than our current rental rates, we may be unable to offset these costs by charging more for our services, which could have a negative impact on our financial results. We cannot assure you that our data centers in the future will have access to sufficient space or power on attractive terms or at all.

Reliance on governmental payments. We receive a material amount of revenue or government subsidies under various government programs, which are further described under the heading “Risk Factors—Risks Relating to Legal and Regulatory Matters." We also provide products or services to various federal, state and local agencies. Governmental agencies frequently reserve the right to terminate their contracts for convenience, or to suspend or debar companies from receiving future subsidies or contracts under certain circumstances. If our governmental contracts are terminated for any reason, or if we are suspended or debarred from governmental programs or contracts, our results of operations and financial condition could be materially adversely affected.

Reliance on financial institutions. We rely on a number of financial institutions to provide us with short-term liquidity under our credit facility. If one or more of these lenders default on their funding commitments, our access to revolving credit could be adversely affected.

Rising costs, changes in consumer behaviors and other industry changes may adversely impact our video business.

The costs of purchasing video programming have risen significantly in recent years and continue to rise. Moreover, an increasing number of consumers are receiving access to video content through video streaming or other services pursuant to new technologies for a nominal or no fee, which will likely reduce demand for more traditional video products, such as the satellite TV services that we resell and our Prism TV services.

New technologies are also affecting consumer behavior in ways that are changing how content is delivered and viewed. Increased access to various media through wireless devices has the potential to reduce the viewing of our content through traditional distribution outlets. These new technologies have increased the number of entertainment choices available to consumers and intensified the challenges posed by audience fragmentation. Some of these newer technologies also give consumers greater flexibility to watch programming on a time-delayed or on-demand basis. All of these changes, coupled with changing consumer preferences and other related developments, could reduce demand for our video products and services. Reduced demand for our video products and services could, in turn, reduce advertisers' willingness to purchase advertising time from us, which would further reduce the profitability of our video offerings.

If we fail to extend or renegotiate our collective bargaining agreements with our labor unions as they expire from time to time, or if our unionized employees were to engage in a strike or other work stoppage, our business and operating results could be materially harmed.

As of December 31, 2015, approximately 37% of our employees were members of various bargaining units represented by the Communications Workers of America or the International Brotherhood of Electrical Workers. From time to time, our labor agreements with unions expire. Although we typically are able to negotiate new bargaining agreements, we cannot predict the outcome of our future negotiations of these agreements. We may be unable to reach new agreements, and union employees may engage in strikes, work slowdowns or other labor actions, which could materially disrupt our ability to provide services and result in increased cost to us. In addition, new labor agreements may impose significant new costs on us, which could impair our financial condition or results of operations in the future. To the extent they contain benefit provisions, these agreements may also limit our flexibility to change benefits in response to industry or competitive changes. In particular, post-employment benefits provided under these agreements could cause us to incur costs not faced by many of our competitors, which could ultimately hinder our competitive position.

Portions of our property, plant and equipment are located on property owned by third parties.

Over the past few years, certain utilities, cooperatives and municipalities in certain of the states in which we operate have requested significant rate increases for attaching our plant to their facilities. To the extent that these entities are successful in increasing the amount we pay for these attachments, our future operating costs will increase.

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In addition, we rely on rights-of-way, colocation agreements and other authorizations granted by governmental bodies and other third parties to locate our cable, conduit and other network equipment on or under their respective properties. Our operations could be adversely affected if any of these authorizations terminate or lapse, or if the landowner requests price increases.

Our business customers may seek to shift risk to us.

We furnish to and receive from our business customers indemnities relating to damages caused or sustained by us in connection with certain of our operations. Our customers’ changing views on risk allocation could cause us to accept greater risk to win new business or could result in us losing business if we are not prepared to take such risks. To the extent that we accept such additional risk, and seek to insure against it, our insurance premiums could rise.

Our international operations expose us to various regulatory, currency, tax, legal and other risks.

Our international operations are subject to U.S. and other laws and regulations regarding operations in foreign jurisdictions in which we provide services. These numerous and sometimes conflicting laws and regulations include anti-corruption laws, anti-competition laws, trade restrictions, tax laws, immigration laws, privacy laws and accounting requirements. Many of these laws are complex and change frequently. Regulations that require the awarding of contracts to local contractors or the employment of local citizens may adversely affect our flexibility or competitiveness in these jurisdictions. Local laws and regulations, and their interpretation and enforcement, differ significantly among those jurisdictions. There is a risk that these laws or regulations may materially restrict our ability to deliver services in various foreign jurisdictions or could be breached through inadvertence or mistake, fraudulent or negligent behavior of our employees or agents, failure to comply with certain formal documentation or technical requirements, or otherwise. Violations of these laws and regulations could result in fines and penalties, criminal sanctions against us or our personnel, or prohibitions on the conduct of our business or our ability to operate in one or more countries, any of which could have a material adverse effect on our business, reputation, results of operations, financial condition or prospects.

Many foreign laws and regulations relating to communications services are more restrictive than U.S. laws and regulations, particularly those relating to privacy rights and data retention. For example, all 28 member states of the European Union have adopted new European data protection laws that we believe could impact our operations in Europe and could potentially expose us to an increased risk of litigation or significant regulatory fines. Moreover, national regulatory frameworks that are consistent with the policies and requirements of the World Trade Organization have only recently been, or are still being, enacted in many countries. Accordingly, many countries are still in the early stages of providing for and adapting to a liberalized telecommunications market. As a result, in these markets we may encounter more protracted and difficult procedures to obtain licenses necessary to provide the full set of products we seek to offer.

In addition to these international regulatory risks, some of the other risks inherent in conducting business internationally include:

• tax, licensing, political or other business restrictions or requirements;

• uncertainty concerning import and export restrictions, including the risk of fines or penalties assessed for violations;

• longer payment cycles and problems collecting accounts receivable;

• domestic and foreign regulation of overseas 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 and repatriation restrictions and fluctuations in currency exchange rates;

• challenges in securing and maintaining 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;

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• reliance on third parties, including those with which we have limited experience;

• 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.

Many of these risks are beyond our control, and we cannot predict the nature or the likelihood of the occurrence or corresponding effect of any such events, each of which could have an adverse effect on our financial condition and results of operations.

We do business and may in the future do additional business in certain countries or regions in which corruption is a serious problem. Moreover, in order to effectively compete in certain foreign jurisdictions, it is frequently necessary or required to establish joint ventures, strategic alliances or marketing arrangements with local operators, partners or agents. In certain instances, these local operators, partners or agents may have interests that are not always aligned with ours. Reliance on local operators, partners or agents could expose us to the risk of being unable to control the scope or quality of our overseas services or products, or being held liable under the FCPA or other anti-corruption laws for actions taken by our strategic or local partners or agents even though these partners or agents may not themselves be subject to the FCPA or other applicable anti-corruption laws. Any determination that we have violated the FCPA or other anti-corruption laws could have a material adverse effect on our business, results of operations, reputation or prospects.

We may be unable to integrate successfully our acquired operations and realize the anticipated benefits of our recent acquisitions.

Historically, much of our growth has been attributable to acquisitions. Although we have completed most of the work to integrate the operations of the acquired companies into our operations, we will continue to devote significant management attention and resources to completing the integration of the business practices, systems and operations of CenturyLink and the acquired companies. You should be aware that our remaining efforts to integrate these companies and businesses could distract our management, disrupt our ongoing business or create inconsistencies in our products, services, standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits of our acquisitions, or could otherwise adversely affect our business and financial results.

Any additional future acquisitions by us would subject us to additional business, operating and financial risks, the impact of which cannot presently be evaluated, and could adversely impact our capital structure or financial position.

From time to time in the future we may pursue other acquisition or expansion opportunities in an effort to implement our business strategies. These transactions could involve acquisitions of entire businesses or investments in start-up or established companies, and could take several forms, including mergers, joint ventures, investments in new lines of business, or the purchase of equity interests or assets. These types of transactions may present significant risks and uncertainties, including distraction of management from current operations, insufficient revenue acquired to offset liabilities assumed, unexpected expenses, inadequate return of capital, regulatory or compliance issues, potential infringements, potential violations of covenants in our debt instruments and other unidentified issues not discovered in due diligence. To the extent we acquire a business that is financially unstable or is otherwise subject to a high level of risk, we may be affected by currently unascertainable risks of that business. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular business or assets that we may acquire. Moreover, we cannot guarantee that any such transaction will ultimately result in the realization of the benefits of the transaction originally anticipated by us or that any such transaction will not have a material adverse impact on our financial condition or results of operations. In particular, we can provide no assurances that we will be able to successfully integrate the technology systems, billing systems, accounting processes, sales force, cost structure, product development and service delivery processes, strategies and culture of the acquired company with ours. In addition, the financing of any future acquisition completed by us could adversely impact our capital structure as any such financing would likely include the issuance of additional securities or the borrowing of additional funds. Except as required by law or applicable securities exchange listing standards, we do not expect to ask our shareholders to vote on any proposed acquisition. Moreover, we generally do not announce our acquisitions until we have entered into a preliminary or definitive agreement.

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Unfavorable general economic conditions could negatively impact our operating results and financial condition.

Unfavorable general economic conditions, including unstable economic and credit markets, could negatively affect our business. Worldwide economic growth has been sluggish since 2008, and many experts believe that a confluence of global factors may result in a prolonged period of economic stagnation, slow growth or economic uncertainty. While it is difficult to predict the ultimate impact of these general economic conditions, they could adversely affect demand for some of our products and services and could cause customers to shift to lower priced products and services or to delay or forego purchases of our products and services. These conditions impact, in particular, our ability to sell discretionary products or services to business customers that are under pressure to reduce costs or to governmental customers that have suffered substantial budget cuts in recent years. Any one or more of these circumstances could continue to depress our revenues. Also, our customers may encounter financial hardships or may not be able to obtain adequate access to credit, which could negatively impact their ability to make timely payments to us. In addition, as discussed further below, unstable economic and credit markets may preclude us from refinancing maturing debt at terms that are as favorable as those from which we previously benefited, at terms that are acceptable to us, or at all. For these reasons, among others, if current economic conditions persist or decline, our operating results, financial condition, and liquidity could be adversely affected.

For additional information about our business and operations, see Item 1 of Part I of this Annual Report.

Risks Relating to Legal and Regulatory Matters

We operate in a highly regulated industry and are therefore exposed to restrictions on our operations and a variety of claims relating to such regulation.

General. We are subject to significant regulation by, among others, (i) the Federal Communications Commission (“FCC”), which regulates interstate communications, (ii) state utility commissions, which regulate intrastate communications, and (iii) various foreign governments and international bodies, which regulate our international operations. Generally, we must obtain and maintain certificates of authority or licenses from these bodies in most territories where we offer regulated services. We cannot assure you that we will be successful in obtaining or retaining all licenses necessary to carry out our business plan, and, even if we are, the prescribed service standards and conditions imposed on us in connection with obtaining or acquiring control of these licenses may impose on us substantial costs and limitations. We are also subject to numerous requirements and interpretations under various international, federal, state and local laws, rules and regulations, which are quite detailed and occasionally in conflict with each other. Accordingly, we cannot ensure that we are always considered to be in compliance with all these requirements at any single point in time. The agencies responsible for the enforcement of these laws, rules and regulations may initiate inquiries or actions based on customer complaints or on their own initiative. Even if we are ultimately found to have complied with applicable regulations, such actions or inquiries could create adverse publicity that negatively impacts our business.

Regulation of the telecommunications industry continues to change, and the regulatory environment varies substantially from jurisdiction to jurisdiction. A substantial portion of our local voice services revenue remains subject to FCC and state utility commission pricing regulation, which periodically exposes us to pricing or earnings disputes and could expose us to unanticipated price declines. Interexchange carriers have filed complaints in various forums requesting reductions in our access rates. In addition, several long distance providers are disputing or refusing to pay amounts owed to us for carrying Voice over Internet Protocol (“VoIP”) traffic, or traffic they claim to be VoIP traffic. Similarly, some carriers are refusing to pay access charges for certain calls between mobile and wireline devices routed through an interexchange carrier. There can be no assurance that future regulatory, judicial or legislative activities will not have a material adverse effect on our operations, or that regulators or third parties will not raise material issues with regard to our compliance or noncompliance with applicable regulations.

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Risks associated with recent changes in regulation. Historically, our financial performance has been substantially impacted by various aspects of federal regulation, including our receipt in the past of significant universal service payments designed to promote rural telephony. In October 2011, the FCC adopted the Connect America and Intercarrier Compensation Reform order (“the 2011 order”) intended to comprehensively reform the existing regulatory regime to focus support on networks capable of providing new technologies, including VoIP and other high-speed Internet services, and re-direct federal universal service funding to foster nationwide voice and high-speed Internet infrastructure. This initial ruling provides for a multi-year transition as intercarrier compensation charges are reduced, federal universal service funding is explicitly targeted to broadband deployment, and subscriber line charges paid by end-user customers are gradually increased. These changes have, among other things, fundamentally altered the manner in which federal subsidies are calculated and disbursed to us (including terminating substantially all of the old universal service payments paid to us under predecessor support programs), and have substantially increased the pace of reductions in the amount of switched access revenues we receive from our wholesale customers. We expect our participation in the FCC's CAF Phase 2 support program will significantly impact our financial results and capital expenditures in the coming years. For more information, see "Regulation" in Item 1 of Part I and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this Annual Report.

Several judicial challenges to the 2011 order are pending and additional future challenges are possible, any of which could alter or delay the FCC’s proposed changes. In addition, based on the outcome of the FCC proceedings, various state commissions may consider changes to their rates and support programs. Moreover, FCC proceedings relating to implementation of the order remain pending. For these and other reasons, we cannot predict the ultimate impact of these proceedings at this time.

In addition, during the last few years Congress or the FCC has initiated various other changes, including various broadband and internet regulation initiatives including “network neutrality” regulations (as discussed further below) and actions that will restrict our ability to discontinue or reduce certain services, even if unprofitable. The FCC is also, among other things, investigating the special access tariffs of several carriers, including us, and considering changes in the regulation of special access services. Any of these recent or pending initiatives could adversely affect our operations or financial results. Moreover, many of the FCC’s regulations adopted in recent years remain subject to judicial review and additional rulemakings, thus increasing the difficulty of determining the ultimate impact of these changes on us and our competitors.

Certain states have recently taken steps that could reduce the amount of their universal service support payments to incumbent local exchange companies. If these trends continue, we would suffer a reduction in our revenues from state support programs.

Risks of higher costs. Regulations continue to create significant operating and capital costs for us. Challenges to our tariffs by regulators or third parties or delays in obtaining certifications and regulatory approvals could cause us to incur substantial legal and administrative expenses, and, if successful, such challenges could adversely affect the rates that we are able to charge our customers.

Our business also may be impacted by legislation and regulation imposing new or greater obligations related to regulations or laws related to regulating broadband services, storing records, bolstering homeland security or cyber security, increasing disaster recovery requirements, minimizing environmental impacts, enhancing privacy, restricting data collection, protecting intellectual property rights of third parties, or addressing other issues that impact our business, including (i) the Communications Assistance for Law Enforcement Act, which requires communications carriers to ensure that their equipment, facilities, and services are able to facilitate authorized electronic surveillance, and (ii) the USA Freedom Act, which requires communication companies to store records of communications of their customers. We expect our compliance costs to increase if future laws or regulations continue to increase our obligations.

In addition, increased regulation of our suppliers could increase our costs. For instance, if enhanced regulation of greenhouse gas emissions increases our energy costs, the profitability of our hosting and other operations could be adversely affected.

Increased risks of fines. We have recently paid certain regulatory fines associated with network or service outages, particularly with respect to outages impacting the availability of emergency - 911 services. We believe that regulators are now pursuing higher fines than in the past for these types of incidents, and expect this trend to continue.

Risks of reduced flexibility. As a diversified full service incumbent local exchange carrier in most of our key markets, we have traditionally been subject to significant regulation that does not apply to many of our competitors. This regulation in many instances restricts our ability to change rates, to compete and to respond rapidly to changing industry conditions. As our business becomes increasingly competitive, regulatory disparities between us and our competitors could impede our ability to compete.

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Risks posed by other regulations. All of our operations are also subject to a variety of environmental, safety, health and other governmental regulations. We monitor our compliance with federal, state and local regulations governing the management, discharge and disposal of hazardous and environmentally sensitive materials. Although we believe that we are in compliance with these regulations in all material respects, our management, discharge or disposal of hazardous and environmentally sensitive materials might expose us to claims or actions that could potentially have a material adverse effect on our business, financial condition and operating results. For a discussion of regulatory risks associated with our international operations, see “Risk Factors—Risks Affecting Our Business—Our international operations expose us to various regulatory, currency, tax, legal and other risks."

Our participation in the FCC's Connect America Fund ("CAF") Phase 2 support program poses certain risks.

Our participation in the CAF Phase 2 support programs subjects us to certain financial risks. If we fail to attain certain specified infrastructure buildout requirements, the FCC could withhold future CAF support payments until these shortcomings are rectified. In addition, if we are not in compliance with FCC measures at the end of the six-year CAF Phase 2 period, we will have 12 months to attain full compliance. If we are not in full compliance after the additional 12 months, we would incur a penalty equal to 1.89 times the average amount of support per location received in the state over the six-year term, plus a potential penalty of 10% of the total CAF Phase 2 support over the six-year term for the state. The amount of these penalties could be material. To comply with the FCC's buildout requirements, we believe we will need to dedicate a substantial portion of our future capital expenditure budget to the construction of new infrastructure. The CAF-related expenditures could reduce the amount of funds we are willing or able to allocate to other initiatives or projects.

“Open Internet” regulation could limit our ability to operate our high-speed data business profitably and to manage our broadband facilities efficiently.

In order to continue to provide quality high-speed data service at attractive prices, we believe we need the continued flexibility to respond to changing consumer demands, to manage bandwidth usage efficiently for the benefit of all customers and to invest in our networks. In February 2015, the FCC adopted new regulations that regulate Internet services as a public utility under Title II of the Communications Act. Several companies, including us, have initiated judicial actions challenging the new regulations, which remain pending. The ultimate impact of the new regulations will depend on several factors, including the results of pending litigation and the manner in which the new regulations are implemented and enforced. Although it is premature for us to determine the ultimate impact of the new regulations upon our operations, we currently anticipate that the proposed rules could hamper our ability to operate our data networks efficiently, restrict our ability to implement network management practices necessary to ensure quality service, increase the cost of network extensions and upgrades, and otherwise negatively impact our current operations. It is possible that Congress, the FCC or the courts could take further action in the future to modify regulations affecting the provision of broadband Internet services.

We may be liable for the material that content providers distribute over our network.

Although we believe our liability for third party information stored on or transmitted through our networks is limited, the liability of private network operators is impacted both by changing technology and evolving legal principles that remain unsettled in many jurisdictions. As a private network provider, we could be exposed to legal claims relating to third party content stored or transmitted on our networks. Such claims could involve, among others, allegations of defamation, invasion of privacy, copyright infringement, or aiding and abetting restricted activities such as online gambling or pornography. If we decide to implement additional measures to reduce our exposure to these risks, or if we are required to defend ourselves against these kinds of claims, our operations and financial results could be negatively affected.

Any adverse outcome in any of our pending key legal proceedings could have a material adverse impact on our financial condition and operating results, on the trading price of our securities and on our ability to access the capital markets.

There are several material proceedings pending against us, as described in Note 14—Commitments and Contingencies to our consolidated financial statements included in Item 8 of Part II of this Annual Report. Results of these legal proceedings cannot be predicted with certainty. Irrespective of its merits, litigation may be both lengthy and disruptive to our operations and could cause significant expenditure and diversion of management attention. Any of the proceedings described in Note 14, as well as current litigation not described therein or future litigation, could have a material adverse effect on our financial position or operating results. We can give you no assurances as to the impact of these matters on our operating results or financial condition.

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We are subject to franchising requirements that could impede our expansion opportunities or result in potential fines or penalties.

We may be required to obtain from municipal authorities operating franchises to install or expand certain facilities related to our fiber transport operations, our competitive local exchange carrier operations, and our facilities-based video services. Some of these franchises may require us to pay franchise fees. Many of our franchise agreements have compliance obligations and failure to comply may result in fines or penalties. In some cases, certain franchise requirements could delay us in expanding our operations or increase the costs of providing these services.

We are exposed to risks arising out of recent legislation affecting U.S. public companies.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and related regulations implemented thereunder, are increasing legal and financial compliance costs and making some activities more time consuming. Any failure to successfully or timely complete annual assessments of our internal controls required by Section 404 of the Sarbanes-Oxley Act could subject us to sanctions or investigation by regulatory authorities. Any such action could adversely affect our financial results or our reputation with investors, lenders or others.

Changes in any of the above-described laws or regulations may limit our ability to plan, and could subject us to further costs or constraints.

From time to time, the laws or regulations governing us or our customers, or the government’s policy of enforcing those laws or regulations, have changed frequently and materially. The variability of these laws could hamper the ability of us and our customers to plan for the future or establish long-term strategies. Moreover, future changes in these laws or regulations could further increase our operating or compliance costs, or further restrict our operational flexibility, any of which could have a material adverse effect on our results of operations, competitive position, financial condition or prospects.

For a more thorough discussion of the regulatory issues that may affect our business, see "Regulation" in Item 1 of Part I of this Annual Report.

Risks Affecting Our Liquidity and Capital Resources

Our high debt levels expose us to a broad range of risks.

We continue to carry significant debt. As of December 31, 2015, our consolidated long-term debt was approximately $20.225 billion. As of the date of this Annual Report, approximately $3.085 billion aggregate principal amount of our consolidated debt securities, excluding capital lease and other obligations, is scheduled to mature prior to December 31, 2018. While we currently believe we will have the financial resources to meet or refinance our obligations when they come due, we cannot fully anticipate our future performance or financial condition, the future condition of the credit markets or the economy generally.

Our significant levels of debt can adversely affect us in several other respects, including:

• limiting our ability to obtain additional financing for working capital, capital expenditures, acquisitions, refinancings or other general corporate purposes, particularly if, as discussed further in the risk factor disclosure below, (i) the ratings assigned to our debt securities by nationally recognized credit rating organizations are revised downward or (ii) we seek capital during periods of turbulent or unsettled market conditions;

• requiring us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal on our debt, thereby reducing the funds available to us for other purposes, including acquisitions, capital expenditures, strategic initiatives, dividends, stock repurchases and marketing;

• hindering our ability to capitalize on business opportunities and to plan for or react to changing market, industry, competitive or economic conditions;

• 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 arrangements 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;

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• 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.

The effects of each of these factors could be intensified if we increase our borrowings.

Any failure to make required debt payments could, among other things, adversely affect our ability to conduct operations or raise capital.

Our debt agreements and the debt agreements of our subsidiaries allow us to incur significantly more debt, which could exacerbate the other risks described in this Annual Report.

The terms of our debt instruments and the debt instruments of our subsidiaries permit us to incur additional indebtedness. Additional debt may be necessary for many reasons, including those discussed above. Incremental borrowings that impose additional financial risks could exacerbate the other risks described in this Annual Report.

We expect to periodically require financing, and we cannot assure you that we will be able to obtain such financing on terms that are acceptable to us, or at all.

We have a significant amount of indebtedness that we intend to refinance over the next several years, principally through the issuance of debt securities of CenturyLink, Inc., Qwest Corporation or both. Our ability to arrange additional financing will depend on, among other factors, our financial position, performance, and credit ratings, as well as prevailing market conditions and other factors beyond our control. Global financial markets continue to be volatile. Prevailing market conditions could be adversely affected by (i) general market conditions, such as disruptions in domestic or overseas sovereign or corporate debt markets, geo-political instabilities, contractions or limited growth in the economy or other similar adverse economic developments in the U.S. or abroad and (ii) specific conditions in the communications industry. Volatility in the global markets could limit our access to the credit markets, leading to higher borrowing costs or, in some cases, the inability to obtain financing on terms that are as favorable as those from which we previously benefited, on terms that are acceptable to us, or at all. Any such failure to obtain additional financing could jeopardize our ability to repay, refinance or reduce our debt obligations.

We may also need to obtain additional financing under a variety of other circumstances, including if:

• 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 14—Commitments and Contingencies to our consolidated financial statements included elsewhere in this Annual Report.

For all the reasons mentioned above, we can give no assurance that additional financing for any of these purposes will be available on terms that are acceptable to us, or at all.

In addition, our ability to borrow funds in the future will depend in part on the satisfaction of the covenants in our credit facilities and other debt instruments. If we are unable to satisfy the financial covenants contained in those instruments, or are unable to generate cash sufficient to make required debt payments, the parties to whom we are indebted could accelerate the maturity of some or all of our outstanding indebtedness. Certain of our debt instruments have cross-default or cross-acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument.

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As noted above, if we are unable to make required debt payments or refinance our debt, we would likely have to consider other options, such as selling assets, issuing additional securities, reducing or terminating our dividend payments, cutting costs or otherwise reducing our cash requirements, or negotiating with our lenders to restructure our applicable debt. Our current and future debt instruments may restrict, or market or business conditions may limit, our ability to do some of these things on favorable terms or at all.

Any downgrade in the credit ratings of us or our affiliates could limit our ability to obtain future financing, increase our borrowing costs and adversely affect the market price of our existing debt securities or otherwise impair our business, financial condition and results of operations.

Nationally recognized credit rating organizations have issued credit ratings relating to CenturyLink, Inc.'s long-term debt and the long-term debt of several of its subsidiaries. Most of these ratings are below “investment grade”, which results in higher borrowing costs than "investment grade" debt as well as reduced marketability of our debt securities. There can be no assurance that any rating assigned to any of these debt securities will remain in effect for any given period of time or that any such ratings will not be lowered, suspended or withdrawn entirely by a rating agency if, in that rating agency’s judgment, circumstances so warrant.

A downgrade of any of these credit ratings could:

• 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.

Under certain circumstances upon a change of control, we will be obligated to offer to repurchase certain of our outstanding debt securities, which could have certain adverse ramifications.

If the credit ratings relating to certain of our long-term debt securities are downgraded in the manner specified thereunder in connection with a “change of control” of CenturyLink, Inc, then we will be required to offer to repurchase such debt securities. If, due to lack of cash, legal or contractual impediments, or otherwise, we fail to offer to repurchase such debt securities, such failure could constitute an event of default under such debt securities, which could in turn constitute a default under other of our agreements relating to our indebtedness outstanding at that time. Moreover, the existence of these repurchase covenants may in certain circumstances render it more difficult or discourage a sale or takeover of us, or the removal of our incumbent directors.

Our business requires us to incur substantial capital and operating expenses, which reduce our available free cash flow.

Our business is capital intensive, and we anticipate that our capital requirements will continue to be significant in the coming years. As noted elsewhere in this Annual Report, we committed to spend substantial sums to construct infrastructure in connection with our participation in the FCC's CAF Phase 2 program. In addition, as discussed further under “Risk Factors—Risks Affecting Our Business—Increases in broadband usage may cause network capacity limitations, resulting in service disruptions, reduced capacity or slower transmission speeds for our customers,” increased bandwidth consumption by consumers and businesses has placed increased demands on the transmission capacity of our networks. If we determine that our networks must be expanded to handle these increased demands or as needed to meet CAF Phase 2 infrastructure requirements, we may determine that substantial additional capital expenditures are required, even though there is no assurance that the return on our investment will be satisfactory. In addition, many of our growth and modernization initiatives are capital intensive and changes in technology could require further spending. In addition to investing in expanded networks, new products or new technologies, we must from time to time invest capital to (i) replace some of our aging equipment that supports many of our legacy services that are experiencing revenue declines or (ii) convert older systems to simplify and modernize our network. While we believe that our planned level of capital expenditures will meet both our maintenance and core growth requirements, this may not be the case if demands on our network continue to accelerate or other circumstances underlying our expectations change. Increased spending could, among other things, adversely affect our operating margins, cash flows, results of operations and financial position.

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Similarly, we continue to anticipate incurring substantial operating expenses to support our incumbent services and growth initiatives. Although we have successfully reduced certain of our operating expenses over the past few years, we may be unable to further reduce these costs, even if revenues in some of our lines of business are decreasing. If so, our operating margins will be adversely impacted.

As a holding company, we rely on payments from our operating companies to meet our obligations.

As a holding company, substantially all of our income and operating cash flow is dependent upon the earnings of our subsidiaries and their distribution of those earnings to us in the form of dividends, loans or other payments. As a result, we rely upon our subsidiaries to generate the funds necessary to meet our obligations, including the payment of amounts owed under our long-term debt. Our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts owed by us or, subject to limited exceptions for tax-sharing or cash management purposes, to make any funds available to us to repay our obligations, whether by dividends, loans or other payments. State law applicable to each of our subsidiaries restricts the amount of dividends that they may pay. Restrictions that have been or may be imposed by state regulators (either in connection with obtaining necessary approvals for our acquisitions or in connection with our regulated operations), and restrictions imposed by credit instruments or other agreements applicable to certain of our subsidiaries may limit the amount of funds that our subsidiaries are permitted to transfer to us, including the amount of dividends that may be paid to us. Moreover, our rights to receive assets of any subsidiary upon its liquidation or reorganization will be effectively subordinated to the claims of creditors of that subsidiary, including trade creditors. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included elsewhere in this Annual Report for further discussion of these matters.

We cannot assure you that we will continue paying dividends at the current rates or at all.

For the reasons noted below, we cannot assure you that we will continue periodic dividends on our capital stock at the current rates or at all.

As noted in the immediately preceding risk factor, because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to furnish funds to us in the form of dividends, loans or other payments.

Any quarterly dividends on our common stock and our outstanding shares of preferred stock will be paid from funds legally available for such purpose when, as and if declared by our Board of Directors. Decisions on whether, when and in which amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of our Board of Directors, which reserves the right to change or terminate our dividend practices at any time and for any reason without prior notice, including without limitation any of the following:

• 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 Annual 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.

Based on its evaluation of these and other relevant factors, our Board of Directors may, in its sole discretion, decide not to declare a dividend on our common stock or our outstanding shares of preferred stock for any period for any reason, regardless of whether we have funds legally available for such purposes. Holders of our equity securities should be aware that they have no contractual or other legal right to receive dividends.

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Similarly, holders of our common stock should be aware that repurchases of our common stock under various repurchase plans are completely discretionary, and may be suspended or discontinued at any time for any reason regardless of our financial position.

Our current dividend practices could limit our ability to deploy cash for other beneficial purposes.

The current practice of our Board of Directors to pay common share dividends reflects a current intention to distribute to our shareholders a substantial portion of our cash flow. As a result, we may not retain a sufficient amount of cash to apply to other transactions that could be beneficial to our shareholders or debtholders, including stock buybacks, debt prepayments or capital expenditures that strengthen our business. In addition, our ability to pursue any material expansion of our business through acquisitions or increased capital spending may depend more than it otherwise would on our ability to obtain third party financing.

We cannot assure you whether, when or in what amounts we will be able to use our net operating losses, or when they will be depleted.

At December 31, 2015, we had approximately $72 million of federal net operating losses, or NOLs, which relate primarily to pre-acquisition losses of Qwest Communications International Inc. ("Qwest"). Under certain circumstances, these NOLs can be used to offset our future federal taxable income. The acquisitions of Qwest, SAVVIS, Inc. ("Savvis") and other corporations caused “ownership changes” under federal tax laws relating to the post-acquisition use of NOLs and other federal tax attributes. As a result, these laws could limit our ability to use the federal NOLs and certain other federal tax attributes of each of those corporations. Further limitations could apply if we are deemed to undergo an ownership change in the future. Based on current laws and circumstances, we expect to use only a portion of the aforementioned federal NOLs from 2016 through 2032.

Additionally, at December 31, 2015, we had state NOLs of approximately $13 billion. A significant portion of the state NOLs are generated in states where separate company income tax returns are filed and our subsidiaries that generated the losses may not have the ability to generate income in sufficient amounts to realize these losses. In addition, certain of these state NOLs will be limited by state laws related to ownership changes. As a result, we expect to utilize only a small portion of the state NOLs, and consequently have determined that as of December 31, 2015, these state NOLs had a net tax benefit (before valuation allowance) of approximately $444 million.

Increases in costs for pension and healthcare benefits for our active and retired employees may reduce our profitability and increase our funding commitments.

With approximately 43,000 employees, approximately 68,000 pension retirees and approximately 14,000 former employees with vested benefits participating in our benefit plans as of December 31, 2015, the costs of pension and healthcare benefits for our active and retired employees have a significant impact on our profitability. Our costs of maintaining our pension and healthcare plans, and the future funding requirements for these plans, are affected by several factors, most of which are outside our control, including:

• 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.

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Increased costs under these plans could reduce our profitability and increase our funding commitments to our pension plans. Any future material cash contributions could have a negative impact on our liquidity by reducing our cash flows.

As of December 31, 2015, our pension plans and our other post-retirement benefit plans were substantially underfunded from an accounting standpoint. See Note 7—Employee Benefits to our consolidated financial statements included in Item 8 of Part II of this Annual Report. For more information on our obligations under our defined benefit pension plans and other post-retirement benefit plans, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Pension and Post-retirement Benefit Obligations” included in Item 7 of Part II of this Annual Report.

For additional information concerning our liquidity and capital resources, see Item 7 of Part II of this Annual Report. For a discussion of certain currency and liquidity risks associated with our international operations, see "Risk Factors—Risks Affecting Our Business—Our international operations expose us to various regulatory, currency, tax, legal and other risks."

Other Risks

We face risks from natural disasters, which can disrupt our operations and cause us to incur substantial additional capital and operating costs.

A substantial number of our facilities are located in Florida, Alabama, Louisiana, Texas, North Carolina, South Carolina and other coastal states, which subjects them to the risks associated with severe tropical storms, hurricanes and tornadoes, including downed telephone lines, flooded facilities, power outages, fuel shortages, damaged or destroyed property and equipment, and work interruptions. Although we maintain property and casualty insurance on our property (excluding our above ground outside plant) and may, under certain circumstances, be able to seek recovery of some additional costs through increased rates, only a portion of our additional costs directly related to such natural disasters have historically been recoverable. We cannot predict whether we will continue to be able to obtain insurance for catastrophic hazard-related damages or, if obtainable and carried, whether this insurance will be adequate to cover our losses. In addition, we expect any insurance of this nature to be subject to substantial deductibles or retentions and the premiums to be based on our loss experience. Moreover, our insurance coverage is limited for certain specified types of exposure to losses. For all these reasons, any future hazard-related costs and work interruptions could adversely affect our operations and our financial condition.

If conditions or assumptions differ from the judgments, assumptions or estimates used in our critical accounting policies, our consolidated financial statements and related disclosures could be materially affected.

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our critical accounting policies, which are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in Item 7 of Part II of this Annual Report, describe those significant accounting policies and methods used in the preparation of our consolidated financial statements that are considered “critical” because they require judgments, assumptions and estimates that materially impact our consolidated financial statements and related disclosures. As a result, if future events or assumptions differ significantly from the judgments, assumptions and estimates in our critical accounting policies, these events or assumptions could have a material impact on our consolidated financial statements and related disclosures.

Lapses in disclosure controls and procedures or internal control over financial reporting could materially and adversely affect our operations, profitability or reputation.

There can be no assurance that our disclosure controls and procedures will be effective in the future or that we will not experience a material weakness or significant deficiency in internal control over financial reporting. Any such lapses or deficiencies may materially and adversely affect our business, operating results or financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the lapses or deficiencies, expose us to regulatory or legal proceedings, including litigation brought by private individuals, subject us to fines, penalties or judgments, harm our reputation, or otherwise cause a decline in investor confidence and our stock price.

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If our goodwill or other intangible assets become impaired, we may be required to record a significant charge to earnings and reduce our stockholders' equity.

As of December 31, 2015, approximately 55% of our total consolidated assets reflected on the consolidated balance sheet included in this Annual Report consisted of goodwill, customer relationships and other intangible assets. Under U.S. generally accepted accounting principles, most of these intangible assets must be tested for impairment on an annual basis or more frequently whenever events or circumstances indicate that their carrying value may not be recoverable. From time to time (most recently for the third quarter of 2013), we have recorded large non-cash charges to earnings in connection with required reductions of the value of our intangible assets. If our intangible assets are determined to be impaired in the future, we may be required to record additional significant, non-cash charges to earnings during the period in which the impairment is determined to have occurred.

Tax audits or changes in tax laws could adversely affect us.

Like all large businesses, we are subject to frequent and regular audits by the Internal Revenue Service as well as state and local tax authorities. These audits could subject us to tax liabilities if adverse positions are taken by these tax authorities.

We believe that we have adequately provided for tax contingencies. However, our tax audits and examinations may result in tax liabilities that differ materially from those that we have recognized in our consolidated financial statements. Because the ultimate outcomes of all of these matters are uncertain, we can give no assurance as to whether an adverse result from one or more of them will have a material effect on our financial results.

Legislators and regulators at all levels of government may from time to time change existing tax laws or regulations or enact new laws or regulations that could negatively impact our operating results or financial condition.

Our agreements and organizational documents and applicable law could limit another party’s ability to acquire us.

A number of provisions in our agreements and organizational documents and various provisions of applicable law may delay, defer or prevent a future takeover of CenturyLink unless the takeover is approved by our Board of Directors. For additional information, please see our Registration Statement on Form 8-A/A filed with the SEC on March 2, 2015. This could deprive our shareholders of any related takeover premium.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

36

ITEM 2. PROPERTIES

Our property, plant and equipment consists principally of telephone lines, cable, central office equipment, land and buildings related to our operations. Our gross property, plant and equipment consisted of the following components:

	As of December 31,
	2015		2014
Land	2	%	2	%
Fiber, conduit and other outside plant (1)	42	%	41	%
Central office and other network electronics (2)	36	%	36	%
Support assets (3)	18	%	18	%
Construction in progress (4)	2	%	3	%
Gross property, plant and equipment	100	%	100	%

_______________________________________________________________________________

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

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

⁽³⁾  Support assets consist of buildings, data centers, computers and other administrative and support equipment.

⁽⁴⁾  Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction.

We own substantially all of our telecommunications equipment required for our business. However, we lease from third parties certain facilities, plant, equipment and software under various capital and operating lease arrangements when the leasing arrangements are more favorable to us than purchasing the assets. We also own and lease administrative offices in major metropolitan locations both in the United States and internationally. Substantially all of our network electronics equipment is located in buildings or on land that we own or lease within our local service area. Outside of our local service area, our assets are generally located on real property pursuant to an agreement with the property owner or another person with rights to the property. It is possible that we may lose our rights under one or more of these agreements, due to their termination or expiration or in connection with legal challenges to our rights under such agreements.

Our net property, plant and equipment was approximately $18.1 billion and $18.4 billion at December 31, 2015 and 2014, respectively. Some of our property, plant and equipment is pledged to secure the long-term debt of subsidiaries. For additional information, see Note 5—Property, Plant and Equipment to our consolidated financial statements in Item 8 of Part II of this Annual Report.

ITEM 3. LEGAL PROCEEDINGS

The information contained under the subheadings "Pending Matters" and "Other Proceedings and Disputes" in Note 14—Commitments and Contingencies to our consolidated financial statements included in Item 8 of Part II of this Annual Report is incorporated herein by reference.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

37

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the New York Stock Exchange ("NYSE") and the Berlin Stock Exchange and is traded under the symbol CTL and CYT, respectively. The following table sets forth the high and low reported sales prices on the NYSE along with the quarterly dividends, for each of the quarters indicated.

	Sales Price			Cash Dividend per Common Share
	High		Low
2015
First quarter	$	40.59	34.04	0.540
Second quarter	37.00		29.28	0.540
Third quarter	31.13		24.29	0.540
Fourth quarter	29.37		24.11	0.540
2014
First quarter	$	32.98	27.93	0.540
Second quarter	38.21		32.45	0.540
Third quarter	45.67		35.70	0.540
Fourth quarter	41.99		37.56	0.540

Dividends on common stock during 2015 and 2014 were paid each quarter. On February 23, 2016, our Board of Directors declared a common stock dividend of $0.54 per share.

As described in greater detail in Item 1A of Part I of this Annual Report, the declaration and payment of dividends is at the discretion of our Board of Directors, and will depend upon our financial results, cash requirements, future prospects and other factors deemed relevant by our Board of Directors.

At February 17, 2016, there were approximately 135,000 stockholders of record, although there were significantly more beneficial holders of our common stock. At February 17, 2016, the closing stock price of our common stock was $29.73.

Issuer Purchases of Equity Securities

In February 2014, our Board of Directors authorized a 24-month program to repurchase up to an aggregate of $1 billion of our outstanding common stock. This 2014 stock repurchase program took effect on May 29, 2014, immediately upon the completion of our predecessor 2013 stock repurchase program. On December 7, 2015, we completed the 2014 stock repurchase program. During the three months ended December 31, 2015, we repurchased approximately 10.3 million shares of our outstanding common stock in the open market. These shares were repurchased for an aggregate market price of $278 million or an average purchase price of $27.07 per share. The common stock repurchased has been retired. For additional information, see Note 17—Repurchase of CenturyLink, Inc. Common Stock to our consolidated financial statements included in Item 8 of Part II of this Annual Report.

The following table contains information about shares of our previously-issued common stock that were repurchased under our 24-month 2014 stock repurchase program during the fourth quarter of 2015:

	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
October 2015	5,031,341	$	26.20	5,031,341	$	145,743,848
November 2015	4,211,762	28.15		4,211,762	27,178,346
December 2015	1,007,841	26.97		1,007,841	—
Total	10,250,944	27.07		10,250,944

38

The following table contains information about shares of our previously-issued common stock that we withheld from employees upon vesting of their stock-based awards during the fourth quarter of 2015 to satisfy the related minimum tax withholding obligations:

	Total Number of Shares Withheld for Taxes	Average Price Paid Per Share
Period
October 2015	2,940	$	25.93
November 2015	27,471	27.72
December 2015	3,884	27.00
Total	34,295

39

ITEM 6. SELECTED FINANCIAL DATA

The following tables of selected consolidated financial data should be read in conjunction with, and are qualified by reference to, our consolidated financial statements and notes thereto in Item 8 of Part II and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this Annual Report.

The tables of selected financial data shown below are derived from our audited consolidated financial statements. These historical results are not necessarily indicative of results that you can expect for any future period.

The results of operations include Savvis for periods after July 15, 2011 and Qwest for periods after April 1, 2011.

Selected financial information from our consolidated statements of operations is as follows:

	Years Ended December 31, (1)
	2015 (2)		2014 (3)	2013 (4)		2012	2011
	(Dollars in millions, except per share amounts and shares in thousands)
Operating revenues	$	17,900	18,031	18,095		18,376	15,351
Operating expenses	15,295		15,621	16,642		15,663	13,326
Operating income	$	2,605	2,410	1,453		2,713	2,025
Income before income tax expense	1,316		1,110	224		1,250	948
Net income (loss)	878		772	(239	)	777	573
Basic earnings (loss) per common share	1.58		1.36	(0.40	)	1.25	1.07
Diluted earnings (loss) per common share	1.58		1.36	(0.40	)	1.25	1.07
Dividends declared per common share	2.16		2.16	2.16		2.90	2.90
Weighted average basic common shares outstanding	554,278		568,435	600,892		620,205	532,780
Weighted average diluted common shares outstanding	555,093		569,739	600,892		622,285	534,121

_______________________________________________________________________________

⁽¹⁾  See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" in Item 7 of Part II of this Annual Report for a discussion of unusual items affecting the results for the years ended December 31, 2015, 2014 and 2013.

⁽²⁾  During 2015, we recognized an incremental $215 million of revenue associated with the Federal Communications Commission ("FCC") Connect America Fund Phase 2 support program. For additional information, see Note 1—Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report.

⁽³⁾  During 2014, we recognized a $60 million tax benefit associated with a deduction for the tax basis for worthless stock in a wholly-owned foreign subsidiary and a $63 million pension settlement charge. For additional information, see Note 13—Quarterly Financial Data (Unaudited) to our consolidated financial statements included in Item 8 of Part II of this Annual Report.

⁽⁴⁾  During 2013, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $1.092 billion for goodwill attributed to one of our previous operating segments and a litigation settlement charge of $235 million.

40

Selected financial information from our consolidated balance sheets is as follows:

	As of December 31,
	2015		2014	2013	2012	2011
	(Dollars in millions)
Net property, plant and equipment	$	18,069	18,433	18,646	18,909	19,361
Goodwill (1)	20,742		20,755	20,674	21,627	21,627
Total assets (2)	47,604		49,103	50,471	52,901	54,842
Total long-term debt (2)(3)	20,225		20,503	20,809	20,481	21,758
Total stockholders' equity (1)	14,060		15,023	17,191	19,289	20,827

_______________________________________________________________________________

⁽¹⁾  During 2013, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $1.092 billion for goodwill attributed to one of our previous operating segments. For additional information, see Note 2—Goodwill, Customer Relationships and Other Intangible Assets to our consolidated financial statements in Item 8 of Part II of this Annual Report.

⁽²⁾  We adopted both ASU 2015-03 "Simplifying the Presentation of Debt Issuance Costs" and ASU 2015-17 "Balance Sheet Classification of Deferred Taxes" by retrospectively applying the requirements of the ASUs to our previously issued consolidated financial statements. The adoption of both ASU 2015-03 and ASU 2015-17 reduced total assets by $1.044 billion, $1.316 billion, $1.039 billion and $1.122 billion in each year for the four years ended December 31, 2014, respectively, and ASU 2015-03 reduced total long-term debt by $168 million, $157 million, $124 million and $78 million in each year for the four years ended December 31, 2014, respectively. See further discussion in Note 1—Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report.

⁽³⁾  Total long-term debt is the sum of current maturities of long-term debt and long-term debt on our consolidated balance sheets. For additional information on our total long-term debt, see Note 3—Long-Term Debt and Credit Facilities to our consolidated financial statements in Item 8 of Part II of this Annual Report. For total contractual obligations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Future Contractual Obligations" in Item 7 of Part II of this Annual Report.

Selected financial information from our consolidated statements of cash flows is as follows:

	Years Ended December 31,
	2015			2014		2013		2012		2011
	(Dollars in millions)
Net cash provided by operating activities	$	5,152		5,188		5,559		6,065		4,201
Net cash used in investing activities	(2,853		)	(3,077	)	(3,148	)	(2,690	)	(3,647	)
Net cash used in financing activities	(2,301		)	(2,151	)	(2,454	)	(3,295	)	(577	)
Payments for property, plant and equipment and capitalized software	(2,872		)	(3,047	)	(3,048	)	(2,919	)	(2,411	)

The following table presents certain of our selected operational metrics:

	As of December 31,
	2015	2014	2013	2012	2011
	(in thousands except for data centers, which are actuals)
Operational metrics:
Total access lines (1)	11,748	12,394	13,002	13,751	14,587
Total high-speed Internet subscribers (1)	6,048	6,082	5,991	5,851	5,655
Prism TV subscribers	285	242	175	106	65
Total data centers (2)	59	58	55	54	51

_______________________________________________________________________________

⁽¹⁾  Access lines are lines reaching from the customers' premises to a connection with the public network and 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. Our methodology for counting our access lines and high-speed Internet subscribers 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 either colocation services, multi-tenant managed services, or both. Our data centers are located in North America, Europe and Asia.

41

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All references to "Notes" in this Item 7 of Part II refer to the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Annual Report. Certain statements in this Annual Report constitute forward-looking statements. See "Special Note Regarding Forward-Looking Statements and Related Matters" in Item 1 of Part I of this Annual Report for factors relating to these statements and "Risk Factors" in Item 1A of Part I of this Annual Report for a discussion of certain risk factors applicable to our business, financial condition, results of operations, liquidity or prospects.

Overview

We are an integrated communications company engaged primarily in providing an array of communications services to our residential and business customers. Our communications services include local and long-distance voice, high-speed Internet, Multi-Protocol Label Switching ("MPLS"), private line (including special access), data integration, Ethernet, colocation, managed hosting (including cloud hosting), network, public access, video, wireless and other ancillary services. We strive to maintain our customer relationships by, among other things, bundling our service offerings to provide our customers with a complete offering of integrated communications services.

At December 31, 2015, we operated approximately 11.7 million access lines in 37 states and served approximately 6.0 million high-speed Internet subscribers and 285 thousand Prism TV subscribers. We also operated 59 data centers throughout North America, Europe and Asia. Our methodology for counting access lines, high-speed Internet subscribers and data centers, which is described further in the operational metrics table below under "Results of Operations", may not be comparable to those of other companies.

Our consolidated financial statements include the accounts of CenturyLink, Inc. and its majority-owned subsidiaries ("CenturyLink").

We are organized into operating segments based on customer type, business and consumer. These operating segments are our two reportable segments in our consolidated financial statements:

• Business Segment. Consists generally of providing strategic, legacy and data integration products and services to small, medium and enterprise business, 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, local and long-distance voice services, including the sale of unbundled network elements ("UNEs") which allow our wholesale customers to use all or part of our network 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; and

• Consumer Segment. 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, video (including our Prism TV services) and wireless services. Our legacy services offered to these customers include local and long-distance voice service.

42

Results of Operations

The following table summarizes the results of our consolidated operations for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015 (1)		2014 (2)	2013 (3)
	(Dollars in millions except per share amounts)
Operating revenues	$	17,900	18,031	18,095
Operating expenses	15,295		15,621	16,642
Operating income	2,605		2,410	1,453
Other expense, net	1,289		1,300	1,229
Income tax expense	438		338	463
Net income (loss)	$	878	772	(239	)
Basic earnings (loss) per common share	$	1.58	1.36	(0.40	)
Diluted earnings (loss) per common share	$	1.58	1.36	(0.40	)

_______________________________________________________________________________

⁽¹⁾  During 2015, we recognized an incremental $215 million of revenue associated with the Federal Communications Commission ("FCC") Connect America Fund Phase 2 support program. For additional information, see Note 1—Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report.

⁽²⁾  During 2014, we recognized a $60 million tax benefit associated with a deduction for the tax basis for worthless stock in a wholly-owned foreign subsidiary and a $63 million pension settlement charge. For additional information, see Note 13—Quarterly Financial Data (Unaudited) to our consolidated financial statements included in Item 8 of Part II of this Annual Report.

⁽³⁾  During 2013, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $1.092 billion for goodwill attributed to one of our previous operating segments and a litigation settlement charge of $235 million.

The following table summarizes our access lines, high-speed Internet subscribers, Prism TV subscribers, data centers and number of employees:

	As of December 31,
	2015	2014	2013
	(in thousands except for data centers, which are actuals)
Operational metrics:
Total access lines (1)	11,748	12,394	13,002
Total high-speed Internet subscribers (1)	6,048	6,082	5,991
Total Prism TV subscribers	285	242	175
Total data centers (2)	59	58	55
Total employees	43	45	47

_______________________________________________________________________________

⁽¹⁾  Access lines are lines reaching from the customers' premises to a connection with the public network and 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. Our methodology for counting our access lines and high-speed Internet subscribers 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 either colocation services, multi-tenant managed services, or both. Our data centers are located in North America, Europe and Asia.

During the last decade, we have experienced revenue declines primarily due to declines in access lines, private line customers, switched access rates and minutes of use. To mitigate these revenue declines, we remain focused on efforts to, among other things:

• promote long-term relationships with our customers through bundling of integrated services;

• provide a wide array of diverse services, including enhanced or additional services that may become available in the future due to, among other things, advances in technology or improvements in our infrastructure;

43

• 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 the capacity and speed of our networks;

• increase usage of our networks; and

• market our products and services to new customers.

Operating Revenues

We currently categorize our products, services and revenues among the following four categories:

• 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 16 markets), VoIP and Verizon Wireless services;

• Legacy services, which include primarily local and long-distance voice services, including the sale of UNEs, switched access, and Integrated Services Digital Network ("ISDN") services (which use 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 business customers; and

• Other operating revenues, which consists primarily of Connect America Fund ("CAF") support payments, Universal Service Fund ("USF") support payments and USF surcharges. We receive federal support payments from both CAF Phase 1 and CAF Phase 2 programs, and support payments from both federal and state USF programs. These support payments are government subsidies designed to reimburse us for various costs related to certain telecommunications services, including the costs of deploying, maintaining and operating voice and high-speed Internet infrastructure 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.

The following tables summarize our consolidated operating revenues recorded under our four revenue categories:

	Years Ended December 31,			Increase / (Decrease)		% Change
	2015		2014
	(Dollars in millions)
Strategic services	$	9,343	9,166	177		2	%
Legacy services	6,752		7,172	(420	)	(6	)%
Data integration	573		690	(117	)	(17	)%
Other	1,232		1,003	229		23	%
Total operating revenues	$	17,900	18,031	(131	)	(1	)%

44

	Years Ended December 31,			Increase / (Decrease)		% Change
	2014		2013
	(Dollars in millions)
Strategic services	$	9,166	8,776	390		4	%
Legacy services	7,172		7,663	(491	)	(6	)%
Data integration	690		656	34		5	%
Other	1,003		1,000	3		—	%
Total operating revenues	$	18,031	18,095	(64	)	—	%

During the first quarter of 2015, we determined that certain products and services associated with our acquisition of SAVVIS, Inc. ("Savvis") are more closely aligned to legacy services than to strategic services. As a result, these operating revenues are now reflected as legacy services. The revision resulted in a reduction of revenue from strategic services of $34 million and $47 million, respectively, and a corresponding increase in revenue from legacy services for the years ended December 31, 2014 and 2013, respectively.

Our total operating revenues decreased by $131 million, or 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014 and operating revenues decreased by $64 million, or less than 1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The decline in revenues for both periods was primarily due to lower legacy services revenues, which decreased by $420 million, or 6%, and $491 million, or 6%, for the respective periods. The decline in legacy services revenues reflects the continuing loss of access lines and loss of long-distance revenues primarily due to the displacement of traditional wireline telephone services by other competitive products and services, including Internet and wireless communication services. At December 31, 2015, we had approximately 11.7 million access lines, or approximately 5.2% less than the number of access lines we operated at December 31, 2014. At December 31, 2014, we had approximately 12.4 million access lines, or approximately 4.7% less than the number of access lines we operated at December 31, 2013. We estimate that the rate of our access lines losses will be between 5.0% and 6.0% over the full year of 2016. The growth in our strategic services revenues for both periods was primarily due to increases in high-speed Internet, Ethernet, MPLS, facilities-based video and IT services and from rate increases on various services, which were substantially offset by declines in private line (including special access) services, colocation and hosting services. The level of strategic revenue growth in 2015 was lower than 2014, primarily driven by revenue declines in hosting products as well as a pricing change for a large wholesale customer in exchange for a longer term commitment. Data integration revenues, which are typically more volatile than our other sources of revenues, decreased by $117 million, or 17%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The decline in data integration revenues was primarily due to declines in governmental sales and professional services, which were partially offset by an increase in maintenance services. Data integration revenues increased by $34 million, or 5%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to several large sales of customer premises equipment to governmental customers and related professional services in 2014. Other operating revenues increased by $229 million, or 23%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The increase in other operating revenues was primarily due to additional revenue recorded under the CAF Phase 2 support program. Other operating revenues increased by $3 million, or less than 1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to higher USF surcharge revenues related to increased universal service fund contribution factors. For additional information about the CAF Phase 2 support program, see the discussion below in "Liquidity and Capital Resources—Connect America Fund."

We are aggressively marketing our strategic services in an effort to partially offset the continuing declines in our legacy and private line services.

Further analysis of our segment operating revenues and trends impacting our performance are provided below in "Segment Results."

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Operating Expenses

Our current definitions of operating expenses are as follows:

• Cost of services and products (exclusive of depreciation and amortization) are expenses incurred in providing products and services to our customers. These expenses include: employee-related expenses directly attributable to operating and maintaining our network (such as salaries, wages, benefits and professional fees); facilities expenses (which include third-party telecommunications expenses we incur for using other carriers' networks to provide services to our customers); rents and utilities expenses; equipment sales expenses (such as data integration and modem expenses); payments to universal service funds (which are federal and state funds that are established to promote the availability of telecommunications services to all consumers at reasonable and affordable rates, among other things, and to which we are often required to contribute); certain litigation expenses associated with our operations; and other expenses directly related to our operations; and

• Selling, general and administrative expenses are corporate overhead and other operating expenses. These expenses include: employee-related expenses (such as salaries, wages, internal commissions, benefits and professional fees) directly attributable to selling products or services and employee-related expenses for administrative functions; marketing and advertising; property and other operating taxes and fees; external commissions; litigation expenses associated with general matters; bad debt expense; and other selling, general and administrative expenses.

These expense classifications may not be comparable to those of other companies.

The following tables summarize our operating expenses:

	Years Ended December 31,			Increase / (Decrease)		% Change
	2015		2014
	(Dollars in millions)
Cost of services and products (exclusive of depreciation and amortization)	$	7,778	7,846	(68	)	(1	)%
Selling, general and administrative	3,328		3,347	(19	)	(1	)%
Depreciation and amortization	4,189		4,428	(239	)	(5	)%
Total operating expenses	$	15,295	15,621	(326	)	(2	)%

	Years Ended December 31,			Increase / (Decrease)		% Change
	2014		2013
	(Dollars in millions)
Cost of services and products (exclusive of depreciation and amortization)	$	7,846	7,507	339		5	%
Selling, general and administrative	3,347		3,502	(155	)	(4	)%
Depreciation and amortization	4,428		4,541	(113	)	(2	)%
Impairment of goodwill	—		1,092	(1,092	)	nm
Total operating expenses	$	15,621	16,642	(1,021	)	(6	)%

_______________________________________________________________________________

nm - Attributing changes in impairment of goodwill to the 2013 goodwill impairment charge are considered not meaningful.

46

Cost of Services and Products (exclusive of depreciation and amortization)

Cost of services and products (exclusive of depreciation and amortization) decreased by $68 million, or 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. Excluding the lower customer premises equipment costs, cost of services and products increased by $56 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The increase in costs of services and products was primarily due to increases in pension and postretirement costs, USF rate increases, higher network expenses and increases in content costs for Prism TV. These increases were partially offset by decreases in salaries and wages from lower headcount, professional fees and contract labor costs. Cost of services and products (exclusive of depreciation and amortization) increased by $339 million, or 5%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to increases in employee-related costs (which was significantly impacted by the below-noted lump sum pension payments), customer premises equipment installation expenses related to the increase in data integration revenues, facility and network costs, real estate and power costs and content costs for Prism TV.

Selling, General and Administrative

Selling, general and administrative expenses decreased by $19 million, or less than 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The decrease in selling, general and administrative expenses was primarily due to lower benefit expenses, insurance costs and asset impairment charges. These decreases were partially offset by increases in bad debt expense, external commissions and regulatory fines of $15 million associated with a 911 system outage. Selling, general and administrative expenses decreased by $155 million, or 4%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to a charge in 2013 of $235 million in connection with a litigation settlement. The decrease was partially offset by increases in employee-related costs (including severance costs), insurance costs and impairment charges related to office buildings sold and currently being held for sale.

Pension Lump Sum Offer

Our pension plan contains provisions that allow us, from time to time, to offer lump sum payment options to certain former employees in settlement of their future retirement benefits. We record an accounting settlement charge associated with these lump sum payments only if, in the aggregate, they exceed the sum of the annual service and interest costs for the plan’s net periodic pension benefit cost, which represents the settlement threshold. In September 2015, we offered to make cash settlement payments in December 2015 to a group of former employees provided they accepted the offer by the end of October 2015. During the fourth quarter of 2015, we made cash settlement payments for the lump sum offer of approximately $356 million. The total amount of the lump sum settlement payments for the year ended December 31, 2015, which included the lump sum offer and lump sum elections from employees who terminated employment during the year, was less than the settlement threshold, therefore settlement accounting was not triggered in 2015. We made cash settlement payments of approximately $460 million, which triggered settlement accounting and resulted in us recording additional pension expense of $63 million for the year ended December 31, 2014. Pension expense is allocated to cost of services and products (exclusive of depreciation and amortization) and to selling, general and administrative.

Non-recurring Operating Expenses Related to Acquisitions

We have incurred certain non-recurring operating expenses related to our acquisitions since 2009, including our acquisitions of Qwest in April 2011 and Savvis in July 2011. These expenses are reflected in cost of services and products and selling, general and administrative expenses in our consolidated statements of operations, as summarized below.

	Years Ended December 31,
	2015		2014	2013
	(Dollars in millions)
Cost of services and products:
Integration and other expenses associated with acquisitions	$	14	15	15
Total	$	14	15	15
Selling, general and administrative:
Integration and other expenses associated with acquisitions	$	18	36	28
Severance expenses, accelerated recognition of share-based awards and retention compensation associated with acquisitions	—		—	10
Total	$	18	36	38

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Based on current plans and information, we estimate, in relation to our Qwest acquisition, total integration, severance and retention expenses to be between $600 million to $625 million (which includes approximately $594 million of cumulative expenses incurred through December 31, 2015) and our capital expenditures associated with integration activities will approximate $170 million (which includes approximately $144 million of cumulative capital expenditures incurred through December 31, 2015). We anticipate that the amount of our integration costs in future years will vary substantially based on integration activities conducted during those periods and could in certain cases be higher than those incurred by us during the year ended December 31, 2015.

Depreciation and Amortization

The following tables provide detail of our depreciation and amortization expense:

	Years Ended December 31,			Increase / (Decrease)		% Change
	2015		2014
	(Dollars in millions)
Depreciation	$	2,836	2,958	(122	)	(4	)%
Amortization	1,353		1,470	(117	)	(8	)%
Total depreciation and amortization	$	4,189	4,428	(239	)	(5	)%

	Years Ended December 31,			Increase / (Decrease)		% Change
	2014		2013
	(Dollars in millions)
Depreciation	$	2,958	2,952	6		—	%
Amortization	1,470		1,589	(119	)	(7	)%
Total depreciation and amortization	$	4,428	4,541	(113	)	(2	)%

Annual depreciation expense is impacted by several factors, including changes in our depreciable cost basis, changes in our estimates of the remaining economic life of certain network assets and the addition of new plant. Depreciation expense decreased by $122 million, or 4%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The depreciation expense related to our plant for the year ended December 31, 2015 was lower than the depreciation expense for the year ended December 31, 2014 due to full depreciation and retirement of certain plant placed in service prior to 2015. This decrease was partially offset by increases in depreciation attributable to new plant placed in service during the year ended December 31, 2015 and the impact of changes in the estimated lives of certain property, plant and equipment which resulted in additional depreciation during 2015. The changes in the estimated lives of certain property, plant and equipment resulted in an increase in depreciation expense of approximately $48 million for 2015, which was more than fully offset by the decrease in depreciation expense noted above. Depreciation expense increased by $6 million, or less than 1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The 2014 depreciation expense was higher than the respective prior period depreciation expense due to new plant additions in 2014 and changes in the estimated lives of certain property, plant and equipment, which were partially offset by our plant aging and becoming fully depreciated or retired. During January 2014, we implemented changes in estimates that reduced the remaining economic lives of certain switch and circuit network equipment, which resulted in increased 2014 annual depreciation expense. Additionally, we developed a plan to migrate customers from one of our networks to another between late 2014 and late 2015. As a result, we implemented changes in estimates that reduced the remaining economic lives of certain network assets. The impact from the above-noted changes in estimates and network migration resulted in an increase in depreciation expense of approximately $90 million for the year ended December 31, 2014. For more information about the changes in our estimates of the remaining economic lives of these assets, see Note 1—Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report.

Amortization expense decreased by $117 million, or 8%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014 and amortization expense decreased by $119 million, or 7%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The decrease in amortization expense for both periods was primarily due to software becoming fully amortized faster than new software was acquired or developed.

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Goodwill Impairment

During our 2013 annual goodwill impairment assessment, we concluded the carrying value of goodwill assigned to one of our previous reporting units exceeded its estimated implied fair value by $1.092 billion. The decline in estimated fair value of this previous reporting unit was the result of slower than previously projected revenue and margin growth and greater than anticipated competitive pressures.

For additional information on the risk associated with intangible assets, see "Critical Accounting Policies and Estimates-Goodwill, Customer Relationships and Other Intangibles Assets" below and "Risk Factors" in Item 1A of Part I of this Annual Report.

Further analysis of our operating expenses by segment is provided below in "Segment Results."

Other Consolidated Results

The following tables summarize our total other expense, net and income tax expense:

	Years Ended December 31,					Increase / (Decrease)		% Change
	2015			2014
	(Dollars in millions)
Interest expense	$	(1,312	)	(1,311	)	1		—	%
Other income, net	23			11		12		109	%
Total other expense, net	$	(1,289	)	(1,300	)	(11	)	(1	)%
Income tax expense	$	438		338		100		30	%

	Years Ended December 31,					Increase / (Decrease)		% Change
	2014			2013
	(Dollars in millions)
Interest expense	$	(1,311	)	(1,298	)	13		1	%
Net gain on early retirement of debt	—			10		(10	)	(100	)%
Other income, net	11			59		(48	)	(81	)%
Total other expense, net	$	(1,300	)	(1,229	)	71		6	%
Income tax expense	$	338		463		(125	)	(27	)%

Interest Expense

Interest expense increased by $1 million, or less than 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The increase in interest expense was primarily due to a reduction in the amortization of debt premiums, which was substantially offset by higher capitalized interest, lower bond coupon rates and lower interest under our Credit Facility. Interest expense increased by $13 million, or 1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The increase in interest expense was primarily due to a reduction in the amortization of debt premiums, which was partially offset by the reversal of certain tax interest reserves and increased capitalized interest.

Net Gain on Early Retirement of Debt

In the fourth quarter of 2013, Qwest redeemed its outstanding debt securities, which resulted in a gain of $10 million.

Other Income, Net

Other income, net reflects certain items not directly related to our core operations, including our share of income from partnerships we do not control, interest income, gains and losses from non-operating asset dispositions and foreign currency gains and losses. Other income, net increased by $12 million, or 109%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. This increase in other income, net was primarily due to the impact of a 2014 impairment charge of $14 million recorded in connection with the sale of our 700 MHz A-Block Wireless Spectrum licenses, which was partially offset by a net loss on early retirement of debt in 2015. Other income, net decreased by $48 million, or 81%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to the above-noted impairment charge and a $32 million gain on the sale of wireless spectrum in 2013.

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Income Tax Expense

Income tax expense increased by $100 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014. Our income tax expense for the year ended December 31, 2014 decreased by $125 million from the amounts for the comparable prior year. For the years ended December 31, 2015, 2014 and 2013, our effective income tax rate was 33.3%, 30.5% and 206.7%, respectively. The effective tax rate for the year ended December 31, 2015, reflects a tax benefit of approximately $34 million related to affiliate debt rationalization, research and development tax credits of $28 million for 2011 through 2015, and a $16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating losses ("NOLs"). The effective tax rate for the year ended December 31, 2014, reflects a $60 million tax benefit associated with a worthless stock deduction for the tax basis in a wholly-owned foreign subsidiary as a result of developments in bankruptcy proceedings involving its sole asset, an indirect investment in KPNQwest, N.V. The subsidiary was acquired as part of the acquisition of Qwest and we assigned it no fair value in the acquisition due to the bankruptcy proceedings, which were then ongoing. The effective tax rate for the year ended December 31, 2014 also reflects a $13 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of NOLs. The rate also reflects the absence of tax benefits from the impairment and disposition of our 700 MHz A-Block wireless spectrum licenses in 2014, because we are not likely to generate income of a character required to realize a tax benefit from the loss on disposition during the period permitted by law for utilization of that loss. The 2013 effective tax rate reflects the impacts of the $1.092 billion non-deductible goodwill impairment and of an unfavorable accounting adjustment of $17 million related to non-deductible life insurance costs. The 2013 tax expense also includes the impacts of a favorable settlement with the Internal Revenue Service ("IRS") of $33 million and a favorable adjustment of $22 million related to the reversal of liabilities for uncertain tax positions. See Note 11—Income Taxes to our consolidated financial statements in Item 8 of Part II of this Annual Report and "Critical Accounting Policies and Estimates—Income Taxes" below for additional information.

Segment Results

The results for our business and consumer segments are summarized below for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment revenues	$	16,668		17,028		17,095
Total segment expenses	8,459			8,509		8,167
Total segment income	$	8,209		8,519		8,928
Total margin percentage	49		%	50	%	52	%
Business segment:
Revenues	$	10,647		11,034		11,091
Expenses	6,034			6,089		5,808
Income	$	4,613		4,945		5,283
Margin percentage	43		%	45	%	48	%
Consumer segment:
Revenues	$	6,021		5,994		6,004
Expenses	2,425			2,420		2,359
Income	$	3,596		3,574		3,645
Margin percentage	60		%	60	%	61	%

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The following table reconciles our total segment revenues and total segment income presented above to consolidated operating revenues and consolidated operating income reported in our consolidated statements of operations.

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment revenues	$	16,668		17,028		17,095
Other operating revenues	1,232			1,003		1,000
Operating revenues reported in our consolidated statements of operations	$	17,900		18,031		18,095
Total segment income	$	8,209		8,519		8,928
Other operating revenues	1,232			1,003		1,000
Depreciation and amortization	(4,189		)	(4,428	)	(4,541	)
Impairment of goodwill (Note 2)	—			—		(1,092	)
Other unassigned operating expenses	(2,647		)	(2,684	)	(2,842	)
Operating income reported in our consolidated statement of operations	$	2,605		2,410		1,453

Allocation of Revenues and Expenses

Our segment revenues include all revenues from our strategic services, legacy services and data integration as described in more detail above. Segment revenues are based upon each customer's classification to an individual segment. We report our segment revenues based upon all services provided to that segment's customers. For information on how we allocate expenses to our segments, as well as other additional information about our segments, see Note 12—Segment Information to our consolidated financial statements in Item 8 of Part II of this Annual Report.

Business Segment

The operations of our business segment have been impacted by several significant trends, including those described below:

• Strategic services. Our mix of total business segment revenues continues to migrate from legacy services to strategic services as our small, medium and enterprise business, wholesale and governmental customers increasingly demand integrated data, Internet, hosting and voice services. During 2015, our strategic revenues were negatively impacted by several factors, including competitive pressures, customer losses, migration from traditional hosting services to lower priced cloud-based services and transitioning to our new management structure negatively impacted the growth of our strategic revenues. Demand for our private line services (including special access) continues to decline due to our customers' optimization of their networks, industry consolidation and technological migration to higher-speed services. Additionally, we face competition in Ethernet based services in the wholesale market from cable companies and fiber based CLEC providers. We anticipate continued pricing pressure for our colocation services as vendors continue to expand their enterprise colocation operations. 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. The demand for new technology has also increased the number of competitors offering strategic services similar to ours. Price compression from each of these above-mentioned competitive pressures has negatively impacted the operating margins of our strategic services and we expect this trend to continue. Operating costs also impact the operating margins of our strategic services, but to a lesser extent than price compression and customer disconnects. 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;

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• Legacy services. We continue to experience customers migrating away from our higher margin legacy services into lower margin strategic services. Our legacy services revenues have been, and we expect they will continue to be, adversely affected by access line losses and price compression. In particular, 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 of our business segment 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 recent FCC order will also reduce our revenue that we collect for local voice and long-distance services provided to correctional facilities. 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. Our data integration operating margins are typically smaller than most of our other offerings; 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.

The following tables summarize the results of operations from our business segment:

	Business Segment
	Years Ended December 31,					Increase / (Decrease)		% Change
	2015			2014
	(Dollars in millions)
Segment revenues:
Strategic services
High-bandwidth data services (1)	$	2,816		2,579		237		9	%
Low-bandwidth data services (2)	2,052			2,345		(293	)	(12	)%
Hosting services (3)	1,281			1,316		(35	)	(3	)%
Other strategic services (4)	162			76		86		113	%
Total strategic services revenues	6,311			6,316		(5	)	—	%
Legacy services
Voice services (5)	2,590			2,780		(190	)	(7	)%
Other legacy services (6)	1,175			1,252		(77	)	(6	)%
Total legacy services revenues	3,765			4,032		(267	)	(7	)%
Data integration	571			686		(115	)	(17	)%
Total revenues	10,647			11,034		(387	)	(4	)%
Segment expenses:
Total expenses	6,034			6,089		(55	)	(1	)%
Segment income	$	4,613		4,945		(332	)	(7	)%
Segment margin percentage	43		%	45	%

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	Business Segment
	Years Ended December 31,					Increase / (Decrease)		% Change
	2014			2013
	(Dollars in millions)
Segment revenues:
Strategic services
High-bandwidth data services (1)	$	2,579		2,230		349		16	%
Low-bandwidth data services (2)	2,345			2,577		(232	)	(9	)%
Hosting services (3)	1,316			1,259		57		5	%
Other strategic services (4)	76			60		16		27	%
Total strategic services revenues	6,316			6,126		190		3	%
Legacy services
Voice services (5)	2,780			2,916		(136	)	(5	)%
Other legacy services (6)	1,252			1,398		(146	)	(10	)%
Total legacy services revenues	4,032			4,314		(282	)	(7	)%
Data integration	686			651		35		5	%
Total revenues	11,034			11,091		(57	)	(1	)%
Segment expenses:
Total expenses	6,089			5,808		281		5	%
Segment income	$	4,945		5,283		(338	)	(6	)%
Segment margin percentage	45		%	48	%

______________________________________________________________________ 

(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

Segment Revenues

Business segment revenues decreased by $387 million, or 4%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The decrease in business segment revenues was primarily due to declines in legacy services revenues, private line (including special access) revenues in our strategic services and data integration revenues. The decline in legacy services revenues was attributable to a reduction in local service access lines and lower volumes of long-distance, access and traditional WAN services for the reasons noted above. The decline in our strategic services revenues was primarily due to a reduction in hosting services and private line (including special access) volumes, as well as a pricing change on private line services for a large wholesale customer in exchange for a longer term commitment. These declines were partially offset by MPLS unit growth and higher Ethernet volumes. The decrease in data integration revenues was primarily due to lower sales of customer premises equipment to governmental and business customers during the period. Business segment revenues decreased by $57 million, or 1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The decrease in business segment revenues was primarily due to the decline in legacy services revenues, which were partially offset by the growth in our strategic services and data integration revenues. The decline in legacy services revenues was attributable to lower volumes of local access and traditional WAN services. The growth in our strategic services revenues was primarily due to MPLS unit growth and higher Ethernet volume, which were substantially offset by a decline in private line (including special access) services. The increase in data integration revenues was primarily due to higher sales of customer premises equipment to governmental customers during the period.

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Segment Expenses

Business segment expenses decreased by $55 million, or 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The decrease was due primarily to reductions in customer premises equipment costs resulting from the lower sales noted above in segment revenues. Excluding the lower customer premises equipment costs, business expenses increased by $59 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The increase is primarily due to increases in salaries and wages, benefits expense, external commissions, network expense and facility costs, which were partially offset by decreases in professional fees, materials and supplies and fleet expenses. Business segment expenses increased by $281 million, or 5%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The increase was primarily due to increases in employee-related costs attributable to higher wages, benefits and internal commissions, customer premises equipment costs resulting from higher sales noted above, facility costs driven by MPLS unit growth and real estate and power costs.

Segment Income

Business segment income decreased by $332 million, or 7%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The decrease in business segment income was due to the loss of customers and lower service volumes in our legacy services and to the increase in operating expenses, excluding the impact of the reduction in customer premises equipment costs. Business segment income decreased by $338 million, or 6%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The decrease was primarily due to customers migrating from legacy services to lower margin strategic services.

Consumer Segment

The operations of our consumer segment have been impacted by several significant trends, including those described below:

• 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 Annual Report, certain of our competitors continue to provide high-speed Internet services at higher average transmission speeds than ours or through advanced wireless data service offerings, both of which we believe have impacted the competitiveness of certain of our high-speed Internet 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 start-up expenses in advance of marketing and selling the service. Also, our associated content costs continue to increase and the video business has become more competitive as more options become available to customers to access video services through new technologies. The demand for new technology has increased the number of competitors offering strategic services similar to ours. Price compression and new technology from our competitors have negatively impacted the operating margins of our strategic services and we expect this trend to continue. 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 content costs, software costs on selected services and installation 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;

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• 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.

The following tables summarize the results of operations from our consumer segment:

	Consumer Segment
	Years Ended December 31,					Increase / (Decrease)		% Change
	2015			2014
	(Dollars in millions)
Segment revenues:
Strategic services
High-speed Internet services (1)	$	2,611		2,469		142		6	%
Other strategic services (2)	421			381		40		10	%
Total strategic services revenues	3,032			2,850		182		6	%
Legacy services
Voice services (3)	2,676			2,864		(188	)	(7	)%
Other legacy services (4)	311			276		35		13	%
Total legacy services revenues	2,987			3,140		(153	)	(5	)%
Data integration	2			4		(2	)	(50	)%
Total revenues	6,021			5,994		27		—	%
Segment expenses:
Total expenses	2,425			2,420		5		—	%
Segment income	$	3,596		3,574		22		1	%
Segment income margin percentage	60		%	60	%

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	Consumer Segment
	Years Ended December 31,					Increase / (Decrease)		% Change
	2014			2013
	(Dollars in millions)
Segment revenues:
Strategic services
High-speed Internet services (1)	$	2,469		2,358		111		5	%
Other strategic services (2)	381			292		89		30	%
Total strategic services revenues	2,850			2,650		200		8	%
Legacy services
Voice services (3)	2,864			3,101		(237	)	(8	)%
Other legacy services (4)	276			248		28		11	%
Total legacy services revenues	3,140			3,349		(209	)	(6	)%
Data integration	4			5		(1	)	(20	)%
Total revenues	5,994			6,004		(10	)	—	%
Segment expenses:
Total expenses	2,420			2,359		61		3	%
Segment income	$	3,574		3,645		(71	)	(2	)%
Segment income margin percentage	60		%	61	%

______________________________________________________________________ 

(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

Segment Revenues

Consumer segment revenues increased by $27 million, or less than 1%, for year ended December 31, 2015 as compared to the year ended December 31, 2014. The increase in strategic services revenues was primarily due to increases in the number of Prism TV customers, as well as from 2015 price increases on various services. The decline in legacy services revenues was primarily due to declines in local and long-distance services volumes associated with access line losses resulting from the competitive and technological changes as further described above. Consumer segment revenues decreased by $10 million, or less than 1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The decline in legacy services revenues was due to the same reasons noted above. The increase in strategic services revenues was primarily due to growth in the number of high-speed Internet subscribers and increases in the number of Prism TV customers, as well as from 2014 price increases on various services. The increase in consumer segment revenues during 2015 as compared to the decline in revenues for 2014 was primarily attributable to the above-noted price increases.

Segment Expenses

Consumer segment expenses increased by $5 million, or less than 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. This increase was primarily due to increases in Prism TV content costs (resulting from higher volume and rates) and bad debt expense, which were partially offset by reductions in employee-related costs, marketing and advertising expenses and fleet expenses. Consumer segment expenses increased by $61 million, or 3%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. This increase was primarily due to increases in marketing and advertising expenses, Prism TV content costs resulting from subscriber growth in our Prism TV markets and the number of modems shipped for Prism TV customers, which were partially offset by reductions in employee-related costs and facility costs.

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Segment Income

Consumer segment income increased by $22 million, or 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. This increase was primarily due to price increases on various services and reduction of costs. Consumer segment income decreased by $71 million, or 2%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. This decrease was primarily due to customers migrating from legacy services to lower margin strategic services, and the increase in Prism TV content costs.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues and expenses. We have identified certain policies and estimates as critical to our business operations and the understanding of our past or present results of operations related to (i) goodwill, customer relationships and other intangible assets; (ii) property, plant and equipment; (iii) pension and post-retirement benefits; (iv) loss contingencies and litigation reserves; (v) Connect America Fund support payments; and (vi) income taxes. These policies and estimates are considered critical because they had a material impact, or they have the potential to have a material impact, on our consolidated financial statements and because they require us to make significant judgments, assumptions or estimates. We believe that the estimates, judgments and assumptions made when accounting for the items described below were reasonable, based on information available at the time they were made. However, there can be no assurance that actual results will not differ from those estimates.

Goodwill, Customer Relationships and Other Intangible Assets

We amortize customer relationships primarily over an estimated life of 10 to 15 years, using either the sum-of-the-years-digits or the straight-line methods, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years, except for approximately $237 million of our capitalized software costs, which represents costs to develop an integrated billing and customer care system which is amortized using the straight-line method over a 20 year period. We annually review the estimated lives and methods used to amortize our other intangible assets, primarily capitalized software. The amount of future amortization expense may differ materially from current amounts, depending on the results of our annual reviews.

Our goodwill was derived from numerous acquisitions where the purchase price exceeded the fair value of the net assets acquired.

We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. We assign goodwill to the reporting units using a relative fair value approach. We utilize the trailing twelve months earnings before interest, taxes, depreciation and amortization as our allocation methodology as we believe that it represents a reasonable proxy for the fair value of the operations being reorganized. The use of other fair value assignment methods could result in materially different results. For additional information on our segments, see Note 12—Segment Information to our consolidated financial statements in Item 8 of Part II of this Annual Report.

We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Our assets and liabilities are employed in and relate to the operations of our reporting units. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment analysis is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment test. Our annual assessment date for testing goodwill impairment is October 31.

As of October 31, 2015, we assessed goodwill for impairment for our three reporting units, which we determined to be business (excluding wholesale), consumer and wholesale and determined that the estimated fair value of our wholesale reporting unit was substantially in excess of our carrying value of equity and the estimated fair value of our business and consumer reporting units exceeded our carrying value of equity by 23% and 8%, respectively.

For additional information on our goodwill balances by segment, see Note 2—Goodwill, Customer Relationships and Other Intangible Assets in Item 8 of Part II of this Annual Report.

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We may be required to assess our goodwill for impairment before our next required assessment date of October 31, 2016 under certain circumstances, including any failure to meet our forecasted future operating results or any significant increases in our weighted average cost of capital. In addition, we cannot assure that adverse conditions will not trigger future goodwill impairment assessments or impairment charges. A number of factors, many of which we cannot control, could affect our financial condition, operating results and business prospects and could cause our actual results to differ from the estimates and assumptions we employed in our goodwill impairment assessment. These factors include, but are not limited to, (i) further weakening in the overall economy; (ii) a significant decline in our stock price and resulting market capitalization as a result of an adverse change to our overall business operations; (iii) changes in the discount rate we use in our testing; (iv) successful efforts by our competitors to gain market share in our markets; (v) adverse changes as a result of regulatory or legislative actions; (vi) a significant adverse change in our legal affairs or in the overall business climate; and (vii) recognition of a goodwill impairment loss in the financial statements of one or more of our subsidiaries that are a component of our segments. We will continue to monitor certain events that impact our operations to determine if an interim assessment of goodwill impairment should be performed prior to the next required assessment date of October 31, 2016.

Property, Plant and Equipment

Property, plant and equipment acquired in connection with our acquisitions was recorded based on its estimated fair value as of its acquisition date, plus the estimated value of any associated legally or contractually required asset retirement obligation. Purchased and constructed property, plant and equipment is recorded at cost, plus the estimated value of any associated legally or contractually required asset retirement obligation. Renewals and betterments of plant and equipment are capitalized while repairs, as well as renewals of minor items, are charged to operating expense. Depreciation of property, plant and equipment is provided on the straight-line method using class or overall group rates. The group method provides for the recognition of the remaining net investment, less anticipated net salvage value, over the remaining useful life of the assets. This method requires the periodic revision of depreciation rates.

Normal retirements of property, plant and equipment are charged against accumulated depreciation, with no gain or loss recognized. We depreciate such property on the straight-line method over estimated service lives ranging from 3 to 45 years.

We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining life of our asset base.

Due to rapid changes in technology and the competitive environment, determining the estimated economic life of telecommunications plant, equipment and software requires a significant amount of judgment. We regularly review data on utilization of equipment, asset retirements and salvage values to determine adjustments to our depreciation rates. The effect of a hypothetical one year increase or decrease in the estimated remaining useful lives of our property, plant and equipment would have decreased depreciation expense by approximately $410 million annually or increased depreciation expense by approximately $580 million annually, respectively.

Pension and Post-retirement Benefits

We sponsor a noncontributory qualified defined benefit pension plan (referred to as our pension plan) for a substantial portion of our employees. In addition to this tax qualified pension plan, we also maintain several non-qualified pension plans for certain eligible highly compensated employees. We also maintain post-retirement benefit plans that provide health care and life insurance benefits for certain eligible retirees.

In 2015, approximately 45% of the qualified pension plan's January 1, 2015 net actuarial loss balance of $2.740 billion was subject to amortization as a component of net periodic expense over the average remaining service period of participating employees expected to receive benefits, which ranges from 8 to 9 years for the plan. The other 55% of the qualified pension plan's beginning net actuarial loss balance was treated as indefinitely deferred during 2015. The entire beginning net actuarial loss of $277 million for the post-retirement benefit plans was treated as indefinitely deferred during 2015.

In 2014, approximately 16% of the qualified pension plans' January 1, 2014 net actuarial loss balance of $1.048 billion was subject to amortization as a component of net periodic expense over the average remaining service period of participating employees expected to receive benefits, which ranges from 8 to 9 years for the plans. The other 84% of the pension plan's beginning net actuarial loss balance was treated as indefinitely deferred during 2014. The entire beginning net actuarial loss of $37 million for the post-retirement benefit plans was treated as indefinitely deferred during 2014.

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In 2013, approximately 33% of the qualified pension plans' January 1, 2013 net actuarial loss balance of $2.221 billion was subject to amortization as a component of net periodic expense over the average remaining service period of participating employees expected to receive benefits, which ranges from 8 to 12 years for the plans. The other 67% of the pension plans' beginning net actuarial loss balance was treated as indefinitely deferred during 2013. The entire beginning net actuarial loss of $446 million for the post-retirement benefit plans was treated as indefinitely deferred during 2013.

In computing our pension and post-retirement health care and life insurance benefit obligations, our most significant assumptions are the discount rate and mortality rates. In computing our periodic pension and post-retirement benefit expense, our most significant assumptions are the discount rate and the expected rate of return on plan assets.

The discount rate for each plan is the rate at which we believe we could effectively settle the plan's benefit obligations as of the end of the year. We selected each plan's discount rate based on a cash flow matching analysis using hypothetical yield curves from U.S. corporate bonds rated high quality and projections of the future benefit payments that constitute the projected benefit obligation for the plans. This process establishes the uniform discount rate that produces the same present value of the estimated future benefit payments as is generated by discounting each year's benefit payments by a spot rate applicable to that year. The spot rates used in this process are derived from a yield curve created from yields on the 60th to 90th percentile of U.S. high quality bonds.

In 2016, we plan to change the method we use to estimate the service and interest components of net periodic benefit cost for pension and other postretirement benefits. This change will result in a decrease in the service and interest components in 2016. Beginning in 2016, we plan to utilize a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows, as opposed to the single weighted-average discount rate derived from the yield curve that we have used in the past. We believe this change provides a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change will not affect the measurement of our total benefit obligations but is currently expected to lower our annual net periodic benefit cost by approximately $150 million in 2016. If implemented as expected, this change will be accounted for as a change in accounting estimate and accordingly will be accounted for prospectively.

Mortality rates help predict the expected life of plan participants and are based on historical demographic studies by the Society of Actuaries. In 2015, we adopted the revised mortality table and projection scale released by the Society of Actuaries ("SOA"), which decreased the projected benefit obligation of our benefit plans by $379 million. In 2014, the SOA published new mortality rate tables reflecting increases in the projected life expectancies of North Americans since its publications of earlier tables. We adopted the new tables immediately. This resulted in an increase to the projected benefit obligation of approximately $1.3 billion for our pension and post-retirement benefit plans.

The expected rate of return on plan assets is the long-term rate of return we expect to earn on the plans' assets in the future, net of administrative expenses paid from plan assets. The rate of return is determined by the strategic allocation of plan assets and the long-term risk and return forecast for each asset class. The forecasts for each asset class are generated primarily from an analysis of the long-term expectations of various third party investment management organizations to which we then add a factor of 50 basis points to reflect the benefit we expect to result from our active management of the assets. The expected rate of return on plan assets is reviewed annually and revised, as necessary, to reflect changes in the financial markets and our investment strategy.

To compute the expected return on pension and post-retirement benefit plan assets, we apply an expected rate of return to the fair value of the pension plan assets and to the fair value of the post-retirement benefit plan assets adjusted for contribution timing and for projected benefit payments to be made from the plan assets. Annual market volatility for these assets (higher or lower than expected return) is reflected in the net actuarial losses.

Changes in any of the above factors could significantly impact operating expenses in the consolidated statements of operations and other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) as well as the value of the liability and accumulated other comprehensive loss of stockholders' equity on our consolidated balance sheets. The expected return on plan assets is reflected as a reduction to our pension and post-retirement benefit expense. If our assumed expected rates of return for 2015 were 100 basis points lower, our qualified pension and post-retirement benefit expenses for 2015 would have increased by $121 million. If our assumed discount rates for 2015 were 100 basis points lower, our qualified pension and post-retirement benefit expenses for 2015 would have increased by $119 million and our projected benefit obligation for 2015 would have increased by approximately $1.821 billion.

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Loss Contingencies and Litigation Reserves

We are involved in several material legal proceedings, as described in more detail in Note 14—Commitments and Contingencies to our consolidated financial statements in Item 8 of Part II of this Annual Report. We assess potential losses in relation to these and other pending or threatened tax and legal matters. For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, our earnings will be increased or decreased accordingly. If the differences are material, our consolidated financial statements could be materially impacted.

For matters related to income taxes, if we determine in our judgment that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize in our financial statements a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if we determine in our judgment that the position has less than a 50% likelihood of being sustained. Though the validity of any tax position is a matter of tax law, the body of statutory, regulatory and interpretive guidance on the application of the law is complex and often ambiguous. Because of this, whether a tax position will ultimately be sustained may be uncertain.

Connect America Fund Support Payments

In 2015, we accepted funding from the Connect America Fund ("CAF)" from the Federal Communications Commission ("FCC") of approximately $500 million per year for six years to fund the deployment of voice and high-speed Internet infrastructure for approximately 1.2 million rural households and businesses (living units) in 33 states under the CAF Phase 2 high-cost support program. This program provides a monthly high-cost subsidy similar to the support provided by the FCC’s previous cost reimbursement programs. Although we believe that there is no specific authoritative U.S. GAAP guidance for the treatment of government assistance, we identified three acceptable methods to account for these funds; 1) recognize revenue when entitled to receive cash, 2) defer cash received until the living units are enabled to receive the service at the FCC specified level, or 3) record the cash received as contra capital. After assessing these alternatives, we have determined that we will recognize CAF Phase 2 funds each month as revenue when we are entitled to receive the cash less a deferred amount. The amount of revenue deferred in 2015 was approximately $12 million. We believe our recognition methodology is consistent with other companies in our industry in the United States, but may not necessarily be consistent with companies outside the United States that receive similar government funding, and we cannot provide assurances to this effect.

In computing the amount of revenue to recognize, we assume that we will not be able to economically enable 100% of the required living units in every state with voice and high-speed Internet capabilities under the CAF Phase 2 program. We defer recognition of the funds related to potential living units that we estimate we will not enable until we can precisely determine that we can fully meet the enablement targets. As disclosed elsewhere herein, in some limited instances, a portion of the funds must be returned. The effect of a hypothetical 1% change in our estimate of living units we will not enable with voice and high-speed Internet capabilities under the CAF Phase 2 program would have increased or decreased our revenue up to $3 million or $9 million, respectively, in 2015.

For additional information about the CAF Phase 2 support program, see the discussion below in "Liquidity and Capital Resources—Connect America Fund."

Income Taxes

Our provision for income taxes includes amounts for tax consequences deferred to future periods. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax credit carryforwards, differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities and tax net operating losses, or NOLs. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.

The measurement of deferred taxes often involves the exercise of considerable judgment related to the realization of tax basis. Our deferred tax assets and liabilities reflect our assessment that tax positions taken in filed tax returns and the resulting tax basis, are more likely than not to be sustained if they are audited by taxing authorities. Assessing tax rates that we expect to apply and determining the years when the temporary differences are expected to affect taxable income requires judgment about the future apportionment of our income among the states in which we operate. Any changes in our practices or judgments involved in the measurement of deferred tax assets and liabilities could materially impact our financial condition or results of operations.

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In connection with recording deferred income tax assets and liabilities, we establish valuation allowances when necessary to reduce deferred income tax assets to amounts that we believe are more likely than not to be realized. We evaluate our deferred tax assets quarterly to determine whether adjustments to our valuation allowance are appropriate in light of changes in facts or circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law. In making this evaluation, we rely on our recent history of pre-tax earnings. We also rely on our forecasts of future earnings and the nature and timing of future deductions and benefits represented by the deferred tax assets, all which involve the exercise of significant judgment. At December 31, 2015, we established a valuation allowance of $380 million, primarily related to state NOLs, as it is more likely than not that these NOLs will expire unused. If forecasts of future earnings and the nature and estimated timing of future deductions and benefits change in the future, we may determine that a valuation allowance for certain deferred tax assets is appropriate, which could materially impact our financial condition or results of operations. See Note 11—Income Taxes to our consolidated financial statements in Item 8 of Part II of this Annual Report for additional information.

Liquidity and Capital Resources

Overview

At December 31, 2015, we held cash and cash equivalents of $126 million and we had approximately $1.7 billion of borrowing capacity available under our $2.0 billion amended and restated revolving credit facility (referred to as our "Credit Facility", which is described further below). At December 31, 2015, cash and cash equivalents of $62 million were held in foreign bank accounts for the purpose of funding our foreign operations. Due to various factors, our access to foreign cash is generally much more restricted than our access to domestic cash.

In connection with our budgeting process in early 2016, our executive officers and our Board of Directors reviewed our sources and potential uses of cash over the next several years, including among other things the previously-disclosed effect of the anticipated depletion of our federal net operating loss carryforwards during 2016. Generally speaking, our principal funding source is cash from operating activities and our principal cash requirements include operating expenses, capital expenditures, income taxes, debt repayments, dividends, periodic stock repurchases and periodic pension contributions.

Based on our current capital allocation objectives, during 2016 we anticipate expending approximately $3.0 billion of cash for capital investment in property, plant and equipment and up to $1.2 billion for dividends on our common stock, based on the current annual common stock dividend rate of $2.16 and the current number of outstanding common shares. During 2016, we have debt maturities of approximately $1.4 billion, scheduled debt principal payments of approximately $22 million and capital lease and other fixed payments of approximately $62 million.

We will continue to monitor our future sources and uses of cash, and anticipate that we will make adjustments to our capital allocation strategies when, as and if determined by our Board of Directors. We typically use our revolving credit facility as a source of liquidity for operating activities and our other cash requirements.

Connect America Fund

In 2015, we accepted CAF funding from the FCC of approximately $500 million per year for six years to fund the deployment of voice and high-speed Internet infrastructure for approximately 1.2 million rural households and businesses in 33 states under the CAF Phase 2 support program. The funding from the CAF Phase 2 support program is expected to substantially supplant the funding we previously received from the interstate USF program that we previously utilized to support voice services in high-cost rural markets in these 33 states. In September of 2015, we began receiving these payments from the FCC under the new CAF Phase 2 support program, which included (i) monthly support payments at a higher rate than under the interstate USF support program and (ii) a one-time cumulative catch-up payment representing the incrementally higher funding under the CAF Phase 2 support program over the interstate USF Support program for the first seven months of 2015. During 2015, we received $209 million more cash than we would have otherwise received during the same period under the interstate USF support program.

We declined annual funding of approximately $10 million in four states, and we expect the funding from the CAF Phase 2 support program for these four states will be auctioned by the FCC, perhaps in the latter part of 2016. In these four states, the interstate USF support we have historically received is expected to continue until the CAF Phase 2 auctions are completed.

As a result of accepting CAF Phase 2 support payments for 33 states, we will be obligated to make substantial capital expenditures to build infrastructure. See "Capital Expenditures" below.

For additional information on the FCC's CAF order and the USF program, see "Business—Regulation" in Item 1 of Part I of this Annual Report. See "Risk Factors—Risks Affecting our Liquidity and Capital Resources" in Item 1A of Part I of this Annual Report.

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In 2013, under the second round of the first phase of the CAF program, we received $40 million in funding for deployment of broadband services in rural areas. The CAF Phase 2 support program overlaps certain eligible areas of the second round of CAF 1 funding, and we are continuing to evaluate how much of the $40 million in funding we will utilize or return to the FCC. As of the date of this Annual Report, we are past one of the benchmark deadlines for completing a portion of the broadband deployment. Due to the delays we encountered in evaluating the eligible areas, we have requested relief and an extension of the deadline with the FCC. If the FCC does not grant us relief, we will be requested to refund a substantial portion of the $40 million in funding we received. This $40 million of CAF 1 Round 2 funding is included in other noncurrent liabilities on our consolidated balance sheet as of December 31, 2015.

Capital Expenditures

We incur capital expenditures on an ongoing basis in order to enhance and modernize our networks, compete effectively in our markets and expand our service offerings. We evaluate capital expenditure projects based on a variety of factors, including expected strategic impacts (such as forecasted impact on revenue growth, productivity, expenses, service levels and customer retention) and our expected return on investment. The amount of capital investment is influenced by, among other things, demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations (such as the CAF Phase 2 infrastructure buildout requirements). Based on current circumstances, we estimate that our total capital expenditures for 2016 will be approximately $3.0 billion, inclusive of CAF Phase 2 related capital expenditures.

Our capital expenditures continue to be focused on our strategic services. For more information on capital spending, see Items 1 and 1A of Part I of this Annual Report.

Debt and Other Financing Arrangements

Subject to market conditions, we expect to continue to issue debt securities from time to time in the future to refinance a substantial portion of our maturing debt, including issuing Qwest Corporation debt securities to refinance its maturing debt to the extent feasible. The availability, interest rate and other terms of any new borrowings will depend on the ratings assigned to us and Qwest Corporation by credit rating agencies, among other factors. For further information on our debt maturities, see below "Future Contractual Obligations."

As of the date of this Annual Report, the credit ratings for the senior unsecured debt of CenturyLink, Inc. and Qwest Corporation were as follows:

Agency	CenturyLink, Inc.	Qwest Corporation
Standard & Poor's	BB	BBB-
Moody's Investors Service, Inc.	Ba2	Baa3
Fitch Ratings	BB+	BBB-

Our credit ratings are reviewed and adjusted from time to time by the rating agencies, and downgrades of CenturyLink, Inc.'s senior unsecured debt ratings could, under certain circumstances, incrementally increase the cost of our borrowing under the Credit Facility. Moreover, any downgrades of CenturyLink, Inc.'s or Qwest Corporation's senior unsecured debt ratings could impact our access to debt capital or further raise our borrowing costs. See "Risk Factors—Risks Affecting our Liquidity and Capital Resources" in Item 1A of Part I of this Annual Report.

In January 2016, Qwest Corporation issued $235 million aggregate principal amount of 7% Notes due 2056, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $227 million. All of the 7% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after February 1, 2021, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

Net Operating Loss Carryforwards

We have been using NOLs to offset our federal taxable income. At December 31, 2015, we had approximately $72 million of federal net operating losses. Since the remainder of our NOLs are subject to the limitations imposed by section 382 of the Internal Revenue Code, we expect that the amounts of our cash flows dedicated to the payment of federal taxes will increase substantially. The amounts of those payments will depend upon many factors, including future earnings, tax law changes and future tax circumstances. Based on current laws (including the extension of bonus depreciation) and circumstances applied to estimates of 2016 earnings, we estimate our cash income tax liability related to 2016 will be between $400 million to $600 million.

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Dividends

We currently expect to continue our current practice of paying quarterly cash dividends in respect of our common stock subject to our Board of Directors' discretion to modify or terminate this practice at any time and for any reason without prior notice. Our current quarterly common stock dividend rate is $0.54 per share, as approved by our Board of Directors, which we believe is a dividend rate per share that gives us the flexibility to balance our multiple objectives of managing our business, paying our fixed commitments and returning cash to our shareholders. Assuming continued payment during 2016 at this rate of $0.54 per share, our total dividends paid each quarter would be approximately $292 million based on our current number of outstanding shares (which does not reflect shares that we might repurchase or issue in future periods). See "Risk Factors—Risks Affecting Our Business" in Item 1A of Part I of this Annual Report.

Credit Facility

Our $2.0 billion Credit Facility matures on December 3, 2019 and has 16 lenders, each with commitments ranging from $3.5 million to $198.5 million. The Credit Facility allows us to obtain revolving loans and to issue up to $400 million of letters of credit, which upon issuance reduce the amount available for other extensions of credit. Interest is assessed on borrowings using either the LIBOR or the base rate (each as defined in the Credit Facility) plus an applicable margin between 1.00% and 2.25% per annum for LIBOR loans and 0.00% and 1.25% per annum for base rate loans depending on our then current senior unsecured long-term debt rating. Our obligations under the Credit Facility are guaranteed by nine of our subsidiaries. At December 31, 2015, we had $330 million in borrowings and no amounts of letters of credit outstanding under the Credit Facility.

Under the Credit Facility, we, and our indirect subsidiary, Qwest Corporation, must maintain a debt to EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our Credit Facility) ratio of not more than 4.0:1.0 and 2.85:1.0, respectively, as of the last day of each fiscal quarter for the four quarters then ended. The Credit Facility also contains a negative pledge covenant, which generally requires us to secure equally and ratably any advances under the Credit Facility if we pledge assets or permit liens on our property for the benefit of other debtholders. The Credit Facility also has a cross payment default provision, and the Credit Facility and certain of our debt securities also have cross acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument. Our debt to EBITDA ratios could be adversely affected by a wide variety of events, including unforeseen expenses or contingencies. This could reduce our financing flexibility due to potential restrictions on incurring additional debt under certain provisions of our debt agreements or, in certain circumstances, could result in a default under certain provisions of such agreements.

Term Loans, Revolving Line of Credit and Revolving Letter of Credit

At December 31, 2015, CenturyLink, Inc. owed $358 million under a term loan maturing in 2019 and Qwest Corporation owed $100 million under a term loan maturing in 2025. Both of these term loans include covenants substantially similar to those set forth in the Credit Facility.

In January 2015, CenturyLink, Inc. entered into a $100 million uncommitted revolving line of credit with one of the lenders under the Credit Facility. The amount available under this uncommitted revolving line of credit is reduced by any amount outstanding under the Credit Facility with the same lender. Interest is paid monthly based upon the LIBOR plus an applicable margin between 1.00% and 2.25% per annum. At December 31, 2015, we had $80 million borrowings outstanding under this uncommitted revolving line of credit.

We have a $160 million uncommitted revolving letter of credit facility which enables us to provide letters of credit under terms that may be more favorable than those under the Credit Facility. At December 31, 2015, our outstanding letters of credit totaled $109 million under this facility.

For information on our outstanding debt securities, see immediately below "Future Contractual Obligations" and Note 3—Long-Term Debt and Credit Facilities to our consolidated financial statements in Item 8 of Part II of this Annual Report.

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Future Contractual Obligations

The following table summarizes our estimated future contractual obligations as of December 31, 2015:

	2016		2017	2018	2019	2020	2021 and thereafter	Total
	(Dollars in millions)
Long-term debt (1)	$	1,503	1,501	251	1,160	1,032	15,082	20,529
Interest on long-term debt and capital leases (2)	1,294		1,195	1,155	1,129	1,061	15,634	21,468
Operating leases	301		289	268	235	209	1,075	2,377
Purchase commitments (3)	364		91	53	26	20	71	625
Post-retirement benefit obligation (4)	56		73	90	87	83	872	1,261
Non-qualified pension obligations (4)	5		5	5	5	5	21	46
Unrecognized tax benefits (5)	—		—	—	—	—	48	48
Other	7		5	7	5	7	60	91
Total future contractual obligations (6)	$	3,530	3,159	1,829	2,647	2,417	32,863	46,445

_______________________________________________________________________________

⁽¹⁾  Includes current maturities and capital lease obligations, but excludes unamortized discounts, net and unamortized debt issuance costs.

⁽²⁾  Actual principal and interest paid in all years may differ due to future refinancing of outstanding debt or issuance of new debt. Interest on our floating rate debt was calculated for all years using the rates effective at December 31, 2015.

⁽³⁾  We have various long-term, non-cancelable purchase commitments for advertising and promotion services, including advertising and marketing at sports arenas and other venues and events. We also have service related commitments with various vendors for data processing, technical and software support services. Future payments under certain service contracts will vary depending on our actual usage. In the table above we estimated payments for these service contracts based on estimates of the level of services we expect to receive.

⁽⁴⁾  Reflects only the portion of total obligation that is contractual in nature. See Note 6 below.

⁽⁵⁾  Represents the amount of tax and interest we would pay for our unrecognized tax benefits. The $48 million is composed of unrecognized tax benefits of $15 million and related estimated interest of $33 million, which would result in future cash payments if our tax positions were not upheld. See Note 11—Income Taxes to our consolidated financial statements in Item 8 of Part II of this Annual Report for additional information. The timing of any payments for our unrecognized tax benefits cannot be predicted with certainty; therefore, such amount is reflected in the "2021 and thereafter" column in the above table.

⁽⁶⁾  The table is limited to contractual obligations only and does not include:

• contingent liabilities;

• our open purchase orders as of December 31, 2015. These purchase orders are generally issued at fair value, and are generally cancelable without penalty;

• other long-term liabilities, such as accruals for legal matters and other taxes that are not contractual obligations by nature. We cannot determine with any degree of reliability the years in which these liabilities might ultimately settle;

• cash funding requirements for qualified pension benefits payable to certain eligible current and future retirees. Benefits paid by our qualified pension plan are paid through a trust. Cash funding requirements for this trust are not included in this table as we are not able to reliably estimate required contributions to this trust. Our funding projections are discussed further below;

• certain post-retirement benefits payable to certain eligible current and future retirees. Not all of our post-retirement benefit obligation amount is a contractual obligation and only the portion that we believe is a contractual obligation is reported in the table. See additional information on our benefits plans in Note 7—Employee Benefits to our consolidated financial statements in Item 8 of Part II of this Annual Report;

• contract termination fees. These fees are non-recurring payments, the timing and payment of which, if any, is uncertain. In the ordinary course of business and to optimize our cost structure, we enter into contracts with terms greater than one year to use the network facilities of other carriers and to purchase other goods and services. Our contracts to use other carriers' network facilities generally have no minimum volume requirements and are based on an interrelationship of volumes and discounted rates. Assuming we terminate these contracts in 2016, the contract termination fees would be approximately $399 million. Under the same assumption, we estimate that our termination fees for these contracts to purchase goods and services would be approximately $154 million. In the normal course of business, we do not believe payment of these fees is likely; and

• potential indemnification obligations to counterparties in certain agreements entered into in the normal course of business. The nature and terms of these arrangements vary.

64

Pension and Post-retirement Benefit Obligations

We are subject to material obligations under our existing defined benefit pension plans and post-retirement benefit plans. At December 31, 2015, the accounting unfunded status of our defined benefit pension plans and post-retirement benefit plans were $2.277 billion and $3.374 billion, respectively. See Note 7—Employee Benefits to our consolidated financial statements in Item 8 of Part II of this Annual Report for additional information about our pension and post-retirement benefit arrangements.

Benefits paid by our qualified pension plan are paid through a trust that holds all of the plan's assets. Based on current laws and circumstances, we do not expect any contributions to be required for our qualified pension plan for 2016. The amount of required contributions to our qualified pension plan in 2017 and beyond will depend on a variety of factors, most of which are beyond our control, including earnings on plan investments, prevailing interest rates, demographic experience, changes in plan benefits and changes in funding laws and regulations. We occasionally make voluntary contributions in addition to required contributions.

Certain of our post-retirement health care and life insurance benefits plans are unfunded. Several trusts hold assets that are used to help cover the health care costs of certain retirees. As of December 31, 2015, the fair value of these trust assets was approximately $193 million; however, a portion of these assets is comprised of investments with restricted liquidity. We estimate that the more liquid assets in these trusts will be adequate to provide continuing reimbursements for covered post-retirement health care costs for approximately one year. Thereafter, covered benefits will be paid either directly by us or from these trusts as the remaining assets become liquid. This projected one year period could be shorter or longer depending on returns on plan assets, the timing of maturities of illiquid plan assets and future changes in benefits.

For 2016, our estimated annual long-term rate of return is 7.0% for both the pension plan trust assets and post-retirement plans trust assets, based on the assets currently held. However, actual returns could be substantially different.

Historical Information

The following tables summarize our consolidated cash flow activities:

	Years Ended December 31,					Increase / (Decrease)
	2015			2014
	(Dollars in millions)
Net cash provided by operating activities	$	5,152		5,188		(36	)
Net cash used in investing activities	(2,853		)	(3,077	)	(224	)
Net cash used in financing activities	(2,301		)	(2,151	)	150

	Years Ended December 31,					Increase / (Decrease)
	2014			2013
	(Dollars in millions)
Net cash provided by operating activities	$	5,188		5,559		(371	)
Net cash used in investing activities	(3,077		)	(3,148	)	(71	)
Net cash used in financing activities	(2,151		)	(2,454	)	(303	)

Net cash provided by operating activities decreased by $36 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 primarily due to a slight negative variance in net income adjusted for non-cash items along with negative variances in accounts payable and other noncurrent assets and liabilities, net. The decreases were substantially offset with positive variances in accrued income and other taxes and other current assets and liabilities, net, which was primarily due to a payment of approximately $235 million in 2014 to settle certain litigation. Our net cash provided by operating activities in 2015 was also positively impacted by the cash received from the CAF Phase 2 support program, which was $209 million greater than the cash we would have otherwise received during the same period under the interstate USF support program. Net cash provided by operating activities decreased by $371 million for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to a negative variance in net income adjusted for non-cash items along with a payment of approximately $235 million in the first quarter of 2014 to settle certain litigation. These decreases were substantially offset by positive variances in the changes in accounts payable and retirement benefits.

65

During the year ended December 31, 2015, we made a voluntary cash contribution to the trust of $100 million to fund our qualified pension plan. During the years ended December 31, 2014 and 2013, and prior to the pension plan merger, we made required cash contributions to the trust of $157 million and $146 million, respectively, to fund our qualified pension plans.

Net cash used in investing activities decreased by $224 million for the year end December 31, 2015 as compared to the year ended December 31, 2014 primarily due to a decrease in payments of property, plant and equipment and amounts paid for acquisitions in 2015. Net cash used in investing activities decreased by $71 million for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to less cash paid for acquisitions.

Net cash used in financing activities increased by $150 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 primarily due to additional common stock repurchases as the net debt repayments were approximately the same in both years. Net cash used in financing activities decreased by $303 million for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily due to reductions in net debt paydowns in 2014 versus net borrowings in 2013 and common stock repurchases.

During the year ended December 31, 2015, we repurchased 27.1 million shares of the company's outstanding common stock in the open market. These shares were repurchased for an aggregate market price of $800 million, or an average purchase price of $29.56 per share. The repurchased common stock has been retired. For additional information, see "Note 17—Repurchase of CenturyLink, Inc. Common Stock" in Item 8 of Part II of this Annual Report.

On October 13, 2015, Qwest Corporation redeemed all $250 million of its 7.2% Notes due 2026, which resulted in an immaterial gain, and redeemed $150 million of its 6.875% Notes due 2033, which resulted in an immaterial loss.

On September 21, 2015, Qwest Corporation issued $400 million aggregate principal amount of 6.625% Notes due 2055, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $386 million. The underwriting agreement included an over-allotment option granting the underwriters for the offering an opportunity to purchase additional 6.625% Notes due 2055. On September 30, 2015, Qwest Corporation issued an additional $10 million aggregate principal amount of its 6.625% Notes under this over-allotment option. All of the 6.625% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after September 15, 2020, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

On June 15, 2015, Qwest Corporation paid at maturity the $92 million principal amount of its 7.625% Notes.

On March 19, 2015, CenturyLink, Inc. issued in a private offering $500 million aggregate principal amount of 5.625% Notes due 2025, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $494 million. The Notes are senior unsecured obligations and may be redeemed, in whole or in part, at any time before January 1, 2025 at a redemption price equal to the greater of 100% of the principal amount of the Notes or the sum of the present value of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date in the manner described in the Notes, plus accrued and unpaid interest to the redemption date. At any time on or after January 1, 2025, CenturyLink, Inc. may redeem the Notes at par plus accrued and unpaid interest to the redemption date. In addition, at any time on or prior to April 1, 2018, CenturyLink, Inc. may redeem up to 35% of the principal amount of the Notes at a redemption price equal to 105.625% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with net cash proceeds of certain equity offerings. Under certain circumstances, CenturyLink, Inc. will be required to make an offer to repurchase the Notes at a price of 101% of the aggregate principal amount plus accrued and unpaid interest to the repurchase date. In October 2015, CenturyLink, Inc. exchanged all of the unregistered Notes issued on March 19, 2015 for fully-registered Notes.

On February 20, 2015, Qwest Corporation entered into a new credit agreement with several lenders that allows Qwest Corporation to borrow up to $100 million under a term loan. Under this new credit agreement, Qwest Corporation borrowed $100 million under a ten-year term note that expires on February 20, 2025.

On February 17, 2015, CenturyLink, Inc. paid at maturity the $350 million plus accrued and unpaid interest due under its Series M 5.00% notes.

In January 2015, CenturyLink, Inc. entered into a $100 million uncommitted revolving line of credit with one of the lenders under the Credit Facility.

66

Certain Matters Related to Acquisitions

When we acquired Qwest and Savvis in 2011, Qwest's pre-acquisition debt obligations consisted primarily of debt securities issued by Qwest and two of its subsidiaries while Savvis' long-term debt obligations (after the discharge of its convertible senior notes in connection with the completion of the acquisition) consisted primarily of capital leases, the remaining outstanding portions of which are all now included in our consolidated debt balances. The indentures governing Qwest's remaining debt securities contain customary covenants that restrict the ability of Qwest or its subsidiaries from making certain payments and investments, granting liens and selling or transferring assets. Based on current circumstances, we do not anticipate that these covenants will significantly restrict our ability to manage cash balances or transfer cash between entities within our consolidated group of companies as needed.

In accounting for the Qwest acquisition, we recorded Qwest's debt securities at their estimated fair values, which totaled $12.292 billion as of April 1, 2011. Our acquisition date fair value estimates were based primarily on quoted market prices in active markets and other observable inputs where quoted market prices were not available. We determined that the fair value of Qwest's debt securities exceeded their stated principal balances on the acquisition date by $693 million, which we recorded as a premium.

The table below summarizes the portions of this premium recognized as a reduction to interest expense or extinguished during the periods indicated:

	Years Ended December 31,			From April 1, 2011 through December 31, 2013	Total Since Acquisition
	2015		2014
	(Dollars in millions)
Amortized	$	22	42	302	366
Extinguished (1)	1		—	276	277
Total	$	23	42	578	643

_______________________________________________________________________________

⁽¹⁾  Extinguished in connection with the payment of Qwest debt securities prior to maturity.

The remaining premium of $50 million as of December 31, 2015, will reduce interest expense in future periods, unless otherwise extinguished.

Other Matters

In February 2015, the FCC adopted new regulations that regulate Internet services as a public utility under Title II of the Communications Act. Although it is premature for us to determine the ultimate impact of the new regulations on our operations, we currently expect that they will negatively impact our current operations. For additional information, see “Risk Factors—Risks Relating to Legal and Regulatory Matters” in Item 1A of Part I of this Annual Report.

CenturyLink has cash management arrangements with certain of its principal subsidiaries, in which substantial portions of the subsidiaries' cash is regularly advanced to CenturyLink. Although CenturyLink periodically repays these advances to fund the subsidiaries' cash requirements throughout the year, at any given point in time CenturyLink may owe a substantial sum to our subsidiaries under these advances, which, in accordance with generally accepted accounting principles, are eliminated in consolidation and therefore not recognized on our consolidated balance sheets.

We also are involved in various legal proceedings that could substantially impact our financial position. See Note 14—Commitments and Contingencies to our consolidated financial statements in Item 8 of Part II of this Annual Report for the current status of such legal proceedings.

On November 4, 2015, we announced that we have retained financial advisors to assist in the exploration of strategic alternatives for our data centers and colocation business operations. The review of strategic alternatives will involve a full range of options, including, but not limited to, a partnership or joint venture, a sale of all or a portion of the data centers, as well as keeping some or all of these assets and operations as part of our portfolio. Strategic services revenues generated from our colocation services was approximately $626 million, $644 million and $623 million for the years ended December 31, 2015, 2014 and 2013, respectively.

67

The following tables present additional metrics related to our data centers:

	As of December 31,				Increase / (Decrease)		% Change
	2015		2014
	(Dollars in millions)
Hosting Data Center Metrics
Number of data centers (1)	59		58		1		2	%
Sellable square feet, million sq ft	1.58		1.46		0.12		8	%
Billed square feet, million sq feet	0.99		0.92		0.07		8	%
Utilization	63	%	63	%	—	%	—	%

	As of December 31,				Increase / (Decrease)		% Change
	2014		2013
	(Dollars in millions)
Hosting Data Center Metrics
Number of data centers (1)	58		55		3		5	%
Sellable square feet, million sq ft	1.46		1.39		0.07		5	%
Billed square feet, million sq feet	0.92		0.96		(0.04)		(4	)%
Utilization	63	%	69	%	(6	)%	(9	)%

______________________________________________________________________ 

(1) 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 of.

Market Risk

We are exposed to market risk from changes in interest rates on our variable rate long-term debt obligations and fluctuations in certain foreign currencies. We seek to maintain a favorable mix of fixed and variable rate debt in an effort to limit interest costs and cash flow volatility resulting from changes in rates.

Management periodically reviews our exposure to interest rate fluctuations and periodically implements strategies to manage the exposure. From time to time, we have used derivative instruments to (i) lock-in or swap our exposure to changing or variable interest rates for fixed interest rates or (ii) to swap obligations to pay fixed interest rates for variable interest rates. As of December 31, 2015, we had no such instruments outstanding. We have established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative instrument activities. We do not hold or issue derivative financial instruments for trading or speculative purposes.

At December 31, 2015, we had approximately $19.8 billion (excluding capital lease and other obligations with a carrying amount of $425 million) of long-term debt outstanding, approximately 95.6% of which bears interest at fixed rates and is therefore not exposed to interest rate risk. At December 31, 2015, we had $738 million floating rate debt exposed to changes in the London InterBank Offered Rate (LIBOR). A hypothetical increase of 100 basis points in LIBOR relative to this debt would decrease our annual pre-tax earnings by $7 million.

By operating internationally, we are exposed to the risk of fluctuations in the foreign currencies used by our international subsidiaries, primarily the British Pound, the Canadian Dollar, the Japanese Yen, the Hong Kong Dollar and the Singapore Dollar. Although the percentages of our consolidated revenues and costs that are denominated in these currencies are immaterial, future volatility in exchange rates and an increase in the number of transactions could adversely impact our consolidated results of operations. We use a sensitivity analysis to estimate our exposure to this foreign currency risk, measuring the change in financial position arising from hypothetical 10% change in the exchange rates of these currencies, relative to the U.S. Dollar, with all other variables held constant. The aggregate potential change in the fair value of financial assets resulting from a hypothetical 10% change in these exchange rates was $19 million at December 31, 2015.

Certain shortcomings are inherent in the method of analysis presented in the computation of exposures to market risks. Actual values may differ materially from those disclosed by us from time to time if market conditions vary from the assumptions used in the analyses performed. These analyses only incorporate the risk exposures that existed at December 31, 2015.

68

Off-Balance Sheet Arrangements

We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support and we do not engage in leasing, hedging or other similar activities that expose us to any significant liabilities that are not (i) reflected on the face of the consolidated financial statements, (ii) disclosed in Note 14—Commitments and Contingencies to our consolidated financial statements in Item 8 of Part II of this Annual Report, or in the Future Contractual Obligations table included in this Item 7 of Part II above, or (iii) discussed under the heading "Market Risk" above.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Risk" in Item 7 of Part II of this Annual Report is incorporated herein by reference.

69

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

CenturyLink, Inc.:

We have audited the accompanying consolidated balance sheets of CenturyLink, Inc. and subsidiaries (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), cash flows, and stockholders' equity for each of the years in the three-year period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for debt issuance costs effective January 1, 2014 due to the adoption of FASB ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. Additionally, as discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for deferred income taxes effective January 1, 2014 due to the adoption of FASB ASU 2015-17, Balance Sheet Classification of Deferred Taxes.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 24, 2016 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/ KPMG LLP

Shreveport, Louisiana

February 24, 2016

70

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

CenturyLink, Inc.:

We have audited CenturyLink, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting (Item 9A). Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework(2013) issued by the COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), cash flows, and stockholders' equity for each of the years in the three-year period ended December 31, 2015, and our report dated February 24, 2016 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Shreveport, Louisiana

February 24, 2016

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CENTURYLINK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions, except per share amounts and shares in thousands)
OPERATING REVENUES	$	17,900		18,031		18,095
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	7,778			7,846		7,507
Selling, general and administrative	3,328			3,347		3,502
Depreciation and amortization	4,189			4,428		4,541
Impairment of goodwill (Note 2)	—			—		1,092
Total operating expenses	15,295			15,621		16,642
OPERATING INCOME	2,605			2,410		1,453
OTHER (EXPENSE) INCOME
Interest expense	(1,312		)	(1,311	)	(1,298	)
Net gain on early retirement of debt	—			—		10
Other income, net	23			11		59
Total other expense, net	(1,289		)	(1,300	)	(1,229	)
INCOME BEFORE INCOME TAX EXPENSE	1,316			1,110		224
Income tax expense	438			338		463
NET INCOME (LOSS)	$	878		772		(239	)
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
BASIC	$	1.58		1.36		(0.40	)
DILUTED	$	1.58		1.36		(0.40	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC	554,278			568,435		600,892
DILUTED	555,093			569,739		600,892

See accompanying notes to consolidated financial statements.

72

CENTURYLINK, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
NET INCOME (LOSS)	$	878		772		(239	)
OTHER COMPREHENSIVE INCOME (LOSS):
Items related to employee benefit plans:
Change in net actuarial gain (loss), net of $(12), $742 and $(606) tax	21			(1,200	)	981
Change in net prior service credit (costs), net of $(47), $1 and $52 tax	76			(1	)	(84	)
Foreign currency translation adjustment and other, net of $—, $1 and $— tax	(14		)	(14	)	2
Other comprehensive income (loss)	83			(1,215	)	899
COMPREHENSIVE INCOME (LOSS)	$	961		(443	)	660

See accompanying notes to consolidated financial statements.

73

CENTURYLINK, INC.

CONSOLIDATED BALANCE SHEETS

	As of December 31,
	2015			2014
	(Dollars in millions and shares in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	126		128
Accounts receivable, less allowance of $152 and $162	1,943			1,988
Other	581			580
Total current assets	2,650			2,696
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	38,785			36,718
Accumulated depreciation	(20,716		)	(18,285	)
Net property, plant and equipment	18,069			18,433
GOODWILL AND OTHER ASSETS
Goodwill	20,742			20,755
Customer relationships, net	3,928			4,893
Other intangible assets, net	1,555			1,647
Other, net	660			679
Total goodwill and other assets	26,885			27,974
TOTAL ASSETS	$	47,604		49,103
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	1,503		550
Accounts payable	968			1,226
Accrued expenses and other liabilities
Salaries and benefits	602			641
Income and other taxes	318			309
Interest	250			256
Other	220			210
Advance billings and customer deposits	743			726
Total current liabilities	4,604			3,918
LONG-TERM DEBT	18,722			19,953
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net	3,569			3,154
Benefit plan obligations, net	5,511			5,808
Other	1,138			1,247
Total deferred credits and other liabilities	10,218			10,209
COMMITMENTS AND CONTINGENCIES (Note 14)
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 543,800 and 568,517 shares	544			569
Additional paid-in capital	15,178			16,324
Accumulated other comprehensive loss	(1,934		)	(2,017	)
Retained earnings	272			147
Total stockholders' equity	14,060			15,023
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	47,604		49,103

See accompanying notes to consolidated financial statements.

74

CENTURYLINK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
OPERATING ACTIVITIES
Net income (loss)	$	878		772		(239	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	4,189			4,428		4,541
Impairment of goodwill (Note 2)	—			—		1,092
Impairment of assets	9			32		—
Deferred income taxes	350			291		391
Provision for uncollectible accounts	177			159		152
Gain on sale of intangible assets	—			—		(32	)
Net long-term debt issuance costs and premium amortization	(3		)	(21	)	(46	)
Net gain on early retirement of debt	—			—		(10	)
Share-based compensation	73			79		71
Changes in current assets and liabilities:
Accounts receivable	(132		)	(163	)	(212	)
Accounts payable	(168		)	70		(76	)
Accrued income and other taxes	32			(84	)	28
Other current assets and liabilities, net	(53		)	(270	)	263
Retirement benefits	(141		)	(184	)	(342	)
Changes in other noncurrent assets and liabilities, net	(78		)	99		8
Other, net	19			(20	)	(30	)
Net cash provided by operating activities	5,152			5,188		5,559
INVESTING ACTIVITIES
Payments for property, plant and equipment and capitalized software	(2,872		)	(3,047	)	(3,048	)
Cash paid for acquisitions	(4		)	(93	)	(160	)
Proceeds from sale of property and intangible assets	31			63		80
Other, net	(8		)	—		(20	)
Net cash used in investing activities	(2,853		)	(3,077	)	(3,148	)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt	989			483		2,481
Payments of long-term debt	(966		)	(800	)	(2,010	)
Net payments on credit facility and revolving line of credit	(315		)	(4	)	(95	)
Early retirement of debt costs	(1		)	—		(31	)
Dividends paid	(1,198		)	(1,228	)	(1,301	)
Net proceeds from issuance of common stock	11			50		73
Repurchase of common stock	(819		)	(650	)	(1,586	)
Other, net	(2		)	(2	)	15
Net cash used in financing activities	(2,301		)	(2,151	)	(2,454	)
Net decrease in cash and cash equivalents	(2		)	(40	)	(43	)
Cash and cash equivalents at beginning of period	128			168		211
Cash and cash equivalents at end of period	$	126		128		168
Supplemental cash flow information:
Income taxes paid, net	$	(63	)	(27	)	(48	)
Interest paid (net of capitalized interest of $52, $47 and $41)	$	(1,310	)	(1,338	)	(1,333	)

See accompanying notes to consolidated financial statements.

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CENTURYLINK, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
COMMON STOCK (represents dollars and shares)
Balance at beginning of period	$	569		584		626
Issuance of common stock through dividend reinvestment, incentive and benefit plans	2			4		4
Repurchase of common stock	(27		)	(19	)	(46	)
Balance at end of period	544			569		584
ADDITIONAL PAID-IN CAPITAL
Balance at beginning of period	16,324			17,343		19,079
Issuance of common stock through dividend reinvestment, incentive and benefit plans	9			46		69
Repurchase of common stock	(767		)	(591	)	(1,551	)
Shares withheld to satisfy tax withholdings	(19		)	(16	)	(18	)
Share-based compensation and other, net	77			82		85
Dividends declared	(446		)	(540	)	(321	)
Balance at end of period	15,178			16,324		17,343
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of period	(2,017		)	(802	)	(1,701	)
Other comprehensive income (loss)	83			(1,215	)	899
Balance at end of period	(1,934		)	(2,017	)	(802	)
RETAINED EARNINGS
Balance at beginning of period	147			66		1,285
Net income (loss)	878			772		(239	)
Dividends declared	(753		)	(691	)	(980	)
Balance at end of period	272			147		66
TOTAL STOCKHOLDERS' EQUITY	$	14,060		15,023		17,191

See accompanying notes to consolidated financial statements.

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CENTURYLINK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

References in the Notes to "CenturyLink," "we," "us" and "our" refer to CenturyLink, Inc. and its consolidated subsidiaries, unless the content otherwise requires and except in Note 3, where such references refer solely to CenturyLink, Inc.

(1) Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

We are an integrated communications company engaged primarily in providing an array of communications services to our residential and business customers. Our communications services include local and long-distance voice, high-speed Internet, Multi-Protocol Label Switching ("MPLS"), private line (including special access), data integration, Ethernet, colocation, managed hosting (including cloud hosting), network, public access, wireless, video and other ancillary services.

The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated.

To simplify the overall presentation of our consolidated financial statements, we report immaterial amounts attributable to noncontrolling interests in certain of our subsidiaries as follows: (i) income attributable to noncontrolling interests in other income, net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities.

We reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenues and our segment reporting. See Note 12—Segment Information for additional information. These changes had no impact on total revenues, total operating expenses or net income (loss) for any period.

Connect America Fund Support Payments

In 2015, we accepted funding from the Federal Communications Commission's ("FCC") Connect America Fund ("CAF") of approximately $500 million per year for six years to fund the deployment of voice and high-speed Internet infrastructure for approximately 1.2 million rural households and businesses in 33 states under the CAF Phase 2 high-cost support program. The funding from the CAF Phase 2 support program in these 33 states will substantially supplant funding from the interstate Universal Service Fund ("USF") high-cost program that we previously utilized to support voice services in high-cost rural markets. In September of 2015, we began receiving these support payments from the FCC under the new CAF Phase 2 support program, which included (i) monthly support payments at a higher rate than under the interstate USF support program and (ii) a one-time cumulative catch-up payment representing the incrementally higher funding under the CAF Phase 2 support program over the interstate USF support program for the first seven months of 2015. During 2015, we recorded $215 million more revenue than we would have otherwise recorded during the same period under the interstate USF support program.

Changes in Estimates

As a result of our annual reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment, effective January 2014, we changed the estimates of the remaining economic lives of certain switch and circuit network equipment. These changes resulted in a net increase in depreciation expense of approximately $78 million for the year ended December 31, 2014. This net increase in depreciation expense, net of tax, reduced consolidated net income by approximately $48 million, or $0.08 per basic and diluted common share, for the year ended December 31, 2014.

Additionally, during the third quarter of 2014, we developed a plan to migrate customers from one of our networks to another over a one-year period beginning in the fourth quarter of 2014. As a result, we implemented changes in estimates that reduced the remaining economic lives of certain network assets. The increase in depreciation expense from the changes in estimates was more than fully offset by decreases in depreciation expense resulting from normal aging of our property, plant and equipment. These changes in the estimated remaining economic lives resulted in an increase in depreciation expense of approximately $48 million and $12 million for the years ended December 31, 2015 and 2014, respectively. This increase in depreciation expense, net of tax, reduced consolidated net income by approximately $32 million, or $0.06 per basic and diluted common share and $7 million, or $0.01 per basic and diluted common share, for the years ended December 31, 2015 and 2014, respectively.

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Summary of Significant Accounting Policies

Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, investments, long-term contracts, customer retention patterns, allowance for doubtful accounts, depreciation, amortization, asset valuations, internal labor capitalization rates, recoverability of assets (including deferred tax assets), impairment assessments, pension, post-retirement and other post-employment benefits, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenues, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See Note 11—Income Taxes and Note 14—Commitments and Contingencies for additional information.

For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.

For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions.

For all of these and other matters, actual results could differ materially from our estimates.

Revenue Recognition

We recognize revenue for services when the related services are provided. Recognition of certain payments received in advance of services being provided is deferred until the service is provided. These advance payments include activation and installation charges, which we recognize as revenue over the expected customer relationship period, which ranges from eighteen months to over ten years depending on the service. We also defer costs for customer activations and installations. The deferral of customer activation and installation costs is limited to the amount of revenue deferred on advance payments. Costs in excess of advance payments are recorded as expense in the period such costs are incurred. Expected customer relationship periods are estimated using historical experience. In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term.

We offer bundle discounts to our customers who receive certain groupings of services. These bundle discounts are recognized concurrently with the associated revenue and are allocated to the various services in the bundled offering based on the estimated selling price of services included in each bundled combination.

Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with the customer arrangement is allocated to each element based on the relative estimated selling price of the separate elements. We have estimated the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned. For example, if we receive an advance payment when we sell equipment and continuing service together, we immediately recognize as revenue the amount allocated to the equipment as long as all the conditions for revenue recognition have been satisfied. The portion of the advance payment allocated to the service based upon its relative selling price is recognized ratably over the longer of the contractual period or the expected customer relationship period.

We periodically transfer optical capacity assets on our network to other telecommunications service carriers. These transactions are structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 20 years. We account for the cash consideration received on transfers of optical capacity assets and on all of the other elements deliverable under an IRU, as revenue ratably over the term of the agreement. We have not recognized revenue on any contemporaneous exchanges of our optical capacity assets for other optical capacity assets.

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In connection with offering products and services provided by third-party vendors, we review the relationship between us, the vendor and the end customer to assess whether revenue should be reported on a gross or net basis. In assessing whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction, take title to the products, have risk and rewards of ownership or act as an agent or broker. Based on our agreements with DIRECTV and Verizon Wireless, we offer these services through sales agency relationships which are reported on a net basis.

We have service level commitments pursuant to contracts with certain of our customers. To the extent that such service levels are not achieved or are otherwise disputed due to performance or service issues or other service interruptions or conditions, we will estimate the amount of credits to be issued and record a reduction to revenues, with a corresponding increase in the credit reserve.

USF, Gross Receipts Taxes and Other Surcharges

In determining whether to include in our revenues and expenses the taxes and surcharges collected from customers and remitted to government authorities, including USF charges, sales, use, value added and some excise taxes, we assess, among other things, whether we are the primary obligor or principal taxpayer for the taxes assessed in each jurisdiction where we do business. In jurisdictions where we determine that we are the principal taxpayer, we record the surcharges on a gross basis and include them in our revenues and costs of services and products. In jurisdictions where we determine that we are merely a collection agent for the government authority, we record the taxes on a net basis and do not include them in our revenues and costs of services and products.

Advertising Costs

Costs related to advertising are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations. Our advertising expense was $210 million, $214 million and $210 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Legal Costs

In the normal course of our business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received.

Income Taxes

We file a consolidated federal income tax return with our eligible subsidiaries. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods, adjustments to our liabilities for uncertain tax positions and amortization of investment tax credits. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating losses ("NOLs"), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.

We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. See Note 11—Income Taxes for additional information.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution.

Book overdrafts occur when checks have been issued but have not been presented to our controlled disbursement bank accounts for payment. Disbursement bank accounts allow us to delay funding of issued checks until the checks are presented for payment. Until the issued checks are presented for payment, the book overdrafts are included in accounts payable on our consolidated balance sheet. This activity is included in the operating activities section in our consolidated statements of cash flows.

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Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recognized based upon the amount due from customers for the services provided or at cost for purchased and other receivables less an allowance for doubtful accounts. The allowance for doubtful accounts receivable reflects our best estimate of probable losses inherent in our receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence. We generally consider our accounts past due if they are outstanding over 30 days. Our collection process varies by the customer segment, amount of the receivable, and our evaluation of the customer's credit risk. Our past due accounts are written off against our allowance for doubtful accounts when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received. The carrying value of accounts receivable net of the allowance for doubtful accounts approximates fair value.

Property, Plant and Equipment

Property, plant and equipment acquired in connection with our acquisitions was recorded based on its estimated fair value as of its acquisition date plus the estimated value of any associated legally or contractually required retirement obligations. Purchased and constructed property, plant and equipment is recorded at cost, plus the estimated value of any associated legally or contractually required retirement obligations. Property, plant and equipment is depreciated primarily using the straight-line group method. Under the straight-line group method, assets dedicated to providing telecommunications services (which comprise the majority of our property, plant and equipment) that have similar physical characteristics, use and expected useful lives are pooled for purposes of depreciation and tracking. The equal life group procedure is used to establish each pool's average remaining useful life. Generally, under the straight-line group method, when an asset is sold or retired in the course of normal business activities, the cost is deducted from property, plant and equipment and charged to accumulated depreciation without recognition of a gain or loss. A gain or loss is recognized in our consolidated statements of operations only if a disposal is abnormal or unusual. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. Interest is capitalized during the construction phase of network and other internal-use capital projects. Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase. Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items for which cost is based on specific identification.

We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining useful life of our asset base. Our remaining useful life assessments anticipate the loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers leave the network. However, the asset is not retired until all customers no longer utilize the asset and we determine there is no alternative use for the asset.

We have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties and the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred.

We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. We determine fair values by using a combination of comparable market values and discounted cash flows, as appropriate.

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Goodwill, Customer Relationships and Other Intangible Assets

Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 10 to 15 years, using either the sum-of-the-years-digits or the straight-line methods, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years, except for approximately $237 million of our capitalized software costs, which represents costs to develop an integrated billing and customer care system which is amortized using the straight-line method over a 20 year period. We amortize our other intangible assets predominantly using the sum-of-the-years-digits method over an estimated life of 4 years. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized.

Internally used software, whether purchased or developed by us, is capitalized and amortized using the straight-line method over its estimated useful life. We have capitalized certain costs associated with software such as costs of employees devoting time to the projects and external direct costs for materials and services. Costs associated with software to be used for internal purposes are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. We review the remaining economic lives of our capitalized software annually. Capitalized software is included in other intangible assets, net, in our consolidated balance sheets.

Our long-lived intangible assets, other than goodwill, with indefinite lives are assessed for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment. These assets are carried at the estimated fair value at the time of acquisition and assets not acquired in acquisitions are recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other indefinite-lived intangible assets are reduced to their estimated fair value through an impairment charge to our consolidated statements of operations.

We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment assessment is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment assessment.

We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. Goodwill is reassigned to the reporting units using a relative fair value approach. We utilize the earnings before interest, taxes, depreciation and amortization as our allocation methodology as it represents a reasonable proxy for the fair value of the operations being reorganized.

See Note 2—Goodwill, Customer Relationships and Other Intangible Assets for additional information.

Pension and Post-Retirement Benefits

We recognize the funded status of our defined benefit and post-retirement plans as an asset or a liability on our consolidated balance sheet. Each year's actuarial gains or losses are a component of our other comprehensive income (loss), which is then included in our accumulated other comprehensive loss. Pension and post-retirement benefit expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make significant assumptions (including the discount rate, expected rate of return on plan assets, mortality and health care trend rates) in computing the pension and post-retirement benefits expense and obligations. See Note 7—Employee Benefits for additional information.

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Foreign Currency

Our results of operations include foreign subsidiaries, which are translated from the applicable functional currency to the United States Dollar using the average exchange rates during the reporting period, while assets and liabilities are translated at the reporting date. We include gains or losses from foreign currency remeasurement in other income, net in our consolidated statements of operations. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and we record the translation of their assets and liabilities into U.S. Dollars at the balance sheet date as translation adjustments and include them as a component of accumulated other comprehensive loss in our consolidated balance sheets.

Common Stock

At December 31, 2015, we had 4 million unissued shares of CenturyLink, Inc. common stock reserved for acquisitions. In addition, we had 25 million shares authorized for future issuance under our equity incentive plans.

Preferred stock

Holders of outstanding CenturyLink, Inc. preferred stock are entitled to receive cumulative dividends, receive preferential distributions equal to $25 per share plus unpaid dividends upon CenturyLink, Inc.'s liquidation and vote as a single class with the holders of common stock.

Dividends

We pay dividends out of retained earnings to the extent we have retained earnings on the date the dividend is declared. If the dividend is in excess of our retained earnings on the declaration date, then the excess is drawn from our additional paid-in capital.

Recently Adopted Accounting Pronouncements

In 2015, we adopted Accounting Standards Update (“ASU”) 2015-03 “Simplifying the Presentation of Debt Issuance Costs” (ASU 2015-03) and ASU 2015-17 “Balance Sheet Classification of Deferred Taxes” (ASU 2015-17). Both ASUs are intended to simplify the presentation of financial information. ASU 2015-03 requires that debt issuance costs be presented as a reduction in the associated debt rather than as an other asset, net. ASU 2015-17 requires that deferred taxes be presented on a net basis by jurisdiction as either a net noncurrent asset or liability. The ASUs affect neither the timing of expense recognition related to the debt issuance costs nor the timing of income and expense recognition related to deferred income taxes.

We adopted both ASU 2015-03 and 2015-17 by retrospectively applying the requirements of the ASUs to our previously issued consolidated financial statements. The retrospective application had no impact on our net income (loss) or earnings (loss) per share for the years ended December 31, 2014 and 2013, but resulted in the following changes in our previously reported consolidated balance sheet as of December 31, 2014:

• A decrease of $880 million in Total current assets;

• A decrease of $164 million in Other assets, net;

• A decrease of $168 million in Long-term debt; and

• A decrease of $876 million in Deferred income taxes, net.

The adoption of the ASUs had no impact on our net cash provided by operating activities, but did change the presentation of the adjustments to reconcile net income and changes in other noncurrent assets and liabilities, net for the years ended December 31, 2014 and 2013.

In 2015, we adopted Accounting Standards Update (“ASU”) 2015-07 (“ASU 2015-07”), which retrospectively changed the disclosure requirements for certain investments that are valued based upon net asset value (“NAV”) as a practical expedient. ASU 2015-07 was issued to eliminate diversity among entities on what level in the fair value hierarchy such investments were assigned. Under ASU 2015-07, investments valued using NAV as a practical expedient are no longer assigned to a level in the fair value hierarchy rather the value associated with the investments is disclosed in a reconciliation of the total investments measured at fair value.

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For us, the change in disclosure requirements as a result of the adoption of ASU 2015-07, only affects the disclosure of the fair value of our pension and post-retirement plan assets included in footnote 7, “Employee Benefits”. ASU 2015-07 results in $5.749 billion and $264 million of pension plan and post-retirement plan assets, respectively as of December 31, 2014, not being assigned to a level in the fair value hierarchy but rather disclosed as a separate line added to the fair value hierarchy table to present total plan assets. There was no change in total pension or post-retirement plan assets as of December 31, 2014 due to the adoption of ASU 2015-07.

Recent Accounting Pronouncements

Revenue Recognition

On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “new standard”). The new standard replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract fulfillment costs only up to the extent of any revenue deferred.

On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, 2018. Early adoption is permitted as of January 1, 2017. ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2017, if adopting early, otherwise in the first quarter of 2018. We have not yet decided which implementation method we will adopt. We are studying the new standard and are in the early stages of assessing the impact the new standard will have on us and our consolidated financial statements. We cannot at this time, however, provide any estimate of the impact of adopting the new standard.

(2) Goodwill, Customer Relationships and Other Intangible Assets

Goodwill, customer relationships and other intangible assets consisted of the following:

	As of December 31,
	2015		2014
	(Dollars in millions)
Goodwill	$	20,742	20,755
Customer relationships, less accumulated amortization of $5,648 and $4,682	3,928		4,893
Indefinite-life intangible assets	269		268
Other intangible assets subject to amortization
Capitalized software, less accumulated amortization of $1,778 and $1,533	1,248		1,338
Trade names and patents, less accumulated amortization of $20 and $196	38		41
Total other intangible assets, net	$	1,555	1,647

Total amortization expense for intangible assets for the years ended December 31, 2015, 2014 and 2013 was $1.353 billion, $1.470 billion and $1.589 billion, respectively. As of December 31, 2015, the gross carrying amount of goodwill, customer relationships, indefinite-life and other intangible assets was $33.671 billion.

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We estimate that total amortization expense for intangible assets for the years ending December 31, 2016 through 2020 will be as follows:

	(Dollars in millions)
2016	$	1,161
2017	1,056
2018	944
2019	827
2020	726

Our goodwill was derived from numerous acquisitions where the purchase price exceeded the fair value of the net assets acquired.

We assess our goodwill and other indefinite-lived intangible assets for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the recorded amount of goodwill exceeds the fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assessed our reporting units, which are business (excluding wholesale), consumer and wholesale. Our annual impairment assessment date for indefinite-lived intangible assets other than goodwill is December 31.

Our reporting units are not discrete legal entities with discrete financial statements. Our assets and liabilities are employed in and relate to the operations of multiple reporting units. For each reporting unit, we compare its estimated fair value of equity to its carrying value of equity that we assign to the reporting unit. If the estimated fair value of the reporting unit is greater than the carrying value, we conclude that no impairment exists. If the estimated fair value of the reporting unit is less than the carrying value, a second calculation is required in which the implied fair value of goodwill is compared to the carrying value of goodwill that we assigned to the reporting unit. If the implied fair value of goodwill is less than its carrying value, goodwill must be written down to its implied fair value.

At October 31, 2015, we estimated the fair value of our business (excluding wholesale), consumer and wholesale reporting units by considering both a market approach and a discounted cash flow method, which resulted in a Level 3 fair value measurement. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow method is based on the present value of projected cash flows and a terminal value, which represents the expected normalized cash flows of the reporting units beyond the cash flows from the discrete projection period. We discounted the estimated cash flows for our consumer and wholesale reporting units using a rate that represents their estimated weighted average cost of capital, which we determined to be approximately 6.0% as of the assessment date (which was comprised of an after-tax cost of debt of 3.3% and a cost of equity of 7.6%). We discounted the estimated cash flows of our business (excluding wholesale) reporting unit using a rate that represents its estimated weighted average cost of capital, which we determined to be approximately 7.0% as of the assessment date (which was comprised of an after-tax cost of debt of 3.3% and a cost of equity of 8.6%). We also reconciled the estimated fair values of the reporting units to our market capitalization as of October 31, 2015 and concluded that the indicated implied control premium of approximately 24.6% was reasonable based on recent transactions in the market place. As of October 31, 2015, based on our assessment performed with respect to these reporting units as described above, we concluded that our goodwill for our three reporting units was not impaired as of that date.

The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2013 through December 31, 2015.

	Business			Consumer		Wholesale		Hosting		Total
	(Dollars in millions)
As of December 31, 2013	$	6,363		10,348		3,274		689		20,674
Purchase accounting adjustments	—			—		—		(11	)	(11	)
November 1, 2014 reorganization	4,022			(70	)	(3,274	)	(678	)	—
Acquisitions	92			—		—		—		92
As of December 31, 2014	$	10,477		10,278		—		—		20,755
Purchase accounting and other adjustments	(13		)	—		—		—		(13	)
As of December 31, 2015	$	10,464		10,278		—		—		20,742

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During the year ended December 31, 2014, we acquired all of the outstanding stock of two companies for total consideration of $95 million, net of $2 million acquired cash and including immaterial future cash payments of which $92 million was attributed to goodwill and the remainder to various assets and liabilities. During 2015, we finalized the valuations for these acquisitions resulting in a $14 million decrease in goodwill, a $13 million increase in other intangible assets and a $1 million decrease in deferred income taxes, net. The acquisitions were consummated to expand the product offerings of our business segment and therefore the goodwill has been assigned to that segment. The goodwill is attributed primarily to expected future increases in business segment revenue from the sale of new products. The goodwill is not deductible for tax purposes.

The acquisitions did not materially impact the consolidated results of operations from the dates of the acquisitions in 2014 and would not materially impact pro forma results of operations.

For additional information on our segments, see Note 12—Segment Information.

We completed our qualitative assessment of our indefinite-lived intangible assets other than goodwill as of December 31, 2015 and concluded it is more likely than not that our indefinite-lived intangible assets are not impaired; thus, no impairment charge was recorded in 2015.

As of October 31, 2014, based on our assessment performed, we concluded that our goodwill for our then four reporting units was not impaired as of that date. During 2013, one of our previous reporting units experienced slower than previously projected revenues and margin growth and greater than anticipated competitive pressures and as a result, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $1.092 billion for goodwill assigned to one of our then four reporting units.

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(3) Long-Term Debt and Credit Facilities

Long-term debt, including unamortized discounts and premiums and unamortized debt issuance costs, consisted of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including Qwest Corporation, Qwest Capital Funding, Inc. and Embarq Corporation and subsidiaries ("Embarq"), were as follows:

			As of December 31,
	Interest Rates	Maturities	2015			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)	2.010% - 4.250%	2019	410			725
Term loan	2.180%	2019	358			380
Subsidiaries
Qwest Corporation
Senior notes	6.125% - 8.375%	2016 - 2055	7,229			7,311
Term loan	2.180%	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	425			509
Unamortized discounts, net			(125		)	(111	)
Unamortized debt issuance costs			(179		)	(168	)
Total long-term debt			20,225			20,503
Less current maturities			(1,503		)	(550	)
Long-term debt, excluding current maturities			$	18,722		19,953

_______________________________________________________________________________

⁽¹⁾  The aggregate amount outstanding on our Credit Facility and revolving line of credit borrowings at December 31, 2015 and 2014 was $410 million and $725 million, respectively, with weighted average interest rates of 2.756% and 2.270%, respectively. These amounts change on a regular basis.

New Issuances

2015

On September 21, 2015, Qwest Corporation issued $400 million aggregate principal amount of 6.625% Notes due 2055, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $386 million. The underwriting agreement included an over-allotment option granting the underwriters for the offering an opportunity to purchase additional 6.625% Notes due 2055. On September 30, 2015, Qwest Corporation issued an additional $10 million aggregate principal amount of the 6.625% Notes under this over-allotment option. All of the 6.625% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after September 15, 2020, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

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On March 19, 2015, CenturyLink, Inc. issued in a private offering $500 million aggregate principal amount of 5.625% Notes due 2025, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $494 million. The Notes are senior unsecured obligations and may be redeemed, in whole or in part, at any time before January 1, 2025 at a redemption price equal to the greater of 100% of the principal amount of the Notes or the sum of the present value of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date in the manner described in the Notes, plus accrued and unpaid interest to the redemption date. At any time on or after January 1, 2025, CenturyLink, Inc. may redeem the Notes at par plus accrued and unpaid interest to the redemption date. In addition, at any time on or prior to April 1, 2018, CenturyLink, Inc. may redeem up to 35% of the principal amount of the Notes at a redemption price equal to 105.625% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with net cash proceeds of certain equity offerings. Under certain circumstances, CenturyLink, Inc. will be required to make an offer to repurchase the Notes at a price of 101% of the aggregate principal amount plus accrued and unpaid interest to the repurchase date. In October 2015, CenturyLink, Inc. exchanged all of the unregistered Notes issued on March 19, 2015 for fully-registered Notes.

2014

On September 29, 2014, Qwest Corporation issued $500 million aggregate principal amount of 6.875% Notes due 2054, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of $483 million. The Notes are senior unsecured obligations and may be redeemed, in whole or in part, on or after October 1, 2019, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

Repayments

2015

On October 13, 2015, Qwest Corporation redeemed all $250 million of its 7.2% Notes due 2026, which resulted in an immaterial gain, and redeemed $150 million of its 6.875% Notes due 2033, which resulted in an immaterial loss.

On June 15, 2015, Qwest Corporation paid at maturity the $92 million principal amount of its 7.625% Notes.

On February 17, 2015, CenturyLink, Inc. paid at maturity the $350 million principal and accrued and unpaid interest due under its Series M 5.00% Notes.

2014

On October 1, 2014, Qwest Corporation paid at maturity the $600 million principal amount of its 7.50% Notes.

On April 1, 2014, a subsidiary of Embarq paid at maturity the $30 million principal amount of its 7.46% first mortgage bonds.

Credit Facility

On December 3, 2014, we amended our existing $2 billion revolving credit facility to extend the maturity date to December 3, 2019. The amended Credit Facility (the "Credit Facility") has 16 lenders, each with commitments ranging from $3.5 million to $198.5 million. The Credit Facility allows us to obtain revolving loans and to issue up to $400 million of letters of credit, which upon issuance reduce the amount available for other extensions of credit. Interest is assessed on borrowings using either the LIBOR or the base rate (each as defined in the Credit Facility) plus an applicable margin between 1.00% and 2.25% per annum for LIBOR loans and 0.00% and 1.25% per annum for base rate loans depending on our then current senior unsecured long-term debt rating. Our obligations under the Credit Facility are guaranteed by nine of our subsidiaries.

Term Loans, Revolving Line of Credit and Revolving Letter of Credit

On March 13, 2015, CenturyLink, Inc. amended its term loan agreement to reduce the interest rate payable by it thereunder and to modify some covenants to provide additional flexibility.

On February 20, 2015, Qwest Corporation entered into a term loan in the amount of $100 million with CoBank, ACB. The outstanding unpaid principal amount of this term loan plus any accrued and unpaid interest is due on February 20, 2025. Interest is paid monthly based upon either the London Interbank Offered Rate (“LIBOR”) or the base rate (as defined in the credit agreement) plus an applicable margin between 1.50% to 2.50% per annum for LIBOR loans and 0.50% to 1.50% per annum for base rate loans depending on Qwest Corporation's then current senior unsecured long-term debt rating. At December 31, 2015, the outstanding principal balance on this term loan was $100 million.

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In January 2015, CenturyLink, Inc. entered into a $100 million uncommitted revolving line of credit with one of the lenders under the Credit Facility. The amount available under this uncommitted revolving line of credit is reduced by any amount outstanding under the Credit Facility with the same lender. Interest is paid monthly based upon the LIBOR plus an applicable margin between 1.00% and 2.25% per annum. At December 31, 2015, CenturyLink, Inc. had $80 million borrowings outstanding under this uncommitted revolving line of credit.

In April 2011, we entered into a $160 million uncommitted revolving letter of credit facility which enables us to provide letters of credit under terms that may be more favorable than those under the Credit Facility. At December 31, 2015 and 2014, our outstanding letters of credit totaled $109 million and $124 million, respectively, under this facility.

Aggregate Maturities of Long-Term Debt

Set forth below is the aggregate principal amount of our long-term debt (excluding unamortized discounts, net and unamortized debt issuance costs) maturing during the following years:

	(Dollars in millions)(1)
2016	$	1,503
2017	1,501
2018	251
2019	1,160
2020	1,032
2021 and thereafter	15,082
Total long-term debt	$	20,529

_______________________________________________________________________________

⁽¹⁾  Actual principal paid in all years may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.

Interest Expense

Interest expense includes interest on long-term debt. The following table presents the amount of gross interest expense, net of capitalized interest:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Interest expense:
Gross interest expense	$	1,364		1,358		1,339
Capitalized interest	(52		)	(47	)	(41	)
Total interest expense	$	1,312		1,311		1,298

Covenants

Certain of our loan agreements contain various restrictions, as described more fully below. Under current circumstances, we believe the covenants currently in effect place no significant restriction on the transfer of funds from our consolidated subsidiaries to CenturyLink.

The senior notes of CenturyLink, Inc. were issued under an indenture dated March 31, 1994. This indenture restricts our ability to (i) incur, issue or create liens upon our property and (ii) consolidate with or merge into, or transfer or lease all or substantially all of our assets to any other party. The indenture does not contain any provisions that are impacted by our credit ratings or that restrict the issuance of new securities in the event of a material adverse change to us. However, if the credit ratings relating to certain of our long-term debt securities issued under this indenture are downgraded in the manner specified thereunder in connection with a "change of control" of CenturyLink, Inc., then we will be required to offer to repurchase such debt securities.

The senior notes of Qwest Corporation were issued under indentures dated April 15, 1990 and October 15, 1999. These indentures contain restrictions on the incurrence of liens and the consummation of certain transactions substantially similar to the above-described covenants in CenturyLink, Inc.'s March 31, 1994 indenture. The senior notes of Qwest Capital Funding, Inc. were issued under an indenture dated June 29, 1998 containing terms substantially similar to those set forth in Qwest Corporation's indentures.

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Embarq's senior notes were issued pursuant to an indenture dated as of May 17, 2006. While Embarq is generally prohibited from creating liens on its property unless its senior notes are secured equally and ratably, Embarq can create liens on its property without equally and ratably securing its senior notes so long as the sum of all indebtedness so secured does not exceed 15% of Embarq's consolidated net tangible assets. The indenture contains customary events of default, none of which are impacted by Embarq's credit rating.

None of the above-listed indentures of CenturyLink, Inc., Qwest Corporation, Qwest Capital Funding, Inc. and Embarq contain any financial covenants or restrictions on the ability to issue new securities in accordance with the terms of the indenture.

Several of our Embarq subsidiaries have outstanding first mortgage bonds. Each issue of these first mortgage bonds is secured by substantially all of the property, plant and equipment of the issuing subsidiary. Approximately 10% of our net property, plant and equipment is pledged to secure the long-term debt of subsidiaries.

Under the Credit Facility, we, and our indirect subsidiary, Qwest Corporation, must maintain a debt to EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our Credit Facility) ratio of not more than 4.0:1.0 and 2.85:1.0, respectively, as of the last day of each fiscal quarter for the four quarters then ended. The Credit Facility also contains a negative pledge covenant, which generally requires us to secure equally and ratably any advances under the Credit Facility if we pledge assets or permit liens on our property for the benefit of other debtholders. The Credit Facility also has a cross payment default provision, and the Credit Facility and certain of our debt securities also have cross acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument. Our debt to EBITDA ratios could be adversely affected by a wide range of events, including unforeseen expenses or contingencies. This could reduce our financing flexibility due to potential restrictions on incurring additional debt under certain provisions of our debt agreements or, in certain circumstances, could result in a default under certain provisions of such agreements.

CenturyLink, Inc. and Qwest Corporation are both indebted under term loans, each of which includes covenants substantially similar to those set forth in the Credit Facility.

At December 31, 2015, we believe we were in compliance with all of the provisions and covenants contained in our Credit Facility and other material debt agreements.

Guarantees

We do not guarantee the debt of any unaffiliated parties, but certain of our subsidiaries guarantee the outstanding senior notes issued by other subsidiaries. In addition, seven of our largest non-regulated subsidiaries guarantee the obligations of (i) CenturyLink, Inc. under the Credit Facility and its term loan and (ii) Qwest Corporation under its term loan.

Subsequent Event

In January 2016, Qwest Corporation issued $235 million aggregate principal amount of 7% Notes due 2056, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $227 million. All of the 7% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after February 1, 2021, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

(4) Accounts Receivable

The following table presents details of our accounts receivable balances:

	As of December 31,
	2015			2014
	(Dollars in millions)
Trade and purchased receivables	$	1,789		1,821
Earned and unbilled receivables	288			307
Other	18			22
Total accounts receivable	2,095			2,150
Less: allowance for doubtful accounts	(152		)	(162	)
Accounts receivable, less allowance	$	1,943		1,988

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We are exposed to concentrations of credit risk from residential and business customers within our local service area, business customers outside of our local service area and from other telecommunications service providers. We generally do not require collateral to secure our receivable balances. We have agreements with other telecommunications service providers whereby we agree to bill and collect on their behalf for services rendered by those providers to our customers within our local service area. We purchase accounts receivable from other telecommunications service providers primarily on a recourse basis and include these amounts in our accounts receivable balance. We have not experienced any significant loss associated with these purchased receivables.

The following table presents details of our allowance for doubtful accounts:

	Beginning Balance		Additions	Deductions		Ending Balance
	(Dollars in millions)
2015	$	162	177	(187	)	152
2014	$	155	159	(152	)	162
2013	$	158	152	(155	)	155

(5) Property, Plant and Equipment

Net property, plant and equipment is composed of the following:

	Depreciable Lives	As of December 31,
		2015			2014
		(Dollars in millions)
Land	n/a	$	571		575
Fiber, conduit and other outside plant (1)	15-45	16,166			15,151
Central office and other network electronics (2)	3-10	14,144			13,248
Support assets (3)	3-30	7,000			6,578
Construction in progress (4)	n/a	904			1,166
Gross property, plant and equipment		38,785			36,718
Accumulated depreciation		(20,716		)	(18,285	)
Net property, plant and equipment		$	18,069		18,433

_______________________________________________________________________________

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

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

⁽³⁾  Support assets consist of buildings, data centers, computers and other administrative and support equipment.

⁽⁴⁾  Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction.

We recorded depreciation expense of $2.836 billion, $2.958 billion and $2.952 billion for the years ended December 31, 2015, 2014 and 2013, respectively.

In 2014, we recorded an impairment charge of $17 million in connection with a sale-leaseback transaction involving an office building which closed in the fourth quarter of 2014. This impairment charge is included in selling, general and administrative expense in our consolidated statement of operations for the year ended December 31, 2014.

Additionally, in 2014 we sold an office building for $12 million.

Asset Retirement Obligations

At December 31, 2015, our asset retirement obligations balance was primarily related to estimated future costs of removing equipment from leased properties and estimated future costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets.

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The following table provides asset retirement obligation activity:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Balance at beginning of year	$	107		106		106
Accretion expense	7			7		7
Liabilities incurred	—			6		—
Liabilities settled	(2		)	(2	)	(4	)
Change in estimate	(21		)	(10	)	(3	)
Balance at end of year	$	91		107		106

During 2015, 2014 and 2013, we revised our estimates for the cost of removal of network equipment, asbestos remediation, and other obligations by $21 million, $10 million and $3 million, respectively. These revisions resulted in a reduction of the asset retirement obligation and offsetting reduction to gross property, plant and equipment and revisions to assets specifically identified are recorded as a reduction to accretion expense.

(6) Severance and Leased Real Estate

Periodically, we have reductions in our workforce and have accrued liabilities for the related severance costs. These workforce reductions resulted primarily from the progression or completion of our post-acquisition integration plans, increased competitive pressures, cost reduction initiatives and reduced workload demands due to the loss of customers purchasing certain legacy services.

We report severance liabilities within accrued expenses and other liabilities - salaries and benefits in our consolidated balance sheets and report severance expenses in cost of services and products and selling, general and administrative expenses in our consolidated statements of operations. As noted in Note 12—Segment Information, we do not allocate these severance expenses to our segments.

We have recognized liabilities to reflect our estimates of the fair values of the existing lease obligations for real estate for which we have ceased using, net of estimated sublease rentals. Our fair value estimates were determined using discounted cash flow methods. We recognize expense to reflect accretion of the discounted liabilities and periodically, we adjust the expense when our actual subleasing experience differs from our initial estimates. We report the current portion of liabilities for ceased-use real estate leases in accrued expenses and other liabilities-other and report the noncurrent portion in deferred credits and other liabilities in our consolidated balance sheets. We report the related expenses in selling, general and administrative expenses in our consolidated statements of operations. At December 31, 2015, the current and noncurrent portions of our leased real estate accrual were $9 million and $71 million, respectively. The remaining lease terms range from 0.3 years to 10 years, with a weighted average of 8 years.

Changes in our accrued liabilities for severance expenses and leased real estate were as follows:

	Severance			Real Estate
	(Dollars in millions)
Balance at December 31, 2013	$	17		113
Accrued to expense	87			1
Payments, net	(78		)	(16	)
Reversals and adjustments	—			(2	)
Balance at December 31, 2014	26			96
Accrued to expense	96			—
Payments, net	(108		)	(13	)
Reversals and adjustments	—			(3	)
Balance at December 31, 2015	$	14		80

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(7) Employee Benefits

Pension, Post-Retirement and Other Post-Employment Benefits

We sponsor various defined benefit pension plans (qualified and non-qualified), which in the aggregate cover a substantial portion of our employees including legacy CenturyLink, legacy Qwest Communications International, Inc. ("Qwest") and legacy Embarq employees. On December 31, 2014, we merged our existing qualified pension plans, which included merging the Qwest Pension Plan and Embarq Retirement Pension Plan into the CenturyLink Retirement Plan. The CenturyLink Retirement Plan was renamed the CenturyLink Combined Pension Plan ("Combined Plan"). Pension benefits for participants of the new Combined Plan who are represented by a collective bargaining agreement are based on negotiated schedules. All other participants' pension benefits are based on each individual participant's years of service and compensation. We also maintain non-qualified pension plans for certain current and former highly compensated employees. We maintain post-retirement benefit plans that provide health care and life insurance benefits for certain eligible retirees. We also provide other post-employment benefits for eligible former employees. We use a December 31 measurement date for all our plans.

Pension Benefits

Current funding laws require a company with a pension shortfall to fund the annual cost of benefits earned in addition to a seven-year amortization of the shortfall. Our funding policy for our Combined Plan is to make contributions with the objective of accumulating sufficient assets to pay all qualified pension benefits when due under the terms of the plan. The accounting unfunded status of our qualified pension plan was $2.215 billion and $2.403 billion as of December 31, 2015 and 2014, respectively.

In 2015, we made a voluntary cash contribution of $100 million to our qualified pension plan and paid approximately $6 million of benefits directly to participants of our non-qualified pension plans. Based on current laws and circumstances, we are not required to make any contributions to our qualified pension plan in 2016, but we estimate that we will pay approximately $5 million of benefits to participants of our non-qualified pension plans.

Our pension plans contain provisions that allow us, from time to time, to offer lump sum payment options to certain former employees in settlement of their future retirement benefits. We record these payments as a settlement only if, in the aggregate, they exceed the sum of the annual service and interest costs for the plan's net periodic pension benefit costs, which represents the settlement threshold. In September 2015, we offered to make cash settlement payments in December 2015 to a group of former employees provided they accepted the offer by the end of October 2015. During the fourth quarter of 2015, we made cash settlement payments for the lump sum offer of approximately $356 million. The total amount of the lump sum settlement payments for the year ended December 31, 2015, which included the lump sum offer and lump sum elections from employees who terminated employment during the year, was less than the settlement threshold, therefore settlement accounting was not triggered in 2015. On December 8, 2014, lump sum pension settlement payments to terminated, but not-yet-retired legacy Qwest participants was $460 million, which exceeded the settlement threshold of $418 million. As a result, we were required to recognize a settlement charge of $63 million in 2014 to accelerate the recognition of a portion of the previously unrecognized actuarial losses in the qualified pension plan, which has been allocated and reflected in cost of services and products (exclusive of depreciation and amortization) and selling, general and administrative in our consolidated statement of operations for the year ended December 31, 2014. This charge reduced our recorded net income and retained earnings, with an offset to accumulated other comprehensive loss in shareholders’ equity. The amount of any future non-cash settlement charges will depend on the level of lump sum benefit payments made in 2016 and beyond.

Post-Retirement Benefits

Our post-retirement benefit plans provide post-retirement benefits to qualified retirees and allow (i) eligible employees retiring before certain dates to receive benefits at no or reduced cost and (ii) eligible employees retiring after certain dates to receive benefits on a shared cost basis. The post-retirement benefits not paid by the trust are funded by us and we expect to continue funding these post-retirement obligations as benefits are paid. The accounting unfunded status of our qualified post-retirement benefit plan was $3.374 billion and $3.477 billion as of December 31, 2015 and 2014, respectively.

No contributions were made to the post-retirement trusts in 2015, and we do not expect to make a contribution in 2016. However, in 2015 we paid approximately $116 million of benefits (net of participant contributions and direct subsidies) that were not payable by the trusts. We estimate that in 2016, we will pay approximately $137 million of benefits (net of participant contributions and direct subsidies) that are not payable by the trusts.

We expect our health care cost trend rate to decrease between 0.05% to 0.10% per year from 5.00% in 2016 to an ultimate rate of 4.50% in 2025. Our post-retirement benefit expense, for certain eligible legacy Qwest retirees and certain eligible legacy CenturyLink retirees, is capped at a set dollar amount. Therefore, those health care benefit obligations are not subject to increasing health care trends after the effective date of the caps.

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A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2015:

	100 Basis Points Change
	Increase		(Decrease)
	(Dollars in millions)
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (consolidated statement of operations)	$	3	(3	)
Effect on benefit obligation (consolidated balance sheet)	73		(68	)

Expected Cash Flows

The qualified pension, non-qualified pension and post-retirement health care benefit payments and premiums and life insurance premium payments are paid by us or distributed from plan assets. The estimated benefit payments provided below are based on actuarial assumptions using the demographics of the employee and retiree populations and have been reduced by estimated participant contributions.

	Pension Plans		Post-Retirement Benefit Plans	Medicare Part D Subsidy Receipts
	(Dollars in millions)
Estimated future benefit payments:
2016	$	1,059	309	(7	)
2017	1,010		300	(7	)
2018	991		290	(7	)
2019	973		283	(7	)
2020	954		276	(7	)
2021 - 2025	4,433		1,256	(30	)

Net Periodic Benefit Expense

The actuarial assumptions used to compute the net periodic benefit expense for our qualified pension, non-qualified pension and post-retirement benefit plans are based upon information available as of the beginning of the year, as presented in the following table.

	Pension Plans						Post-Retirement Benefit Plans
	2015		2014		2013		2015		2014		2013
Actuarial assumptions at beginning of year:
Discount rate	3.50% - 4.10%		4.20% - 5.10%		3.50% - 4.20%		3.80	%	4.50	%	3.60	%
Rate of compensation increase	3.25	%	3.25	%	3.25	%	N/A		N/A		N/A
Expected long-term rate of return on plan assets	7.50	%	7.50	%	7.50	%	7.50	%	6.00% - 7.50%		6.00% - 7.30%
Initial health care cost trend rate	N/A		N/A		N/A		6.00% / 6.50%		6.00% / 6.50%		6.50% / 7.00%
Ultimate health care cost trend rate	N/A		N/A		N/A		4.50	%	4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2025		2024		2022

_______________________________________________________________________________

N/A-Not applicable

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Net periodic (income) expense for our qualified and non-qualified pension plans includes the following components:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Service cost	$	83		77		91
Interest cost	568			602		544
Expected return on plan assets	(898		)	(891	)	(896	)
Settlements	—			63		—
Recognition of prior service cost	5			5		5
Recognition of actuarial loss	161			22		84
Net periodic pension benefit income	$	(81	)	(122	)	(172	)

Net periodic expense (income) for our post-retirement benefit plans includes the following components:

	Post-Retirement Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Service cost	$	24		22		24
Interest cost	140			159		140
Expected return on plan assets	(21		)	(33	)	(39	)
Recognition of prior service cost	19			20		—
Recognition of actuarial loss	—			—		4
Net periodic post-retirement benefit expense	$	162		168		129

We report net periodic benefit (income) expense for our qualified pension, non-qualified pension and post-retirement benefit plans in both cost of services and products and selling, general and administrative expenses on our consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013.

Benefit Obligations

The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2015 and 2014 and are as follows:

	Pension Plans				Post-Retirement Benefit Plans
	December 31,				December 31,
	2015		2014		2015		2014
Actuarial assumptions at end of year:
Discount rate	3.50% - 4.50%		3.50% - 4.10%		4.15	%	3.80	%
Rate of compensation increase	3.25	%	3.25	%	N/A		N/A
Initial health care cost trend rate	N/A		N/A		5.00% / 5.25%		6.00% / 6.50%
Ultimate health care cost trend rate	N/A		N/A		4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		2025		2024

_______________________________________________________________________________

N/A-Not applicable

In 2015, we adopted the revised mortality table and projection scale released by the Society of Actuaries ("SOA"), which decreased the projected benefit obligation of our benefit plans by $379 million. In 2014, to better reflect the expected lifetimes of our plan participants, we adopted a new mortality table for our defined benefit plan. The table used was based on SOA tables and increased the projected benefit obligation by approximately $1.3 billion. The 2014 increase in the projected obligation was recognized as part of the net actuarial loss and is included in the other comprehensive loss, a portion of which is subject to be amortized over the remaining estimated life of plan participants (approximately 8 years).

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The following tables summarize the change in the benefit obligations for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	15,042		13,401		14,881
Service cost	83			77		91
Interest cost	568			602		544
Plan amendments	(100		)	4		—
Actuarial loss (gain)	(800		)	2,269		(1,179	)
Settlements	—			(460	)	—
Benefits paid by company	(6		)	(6	)	(5	)
Benefits paid from plan assets	(1,438		)	(845	)	(931	)
Benefit obligation at end of year	$	13,349		15,042		13,401

	Post-Retirement Benefit Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	3,830		3,688		4,075
Service cost	24			22		24
Interest cost	140			159		140
Participant contributions	57			69		96
Plan amendments	—			23		141
Direct subsidy receipts	8			9		13
Actuarial loss (gain)	(148		)	245		(399	)
Benefits paid by company	(181		)	(166	)	(266	)
Benefits paid from plan assets	(163		)	(219	)	(136	)
Benefit obligation at end of year	$	3,567		3,830		3,688

Our aggregate benefit obligation as of December 31, 2015, 2014 and 2013 was $16.916 billion, $18.872 billion and $17.089 billion, respectively.

Plan Assets

We maintain plan assets for our qualified pension plan and certain post-retirement benefit plans. The qualified pension plan's assets are used for the payment of pension benefits and certain eligible plan expenses. The post-retirement benefit plan's assets are used to pay health care benefits and premiums on behalf of eligible retirees and to pay certain eligible plan expenses. The expected rate of return on plan assets is the long-term rate of return we expect to earn on the plans' assets, net of administrative expenses paid from plan assets. The rate of return is determined by the strategic allocation of plan assets and the long-term risk and return forecast for each asset class. The forecasts for each asset class are generated primarily from an analysis of the long-term expectations of various third party investment management organizations. The expected rate of return on plan assets is reviewed annually and revised, as necessary, to reflect changes in the financial markets and our investment strategy.

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The following tables summarize the change in the fair value of plan assets for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	12,571		12,346		12,321
Return on plan assets	(161		)	1,373		810
Employer contributions	100			157		146
Settlements	—			(460	)	—
Benefits paid from plan assets	(1,438		)	(845	)	(931	)
Fair value of plan assets at end of year	$	11,072		12,571		12,346

	Post-Retirement Benefit Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	353		535		626
Return on plan assets	3			37		45
Benefits paid from plan assets	(163		)	(219	)	(136	)
Fair value of plan assets at end of year	$	193		353		535

Pension Plans: Our investment objective for the qualified pension plan assets is to achieve an attractive risk-adjusted return over time that will provide for the payment of benefits and minimize the risk of large losses. Our pension plan investment strategy is designed to meet this objective by broadly diversifying plan assets across numerous strategies with differing expected returns, volatilities and correlations. The pension plan assets have target allocations of 45% to interest rate sensitive investments and 55% to investments designed to provide higher expected returns than the interest rate sensitive investments. Interest rate sensitive investments include 30% of plan assets targeted primarily to long-duration investment grade bonds, 10% targeted to high yield and emerging market bonds and 5% targeted to diversified strategies, which primarily have exposures to global bonds, as well as some exposures to global stocks and commodities. Assets expected to provide higher returns than the interest rate sensitive assets include broadly diversified equity investments with targets of approximately 15% to U.S. equity markets and 15% to non-U.S. developed and emerging markets. Approximately 7% is targeted to broadly diversified multi-asset class strategies that have the flexibility to adjust exposures to different asset classes. Approximately 10% is allocated to private markets investments including funds primarily invested in private equity, private debt and hedge funds. Real estate investments are targeted at 8% of plan assets. At the beginning of 2016, our expected annual long-term rate of return on pension assets before consideration of administrative expenses is assumed to be 7.5%. However, projected increases in PBGC (Pension Benefit Guaranty Corporation) premium rates have now become large enough to reduce the annual long-term expected return net of administrative expenses to 7.0%.

Our non-qualified pension plans are not funded. We pay benefits directly to the participants of these plans.

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Post-Retirement Benefit Plans: Our investment objective for the post-retirement benefit plans' assets is to achieve an attractive risk-adjusted return and minimize the risk of large losses over the expected life of the assets. Investment risk is managed by broadly diversifying assets across numerous strategies with differing expected returns, volatilities and correlations. Our investment strategy is designed to be consistent with the investment objective, with particular focus on providing liquidity for the reimbursement of our union-represented employees' post-retirement health care costs. The liquid post-retirement benefit plan assets (excluding private market investments) have target allocations of 20% to equities and 80% to non-equity investments. Specific target allocations within these broad categories are allowed to vary to meet reimbursement requirements. Liquid equity investments are broadly diversified with exposure to publicly traded U.S., non-U.S. and emerging market stocks. The 80% non-equity allocation includes investment grade bonds, real estate, hedge funds and diversified strategies. While no new private market investments have been made in recent years, the percent allocation to existing private market investments is expected to increase as liquid, publicly traded stocks are drawn down for the reimbursement of health care costs. At the beginning of 2016, our expected annual long-term rate of return on post-retirement benefit plan assets is assumed to be 7.0%.

Permitted investments: Plan assets are managed consistent with the restrictions set forth by the Employee Retirement Income Security Act of 1974, as amended, which requires diversification of assets and also generally prohibits defined benefit and welfare plans from investing more than 10% of their assets in securities issued by the sponsor company. At December 31, 2015 and 2014, the pension and post-retirement benefit plans did not directly own any shares of our common stock or any of our debt.

Derivative instruments: Derivative instruments are used to reduce risk as well as provide return. The pension and post-retirement benefit plans use exchange traded futures and swaps to gain exposure to equity and interest rate markets consistent with target asset allocations and to reduce risk relative to measurement of the benefit obligation, which is sensitive to interest rate changes. Foreign exchange forward contracts are used to manage currency exposures. Credit default swaps are used to manage credit risk exposures in a cost effective and targeted manner relative to transacting with physical corporate fixed income securities. Options are currently used to manage interest rate exposure taking into account the implied volatility and current pricing of the specific underlying market instrument. Some derivative instruments subject the plans to counterparty risk. The external investment managers, along with Plan Management, monitor counterparty exposure and mitigate this risk by diversifying the exposure among multiple high credit quality counterparties, requiring collateral and limiting exposure by periodically settling contracts.

The gross notional exposure of the derivative instruments directly held by the plans is shown below. The notional amount of the derivatives corresponds to market exposure but does not represent an actual cash investment.

	Gross Notional Exposure
	Pension Plans			Post-Retirement Benefit Plans
	Years Ended December 31,
	2015		2014	2015	2014
	(Dollars in millions)
Derivative instruments:
Exchange-traded U.S. equity futures	$	79	134	—	7
Exchange-traded Treasury and other interest rate futures	1,767		2,451	—	—
Interest rate swaps	550		579	—	—
Credit default swaps	189		382	—	—
Foreign exchange forwards	992		1,195	—	13
Options	285		529	—	—

Fair Value Measurements: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB. For additional information on the fair value hierarchy, see Note 10—Fair Value Disclosure.

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At December 31, 2015, we used the following valuation techniques to measure fair value for assets. There were no changes to these methodologies during 2015:

• Level 1—Assets were valued using the closing price reported in the active market in which the individual security was traded.

• Level 2—Assets were valued using quoted prices in markets that are not active, broker dealer quotations, net asset value of shares held by the plans and other methods by which all significant inputs were observable at the measurement date.

• Level 3—Assets were valued using unobservable inputs in which little or no market data exists as reported by the respective institutions at the measurement date.

The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2015. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivables, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2015
	Level 1		Level 2		Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	841	1,045		—	$	1,886
High yield bonds (b)	—		544		13	557
Emerging market bonds (c)	208		232		1	441
Convertible bonds (d)	—		2		—	2
U.S. stocks (f)	1,201		—		—	1,201
Non-U.S. stocks (g)	1,127		1		—	1,128
Multi-asset strategies (m)	376		—		—	376
Derivatives (n)	2		(6	)	—	(4		)
Cash equivalents and short-term investments (o)	—		192		—	192
Total investments, excluding investments valued at NAV	$	3,755	2,010		14	5,779
Investments valued at NAV						5,293
Total pension plan assets						$	11,072

	Fair Value of Post-Retirement Plan Assets at December 31, 2015
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	2	1	—	$	3
High yield bonds (b)	—		1	—	1
U.S. stocks (f)	16		—	—	16
Non-U.S. stocks (g)	12		—	—	12
Emerging market stocks (h)	4		—	—	4
Cash equivalents and short-term investments (o)	—		4	—	4
Total investments, excluding investments valued at NAV	$	34	6	—	40
Investments valued at NAV					153
Total post-retirement plan assets					$	193

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The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2014. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivable, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2014
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	1,068	1,278	—	$	2,346
High yield bonds (b)	—		647	7	654
Emerging market bonds (c)	208		407	—	615
Convertible bonds (d)	—		4	—	4
U.S. stocks (f)	1,389		1	—	1,390
Non-U.S. stocks (g)	1,169		1	—	1,170
Derivatives (n)	2		15	—	17
Cash equivalents and short-term investments (o)	—		626	—	626
Total investments, excluding investments valued at NAV	$	3,836	2,979	7	6,822
Investments valued at NAV					5,749
Total pension plan assets					$	12,571

	Fair Value of Post-Retirement Plan Assets at December 31, 2014
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	5	1	—	$	6
High yield bonds (b)	—		1	—	1
U.S. stocks (f)	35		—	—	35
Non-U.S. stocks (g)	33		—	—	33
Emerging market stocks (h)	6		—	—	6
Cash equivalents and short-term investments (o)	—		8	—	8
Total investments, excluding investments valued at NAV	$	79	10	—	89
Investments valued at NAV					264
Total post-retirement plan assets					$	353

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The table below presents the fair value of plan assets valued at NAV by category for our pension and post-retirement plans at December 31, 2015 and 2014. See Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding the 2015 adoption of ASU 2015-07.

	Fair Value of Plan Assets Valued at NAV
	Pension Plans at December 31,			Post-Retirement Benefit Plans at December 31,
	2015		2014	2015	2014
	(Dollars in millions)
Investment grade bonds (a)	$	115	148	35	71
High yield bonds (b)	512		860	1	14
Emerging market bonds (c)	9		27	—	—
Convertible bonds (d)	—		10	—	—
Diversified strategies (e)	516		718	54	89
U.S. stocks (f)	70		86	—	—
Non-U.S. stocks (g)	289		384	—	—
Emerging market stocks (h)	64		102	—	—
Private equity (i)	526		673	21	28
Private debt (j)	371		394	2	3
Market neutral hedge funds (k)	825		1,026	17	25
Directional hedge funds (k)	594		558	1	1
Real estate (l)	968		699	20	28
Multi-asset strategies (m)	386		—	—	—
Cash equivalents and short-term investments (o)	48		64	2	5
Total investments valued at NAV	$	5,293	5,749	153	264

The plans' assets are invested in various asset categories utilizing multiple strategies and investment managers. For several of the investments in the tables above and discussed below, the plans own units in commingled funds and limited partnerships that invest in various types of assets. Interests in commingled funds are valued using the net asset value ("NAV") per unit of each fund. The NAV reported by the fund manager is based on the market value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding. Commingled funds can be redeemed at NAV within a year of the financial statement date. Investments in limited partnerships represent long-term commitments with a fixed maturity date, typically ten years and are also valued at NAV. Valuation inputs for these limited partnership interests are generally based on assumptions and other information not observable in the market. The assumptions and valuation methodologies of the pricing vendors, account managers, fund managers and partnerships are monitored and evaluated for reasonableness. Below is an overview of the asset categories, the underlying strategies and valuation inputs used to value the assets in the preceding tables:

(a) Investment grade bonds represent investments in fixed income securities as well as commingled bond funds comprised of U.S. Treasury securities, agencies, corporate bonds, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. Treasury securities are valued at the bid price reported in the active market in which the security is traded and are classified as Level 1. The valuation inputs of other investment grade bonds primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. The primary observable inputs include references to the new issue market for similar securities, the secondary trading markets and dealer quotes. Option adjusted spread models are utilized to evaluate securities such as asset backed securities that have early redemption features. These securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying fixed income securities using the same valuation inputs described above.

(b) High yield bonds represent investments in below investment grade fixed income securities as well as commingled high yield bond funds. The valuation inputs for the securities primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. These securities are primarily classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying high yield instruments using the same valuation inputs described above.

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(c) Emerging market bonds represent investments in securities issued by governments and other entities located in developing countries as well as registered mutual funds and commingled emerging market bond funds. The valuation inputs for the securities utilize observable market information and are primarily based on dealer quotes or a spread relative to the local government bonds. The registered mutual fund is classified as Level 1 while individual securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying emerging market bonds using the same valuation inputs described above.

(d) Convertible bonds primarily represent investments in corporate debt securities that have features that allow the debt to be converted into equity securities under certain circumstances. The valuation inputs for the individual convertible bonds primarily utilize observable market information including a spread to U.S. Treasuries and the value and volatility of the underlying equity security. Convertible bonds are classified as Level 2.

(e) Diversified strategies represent an investment in a commingled fund that primarily has exposures to global government, corporate and inflation linked bonds, global stocks and commodities. The commingled fund is valued at NAV based on the market value of the underlying investments. The valuation inputs utilize observable market information including published prices for exchange traded securities, bid prices for government bonds, and spreads and yields available for comparable fixed income securities with similar credit ratings.

(f) U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

(g) Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

(h) Emerging market stocks represent investments in a registered mutual fund and commingled funds comprised of stocks of companies located in developing markets. Registered mutual funds trade at the daily NAV, as determined by the market value of the underlying investments, and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described previously for individual stocks.

(i) Private equity represents non-public investments in domestic and foreign buy out and venture capital funds. Private equity funds are structured as limited partnerships and are valued according to the valuation policy of each partnership, subject to prevailing accounting and other regulatory guidelines. The partnerships are valued at NAV using valuation methodologies that give consideration to a range of factors, including but not limited to the price at which investments were acquired, the nature of the investments, market conditions, trading values on comparable public securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investments. These valuation methodologies involve a significant degree of judgment.

(j) Private debt represents non-public investments in distressed or mezzanine debt funds. Mezzanine debt instruments are debt instruments that are subordinated to other debt issues and may include embedded equity instruments such as warrants. Private debt funds are structured as limited partnerships and are valued at NAV according to the valuation policy of each partnership, subject to prevailing accounting and other regulatory guidelines. The valuation of underlying fund investments are based on factors including the issuer's current and projected credit worthiness, the security's terms, reference to the securities of comparable companies, and other market factors. These valuation methodologies involve a significant degree of judgment.

(k) Market neutral hedge funds hold investments in a diversified mix of instruments that are intended in combination to exhibit low correlations to market fluctuations. These investments are typically combined with futures to achieve uncorrelated excess returns over various markets. Directional hedge funds—This asset category represents investments that may exhibit somewhat higher correlations to market fluctuations than the market neutral hedge funds. Investments in hedge funds include both direct investments and investments in diversified funds of funds. Hedge Funds are valued at NAV based on the market value of the underlying investments which include publicly traded equity and fixed income securities and privately negotiated debt securities. The hedge funds are valued by third party administrators using the same valuation inputs previously described.

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(l) Real estate represents investments in commingled funds and limited partnerships that invest in a diversified portfolio of real estate properties. These investments are valued at NAV according to the valuation policy of each fund or partnership, subject to prevailing accounting and other regulatory guidelines. The valuation inputs of the underlying properties are generally based on third-party appraisals that use comparable sales or a projection of future cash flows to determine fair value.

(m) Multi-asset strategies is a new allocation in 2015 and represents broadly diversified strategies that have the flexibility to tactically adjust exposures to different asset classes through time. This asset category includes investments in a registered mutual fund which is classified as Level 1 and a commingled fund which is valued at NAV based on the market value of the underlying investments.

(n) Derivatives include exchange traded futures contracts which are classified as Level 1, as well as privately negotiated over-the-counter swaps and options that are valued based on the change in interest rates or a specific market index and are classified as Level 2. The market values represent gains or losses that occur due to fluctuations in interest rates, foreign currency exchange rates, security prices, or other factors.

(o) Cash equivalents and short-term investments represent investments that are used in conjunction with derivatives positions or are used to provide liquidity for the payment of benefits or other purposes. The valuation inputs of securities are based on a spread to U.S. Treasury Bills, the Federal Funds Rate, or London Interbank Offered Rate and consider yields available on comparable securities of issuers with similar credit ratings and are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

Concentrations of Risk: Investments, in general, are exposed to various risks, such as significant world events, interest rate, credit, foreign currency and overall market volatility risk. These risks are managed by broadly diversifying assets across numerous asset classes and strategies with differing expected returns, volatilities and correlations. Risk is also broadly diversified across numerous market sectors and individual companies. Financial instruments that potentially subject the plans to concentrations of counterparty risk consist principally of investment contracts with high quality financial institutions. These investment contracts are typically collateralized obligations and/or are actively managed, limiting the amount of counterparty exposure to any one financial institution. Although the investments are well diversified, the value of plan assets could change materially depending upon the overall market volatility, which could affect the funded status of the plans.

The table below presents a rollforward of the pension plan assets valued using Level 3 inputs:

	Pension Plan Assets Valued Using Level 3 Inputs
	High Yield Bonds			Emerging Market Bonds	Total
	(Dollars in millions)
Balance at December 31, 2013	$	—		—	—
Net transfers	6			—	6
Acquisitions	1			—	1
Dispositions	(3		)	—	(3	)
Actual return on plan assets:
Gains relating to assets sold during the year	4			—	4
(Losses) gains relating to assets still held at year-end	(1		)	—	(1	)
Balance at December 31, 2014	7			—	7
Net transfers	4			1	5
Acquisitions	4			—	4
Dispositions	(2		)	—	(2	)
Actual return on plan assets:
Gains relating to assets sold during the year	—			—	—
(Losses) gains relating to assets still held at year-end	—			—	—
Balance at December 31, 2015	$	13		1	14

Certain gains and losses are allocated between assets sold during the year and assets still held at year-end based on transactions and changes in valuations that occurred during the year. These allocations also impact our calculation of net acquisitions and dispositions.

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For the year ended December 31, 2015, the investment program produced actual losses on qualified pension and post-retirement plan assets of $158 million as compared to expected returns of $919 million for a difference of $1.077 billion. For the year ended December 31, 2014, the investment program produced actual gains on pension and post-retirement plan assets of $1.410 billion as compared to the expected returns of $924 million for a difference of $486 million. The short-term annual returns on plan assets will almost always be different from the expected long-term returns and the plans could experience net gains or losses, due primarily to the volatility occurring in the financial markets during any given year.

Unfunded Status

The following table presents the unfunded status of the pensions and post-retirement benefit plans:

	Pension Plans					Post-Retirement Benefit Plans
	Years Ended December 31,					Years Ended December 31,
	2015			2014		2015		2014
	(Dollars in millions)
Benefit obligation	$	(13,349	)	(15,042	)	(3,567	)	(3,830	)
Fair value of plan assets	11,072			12,571		193		353
Unfunded status	(2,277		)	(2,471	)	(3,374	)	(3,477	)
Current portion of unfunded status	$	(5	)	(6	)	(135	)	(134	)
Non-current portion of unfunded status	$	(2,272	)	(2,465	)	(3,239	)	(3,343	)

The current portion of our post-retirement benefit obligations is recorded on our consolidated balance sheets in accrued expenses and other current liabilities-salaries and benefits.

Accumulated Other Comprehensive Loss-Recognition and Deferrals

The following tables present cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2014, items recognized as a component of net periodic benefits expense in 2015, additional items deferred during 2015 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2015. The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss:

	As of and for the Years Ended December 31,
	2014			Recognition of Net Periodic Benefits Expense		Deferrals		Net Change in AOCL		2015
	(Dollars in millions)
Accumulated other comprehensive loss:
Pension plans:
Net actuarial (loss) gain	$	(2,760	)	161		(258	)	(97	)	(2,857	)
Prior service (cost) benefit	(32		)	5		99		104		72
Deferred income tax benefit (expense)	1,072			(63	)	61		(2	)	1,070
Total pension plans	(1,720		)	103		(98	)	5		(1,715	)
Post-retirement benefit plans:
Net actuarial (loss) gain	(277		)	—		130		130		(147	)
Prior service (cost) benefit	(166		)	19		—		19		(147	)
Deferred income tax benefit (expense)	171			(7	)	(50	)	(57	)	114
Total post-retirement benefit plans	(272		)	12		80		92		(180	)
Total accumulated other comprehensive loss	$	(1,992	)	115		(18	)	97		(1,895	)

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The following table presents estimated items to be recognized in 2016 as a component of net periodic benefit expense of the pension, non-qualified pension and post-retirement benefit plans:

	Pension Plans			Post-Retirement Plans
	(Dollars in millions)
Estimated recognition of net periodic benefit (cost)/income in 2016:
Net actuarial loss	$	(168	)	—
Prior service (cost)/income	8			(20	)
Deferred income tax benefit	61			8
Estimated net periodic benefit expense to be recorded in 2016 as a component of other comprehensive income (loss)	$	(99	)	(12	)

Medicare Prescription Drug, Improvement and Modernization Act of 2003

We sponsor post-retirement health care plans with several benefit options that provide prescription drug benefits that we deem actuarially equivalent to or exceeding Medicare Part D. We recognize the impact of the federal subsidy received under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 in the calculation of our post-retirement benefit obligation and net periodic post-retirement benefit expense.

Other Benefit Plans

Health Care and Life Insurance

We provide health care and life insurance benefits to essentially all of our active employees. We are largely self-funded for the cost of the health care plan. Our health care benefit expense for current employees was $381 million, $381 million and $362 million for the years ended December 31, 2015, 2014 and 2013, respectively. Union-represented employee benefits are based on negotiated collective bargaining agreements. Employees contributed $125 million, $136 million and $117 million for the years ended December 31, 2015, 2014 and 2013, respectively. Our group basic life insurance plans are fully insured and the premiums are paid by us.

401(k) Plans

We sponsor qualified defined contribution plans covering substantially all of our employees. Under these plans, employees may contribute a percentage of their annual compensation up to certain maximums, as defined by the plans and by the Internal Revenue Service ("IRS"). Currently, we match a percentage of employee contributions in cash. At both December 31, 2015 and 2014, the assets of the plans included approximately 8 million shares of our common stock as a result of the combination of previous employer match and participant directed contributions. We recognized expenses related to these plans of $83 million, $81 million and $89 million and for the years ended December 31, 2015, 2014 and 2013, respectively.

Deferred Compensation Plans

We sponsored non-qualified unfunded deferred compensation plans for various groups that included certain of our current and former highly compensated employees. The value of liabilities related to these plans was not significant.

(8) Share-based Compensation

We maintain equity programs that allow our Board of Directors (through its Compensation Committee or our Chief Executive Officer as its delegate) to grant incentives to certain employees and our outside directors in any one or a combination of several forms, including incentive and non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units and market and performance shares. Stock options generally expire ten years from the date of grant. Until June 30, 2014, we offered an employee stock purchase plan, which allowed eligible employees to purchase our common stock at a 15% discount based on the lower of the beginning or ending stock price during recurring six month offering periods.

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Stock Options

The following table summarizes activity involving stock option awards for the year ended December 31, 2015:

	Number of Options		Weighted- Average Exercise Price
	(in thousands)
Outstanding and Exercisable at December 31, 2014	4,106		$	37.99
Exercised	(335	)	26.00
Forfeited/Expired	(246	)	30.33
Outstanding and Exercisable at December 31, 2015	3,525		39.67

The aggregate intrinsic value of our options outstanding and exercisable at December 31, 2015 was $1 million. The weighted average remaining contractual term for such options was 1.9 years.

During 2015, we received net cash proceeds of $9 million in connection with our option exercises. The tax benefit realized from these exercises was $1 million. The total intrinsic value of options exercised for the years ended December 31, 2015, 2014 and 2013, was $4 million, $9 million and $11 million, respectively.

Restricted Stock Awards

For equity based awards that contain only service conditions for vesting, we calculate the award fair value based on the closing stock price on the accounting grant date. For equity based restricted stock awards that contain market conditions, the award fair value is calculated through Monte-Carlo simulations.

During the first quarter of 2015, we granted approximately 496 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 198 thousand contained only service conditions and will vest on a straight-line basis on February 23, 2016, 2017 and 2018. The remaining awards contain market and service conditions and are scheduled to vest on February 23, 2018. These shares, with market and service conditions, represent only the target for the award, as each recipient has the opportunity to ultimately receive a number of shares between 0% and 200% of the target restricted stock award depending on our total shareholder return versus that of selected peer companies for 2015, 2016 and 2017.

At the end of the first quarter of 2015, we granted approximately 1.2 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions and will vest on a straight-line basis on March 12, 2016, 2017 and 2018. During the third quarter of 2015 we granted shares to certain key employees as part of our long-term equity retention program. These awards will vest over a three to seven year period with approximately 193 thousand, 423 thousand and 230 thousand shares vesting on August 14, 2018, 2020 and 2022, respectively, and 55 thousand shares vesting equally on August 14, 2017, 2019, and 2021. The remaining awards granted throughout 2015 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period.

During the first quarter of 2014, we granted approximately 440 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 250 thousand contained only service conditions and will vest on a straight-line basis on February 20, 2015, 2016 and 2017. The remaining awards contain market and service conditions and are scheduled to vest on February 20, 2017. These shares, with market and service conditions, represent only the target for the award, as each recipient has the opportunity to ultimately receive a number of shares between 0% and 200% of the target restricted stock award depending on our total shareholder return versus that of selected peer companies for 2014, 2015 and 2016.

During the second quarter of 2014, we granted approximately 1.5 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions and will vest on a straight-line basis on March 26, 2015, 2016 and 2017. During the third quarter of 2014 we granted shares to certain key employees as part of our long-term equity retention program. These awards will vest over a three to seven year period with approximately 105 thousand, 325 thousand and 220 thousand vesting on August 4, 2017, 2019 and 2021, respectively. The remaining awards granted throughout 2014 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period.

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During the second quarter of 2013, we granted approximately 335 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 223 thousand contained only service conditions and are scheduled to vest on a straight-line basis on May 23, 2014, 2015 and 2016. The remaining awards contain market and service conditions and will vest on May 23, 2016. These shares, with market and service conditions, represent only the target for the award as each recipient has the opportunity to ultimately receive a number of shares between 0% and 200% of the target restricted stock award depending on, our total shareholder return versus that of selected peer companies for 2013, 2014 and 2015.

In addition, during the first and second quarter of 2013, we granted approximately 1.2 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions. The remaining awards granted throughout 2013 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period.

The following table summarizes activity involving restricted stock and restricted stock unit awards for the year ended December 31, 2015:

	Number of Shares		Weighted- Average Grant Date Fair Value
	(in thousands)
Non-vested at December 31, 2014	4,400		$	36.59
Granted	2,904		31.83
Vested	(1,724	)	35.71
Forfeited	(678	)	38.95
Non-vested at December 31, 2015	4,902		33.86

During 2014, we granted 2.9 million shares of restricted stock and restricted stock unit awards at a weighted-average price of $35.87. The total fair value of restricted stock that vested during 2015, 2014 and 2013, was $59 million, $53 million and $52 million, respectively.

Compensation Expense and Tax Benefit

We recognize compensation expense related to our market and performance share-based awards with graded vesting that only have a service condition on a straight-line basis over the requisite service period for the entire award. Total compensation expense for all share-based payment arrangements for the years ended December 31, 2015, 2014 and 2013, was $73 million, $75 million and $63 million, respectively. Our tax benefit recognized in the consolidated statements of operations for our share-based payment arrangements for the years ended December 31, 2015, 2014 and 2013, was $28 million, $29 million and $25 million, respectively. At December 31, 2015, there was $113 million of total unrecognized compensation expense related to our share-based payment arrangements, which we expect to recognize over a weighted-average period of 2.5 years.

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(9) Earnings (Loss) Per Common Share

Basic and diluted earnings (loss) per common share for the years ended December 31, 2015, 2014 and 2013 were calculated as follows:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions, except per share amounts, shares in thousands)
Income (Loss) (Numerator):
Net income (loss)	$	878		772		(239	)
Earnings applicable to non-vested restricted stock	—			—		—
Net income (loss) applicable to common stock for computing basic earnings (loss) per common share	878			772		(239	)
Net income (loss) as adjusted for purposes of computing diluted earnings (loss) per common share	$	878		772		(239	)
Shares (Denominator):
Weighted average number of shares:
Outstanding during period	559,260			572,748		604,404
Non-vested restricted stock	(4,982		)	(4,313	)	(3,512	)
Weighted average shares outstanding for computing basic earnings (loss) per common share	554,278			568,435		600,892
Incremental common shares attributable to dilutive securities:
Shares issuable under convertible securities	10			10		—
Shares issuable under incentive compensation plans	805			1,294		—
Number of shares as adjusted for purposes of computing diluted earnings (loss) per common share	555,093			569,739		600,892
Basic earnings (loss) per common share	$	1.58		1.36		(0.40	)
Diluted earnings (loss) per common share	$	1.58		1.36		(0.40	)

Our calculation of diluted earnings (loss) per common share excludes shares of common stock that are issuable upon exercise of stock options when the exercise price is greater than the average market price of our common stock. We also exclude unvested restricted stock awards that are antidilutive as a result of unrecognized compensation cost. Such shares averaged 3.1 million, 2.5 million and 2.7 million for 2015, 2014 and 2013, respectively. For the year ended December 31, 2013, due to the net loss position, we excluded from the calculation of diluted loss per share 1.3 million shares which were potentially issuable under incentive compensation plans or convertible securities, as their effect, if included, would have been anti-dilutive.

(10) Fair Value Disclosure

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt, excluding capital lease obligations. Due to their short-term nature, the carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate their fair values.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB.

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

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

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.

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

		As of December 31, 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	$	19,800	19,473	19,994	21,255

(11) Income Taxes

	Years Ended December 31,
	2015		2014		2013
	(Dollars in millions)
Income tax expense was as follows:
Federal
Current	$	28	18		1
Deferred	329		305		403
State
Current	40		26		62
Deferred	21		(14	)	(8	)
Foreign
Current	16		3		9
Deferred	4		—		(4	)
Total income tax expense	$	438	338		463

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Income tax expense was allocated as follows:
Income tax expense in the consolidated statements of operations:
Attributable to income	$	438		338		463
Stockholders' equity:
Compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes	(5		)	(5	)	(14	)
Tax effect of the change in accumulated other comprehensive loss	59			(744	)	554

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The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate:

	Years Ended December 31,
	2015		2014		2013
	(Percentage of pre-tax income)
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal income tax benefit	2.6	%	2.7	%	2.8	%
Impairment of goodwill	—	%	—	%	188.5	%
Change in liability for unrecognized tax position	0.4	%	0.4	%	(24.5	)%
Foreign income taxes	0.7	%	0.4	%	2.7	%
Nondeductible accounting adjustment for life insurance	—	%	—	%	3.1	%
Affiliate debt rationalization	(2.6	)%	—	%	—	%
Release state valuation allowance	—	%	—	%	(2.3	)%
Research and development credits	(2.1	)%	—	%	—	%
Loss on worthless investment in foreign subsidiary	—	%	(5.4	)%	—	%
Other, net	(0.7	)%	(2.6	)%	1.4	%
Effective income tax rate	33.3	%	30.5	%	206.7	%

The 2015 effective tax rate is 33.3% compared to 30.5% for 2014. The 2015 rate reflects a tax benefit of approximately $34 million related to affiliate debt rationalization, research and development tax credits of $28 million for 2011 through 2015 and a $16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating losses ("NOLs"). The 2014 rate reflects a $60 million tax benefit associated with a deduction for tax basis for worthless stock in a wholly-owned foreign subsidiary as a result of developments in bankruptcy proceedings involving its sole asset and a $13 million tax decrease due to changes in the state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of NOLs. The 2013 rate reflects the tax effect of a $1.092 billion non-deductible goodwill impairment charge, a favorable settlement with the Internal Revenue Service of $33 million, a $22 million reduction due to the reversal of an uncertain tax position and the tax effect of a $17 million unfavorable accounting adjustment for non-deductible life insurance costs. Also in 2013, the tax rate was decreased by a $5 million reduction to the valuation allowance due to the estimated ability to utilize more state NOLs than previously expected.

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:

	As of December 31,
	2015			2014
	(Dollars in millions)
Deferred tax assets
Post-retirement and pension benefit costs	$	2,154		2,276
Net operating loss carryforwards	487			1,091
Other employee benefits	182			214
Other	458			602
Gross deferred tax assets	3,281			4,183
Less valuation allowance	(380		)	(409	)
Net deferred tax assets	2,901			3,774
Deferred tax liabilities
Property, plant and equipment, primarily due to depreciation differences	(3,841		)	(3,869	)
Goodwill and other intangible assets	(2,588		)	(2,908	)
Other	(38		)	(147	)
Gross deferred tax liabilities	(6,467		)	(6,924	)
Net deferred tax liability	$	(3,566	)	(3,150	)

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Of the $3.566 billion and $3.150 billion net deferred tax liability at December 31, 2015 and 2014, respectively, $3.569 billion and $3.154 billion is reflected as a long-term liability and $3 million and $4 million is reflected as a net noncurrent deferred tax asset at December 31, 2015 and 2014, respectively.

At December 31, 2015, we had federal NOLs of $72 million and state NOLs of $13 billion. If unused, the NOLs will expire between 2016 and 2032; however, no significant amounts expire until 2021. At December 31, 2015, we had federal tax credits of $28 million. Additionally, we had $36 million ($23 million net of federal income tax) of state investment tax credit carryforwards that will expire between 2016 and 2025 if not utilized. In addition, at December 31, 2015, we had $79 million of federal alternative minimum tax, or AMT, credits. Our acquisitions of Qwest and SAVVIS, Inc. ("Savvis") caused "ownership changes" within the meaning of Section 382 of the Internal Revenue Code ("Section 382"). As a result, our ability to use these NOLs and AMT credits are subject to annual limits imposed by Section 382. Despite this, we expect to use substantially all of these tax attributes to reduce our future federal tax liabilities, although the timing of that use will depend upon our future earnings and future tax circumstances.

We establish valuation allowances when necessary to reduce the deferred tax assets to amounts we expect to realize. As of December 31, 2015, a valuation allowance of $380 million was established as it is more likely than not that this amount of net operating loss and tax credit carryforwards will not be utilized prior to expiration. Our valuation allowance at December 31, 2015 and 2014 is primarily related to state NOL carryforwards. This valuation allowance decreased by $29 million during 2015.

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2015 and 2014 is as follows:

	2015			2014
	(Dollars in millions)
Unrecognized tax benefits at beginning of year	$	17		14
Increase in tax positions taken in the current year	1			—
Increase in tax positions taken in the prior year	7			9
Decrease due to the reversal of tax positions taken in a prior year	(9		)	(2	)
Decrease from the lapse of statute of limitations	(1		)	(1	)
Settlements	—			(3	)
Unrecognized tax benefits at end of year	$	15		17

The total amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate was $32 million at both December 31, 2015 and 2014.

Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense. We had accrued interest (presented before related tax benefits) of approximately $33 million and $30 million at December 31, 2015 and 2014, respectively.

We file income tax returns, including returns for our subsidiaries, with federal, state and local jurisdictions. Our uncertain income tax positions are related to tax years that are currently under or remain subject to examination by the relevant taxing authorities.

In 2013, Qwest filed an amended 2009 federal income tax return primarily to report the carryforward impact of prior year settlements. The refund for the 2009 amended return filed in 2013 was received in 2014. In 2014, Qwest filed an amended federal income tax return for 2010. The refund claim filed for 2010 was accepted by the IRS, and the refund was received in 2015. The 2010 amended return released certain general business credits that were required to be carried back to 2009. As a result, a subsequent 2009 federal amended return was filed by Qwest in 2014 to reflect the carrybacks from 2010. The 2009 refund claim filed in 2014 was accepted by the IRS and the refund was received in 2015.

Beginning with the 2012 tax year, our federal consolidated returns are subject to annual examination by the IRS.

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Our open income tax years by major jurisdiction are as follows at December 31, 2015:

Jurisdiction	Open Tax Years
Federal	2012—current
State
Arizona	2010—current
Florida	2010—current
Other states	2011—current

Since the period for assessing additional liability typically begins upon the filing of a return, it is possible that certain jurisdictions could assess tax for years prior to the open tax years disclosed above. Additionally, it is possible that certain jurisdictions in which we do not believe we have an income tax filing responsibility, and accordingly did not file a return, may attempt to assess a liability, or that other jurisdictions to which we pay taxes may attempt to assert that we owe additional taxes.

Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement of certain disputed issues, and (iv) the administrative practices of applicable taxing jurisdictions, it is reasonably possible that the related unrecognized tax benefits for uncertain tax positions previously taken may decrease by up to $11 million within the next 12 months. The actual amount of such decrease, if any, will depend on several future developments and events, many of which are outside our control.

(12) Segment Information

We are organized into operating segments based on customer type, business and consumer. These operating segments are our two reportable segments in our consolidated financial statements:

• Business Segment. Consists generally of providing strategic, legacy and data integration products and services to small, medium and enterprise business, 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 all or part of our network 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; and

• Consumer Segment. 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, video (including our Prism TV services) and wireless services. Our legacy services offered to these customers include local and long-distance voice services.

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The following table summarizes our segment results for 2015, 2014 and 2013 based on the segment categorization we were operating under at December 31, 2015.

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment revenues	$	16,668		17,028		17,095
Total segment expenses	8,459			8,509		8,167
Total segment income	$	8,209		8,519		8,928
Total margin percentage	49		%	50	%	52	%
Business segment:
Revenues	$	10,647		11,034		11,091
Expenses	6,034			6,089		5,808
Income	$	4,613		4,945		5,283
Margin percentage	43		%	45	%	48	%
Consumer segment:
Revenues	$	6,021		5,994		6,004
Expenses	2,425			2,420		2,359
Income	$	3,596		3,574		3,645
Margin percentage	60		%	60	%	61	%

Product and Service Categories

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

• 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 16 markets), VoIP and Verizon Wireless and other ancillary services;

• Legacy services, which include primarily local and long-distance voice services, including the sale of UNEs, switched access and Integrated Services Digital Network ("ISDN") services (which use 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 operating revenues, which consist primarily of CAF support payments, USF support payments and USF surcharges. We receive federal support payments from both CAF Phase 1 and CAF Phase 2 programs, and support payments from both federal and state USF programs. These support payments are government subsidies designed to reimburse us for various costs related to certain telecommunications services, including the costs of deploying, maintaining and operating voice and high-speed Internet infrastructure 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.

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Our operating revenues for our products and services consisted of the following categories for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015		2014	2013
	(Dollars in millions)
Strategic services
Business high-bandwidth data services (1)	$	2,816	2,579	2,230
Business low-bandwidth data services (2)	2,052		2,345	2,577
Business hosting services (3)	1,281		1,316	1,259
Other business strategic services (4)	162		76	60
Consumer high-speed Internet services (5)	2,611		2,469	2,358
Other consumer strategic services (6)	421		381	292
Total strategic services revenues	9,343		9,166	8,776
Legacy services
Business legacy voice services (7)	2,590		2,780	2,916
Other business legacy services (8)	1,175		1,252	1,398
Consumer legacy voice services (7)	2,676		2,864	3,101
Other consumer legacy services (9)	311		276	248
Total legacy services revenues	6,752		7,172	7,663
Data integration
Business data integration	571		686	651
Consumer data integration	2		4	5
Total data integration revenues	573		690	656
Other revenues
High-cost support revenue (10)	732		528	547
Other revenue (11)	500		475	453
Total other revenues	1,232		1,003	1,000
Total revenues	$	17,900	18,031	18,095

______________________________________________________________________ 

(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

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During the first quarter of 2015, we determined that certain products and services associated with our acquisition of Savvis are more closely aligned to legacy services than to strategic services. As a result, these operating revenues are now reflected as legacy services. The revision resulted in a reduction of revenue from strategic services of $34 million and $47 million and a corresponding increase in revenue from legacy services for the years ended December 31, 2014 and 2013, respectively.

We recognize revenues in our consolidated statements of operations for certain USF surcharges and transaction taxes that we bill to our customers. Our consolidated statements of operations also reflect the related expense for the amounts we remit to the government agencies. The total amount of such surcharges that we included in revenues aggregated approximately $544 million, $526 million and $489 million for the years ended December 31, 2015, 2014 and 2013, respectively. Those USF surcharges, where we record revenue, are included in "other" operating revenues and transaction tax surcharges are included in "legacy services" revenues. We also act as a collection agent for certain other USF and transaction taxes that we are required by government agencies to include in our bills to customers, for which we do not record any revenue or expense because we only act as a pass-through agent.

Allocations of Revenues and Expenses

Our segment revenues include all revenues from our strategic, legacy and data integration operations as described in more detail above. Segment revenues are based upon each customer's classification to an individual segment. We report our segment revenues based upon all services provided to that segment's customers. Our segment expenses for our two segments include specific expenses incurred as a direct result of providing services and products to segment customers, along with selling, general and administrative expenses that are directly associated with specific segment customers or activities; and allocated expenses which include network expenses, facilities expenses and other expenses such as fleet and real estate expenses. We do not assign depreciation and amortization expense or impairments to our segments, as the related assets and capital expenditures are centrally managed and are not monitored by or reported to the chief operating decision maker ("CODM") by segment. Generally speaking, severance expenses, restructuring expenses and certain centrally managed administrative functions (such as finance, information technology, legal and human resources) are not assigned to our segments. Interest expense is also excluded from segment results because we manage our financing on a total company basis and have not allocated assets or debt to specific segments. Other income, net is not monitored as a part of our segment operations and is therefore excluded from our segment results.

The following table reconciles segment income to net income for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment income	$	8,209		8,519		8,928
Other operating revenues	1,232			1,003		1,000
Depreciation and amortization	(4,189		)	(4,428	)	(4,541	)
Impairment of goodwill	—			—		(1,092	)
Other unassigned operating expenses	(2,647		)	(2,684	)	(2,842	)
Other expenses, net	(1,289		)	(1,300	)	(1,229	)
Income tax expense	(438		)	(338	)	(463	)
Net income (loss)	$	878		772		(239	)

We do not have any single customer that provides more than 10% of our total consolidated operating revenues. Substantially all of our consolidated revenues come from customers located in the United States.

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(13) Quarterly Financial Data (Unaudited)

	First Quarter		Second Quarter	Third Quarter	Fourth Quarter	Total
	(Dollars in millions, except per share amounts)
2015
Operating revenues	$	4,451	4,419	4,554	4,476	17,900
Operating income	649		549	656	751	2,605
Net income	192		143	205	338	878
Basic earnings per common share	0.34		0.26	0.37	0.62	1.58
Diluted earnings per common share	0.34		0.26	0.37	0.62	1.58
2014
Operating revenues	$	4,538	4,541	4,514	4,438	18,031
Operating income	653		655	619	483	2,410
Net income	203		193	188	188	772
Basic earnings per common share	0.35		0.34	0.33	0.33	1.36
Diluted earnings per common share	0.35		0.34	0.33	0.33	1.36

During the third quarter of 2015, we recognized an incremental $158 million of revenue associated with the FCC's CAF Phase 2 support program, and an additional incremental $57 million in the fourth quarter of 2015. During the fourth quarter of 2015, we also recognized a tax benefit of approximately $34 million related to affiliate debt rationalization, research and development tax credits of $28 million for 2011 through 2015, and a $16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating losses ("NOLs").

During the fourth quarter of 2014, we recognized a $60 million tax benefit associated with a deduction for the tax basis for worthless stock in a wholly-owned foreign subsidiary as a result of developments in bankruptcy proceedings involving its sole asset that occurred in the first quarter of 2014. During the fourth quarter of 2014, we also recognized a pension settlement charge of $63 million.

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(14) Commitments and Contingencies

We are vigorously defending against all of the matters described below under the headings "Pending Matters" and "Other Proceedings and Disputes." As a matter of course, we are prepared both to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. In this Note, when we refer to a class action as "putative" it is because a class has been alleged, but not certified in that matter. We have established accrued liabilities for these matters described below where losses are deemed probable and reasonably estimable.

PendingMatters

In William Douglas Fulghum, et al. v. Embarq Corporation, et al., filed on December 28, 2007 in the United States District Court for the District of Kansas, a group of retirees filed a class action lawsuit challenging the decision to make certain modifications in retiree benefits programs relating to life insurance, medical insurance and prescription drug benefits, generally effective January 1, 2006 and January 1, 2008 (which, at the time of the modifications, was expected to reduce estimated future expenses for the subject benefits by more than $300 million). Defendants include Embarq, certain of its benefit plans, its Employee Benefits Committee and the individual plan administrator of certain of its benefits plans. Additional defendants include Sprint Nextel and certain of its benefit plans. The Court certified a class on certain of plaintiffs' claims, but rejected class certification as to other claims. On October 14, 2011, the Fulghum lawyers filed a new, related lawsuit, Abbott et al. v. Sprint Nextel et al. In Abbott, approximately 1,500 plaintiffs allege breach of fiduciary duty in connection with the changes in retiree benefits that also are at issue in the Fulghum case. The Abbott plaintiffs are all members of the class that was certified in Fulghum on claims for allegedly vested benefits (Counts I and III), and the Abbott claims are similar to the Fulghum breach of fiduciary duty claim (Count II), on which the Fulghum court denied class certification. The Court has stayed proceedings in Abbott indefinitely, except for limited discovery and motion practice as to approximately 80 of the plaintiffs. On February 14, 2013, the Fulghum court dismissed the majority of the plaintiffs' claims in the case. On interlocutory appeal, the United States Court of Appeals for the Tenth Circuit ruled on February 24, 2015, that the plan documents reviewed do not support any claim for vested benefits, and affirmed the district court's dismissal of claims based on those documents. The Tenth Circuit decision allowed a subset of claims for vested benefits to return to the district court for further proceedings. The Tenth Circuit also affirmed the district court's dismissal of all age discrimination claims. The Tenth Circuit reversed the district court's determination that the statute of repose under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), is a time bar to the breach of fiduciary duty claims of fifteen named plaintiffs. On June 10, 2015, the district court in Fulghum granted summary judgment to defendants on an additional group of claims for vested benefits. On July 27, 2015, pursuant to the terms of a stipulation by the parties, the district court in Fulghum granted judgment in favor of defendants on all remaining and unadjudicated vested benefits claims. This judgment is without prejudice to any rights the parties may have to pursue any additional appellate relief. As to any further proceedings that may occur in the district court, defendants will continue to vigorously contest any remaining claims in Fulghum and Abbott. We have not accrued a liability for these matters because we believe it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability.

On July 16, 2013, Comcast MO Group, Inc. ("Comcast") filed a lawsuit in Colorado state court against Qwest Communications International, Inc. ("Qwest"). Comcast alleges Qwest breached the parties' 1998 tax sharing agreement ("TSA") when it refused to partially indemnify Comcast for a tax liability settlement Comcast reached with the Commonwealth of Massachusetts in a dispute to which we were not a party. Comcast seeks approximately $80 million in damages, excluding interest. Qwest and Comcast are parties to the TSA in their capacities as successors to the TSA's original parties, U S WEST, Inc., a telecommunications company, and MediaOne Group, Inc., a cable television company, respectively. In October 2014, the state court granted summary judgment in Qwest's favor. In December 2015, the Colorado Court of Appeals affirmed the judgment. Comcast has filed a petition with the Colorado Supreme Court to review the Court of Appeals judgment. We have not accrued a liability for this matter because we do not believe that liability is probable.

The local exchange carrier subsidiaries of CenturyLink are among hundreds of defendants nationwide in dozens of lawsuits filed by Sprint Communications Company and affiliates of Verizon Communications Inc. The plaintiffs in these suits have challenged the right of local exchange carriers to bill interexchange carriers for switched access charges for certain calls between mobile and wireline devices that are routed through an interexchange carrier. In the lawsuits, the plaintiffs are seeking refunds of access charges previously paid and relief from future access charges. In addition, these and some other interexchange carriers have ceased paying switched access charges on these calls. These lawsuits involving our local exchange carriers and many other carriers have been consolidated for pretrial purposes in the United States District Court for the District of Northern Texas. In November 2015, the Court dismissed the plaintiffs' federal law claims and granted them leave to file state law claims, if any. Some of the defendants, including our affiliated carriers, have petitioned the Federal Communications Commission to address these issues on an industry-wide basis.

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As both an interexchange carrier and a local exchange carrier, we both pay and assess significant amounts of the access charges in question. The outcome of these disputes and suits, as well as any related regulatory proceedings that could ensue, are currently not predictable. If we are required to stop assessing these charges or to pay refunds of any such charges, our financial results could be negatively affected.

Other Proceedings and Disputes

From time to time, we are involved in other proceedings incidental to our business, including patent infringement allegations, administrative hearings of state public utility commissions relating primarily to our rates or services, actions relating to employee claims, various tax issues, environmental law issues, grievance hearings before labor regulatory agencies, and miscellaneous third party tort actions.

We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities, many of whom are seeking substantial recoveries. These cases have progressed to various stages and one or more may go to trial in the coming 24 months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers. As with all litigation, we are vigorously defending these actions and, as a matter of course, are prepared to litigate the matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities.

We are subject to various foreign, federal, state and local environmental protection and health and safety laws. From time to time, we are subject to judicial and administrative proceedings brought by various governmental authorities under these laws. Several such proceedings are currently pending, but none is reasonably expected to exceed $100,000 in fines and penalties.

The outcome of these other proceedings is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these other proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on our financial position, results of operations or cash flows.

Capital Leases

We lease certain facilities and equipment under various capital lease arrangements. Depreciation of assets under capital leases is included in depreciation and amortization expense in our consolidated statements of operations. Payments on capital leases are included in repayments of long-term debt, including current maturities in our consolidated statements of cash flows.

The tables below summarize our capital lease activity:

	Years Ended December 31,
	2015		2014	2013
	(Dollars in millions)
Assets acquired through capital leases	$	17	37	12
Depreciation expense	96		126	136
Cash payments towards capital leases	89		118	119

	As of December 31,
	2015		2014
	(Dollars in millions)
Assets included in property, plant and equipment	$	722	850
Accumulated depreciation	352		393

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The future annual minimum payments under capital lease arrangements as of December 31, 2015 were as follows:

	Future Minimum Payments
	(Dollars in millions)
Capital lease obligations:
2016	$	85
2017	78
2018	76
2019	62
2020	47
2021 and thereafter	223
Total minimum payments	571
Less: amount representing interest and executory costs	(153		)
Present value of minimum payments	418
Less: current portion	(56		)
Long-term portion	$	362

Operating Leases

CenturyLink leases various equipment, office facilities, retail outlets, switching facilities, and other network sites. These leases, with few exceptions, provide for renewal options and escalations that are either fixed or based on the consumer price index. Any rent abatements, along with rent escalations, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The lease term for most leases includes the initial non-cancelable term plus any term under renewal options that are reasonably assured. For the years ended December 31, 2015, 2014 and 2013, our gross rental expense was $467 million, $446 million and $455 million, respectively. We also received sublease rental income for the years ended December 31, 2015, 2014 and 2013 of $12 million, $14 million and $16 million, respectively.

At December 31, 2015, our future rental commitments for operating leases were as follows:

	Future Minimum Payments
	(Dollars in millions)
2016	$	301
2017	289
2018	268
2019	235
2020	209
2021 and thereafter	1,075
Total future minimum payments (1)	$	2,377

_______________________________________________________________________________

⁽¹⁾  Minimum payments have not been reduced by minimum sublease rentals of $87 million due in the future under non-cancelable subleases.

Purchase Commitments

We have several commitments primarily for marketing activities and support services from a variety of vendors to be used in the ordinary course of business totaling $625 million at December 31, 2015. Of this amount, we expect to purchase $364 million in 2016, $144 million in 2017 through 2018, $46 million in 2019 through 2020 and $71 million in 2021 and thereafter. These amounts do not represent our entire anticipated purchases in the future, but represent only those items for which we were contractually committed as of December 31, 2015.

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(15) Other Financial Information

Other Current Assets

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

	As of December 31,
	2015		2014
	(Dollars in millions)
Prepaid expenses	$	238	260
Materials, supplies and inventory	144		132
Assets held for sale	8		14
Deferred activation and installation charges	105		103
Other	86		71
Total other current assets	$	581	580

Assets held for sale includes several assets that we expect to sell within the next twelve months. During 2014, we sold our remaining 700 MHz A-Block wireless spectrum licenses, which we purchased in 2008 but never placed into service. As a result of changes in market conditions and prevailing spectrum prices, we recorded an impairment charge of $14 million, which is included in other income, net in our consolidated statements of operations for the for the year ended December 31, 2014. The sale closed on November 3, 2014, and we received $39 million in cash in the aggregate.

In January 2013, we sold $43 million of our wireless spectrum assets held for sale. The sale resulted in a gain of $32 million, which is recorded as other income, net on our consolidated statements of operations.

Selected Current Liabilities

Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as follows:

	As of December 31
	2015		2014
	(Dollars in millions)
Accounts payable	$	968	1,226
Other current liabilities:
Accrued rent	$	32	34
Legal reserves	20		27
Other	168		149
Total other current liabilities	$	220	210

Included in accounts payable at December 31, 2015 and 2014, were $68 million and $80 million, respectively, representing book overdrafts and $94 million and $185 million, respectively, associated with capital expenditures.

(16) Labor Union Contracts

Approximately 37% of our employees are members of various bargaining units represented by the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). As of December 31, 2015, approximately three hundred, or 2%, of our employees are subject to collective bargaining agreements that expired in 2015. We believe that relations with our employees continue to be generally good. We are currently negotiating the terms of new agreements covering these employees. Approximately one thousand, or 6%, of our employees are subject to collective bargaining agreements that expire in 2016.

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(17) Repurchase of CenturyLink, Inc. Common Stock

In February 2014, our Board of Directors authorized a 24-month program to repurchase up to an aggregate of $1 billion of our outstanding common stock. This 2014 stock repurchase program took effect on May 29, 2014, immediately upon the completion of our predecessor 2013 stock repurchase program. On December 7, 2015, we completed the 2014 stock repurchase program, repurchasing over the course of the program a total of 32.3 million shares in the open market at an average purchase price of $30.99 per share. During the year ended December 31, 2015, we repurchased 27.1 million shares of our outstanding common stock in the open market. These shares were repurchased for an aggregate market price of $800 million, or an average purchase price of $29.56 per share. The repurchased common stock has been retired.

(18) Accumulated Other Comprehensive Loss

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2015:

	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	(98		)	80		(14	)	(32	)
Amounts reclassified from accumulated other comprehensive income	103			12		—		115
Net current-period other comprehensive income (loss)	5			92		(14	)	83
Balance at December 31, 2015	$	(1,715	)	(180	)	(39	)	(1,934	)

The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2015:

Year Ended December 31, 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	$	161		See Note 7—Employee Benefits
Prior service cost	24			See Note 7—Employee Benefits
Total before tax	185
Income tax expense (benefit)	(70		)	Income tax expense
Net of tax	$	115

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2014:

	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 (loss) before reclassifications	(1,107		)	(162	)	(15	)	(1,284	)
Amounts reclassified from accumulated other comprehensive income	56			12		1		69
Net current-period other comprehensive income (loss)	(1,051		)	(150	)	(14	)	(1,215	)
Balance at December 31, 2014	$	(1,720	)	(272	)	(25	)	(2,017	)

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The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2014:

Year Ended December 31, 2014	Decrease (Increase) in Net Loss			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	$	85		See Note 7—Employee Benefits
Prior service cost	25			See Note 7—Employee Benefits
Total before tax	110
Income tax expense (benefit)	(42		)	Income tax expense
Insignificant items	1
Net of tax	$	69

(19) Dividends

Our Board of Directors declared the following dividends payable in 2015 and 2014:

Date Declared	Record Date	Dividend Per Share		Total Amount		Payment Date
				(in millions)
November 10, 2015	11/24/2015	$	0.540	$	293	12/8/2015
August 25, 2015	9/8/2015	0.540		300		9/22/2015
May 20, 2015	6/2/2015	0.540		303		6/16/2015
February 23, 2015	3/6/2015	0.540		303		3/20/2015
November 11, 2014	11/24/2014	0.540		307		12/5/2014
August 19, 2014	8/29/2014	0.540		308		9/12/2014
May 28, 2014	6/9/2014	0.540		307		6/20/2014
February 24, 2014	3/10/2014	0.540		309		3/21/2014

The declaration of dividends is solely at the discretion of our Board of Directors.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act (the “Exchange Act”)) designed to provide reasonable assurance that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. These include controls and procedures designed to ensure that this information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer, Glen F. Post, III, and our Chief Financial Officer, R. Stewart Ewing, Jr., evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2015. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2015, at the reasonable assurance level.

The effectiveness of our or any system of disclosure controls and procedures is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events and the inability to eliminate misconduct completely. As a result, there can be no assurance that our disclosure controls and procedures will detect all errors or fraud. By their nature, our or any system of disclosure controls and procedures can provide only reasonable assurance regarding management's control objectives.

Internal Control Over Financial Reporting

Management’s Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act), a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the COSO. Based on our evaluation under the framework of COSO, management concluded that our internal control over financial reporting was effective at December 31, 2015. The effectiveness of our internal control over financial reporting at December 31, 2015 has been audited by KPMG LLP, as stated in their report. See the Report of Independent Registered Public Accounting Firm on our internal control over financial reporting in Item 8, which is incorporated herein by reference.

Management’s Report on the Consolidated Financial Statements

Management has prepared and is responsible for the integrity and objectivity of our consolidated financial statements for the year ended December 31, 2015. The consolidated financial statements included in this Annual Report have been prepared in accordance with accounting principles generally accepted in the United States and necessarily include amounts determined using our best judgments and estimates.

Our consolidated financial statements have been audited by KPMG LLP, an independent registered public accounting firm, who have expressed their opinion with respect to the fairness of the consolidated financial statements. Their audit was conducted in accordance with standards of the Public Company Accounting Oversight Board (United States).

Audit Committee

The Audit Committee of the Board of Directors is composed of independent directors who are not officers or employees. The Committee meets periodically with the external auditors, internal auditors and management. The Committee considers the independence of the external auditors and the audit scope and discusses internal control, financial and reporting matters. Both the external and internal auditors have free access to the Committee.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2015 that materially affected, or that we believe are reasonably likely to materially affect, our internal control over financial reporting.

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/s/ Glen F. Post, III	/s/ R. Stewart Ewing, Jr.
Glen F. Post, III	R. Stewart Ewing, Jr.
Chief Executive Officer, President and Director	Executive Vice President, Chief Financial Officer and Assistant Secretary
February 24, 2016

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 is incorporated by reference to the Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated by reference to the Proxy Statement.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The following table provides information as of December 31, 2015 about our equity compensation plans under which Common Shares are authorized for issuance:

	Number of securities to be issued upon exercise of outstanding options and rights (a)		Weighted-average exercise price of outstanding options and rights (b)			Number of securities remaining available for future issuance under plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by shareholders	1,731,186	(1)	$	44.43	(2)	20,759,094
Equity compensation plans not approved by shareholders (3)	2,640,563		38.07			—
Totals	4,371,749	(1)	$	39.67	(2)	20,759,094

_______________________________________________________________________________

⁽¹⁾  These amounts include restricted stock units, which represent the difference between the number of shares of restricted stock subject to market conditions granted at target and the maximum possible payout for these awards. Depending on performance, the actual share payout of these awards may range between 0-200% of target.

⁽²⁾  The amounts in column (a) include restricted stock units, which do not have an exercise price. Consequently, those awards were excluded from the calculation of this exercise price.

⁽³⁾  These amounts represent common shares to be issued upon exercise of options that were assumed in connection with certain acquisitions.

The balance of the information required by Item 12 is incorporated by reference to the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by Item 13 is incorporated by reference to the Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 is incorporated by reference to the Proxy Statement.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibits identified in parentheses below are on file with the SEC and are incorporated herein by reference. All other exhibits are provided as part of this electronic submission.

Exhibit Number	Description
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).
4.2	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).
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).

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Exhibit Number	Description
	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).
	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).

126

Exhibit Number	Description
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).
		(i).	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).
		(ii)	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).
		(iii)	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).
		(iv)	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).
		(v)	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).
		(vi)	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).

127

Exhibit Number	Description
		(vii)	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).
		(viii)	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).
		(ix)	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).
		(x)	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).
		(xi)	Fifteenth Supplemental Indenture, dated as of January 29, 2016, by and between Qwest Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.16 of Qwest Corporation's Form 8-A (File No. 001-03040) filed with the Securities and Exchange Commission on January 29, 2016).
	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)
	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).

128

Exhibit Number	Description
	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).
	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).

129

Exhibit Number	Description
	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).
	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).

130

Exhibit Number	Description
		(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).
		(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).

131

Exhibit Number	Description
		(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).
		(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).

132

Exhibit Number	Description
		(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).
		(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).

133

Exhibit Number	Description
		(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).
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.)

134

Exhibit Number	Description
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).
	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).

135

Exhibit Number	Description
	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.
21*	Subsidiaries of CenturyLink, Inc.
23*	Independent Registered Public Accounting Firm Consent
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.
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.

136

Exhibit Number

Description

101*

Financial statements from the Annual Report on Form 10-K of CenturyLink, Inc. for the period ended December 31, 2015, formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income (Loss), (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.

_______________________________________________________________________________

⁽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.

137

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned thereunto duly authorized.

		CenturyLink, Inc.
Date: February 24, 2016	By:	/s/ David D. Cole
		David D. Cole
		Executive Vice President, Controller and Operations Support (Chief Accounting Officer)

________________________________________________________________________________________________________________________

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

/s/ Glen F. Post, III	Chief Executive Officer,     President and Director	February 24, 2016
Glen F. Post, III
/s/ William A. Owens	Chairman of the Board	February 24, 2016
William A. Owens
/s/ R. Stewart Ewing, Jr.	Executive Vice President, Chief Financial     Officer and Assistant Secretary	February 24, 2016
R. Stewart Ewing, Jr.
/s/ David D. Cole	Executive Vice President, Controller and     Operations Support	February 24, 2016
David D. Cole
/s/ Martha Bejar	Director	February 24, 2016
Martha Bejar
/s/ Virginia Boulet	Director	February 24, 2016
Virginia Boulet
/s/ Peter C. Brown	Director	February 24, 2016
Peter C. Brown
/s/ Richard A. Gephardt	Director	February 24, 2016
Richard A. Gephardt
/s/ W. Bruce Hanks	Director	February 24, 2016
W. Bruce Hanks
/s/ Mary L. Landrieu	Director	February 24, 2016
Mary L. Landrieu

138

/s/ Gregory J. McCray	Director	February 24, 2016
Gregory J. McCray
/s/ C. G. Melville, Jr.	Director	February 24, 2016
C. G. Melville, Jr.
/s/ Harvey P. Perry	Director	February 24, 2016
Harvey P. Perry
/s/ Michael J. Roberts	Director	February 24, 2016
Michael J. Roberts
/s/ Laurie A. Siegel	Director	February 24, 2016
Laurie A. Siegel

139

EX-12

Exhibit 12

CENTURYLINK, INC.

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

(UNAUDITED)

	Years Ended December 31,
	2015			2014		2013		2012		2011
	(Dollars in millions)
Income before income taxes and cumulative effect of change in accounting principle	$	1,316		1,110		224		1,250		948
Less: income from equity investee	(25		)	(22	)	(24	)	(15	)	(13	)
Add: estimated fixed charges	1,516			1,502		1,486		1,504		1,223
Add: estimated amortization of capitalized interest	19			17		16		15		12
Add: distributed income of equity investee	19			22		14		12		14
Less: interest capitalized	(52		)	(47	)	(41	)	(43	)	(25	)
Total earnings available for fixed charges	$	2,793		2,582		1,675		2,723		2,159
Estimate of interest factor on rentals	$	152		144		147		142		126
Interest expense, including amortization of premiums, discounts and debt issuance costs	1,312			1,311		1,298		1,319		1,072
Interest capitalized	52			47		41		43		25
Total fixed charges	$	1,516		1,502		1,486		1,504		1,223
Ratio of earnings to fixed charges	1.84			1.72		1.13		1.81		1.77

EX-21

Exhibit 21

CENTURYLINK, INC.

SUBSIDIARIES OF THE REGISTRANT

AS OF DECEMBER 31, 2015

Subsidiary	State of incorporation or formation
Actel, LLC	Delaware
Bloomingdale Telephone Company, Inc. (20%)	Michigan
Century Cellunet International, Inc.	Louisiana
Cellunet of India Limited	Mauritius
Century Telephone of West Virginia, Inc.	West Virginia
CenturyLink – Clarke M. Williams Foundation	Colorado
CenturyLink Communications, LLC	Delaware
Cognilytics, Inc.	California
Cognilytics Software and Consulting Private Limited	India
Qwest International Services Corporation	Delaware
Qwest N Limited Partnership (98.5%)	Delaware
Qwest Transoceanic, Inc.	Delaware
Qwest Communications International Ltd.	United Kingdom
Qwest Holdings, BV	Netherlands
CenturyLink Belgium Sprl	Belgium
Qwest France SAS	France
Qwest Germany GmbH	Germany
Qwest Netherlands BV	Netherlands
Qwest Peru S.R.L.	Peru
Qwest Telecommunications Asia, Limited	Hong Kong
Qwest Australia Pty Limited	Australia
Qwest Communications Japan Corporation	Japan
Qwest Communications Korea, Limited	Korea
Qwest Hong Kong Telecommunications, Limited	Hong Kong
Qwest Singapore Pte Ltd.	Singapore
Qwest Taiwan Telecommunications, Limited	Taiwan
CenturyTel of Adamsville, Inc.	Tennessee
CenturyTel of Arkansas, Inc.	Arkansas
CenturyTel Broadband Services, LLC	Louisiana
CenturyTel TeleVideo, Inc.	Wisconsin
CenturyTel/Teleview of Wisconsin, Inc.	Wisconsin
Qwest Broadband Services, Inc.	Delaware
CenturyTel Broadband Wireless, LLC	Louisiana
CenturyTel of Central Indiana, Inc.	Indiana
CenturyTel of Central Louisiana, LLC	Louisiana
CenturyTel of Chatham, LLC	Louisiana
CenturyTel of Chester, Inc.	Iowa
CenturyTel of Claiborne, Inc.	Tennessee
CenturyTel of East Louisiana, LLC	Louisiana
CenturyTel of Evangeline, LLC	Louisiana

Subsidiary	State of incorporation or formation
CenturyTel Holdings, Inc.	Louisiana
Century Marketing Solutions, LLC	Louisiana
CenturyTel Arkansas Holdings, Inc.	Arkansas
CenturyTel of Central Arkansas, LLC	Louisiana
CenturyTel of Northwest Arkansas, LLC	Louisiana
CenturyTel Holdings Alabama, Inc.	Alabama
CenturyTel of Alabama, LLC	Louisiana
CenturyTel Holdings Missouri, Inc.	Missouri
CenturyTel of Missouri, LLC	Louisiana
CenturyTel Investments of Texas, Inc.	Delaware
CenturyTel of the Northwest, Inc.	Washington
Brown Equipment Corp.	Nevada
Carter Company, Inc.	Hawaii
Honomach PR, Inc.	Puerto Rico
Cascade Autovon Company	Washington
CenturyTel/Cable Layers, Inc.	Wisconsin
CenturyTel of Central Wisconsin, LLC	Delaware
CenturyTel of Colorado, Inc.	Colorado
CenturyTel of Eagle, Inc.	Colorado
CenturyTel of Eastern Oregon, Inc.	Oregon
CenturyTel Entertainment, Inc.	Washington
CenturyTel of Fairwater-Brandon-Alto, LLC	Delaware
CenturyTel of Forestville, LLC	Delaware
CenturyTel of the Gem State, Inc. (97%)	Idaho
CenturyTel of Inter Island, Inc.	Washington
CenturyTel of Larsen-Readfield, LLC	Delaware
CenturyTel of the Midwest-Kendall, LLC	Delaware
CenturyTel of the Midwest-Wisconsin, LLC	Delaware
CenturyTel of Minnesota, Inc.	Minnesota
CenturyTel of Monroe County, LLC	Delaware
CenturyTel of Montana, Inc. (99%)	Oregon
CenturyTel of Northern Wisconsin, LLC	Delaware
CenturyTel of Northwest Wisconsin, LLC	Delaware
CenturyTel of Oregon, Inc.	Oregon
CenturyTel of Paradise, Inc.	Washington
CenturyTel of Cowiche, Inc.	Washington
CenturyTel of Postville, Inc.	Iowa
CenturyTel of Southern Wisconsin, LLC	Delaware
CenturyTel of the Southwest, Inc.	New Mexico
CenturyTel Telecom Service, Inc.	Washington
CenturyTel Telephone Utilities, Inc.	Washington
CenturyTel of Upper Michigan, Inc.	Michigan
CenturyTel of Washington, Inc.	Washington
CenturyTel/WORLDVOX, Inc.	Oregon

Subsidiary	State of incorporation or formation
CenturyTel of Wyoming, Inc.	Wyoming
Eagle Valley Communications Corporation	Colorado
International Communications Holdings, Inc.	Delaware
Pacific Telecom, Inc. (Shell)	Oregon
PTI Communications of Ketchikan, Inc.	Alaska
PTI Communications of Minnesota, Inc.	Minnesota
PTI Transponders, Inc.	Oregon
Universal Manufacturing Corp.	Wisconsin
CenturyTel of Idaho, Inc.	Delaware
CenturyTel Internet Holdings, Inc.	Louisiana
centurytel.com, LLC	Louisiana
CenturyTel Investments, LLC	Louisiana
CenturyTel of Michigan, Inc.	Michigan
CenturyTel Midwest - Michigan, Inc.	Michigan
CenturyTel Mobile Communications, Inc.	Louisiana
CenturyTel of Mountain Home, Inc.	Arkansas
CenturyTel of North Louisiana, LLC	Louisiana
CenturyTel of North Mississippi, Inc.	Mississippi
CenturyTel of Northern Michigan, Inc.	Michigan
CenturyTel of Northwest Louisiana, Inc.	Louisiana
CenturyTel of Odon, Inc.	Indiana
CenturyTel of Ohio, Inc.	Ohio
CenturyTel of Ooltewah-Collegedale, Inc.	Tennessee
CenturyTel of Port Aransas, Inc.	Texas
CenturyTel of Redfield, Inc.	Arkansas
CenturyTel of Ringgold, LLC	Louisiana
CenturyTel SM Telecorp, Inc.	Texas
CenturyTel Telecommunications, Inc.	Texas
CenturyTel of San Marcos, Inc.	Texas
CenturyTel San Marcos Investments, LLC	Delaware
CenturyTel Security Systems, Inc.	Louisiana
CenturyTel Service Group, LLC	Louisiana
CenturyTel of South Arkansas, Inc.	Arkansas
CenturyTel of Southeast Louisiana, LLC	Louisiana
CenturyTel of Southwest Louisiana, LLC	Louisiana
CenturyTel Supply Group, Inc.	Louisiana
CenturyTel/Tele-Max, Inc.	Texas
CenturyTel of Lake Dallas, Inc.	Texas
CenturyTel Web Solutions, LLC	Louisiana
CenturyTel of Wisconsin, LLC	Louisiana
Embarq Corporation	Delaware
Carolina Telephone and Telegraph Company LLC	North Carolina
NOCUTS, Inc.	Pennsylvania
SC One Company	Kansas

Subsidiary	State of incorporation or formation
Centel Corporation	Kansas
Centel Capital Corporation	Delaware
Centel-Texas, Inc.	Texas
Central Telephone Company of Texas	Texas
EQ Central Texas Equipment LLC	Texas
Central Telephone Company	Delaware
Central Telephone Company of Virginia	Virginia
Embarq Florida, Inc.	Florida
The Winter Park Telephone Company	Florida
CenturyLink Intellectual Property LLC	Delaware
Embarq Directory Trademark Company, LLC	Delaware
CenturyLink Public Communications, Inc.	Florida
CenturyLink Sales Solutions, Inc.	Delaware
Embarq, Inc.	Kansas
Embarq Capital Corporation	Delaware
SC Seven Company	Kansas
Embarq Interactive Holdings LLC	Delaware
Embarq Interactive Markets LLC	Delaware
Embarq Management Company	Delaware
EQ Management Equipment LP	Nevada
Embarq Mid-Atlantic Management Services Company	North Carolina
Embarq Minnesota, Inc.	Minnesota
Embarq Missouri, Inc.	Missouri
SC Eight Company	Kansas
Embarq Network Company LLC	Delaware
EQ Equipment Leasing, Inc.	Delaware
United Telephone Company of the Carolinas LLC	South Carolina
SC Two Company	Kansas
United Telephone Company of Eastern Kansas	Delaware
United Telephone Company of Florida	Florida
United Telephone Company of Indiana, Inc.	Indiana
SC Four Company	Kansas
United Telephone Company of Kansas	Kansas
Embarq Midwest Management Services Company	Kansas
United Teleservices, Inc.	Kansas
United Telephone Company of New Jersey, Inc.	New Jersey
United Telephone Company of the Northwest	Oregon
United Telephone Company of Ohio	Ohio
SC Five Company	Kansas
United Telephone Company of Pennsylvania LLC, The	Pennsylvania
SC Six Company	Kansas
Valley Network Partnership (40% aggregate)	Virginia
United Telephone Company of Southcentral Kansas	Arkansas
United Telephone Company of Texas, Inc.	Texas

Subsidiary	State of incorporation or formation
EQ United Texas Equipment LLC	Texas
United Telephone Company of the West	Delaware
United Telephone Southeast LLC	Virginia
SC Three Company	Kansas
Hillsboro Telephone Company, Inc. (20%)	Wisconsin
Lafayette MSA Limited Partnership (49%)	Delaware
Madison River Communications Corp.	Delaware
Gallatin River Holdings L.L.C.	Delaware
Gallatin River Communications L.L.C.	Delaware
Madison River Finance Corp.	Delaware
Madison River Holdings LLC	Delaware
Madison River LTD Funding LLC	Delaware
Coastal Utilities, Inc.	Georgia
Gulf Coast Services, LLC	Alabama
Gulf Telephone Company, LLC	Alabama
Madison River Management LLC	Delaware
Mebtel, Inc.	North Carolina
Pacific Telecom Cellular of Alaska RSA #1, Inc.	Alaska
Qwest Communications International, Inc.	Delaware
EUnet International Limited	United Kingdom
EUnet International B.V.	Netherlands
Qwest B.V.	Netherlands
KPNQwest N.V. (44.34%)	Netherlands
Qwest Capital Funding, Inc.	Colorado
Qwest Europe LLC	Delaware
Qwest Services Corporation	Colorado
CenturyLink Investment Management Company	Colorado
Qwest Corporation	Colorado
1200 Landmark Center Condominium Association, Inc.	Nebraska
Block 142 Parking Garage Association	Colorado
Qwest Database Services, Inc.	Colorado
SMS/800, Inc. (33.3%)	District of Columbia
Qwest India Holdings, LLC	Delaware
CenturyLink Technologies India Private Limited	India
The El Paso County Telephone Company	Colorado
MoveARoo, LLC (33.3%)	Delaware
Qwest Dex Holdings, Inc.	Delaware
Qwest Government Services, Inc.	Colorado
Qwest Wireless, L.L.C.	Delaware
SAVVIS, Inc.	Delaware
AppFog, Inc.	Delaware
CenturyLink Australia Pty. Ltd.	Australia
CenturyLink do Brasil Participaҫões Ltda.	Brazil
CenturyLink Comunicaҫões Ltda.	Brazil

Subsidiary	State of incorporation or formation
CenturyLink Europe B.V.	Netherlands
CenturyLink Europe B.V., The Netherlands, filial Sweden	Sweden
SAVVIS Europe BV Sucursal en España	Spain
CenturyLink France S.A.S.	France
CenturyLink Germany GmbH	Germany
CenturyLink Italia S.r.l.	Italy
CenturyLink Japan, Ltd	Japan
CenturyLink New Zealand Limited	New Zealand
CenturyLink Philippines, Inc.	Philippines
CenturyLink Poland Sp Zo.o.	Poland
CenturyLink Singapore Pte. Ltd.	Singapore
CenturyLink Switzerland A.G.	Switzerland
CenturyLink Taiwan Limited	Taiwan
CenturyLink Technology Hong Kong Limited	Hong Kong
CenturyLink IT Consulting (Shanghai) Co., Ltd.	China
CenturyLink Technology Malaysia Sdn. Bhd.	Malaysia
CenturyLink Technology UK Limited	United Kingdom
CenturyLink Austria GmbH	Austria
CenturyLink Limited	United Kingdom
CenturyLink (Thailand) Limited	Thailand
DataGardens, Inc.	Canada
Digital Savvis HK JV	British VI
Digital Savvis HK Holding 1 Limited	British VI
Digital Savvis Investment Management HK Limited	Hong Kong
Digital Savvis Management Subsidiary Limited	Hong Kong
SAVVIS Canada, Inc.	Delaware
SAVVIS Communications Canada, Inc.	Canada
SAVVIS Communications Chile, S.A.	Chile
SAVVIS Communications Corporation	Missouri
SAVVIS Federal Systems, Inc.	Delaware
SAVVIS Communications International, Inc.	Delaware
CenturyLink Korea Limited	Korea
SAVVIS Communications Private Limited	India
SAVVIS do Brasil Ltda.	Brazil
SAVVIS Telecommunicacões Ltda.	Brazil
SAVVIS Hungary Telecommunications KFT	Hungary
SAVVIS Mexico, S.A. de C.V.	Mexico
Tier 3, Inc.	Washington
SkyComm Technologies Corporation (50.0%)	Delaware
Spectra Communications Group, LLC	Delaware
TelUSA Holdings, LLC (89%)	Delaware
Telephone USA of Wisconsin, LLC	Delaware
Western Re, Inc.	Louisiana

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

CenturyLink, Inc.:

We consent to the incorporation by reference in the Registration Statements (No. 333-202411 and No. 333-187366) on Form S-3, the Registration Statements (No. 33-60061, No. 333-160391, No. 333-37148, No. 333-60806, No. 333-150157, No. 333-124854, No. 333-150188, and No. 333-174571) on Form S-8, and the Registration Statements (No. 33-48956, No. 333-17015, No. 333-167339, No. 333-174291, No. 333-155521, and No. 333-206725) on Form S-4 of CenturyLink, Inc. of our reports dated February 24, 2016, with respect to the consolidated balance sheets of CenturyLink, Inc. and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), cash flows, and stockholders' equity for each of the years in the three-year period ended December 31, 2015, and the effectiveness of internal control over financial reporting as of December 31, 2015, which reports appear in the December 31, 2015 annual report on Form 10-K of CenturyLink, Inc.

Our report on the consolidated financial statements dated February 24, 2016 refers to a change in accounting for debt issuance costs and accounting for deferred income taxes.

/s/ KPMG LLP

Shreveport, Louisiana

February 24, 2016

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Glen F. Post, III, Chief Executive Officer and President, certify that:

1. I have reviewed this annual report on Form 10-K of CenturyLink, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 24, 2016	/s/ Glen F. Post, III
	Glen F. Post, III Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION

I, R. Stewart Ewing, Jr., Executive Vice President, Chief Financial Officer and Assistant Secretary, certify that:

1. I have reviewed this annual report on Form 10-K of CenturyLink, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 24, 2016	/s/ R. Stewart Ewing, Jr.
	R. Stewart Ewing, Jr. Executive Vice President, Chief     Financial Officer and Assistant     Secretary

EX-32

Exhibit 32

Chief Executive Officer and Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Each of the undersigned, acting in his capacity as the Chief Executive Officer or Chief Financial Officer of CenturyLink, Inc. ("CenturyLink"), certifies that, to his knowledge, the Annual Report on Form 10-K for the year ended December 31, 2015 of CenturyLink fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of CenturyLink as of the dates and for the periods covered by such report.

A signed original of this statement has been provided to CenturyLink and will be retained by CenturyLink and furnished to the Securities and Exchange Commission or its staff upon request.

Date: February 24, 2016
/s/ Glen F. Post, III	/s/ R. Stewart Ewing, Jr.
Glen F. Post, III	R. Stewart Ewing, Jr.
Chief Executive Officer and     President	Executive Vice President, Chief     Financial Officer and Assistant     Secretary

XML

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2015	Feb. 17, 2016	Jun. 30, 2015
Document and Entity Information
Entity Registrant Name	CENTURYLINK, INC
Entity Central Index Key	0000018926
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 16.4
Entity Common Stock, Shares Outstanding (shares)		543,852,862
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
Operating revenues	$ 17,900	$ 18,031	$ 18,095
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	7,778	7,846	7,507
Selling, general and administrative	3,328	3,347	3,502
Depreciation and amortization	4,189	4,428	4,541
Impairment of goodwill (Note 2)	0	0	1,092
Total operating expenses	15,295	15,621	16,642
OPERATING INCOME	2,605	2,410	1,453
OTHER (EXPENSE) INCOME
Interest expense	(1,312)	(1,311)	(1,298)
Net gain on early retirement of debt	0	0	10
Other income, net	23	11	59
Total other expense, net	(1,289)	(1,300)	(1,229)
INCOME BEFORE INCOME TAX EXPENSE	1,316	1,110	224
Income tax expense	438	338	463
NET INCOME (LOSS)	$ 878	$ 772	$ (239)
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Basic earnings (loss) per common share (in dollars per share)	$ 1.58	$ 1.36	$ (0.40)
Diluted earnings (loss) per common share (in dollars per share)	$ 1.58	$ 1.36	$ (0.40)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC (in shares)	554,278	568,435	600,892
DILUTED (in shares)	555,093	569,739	600,892

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 878	$ 772	$ (239)
Items related to employee benefit plans:
Change in net actuarial gain (loss), net of $(12), $742 and $(606) tax	21	(1,200)	981
Change in net prior service credit (costs), net of $(47), $1 and $52 tax	76	(1)	(84)
Foreign currency translation adjustment and other, net of $-, $1 and $- tax	(14)	(14)	2
Other comprehensive income (loss)	83	(1,215)	899
COMPREHENSIVE INCOME (LOSS)	$ 961	$ (443)	$ 660

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
Change in net actuarial (loss) gain, tax	$ (12)	$ 742	$ (606)
Change in net prior service credit (costs), tax	(47)	1	52
Foreign currency translation adjustment and other, tax	$ 0	$ 1	$ 0

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 126	$ 128
Accounts receivable, less allowance of $152 and $162	1,943	1,988
Other	581	580
Total current assets	2,650	2,696
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	38,785	36,718
Accumulated depreciation	(20,716)	(18,285)
Net property, plant and equipment	18,069	18,433
GOODWILL AND OTHER ASSETS
Goodwill	20,742	20,755
Other intangible assets, net	1,555	1,647
Other, net	660	679
Total goodwill and other assets	26,885	27,974
TOTAL ASSETS	47,604	49,103
CURRENT LIABILITIES
Current maturities of long-term debt	1,503	550
Accounts payable	968	1,226
Accrued expenses and other liabilities
Salaries and benefits	602	641
Income and other taxes	318	309
Interest	250	256
Other	220	210
Advance billings and customer deposits	743	726
Total current liabilities	4,604	3,918
LONG-TERM DEBT	18,722	19,953
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net	3,569	3,154
Benefit plan obligations, net	5,511	5,808
Other	1,138	1,247
Total deferred credits and other liabilities	$ 10,218	$ 10,209
COMMITMENTS AND CONTINGENCIES (Note 14)
STOCKHOLDERS' EQUITY
Preferred stock — non-redeemable, $25.00 par value, authorized 2,000 shares, issued and outstanding 7 and 7 shares	$ 0	$ 0
Common stock, $1.00 par value, authorized 1,600,000 and 1,600,000 shares, issued and outstanding 543,800 and 568,517 shares	544	569
Additional paid-in capital	15,178	16,324
Accumulated other comprehensive loss	(1,934)	(2,017)
Retained earnings	272	147
Total stockholders' equity	14,060	15,023
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	47,604	49,103
Customer relationships, net
Finite lived intangible assets, net	$ 3,928	$ 4,893

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$ 152	$ 162
Preferred stock-non-redeemable, par value (in dollars per share)	$ 25.00	$ 25.00
Preferred stock-non-redeemable, authorized shares (shares)	2,000	2,000
Preferred stock-non-redeemable, issued shares (shares)	7	7
Preferred stock-non-redeemable, outstanding shares (shares)	7	7
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, authorized shares (shares)	1,600,000	1,600,000
Common stock, issued shares (shares)	543,800	568,517
Common stock, outstanding shares (shares)	543,800	568,517

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
OPERATING ACTIVITIES
Net income (loss)	$ 878	$ 772	$ (239)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	4,189	4,428	4,541
Impairment of goodwill (Note 2)	0	0	1,092
Impairment of assets	9	32	0
Deferred income taxes	350	291	391
Provision for uncollectible accounts	177	159	152
Gain on sale of intangible assets	0	0	(32)
Net long-term debt issuance costs and premium amortization	(3)	(21)	(46)
Net gain on early retirement of debt	0	0	(10)
Share-based compensation	73	79	71
Changes in current assets and liabilities:
Accounts receivable	(132)	(163)	(212)
Accounts payable	(168)	70	(76)
Accrued income and other taxes	32	(84)	28
Other current assets and liabilities, net	(53)	(270)	263
Retirement benefits	(141)	(184)	(342)
Changes in other noncurrent assets and liabilities, net	(78)	99	8
Other, net	19	(20)	(30)
Net cash provided by operating activities	5,152	5,188	5,559
INVESTING ACTIVITIES
Payments for property, plant and equipment and capitalized software	(2,872)	(3,047)	(3,048)
Cash paid for acquisitions	4	93	160
Proceeds from sale of property and intangible assets	31	63	80
Other, net	(8)	0	(20)
Net cash used in investing activities	(2,853)	(3,077)	(3,148)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt	989	483	2,481
Repayments of long-term debt	(966)	(800)	(2,010)
Net payments on credit facility and revolving line of credit	(315)	(4)	(95)
Early retirement of debt costs	(1)	0	(31)
Dividends paid	(1,198)	(1,228)	(1,301)
Net proceeds from issuance of common stock	11	50	73
Repurchase of common stock	(819)	(650)	(1,586)
Other, net	(2)	(2)	15
Net cash used in financing activities	(2,301)	(2,151)	(2,454)
Net decrease in cash and cash equivalents	(2)	(40)	(43)
Cash and cash equivalents at beginning of period	128	168	211
Cash and cash equivalents at end of period	126	128	168
Supplemental cash flow information:
Income taxes paid, net	(63)	(27)	(48)
Interest paid (net of capitalized interest of $52, $47 and $41)	$ (1,310)	$ (1,338)	$ (1,333)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Cash Flows [Abstract]
Interest (paid) capitalized interest	$ 52	$ 47	$ 41

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions	Total	COMMON STOCK	ADDITIONAL PAID-IN CAPITAL	ACCUMULATED OTHER COMPREHENSIVE LOSS	RETAINED EARNINGS
Balance at beginning of period at Dec. 31, 2012		$ 626	$ 19,079	$ (1,701)	$ 1,285
Increase (Decrease) in Stockholders' Equity
Issuance of common stock through dividend reinvestment, incentive and benefit plans		4	69
Repurchase of common stock		(46)	(1,551)
Shares withheld to satisfy tax withholdings			(18)
Share-based compensation and other, net			85
Other comprehensive income (loss)				899
Dividends declared			(321)		(980)
Net income (loss)	$ (239)				(239)
Balance at end of period at Dec. 31, 2013	17,191	584	17,343	(802)	66
Increase (Decrease) in Stockholders' Equity
Issuance of common stock through dividend reinvestment, incentive and benefit plans		4	46
Repurchase of common stock		(19)	(591)
Shares withheld to satisfy tax withholdings			(16)
Share-based compensation and other, net			82
Other comprehensive income (loss)	(1,215)			(1,215)
Dividends declared			(540)		(691)
Net income (loss)	772				772
Balance at end of period at Dec. 31, 2014	15,023	569	16,324	(2,017)	147
Increase (Decrease) in Stockholders' Equity
Issuance of common stock through dividend reinvestment, incentive and benefit plans		2	9
Repurchase of common stock		(27)	(767)
Shares withheld to satisfy tax withholdings			(19)
Share-based compensation and other, net			77
Other comprehensive income (loss)	83			83
Dividends declared			(446)		(753)
Net income (loss)	878				878
Balance at end of period at Dec. 31, 2015	$ 14,060	$ 544	$ 15,178	$ (1,934)	$ 272

XML

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

We are an integrated communications company engaged primarily in providing an array of communications services to our residential and business customers. Our communications services include local and long-distance voice, high-speed Internet, Multi-Protocol Label Switching ("MPLS"), private line (including special access), data integration, Ethernet, colocation, managed hosting (including cloud hosting), network, public access, wireless, video and other ancillary services.

The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated.

To simplify the overall presentation of our consolidated financial statements, we report immaterial amounts attributable to noncontrolling interests in certain of our subsidiaries as follows: (i) income attributable to noncontrolling interests in other income, net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities.

We reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenues and our segment reporting. See Note 12—Segment Information for additional information. These changes had no impact on total revenues, total operating expenses or net income (loss) for any period.

Connect America Fund Support Payments

In 2015, we accepted funding from the Federal Communications Commission's ("FCC") Connect America Fund ("CAF") of approximately $500 million per year for six years to fund the deployment of voice and high-speed Internet infrastructure for approximately 1.2 million rural households and businesses in 33 states under the CAF Phase 2 high-cost support program. The funding from the CAF Phase 2 support program in these 33 states will substantially supplant funding from the interstate Universal Service Fund ("USF") high-cost program that we previously utilized to support voice services in high-cost rural markets. In September of 2015, we began receiving these support payments from the FCC under the new CAF Phase 2 support program, which included (i) monthly support payments at a higher rate than under the interstate USF support program and (ii) a one-time cumulative catch-up payment representing the incrementally higher funding under the CAF Phase 2 support program over the interstate USF support program for the first seven months of 2015. During 2015, we recorded $215 million more revenue than we would have otherwise recorded during the same period under the interstate USF support program.

Changes in Estimates

As a result of our annual reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment, effective January 2014, we changed the estimates of the remaining economic lives of certain switch and circuit network equipment. These changes resulted in a net increase in depreciation expense of approximately $78 million for the year ended December 31, 2014. This net increase in depreciation expense, net of tax, reduced consolidated net income by approximately $48 million, or $0.08 per basic and diluted common share, for the year ended December 31, 2014.

Additionally, during the third quarter of 2014, we developed a plan to migrate customers from one of our networks to another over a one-year period beginning in the fourth quarter of 2014. As a result, we implemented changes in estimates that reduced the remaining economic lives of certain network assets. The increase in depreciation expense from the changes in estimates was more than fully offset by decreases in depreciation expense resulting from normal aging of our property, plant and equipment. These changes in the estimated remaining economic lives resulted in an increase in depreciation expense of approximately $48 million and $12 million for the years ended December 31, 2015 and 2014, respectively. This increase in depreciation expense, net of tax, reduced consolidated net income by approximately $32 million, or $0.06 per basic and diluted common share and $7 million, or $0.01 per basic and diluted common share, for the years ended December 31, 2015 and 2014, respectively.

Summary of Significant Accounting Policies

Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, investments, long-term contracts, customer retention patterns, allowance for doubtful accounts, depreciation, amortization, asset valuations, internal labor capitalization rates, recoverability of assets (including deferred tax assets), impairment assessments, pension, post-retirement and other post-employment benefits, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenues, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See Note 11—Income Taxes and Note 14—Commitments and Contingencies for additional information.

For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.

For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions.

For all of these and other matters, actual results could differ materially from our estimates.

Revenue Recognition

We recognize revenue for services when the related services are provided. Recognition of certain payments received in advance of services being provided is deferred until the service is provided. These advance payments include activation and installation charges, which we recognize as revenue over the expected customer relationship period, which ranges from eighteen months to over ten years depending on the service. We also defer costs for customer activations and installations. The deferral of customer activation and installation costs is limited to the amount of revenue deferred on advance payments. Costs in excess of advance payments are recorded as expense in the period such costs are incurred. Expected customer relationship periods are estimated using historical experience. In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term.

We offer bundle discounts to our customers who receive certain groupings of services. These bundle discounts are recognized concurrently with the associated revenue and are allocated to the various services in the bundled offering based on the estimated selling price of services included in each bundled combination.

Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with the customer arrangement is allocated to each element based on the relative estimated selling price of the separate elements. We have estimated the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned. For example, if we receive an advance payment when we sell equipment and continuing service together, we immediately recognize as revenue the amount allocated to the equipment as long as all the conditions for revenue recognition have been satisfied. The portion of the advance payment allocated to the service based upon its relative selling price is recognized ratably over the longer of the contractual period or the expected customer relationship period.

We periodically transfer optical capacity assets on our network to other telecommunications service carriers. These transactions are structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 20 years. We account for the cash consideration received on transfers of optical capacity assets and on all of the other elements deliverable under an IRU, as revenue ratably over the term of the agreement. We have not recognized revenue on any contemporaneous exchanges of our optical capacity assets for other optical capacity assets.

In connection with offering products and services provided by third-party vendors, we review the relationship between us, the vendor and the end customer to assess whether revenue should be reported on a gross or net basis. In assessing whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction, take title to the products, have risk and rewards of ownership or act as an agent or broker. Based on our agreements with DIRECTV and Verizon Wireless, we offer these services through sales agency relationships which are reported on a net basis.

We have service level commitments pursuant to contracts with certain of our customers. To the extent that such service levels are not achieved or are otherwise disputed due to performance or service issues or other service interruptions or conditions, we will estimate the amount of credits to be issued and record a reduction to revenues, with a corresponding increase in the credit reserve.

USF, Gross Receipts Taxes and Other Surcharges

In determining whether to include in our revenues and expenses the taxes and surcharges collected from customers and remitted to government authorities, including USF charges, sales, use, value added and some excise taxes, we assess, among other things, whether we are the primary obligor or principal taxpayer for the taxes assessed in each jurisdiction where we do business. In jurisdictions where we determine that we are the principal taxpayer, we record the surcharges on a gross basis and include them in our revenues and costs of services and products. In jurisdictions where we determine that we are merely a collection agent for the government authority, we record the taxes on a net basis and do not include them in our revenues and costs of services and products.

Advertising Costs

Costs related to advertising are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations. Our advertising expense was $210 million, $214 million and $210 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Legal Costs

In the normal course of our business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received.

Income Taxes

We file a consolidated federal income tax return with our eligible subsidiaries. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods, adjustments to our liabilities for uncertain tax positions and amortization of investment tax credits. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating losses ("NOLs"), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.

We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. See Note 11—Income Taxes for additional information.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution.

Book overdrafts occur when checks have been issued but have not been presented to our controlled disbursement bank accounts for payment. Disbursement bank accounts allow us to delay funding of issued checks until the checks are presented for payment. Until the issued checks are presented for payment, the book overdrafts are included in accounts payable on our consolidated balance sheet. This activity is included in the operating activities section in our consolidated statements of cash flows.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recognized based upon the amount due from customers for the services provided or at cost for purchased and other receivables less an allowance for doubtful accounts. The allowance for doubtful accounts receivable reflects our best estimate of probable losses inherent in our receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence. We generally consider our accounts past due if they are outstanding over 30 days. Our collection process varies by the customer segment, amount of the receivable, and our evaluation of the customer's credit risk. Our past due accounts are written off against our allowance for doubtful accounts when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received. The carrying value of accounts receivable net of the allowance for doubtful accounts approximates fair value.

Property, Plant and Equipment

Property, plant and equipment acquired in connection with our acquisitions was recorded based on its estimated fair value as of its acquisition date plus the estimated value of any associated legally or contractually required retirement obligations. Purchased and constructed property, plant and equipment is recorded at cost, plus the estimated value of any associated legally or contractually required retirement obligations. Property, plant and equipment is depreciated primarily using the straight-line group method. Under the straight-line group method, assets dedicated to providing telecommunications services (which comprise the majority of our property, plant and equipment) that have similar physical characteristics, use and expected useful lives are pooled for purposes of depreciation and tracking. The equal life group procedure is used to establish each pool's average remaining useful life. Generally, under the straight-line group method, when an asset is sold or retired in the course of normal business activities, the cost is deducted from property, plant and equipment and charged to accumulated depreciation without recognition of a gain or loss. A gain or loss is recognized in our consolidated statements of operations only if a disposal is abnormal or unusual. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. Interest is capitalized during the construction phase of network and other internal-use capital projects. Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase. Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items for which cost is based on specific identification.

We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining useful life of our asset base. Our remaining useful life assessments anticipate the loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers leave the network. However, the asset is not retired until all customers no longer utilize the asset and we determine there is no alternative use for the asset.

We have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties and the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred.

We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. We determine fair values by using a combination of comparable market values and discounted cash flows, as appropriate.

Goodwill, Customer Relationships and Other Intangible Assets

Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 10 to 15 years, using either the sum-of-the-years-digits or the straight-line methods, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years, except for approximately $237 million of our capitalized software costs, which represents costs to develop an integrated billing and customer care system which is amortized using the straight-line method over a 20 year period. We amortize our other intangible assets predominantly using the sum-of-the-years-digits method over an estimated life of 4 years. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized.

Internally used software, whether purchased or developed by us, is capitalized and amortized using the straight-line method over its estimated useful life. We have capitalized certain costs associated with software such as costs of employees devoting time to the projects and external direct costs for materials and services. Costs associated with software to be used for internal purposes are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. We review the remaining economic lives of our capitalized software annually. Capitalized software is included in other intangible assets, net, in our consolidated balance sheets.

Our long-lived intangible assets, other than goodwill, with indefinite lives are assessed for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment. These assets are carried at the estimated fair value at the time of acquisition and assets not acquired in acquisitions are recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other indefinite-lived intangible assets are reduced to their estimated fair value through an impairment charge to our consolidated statements of operations.

We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment assessment is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment assessment.

We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. Goodwill is reassigned to the reporting units using a relative fair value approach. We utilize the earnings before interest, taxes, depreciation and amortization as our allocation methodology as it represents a reasonable proxy for the fair value of the operations being reorganized.

See Note 2—Goodwill, Customer Relationships and Other Intangible Assets for additional information.

Pension and Post-Retirement Benefits

We recognize the funded status of our defined benefit and post-retirement plans as an asset or a liability on our consolidated balance sheet. Each year's actuarial gains or losses are a component of our other comprehensive income (loss), which is then included in our accumulated other comprehensive loss. Pension and post-retirement benefit expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make significant assumptions (including the discount rate, expected rate of return on plan assets, mortality and health care trend rates) in computing the pension and post-retirement benefits expense and obligations. See Note 7—Employee Benefits for additional information.

Foreign Currency

Our results of operations include foreign subsidiaries, which are translated from the applicable functional currency to the United States Dollar using the average exchange rates during the reporting period, while assets and liabilities are translated at the reporting date. We include gains or losses from foreign currency remeasurement in other income, net in our consolidated statements of operations. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and we record the translation of their assets and liabilities into U.S. Dollars at the balance sheet date as translation adjustments and include them as a component of accumulated other comprehensive loss in our consolidated balance sheets.

Common Stock

At December 31, 2015, we had 4 million unissued shares of CenturyLink, Inc. common stock reserved for acquisitions. In addition, we had 25 million shares authorized for future issuance under our equity incentive plans.

Preferred stock

Holders of outstanding CenturyLink, Inc. preferred stock are entitled to receive cumulative dividends, receive preferential distributions equal to $25 per share plus unpaid dividends upon CenturyLink, Inc.'s liquidation and vote as a single class with the holders of common stock.

Dividends

We pay dividends out of retained earnings to the extent we have retained earnings on the date the dividend is declared. If the dividend is in excess of our retained earnings on the declaration date, then the excess is drawn from our additional paid-in capital.

Recently Adopted Accounting Pronouncements

In 2015, we adopted Accounting Standards Update (“ASU”) 2015-03 “Simplifying the Presentation of Debt Issuance Costs” (ASU 2015-03) and ASU 2015-17 “Balance Sheet Classification of Deferred Taxes” (ASU 2015-17). Both ASUs are intended to simplify the presentation of financial information. ASU 2015-03 requires that debt issuance costs be presented as a reduction in the associated debt rather than as an other asset, net. ASU 2015-17 requires that deferred taxes be presented on a net basis by jurisdiction as either a net noncurrent asset or liability. The ASUs affect neither the timing of expense recognition related to the debt issuance costs nor the timing of income and expense recognition related to deferred income taxes.

We adopted both ASU 2015-03 and 2015-17 by retrospectively applying the requirements of the ASUs to our previously issued consolidated financial statements. The retrospective application had no impact on our net income (loss) or earnings (loss) per share for the years ended December 31, 2014 and 2013, but resulted in the following changes in our previously reported consolidated balance sheet as of December 31, 2014:

• A decrease of $880 million in Total current assets;

• A decrease of $164 million in Other assets, net;

• A decrease of $168 million in Long-term debt; and

• A decrease of $876 million in Deferred income taxes, net.

The adoption of the ASUs had no impact on our net cash provided by operating activities, but did change the presentation of the adjustments to reconcile net income and changes in other noncurrent assets and liabilities, net for the years ended December 31, 2014 and 2013.

In 2015, we adopted Accounting Standards Update (“ASU”) 2015-07 (“ASU 2015-07”), which retrospectively changed the disclosure requirements for certain investments that are valued based upon net asset value (“NAV”) as a practical expedient. ASU 2015-07 was issued to eliminate diversity among entities on what level in the fair value hierarchy such investments were assigned. Under ASU 2015-07, investments valued using NAV as a practical expedient are no longer assigned to a level in the fair value hierarchy rather the value associated with the investments is disclosed in a reconciliation of the total investments measured at fair value.

For us, the change in disclosure requirements as a result of the adoption of ASU 2015-07, only affects the disclosure of the fair value of our pension and post-retirement plan assets included in footnote 7, “Employee Benefits”. ASU 2015-07 results in $5.749 billion and $264 million of pension plan and post-retirement plan assets, respectively as of December 31, 2014, not being assigned to a level in the fair value hierarchy but rather disclosed as a separate line added to the fair value hierarchy table to present total plan assets. There was no change in total pension or post-retirement plan assets as of December 31, 2014 due to the adoption of ASU 2015-07.

Recent Accounting Pronouncements

Revenue Recognition

On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “new standard”). The new standard replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract fulfillment costs only up to the extent of any revenue deferred.

On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, 2018. Early adoption is permitted as of January 1, 2017. ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2017, if adopting early, otherwise in the first quarter of 2018. We have not yet decided which implementation method we will adopt. We are studying the new standard and are in the early stages of assessing the impact the new standard will have on us and our consolidated financial statements. We cannot at this time, however, provide any estimate of the impact of adopting the new standard.

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Goodwill, Customer Relationships and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, Customer Relationships and Other Intangible Assets

Goodwill, Customer Relationships and Other Intangible Assets

Goodwill, customer relationships and other intangible assets consisted of the following:

	As of December 31,
	2015		2014
	(Dollars in millions)
Goodwill	$	20,742	20,755
Customer relationships, less accumulated amortization of $5,648 and $4,682	3,928		4,893
Indefinite-life intangible assets	269		268
Other intangible assets subject to amortization
Capitalized software, less accumulated amortization of $1,778 and $1,533	1,248		1,338
Trade names and patents, less accumulated amortization of $20 and $196	38		41
Total other intangible assets, net	$	1,555	1,647

Total amortization expense for intangible assets for the years ended December 31, 2015, 2014 and 2013 was $1.353 billion, $1.470 billion and $1.589 billion, respectively. As of December 31, 2015, the gross carrying amount of goodwill, customer relationships, indefinite-life and other intangible assets was $33.671 billion.

We estimate that total amortization expense for intangible assets for the years ending December 31, 2016 through 2020 will be as follows:

	(Dollars in millions)
2016	$	1,161
2017	1,056
2018	944
2019	827
2020	726

Our goodwill was derived from numerous acquisitions where the purchase price exceeded the fair value of the net assets acquired.

We assess our goodwill and other indefinite-lived intangible assets for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the recorded amount of goodwill exceeds the fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assessed our reporting units, which are business (excluding wholesale), consumer and wholesale. Our annual impairment assessment date for indefinite-lived intangible assets other than goodwill is December 31.

Our reporting units are not discrete legal entities with discrete financial statements. Our assets and liabilities are employed in and relate to the operations of multiple reporting units. For each reporting unit, we compare its estimated fair value of equity to its carrying value of equity that we assign to the reporting unit. If the estimated fair value of the reporting unit is greater than the carrying value, we conclude that no impairment exists. If the estimated fair value of the reporting unit is less than the carrying value, a second calculation is required in which the implied fair value of goodwill is compared to the carrying value of goodwill that we assigned to the reporting unit. If the implied fair value of goodwill is less than its carrying value, goodwill must be written down to its implied fair value.

At October 31, 2015, we estimated the fair value of our business (excluding wholesale), consumer and wholesale reporting units by considering both a market approach and a discounted cash flow method, which resulted in a Level 3 fair value measurement. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow method is based on the present value of projected cash flows and a terminal value, which represents the expected normalized cash flows of the reporting units beyond the cash flows from the discrete projection period. We discounted the estimated cash flows for our consumer and wholesale reporting units using a rate that represents their estimated weighted average cost of capital, which we determined to be approximately 6.0% as of the assessment date (which was comprised of an after-tax cost of debt of 3.3% and a cost of equity of 7.6%). We discounted the estimated cash flows of our business (excluding wholesale) reporting unit using a rate that represents its estimated weighted average cost of capital, which we determined to be approximately 7.0% as of the assessment date (which was comprised of an after-tax cost of debt of 3.3% and a cost of equity of 8.6%). We also reconciled the estimated fair values of the reporting units to our market capitalization as of October 31, 2015 and concluded that the indicated implied control premium of approximately 24.6% was reasonable based on recent transactions in the market place. As of October 31, 2015, based on our assessment performed with respect to these reporting units as described above, we concluded that our goodwill for our three reporting units was not impaired as of that date.

The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2013 through December 31, 2015.

	Business			Consumer		Wholesale		Hosting		Total
	(Dollars in millions)
As of December 31, 2013	$	6,363		10,348		3,274		689		20,674
Purchase accounting adjustments	—			—		—		(11	)	(11	)
November 1, 2014 reorganization	4,022			(70	)	(3,274	)	(678	)	—
Acquisitions	92			—		—		—		92
As of December 31, 2014	$	10,477		10,278		—		—		20,755
Purchase accounting and other adjustments	(13		)	—		—		—		(13	)
As of December 31, 2015	$	10,464		10,278		—		—		20,742

During the year ended December 31, 2014, we acquired all of the outstanding stock of two companies for total consideration of $95 million, net of $2 million acquired cash and including immaterial future cash payments of which $92 million was attributed to goodwill and the remainder to various assets and liabilities. During 2015, we finalized the valuations for these acquisitions resulting in a $14 million decrease in goodwill, a $13 million increase in other intangible assets and a $1 million decrease in deferred income taxes, net. The acquisitions were consummated to expand the product offerings of our business segment and therefore the goodwill has been assigned to that segment. The goodwill is attributed primarily to expected future increases in business segment revenue from the sale of new products. The goodwill is not deductible for tax purposes.

The acquisitions did not materially impact the consolidated results of operations from the dates of the acquisitions in 2014 and would not materially impact pro forma results of operations.

For additional information on our segments, see Note 12—Segment Information.

We completed our qualitative assessment of our indefinite-lived intangible assets other than goodwill as of December 31, 2015 and concluded it is more likely than not that our indefinite-lived intangible assets are not impaired; thus, no impairment charge was recorded in 2015.

As of October 31, 2014, based on our assessment performed, we concluded that our goodwill for our then four reporting units was not impaired as of that date. During 2013, one of our previous reporting units experienced slower than previously projected revenues and margin growth and greater than anticipated competitive pressures and as a result, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $1.092 billion for goodwill assigned to one of our then four reporting units.

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Long-Term Debt and Credit Facilities

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Long-Term Debt and Credit Facilities

Long-Term Debt and Credit Facilities

Long-term debt, including unamortized discounts and premiums and unamortized debt issuance costs, consisted of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including Qwest Corporation, Qwest Capital Funding, Inc. and Embarq Corporation and subsidiaries ("Embarq"), were as follows:

			As of December 31,
	Interest Rates	Maturities	2015			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)	2.010% - 4.250%	2019	410			725
Term loan	2.180%	2019	358			380
Subsidiaries
Qwest Corporation
Senior notes	6.125% - 8.375%	2016 - 2055	7,229			7,311
Term loan	2.180%	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	425			509
Unamortized discounts, net			(125		)	(111	)
Unamortized debt issuance costs			(179		)	(168	)
Total long-term debt			20,225			20,503
Less current maturities			(1,503		)	(550	)
Long-term debt, excluding current maturities			$	18,722		19,953

_______________________________________________________________________________

⁽¹⁾  The aggregate amount outstanding on our Credit Facility and revolving line of credit borrowings at December 31, 2015 and 2014 was $410 million and $725 million, respectively, with weighted average interest rates of 2.756% and 2.270%, respectively. These amounts change on a regular basis.

New Issuances

2015

On September 21, 2015, Qwest Corporation issued $400 million aggregate principal amount of 6.625% Notes due 2055, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $386 million. The underwriting agreement included an over-allotment option granting the underwriters for the offering an opportunity to purchase additional 6.625% Notes due 2055. On September 30, 2015, Qwest Corporation issued an additional $10 million aggregate principal amount of the 6.625% Notes under this over-allotment option. All of the 6.625% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after September 15, 2020, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

On March 19, 2015, CenturyLink, Inc. issued in a private offering $500 million aggregate principal amount of 5.625% Notes due 2025, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $494 million. The Notes are senior unsecured obligations and may be redeemed, in whole or in part, at any time before January 1, 2025 at a redemption price equal to the greater of 100% of the principal amount of the Notes or the sum of the present value of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date in the manner described in the Notes, plus accrued and unpaid interest to the redemption date. At any time on or after January 1, 2025, CenturyLink, Inc. may redeem the Notes at par plus accrued and unpaid interest to the redemption date. In addition, at any time on or prior to April 1, 2018, CenturyLink, Inc. may redeem up to 35% of the principal amount of the Notes at a redemption price equal to 105.625% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with net cash proceeds of certain equity offerings. Under certain circumstances, CenturyLink, Inc. will be required to make an offer to repurchase the Notes at a price of 101% of the aggregate principal amount plus accrued and unpaid interest to the repurchase date. In October 2015, CenturyLink, Inc. exchanged all of the unregistered Notes issued on March 19, 2015 for fully-registered Notes.

2014

On September 29, 2014, Qwest Corporation issued $500 million aggregate principal amount of 6.875% Notes due 2054, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of $483 million. The Notes are senior unsecured obligations and may be redeemed, in whole or in part, on or after October 1, 2019, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

Repayments

2015

On October 13, 2015, Qwest Corporation redeemed all $250 million of its 7.2% Notes due 2026, which resulted in an immaterial gain, and redeemed $150 million of its 6.875% Notes due 2033, which resulted in an immaterial loss.

On June 15, 2015, Qwest Corporation paid at maturity the $92 million principal amount of its 7.625% Notes.

On February 17, 2015, CenturyLink, Inc. paid at maturity the $350 million principal and accrued and unpaid interest due under its Series M 5.00% Notes.

2014

On October 1, 2014, Qwest Corporation paid at maturity the $600 million principal amount of its 7.50% Notes.

On April 1, 2014, a subsidiary of Embarq paid at maturity the $30 million principal amount of its 7.46% first mortgage bonds.

Credit Facility

On December 3, 2014, we amended our existing $2 billion revolving credit facility to extend the maturity date to December 3, 2019. The amended Credit Facility (the "Credit Facility") has 16 lenders, each with commitments ranging from $3.5 million to $198.5 million. The Credit Facility allows us to obtain revolving loans and to issue up to $400 million of letters of credit, which upon issuance reduce the amount available for other extensions of credit. Interest is assessed on borrowings using either the LIBOR or the base rate (each as defined in the Credit Facility) plus an applicable margin between 1.00% and 2.25% per annum for LIBOR loans and 0.00% and 1.25% per annum for base rate loans depending on our then current senior unsecured long-term debt rating. Our obligations under the Credit Facility are guaranteed by nine of our subsidiaries.

Term Loans, Revolving Line of Credit and Revolving Letter of Credit

On March 13, 2015, CenturyLink, Inc. amended its term loan agreement to reduce the interest rate payable by it thereunder and to modify some covenants to provide additional flexibility.

On February 20, 2015, Qwest Corporation entered into a term loan in the amount of $100 million with CoBank, ACB. The outstanding unpaid principal amount of this term loan plus any accrued and unpaid interest is due on February 20, 2025. Interest is paid monthly based upon either the London Interbank Offered Rate (“LIBOR”) or the base rate (as defined in the credit agreement) plus an applicable margin between 1.50% to 2.50% per annum for LIBOR loans and 0.50% to 1.50% per annum for base rate loans depending on Qwest Corporation's then current senior unsecured long-term debt rating. At December 31, 2015, the outstanding principal balance on this term loan was $100 million.

In January 2015, CenturyLink, Inc. entered into a $100 million uncommitted revolving line of credit with one of the lenders under the Credit Facility. The amount available under this uncommitted revolving line of credit is reduced by any amount outstanding under the Credit Facility with the same lender. Interest is paid monthly based upon the LIBOR plus an applicable margin between 1.00% and 2.25% per annum. At December 31, 2015, CenturyLink, Inc. had $80 million borrowings outstanding under this uncommitted revolving line of credit.

In April 2011, we entered into a $160 million uncommitted revolving letter of credit facility which enables us to provide letters of credit under terms that may be more favorable than those under the Credit Facility. At December 31, 2015 and 2014, our outstanding letters of credit totaled $109 million and $124 million, respectively, under this facility.

Aggregate Maturities of Long-Term Debt

Set forth below is the aggregate principal amount of our long-term debt (excluding unamortized discounts, net and unamortized debt issuance costs) maturing during the following years:

	(Dollars in millions)(1)
2016	$	1,503
2017	1,501
2018	251
2019	1,160
2020	1,032
2021 and thereafter	15,082
Total long-term debt	$	20,529

_______________________________________________________________________________

⁽¹⁾  Actual principal paid in all years may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.

Interest Expense

Interest expense includes interest on long-term debt. The following table presents the amount of gross interest expense, net of capitalized interest:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Interest expense:
Gross interest expense	$	1,364		1,358		1,339
Capitalized interest	(52		)	(47	)	(41	)
Total interest expense	$	1,312		1,311		1,298

Covenants

Certain of our loan agreements contain various restrictions, as described more fully below. Under current circumstances, we believe the covenants currently in effect place no significant restriction on the transfer of funds from our consolidated subsidiaries to CenturyLink.

The senior notes of CenturyLink, Inc. were issued under an indenture dated March 31, 1994. This indenture restricts our ability to (i) incur, issue or create liens upon our property and (ii) consolidate with or merge into, or transfer or lease all or substantially all of our assets to any other party. The indenture does not contain any provisions that are impacted by our credit ratings or that restrict the issuance of new securities in the event of a material adverse change to us. However, if the credit ratings relating to certain of our long-term debt securities issued under this indenture are downgraded in the manner specified thereunder in connection with a "change of control" of CenturyLink, Inc., then we will be required to offer to repurchase such debt securities.

The senior notes of Qwest Corporation were issued under indentures dated April 15, 1990 and October 15, 1999. These indentures contain restrictions on the incurrence of liens and the consummation of certain transactions substantially similar to the above-described covenants in CenturyLink, Inc.'s March 31, 1994 indenture. The senior notes of Qwest Capital Funding, Inc. were issued under an indenture dated June 29, 1998 containing terms substantially similar to those set forth in Qwest Corporation's indentures.

Embarq's senior notes were issued pursuant to an indenture dated as of May 17, 2006. While Embarq is generally prohibited from creating liens on its property unless its senior notes are secured equally and ratably, Embarq can create liens on its property without equally and ratably securing its senior notes so long as the sum of all indebtedness so secured does not exceed 15% of Embarq's consolidated net tangible assets. The indenture contains customary events of default, none of which are impacted by Embarq's credit rating.

None of the above-listed indentures of CenturyLink, Inc., Qwest Corporation, Qwest Capital Funding, Inc. and Embarq contain any financial covenants or restrictions on the ability to issue new securities in accordance with the terms of the indenture.

Several of our Embarq subsidiaries have outstanding first mortgage bonds. Each issue of these first mortgage bonds is secured by substantially all of the property, plant and equipment of the issuing subsidiary. Approximately 10% of our net property, plant and equipment is pledged to secure the long-term debt of subsidiaries.

Under the Credit Facility, we, and our indirect subsidiary, Qwest Corporation, must maintain a debt to EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our Credit Facility) ratio of not more than 4.0:1.0 and 2.85:1.0, respectively, as of the last day of each fiscal quarter for the four quarters then ended. The Credit Facility also contains a negative pledge covenant, which generally requires us to secure equally and ratably any advances under the Credit Facility if we pledge assets or permit liens on our property for the benefit of other debtholders. The Credit Facility also has a cross payment default provision, and the Credit Facility and certain of our debt securities also have cross acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument. Our debt to EBITDA ratios could be adversely affected by a wide range of events, including unforeseen expenses or contingencies. This could reduce our financing flexibility due to potential restrictions on incurring additional debt under certain provisions of our debt agreements or, in certain circumstances, could result in a default under certain provisions of such agreements.

CenturyLink, Inc. and Qwest Corporation are both indebted under term loans, each of which includes covenants substantially similar to those set forth in the Credit Facility.

At December 31, 2015, we believe we were in compliance with all of the provisions and covenants contained in our Credit Facility and other material debt agreements.

Guarantees

We do not guarantee the debt of any unaffiliated parties, but certain of our subsidiaries guarantee the outstanding senior notes issued by other subsidiaries. In addition, seven of our largest non-regulated subsidiaries guarantee the obligations of (i) CenturyLink, Inc. under the Credit Facility and its term loan and (ii) Qwest Corporation under its term loan.

Subsequent Event

In January 2016, Qwest Corporation issued $235 million aggregate principal amount of 7% Notes due 2056, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $227 million. All of the 7% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after February 1, 2021, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

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Accounts Receivable

12 Months Ended

Dec. 31, 2015

Receivables [Abstract]

Accounts Receivable

Accounts Receivable

The following table presents details of our accounts receivable balances:

	As of December 31,
	2015			2014
	(Dollars in millions)
Trade and purchased receivables	$	1,789		1,821
Earned and unbilled receivables	288			307
Other	18			22
Total accounts receivable	2,095			2,150
Less: allowance for doubtful accounts	(152		)	(162	)
Accounts receivable, less allowance	$	1,943		1,988

We are exposed to concentrations of credit risk from residential and business customers within our local service area, business customers outside of our local service area and from other telecommunications service providers. We generally do not require collateral to secure our receivable balances. We have agreements with other telecommunications service providers whereby we agree to bill and collect on their behalf for services rendered by those providers to our customers within our local service area. We purchase accounts receivable from other telecommunications service providers primarily on a recourse basis and include these amounts in our accounts receivable balance. We have not experienced any significant loss associated with these purchased receivables.

The following table presents details of our allowance for doubtful accounts:

	Beginning Balance		Additions	Deductions		Ending Balance
	(Dollars in millions)
2015	$	162	177	(187	)	152
2014	$	155	159	(152	)	162
2013	$	158	152	(155	)	155

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Net property, plant and equipment is composed of the following:

	Depreciable Lives	As of December 31,
		2015			2014
		(Dollars in millions)
Land	n/a	$	571		575
Fiber, conduit and other outside plant (1)	15-45	16,166			15,151
Central office and other network electronics (2)	3-10	14,144			13,248
Support assets (3)	3-30	7,000			6,578
Construction in progress (4)	n/a	904			1,166
Gross property, plant and equipment		38,785			36,718
Accumulated depreciation		(20,716		)	(18,285	)
Net property, plant and equipment		$	18,069		18,433

_______________________________________________________________________________

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

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

⁽³⁾  Support assets consist of buildings, data centers, computers and other administrative and support equipment.

⁽⁴⁾  Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction.

We recorded depreciation expense of $2.836 billion, $2.958 billion and $2.952 billion for the years ended December 31, 2015, 2014 and 2013, respectively.

In 2014, we recorded an impairment charge of $17 million in connection with a sale-leaseback transaction involving an office building which closed in the fourth quarter of 2014. This impairment charge is included in selling, general and administrative expense in our consolidated statement of operations for the year ended December 31, 2014.

Additionally, in 2014 we sold an office building for $12 million.

Asset Retirement Obligations

At December 31, 2015, our asset retirement obligations balance was primarily related to estimated future costs of removing equipment from leased properties and estimated future costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets.

The following table provides asset retirement obligation activity:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Balance at beginning of year	$	107		106		106
Accretion expense	7			7		7
Liabilities incurred	—			6		—
Liabilities settled	(2		)	(2	)	(4	)
Change in estimate	(21		)	(10	)	(3	)
Balance at end of year	$	91		107		106

During 2015, 2014 and 2013, we revised our estimates for the cost of removal of network equipment, asbestos remediation, and other obligations by $21 million, $10 million and $3 million, respectively. These revisions resulted in a reduction of the asset retirement obligation and offsetting reduction to gross property, plant and equipment and revisions to assets specifically identified are recorded as a reduction to accretion expense.

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Severance and Leased Real Estate

12 Months Ended

Dec. 31, 2015

Restructuring and Related Activities [Abstract]

Severance and Leased Real Estate

Severance and Leased Real Estate

Periodically, we have reductions in our workforce and have accrued liabilities for the related severance costs. These workforce reductions resulted primarily from the progression or completion of our post-acquisition integration plans, increased competitive pressures, cost reduction initiatives and reduced workload demands due to the loss of customers purchasing certain legacy services.

We report severance liabilities within accrued expenses and other liabilities - salaries and benefits in our consolidated balance sheets and report severance expenses in cost of services and products and selling, general and administrative expenses in our consolidated statements of operations. As noted in Note 12—Segment Information, we do not allocate these severance expenses to our segments.

We have recognized liabilities to reflect our estimates of the fair values of the existing lease obligations for real estate for which we have ceased using, net of estimated sublease rentals. Our fair value estimates were determined using discounted cash flow methods. We recognize expense to reflect accretion of the discounted liabilities and periodically, we adjust the expense when our actual subleasing experience differs from our initial estimates. We report the current portion of liabilities for ceased-use real estate leases in accrued expenses and other liabilities-other and report the noncurrent portion in deferred credits and other liabilities in our consolidated balance sheets. We report the related expenses in selling, general and administrative expenses in our consolidated statements of operations. At December 31, 2015, the current and noncurrent portions of our leased real estate accrual were $9 million and $71 million, respectively. The remaining lease terms range from 0.3 years to 10 years, with a weighted average of 8 years.

Changes in our accrued liabilities for severance expenses and leased real estate were as follows:

	Severance			Real Estate
	(Dollars in millions)
Balance at December 31, 2013	$	17		113
Accrued to expense	87			1
Payments, net	(78		)	(16	)
Reversals and adjustments	—			(2	)
Balance at December 31, 2014	26			96
Accrued to expense	96			—
Payments, net	(108		)	(13	)
Reversals and adjustments	—			(3	)
Balance at December 31, 2015	$	14		80

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Employee Benefits

12 Months Ended

Dec. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefits

Employee Benefits

Pension, Post-Retirement and Other Post-Employment Benefits

We sponsor various defined benefit pension plans (qualified and non-qualified), which in the aggregate cover a substantial portion of our employees including legacy CenturyLink, legacy Qwest Communications International, Inc. ("Qwest") and legacy Embarq employees. On December 31, 2014, we merged our existing qualified pension plans, which included merging the Qwest Pension Plan and Embarq Retirement Pension Plan into the CenturyLink Retirement Plan. The CenturyLink Retirement Plan was renamed the CenturyLink Combined Pension Plan ("Combined Plan"). Pension benefits for participants of the new Combined Plan who are represented by a collective bargaining agreement are based on negotiated schedules. All other participants' pension benefits are based on each individual participant's years of service and compensation. We also maintain non-qualified pension plans for certain current and former highly compensated employees. We maintain post-retirement benefit plans that provide health care and life insurance benefits for certain eligible retirees. We also provide other post-employment benefits for eligible former employees. We use a December 31 measurement date for all our plans.

Pension Benefits

Current funding laws require a company with a pension shortfall to fund the annual cost of benefits earned in addition to a seven-year amortization of the shortfall. Our funding policy for our Combined Plan is to make contributions with the objective of accumulating sufficient assets to pay all qualified pension benefits when due under the terms of the plan. The accounting unfunded status of our qualified pension plan was $2.215 billion and $2.403 billion as of December 31, 2015 and 2014, respectively.

In 2015, we made a voluntary cash contribution of $100 million to our qualified pension plan and paid approximately $6 million of benefits directly to participants of our non-qualified pension plans. Based on current laws and circumstances, we are not required to make any contributions to our qualified pension plan in 2016, but we estimate that we will pay approximately $5 million of benefits to participants of our non-qualified pension plans.

Our pension plans contain provisions that allow us, from time to time, to offer lump sum payment options to certain former employees in settlement of their future retirement benefits. We record these payments as a settlement only if, in the aggregate, they exceed the sum of the annual service and interest costs for the plan's net periodic pension benefit costs, which represents the settlement threshold. In September 2015, we offered to make cash settlement payments in December 2015 to a group of former employees provided they accepted the offer by the end of October 2015. During the fourth quarter of 2015, we made cash settlement payments for the lump sum offer of approximately $356 million. The total amount of the lump sum settlement payments for the year ended December 31, 2015, which included the lump sum offer and lump sum elections from employees who terminated employment during the year, was less than the settlement threshold, therefore settlement accounting was not triggered in 2015. On December 8, 2014, lump sum pension settlement payments to terminated, but not-yet-retired legacy Qwest participants was $460 million, which exceeded the settlement threshold of $418 million. As a result, we were required to recognize a settlement charge of $63 million in 2014 to accelerate the recognition of a portion of the previously unrecognized actuarial losses in the qualified pension plan, which has been allocated and reflected in cost of services and products (exclusive of depreciation and amortization) and selling, general and administrative in our consolidated statement of operations for the year ended December 31, 2014. This charge reduced our recorded net income and retained earnings, with an offset to accumulated other comprehensive loss in shareholders’ equity. The amount of any future non-cash settlement charges will depend on the level of lump sum benefit payments made in 2016 and beyond.

Post-Retirement Benefits

Our post-retirement benefit plans provide post-retirement benefits to qualified retirees and allow (i) eligible employees retiring before certain dates to receive benefits at no or reduced cost and (ii) eligible employees retiring after certain dates to receive benefits on a shared cost basis. The post-retirement benefits not paid by the trust are funded by us and we expect to continue funding these post-retirement obligations as benefits are paid. The accounting unfunded status of our qualified post-retirement benefit plan was $3.374 billion and $3.477 billion as of December 31, 2015 and 2014, respectively.

No contributions were made to the post-retirement trusts in 2015, and we do not expect to make a contribution in 2016. However, in 2015 we paid approximately $116 million of benefits (net of participant contributions and direct subsidies) that were not payable by the trusts. We estimate that in 2016, we will pay approximately $137 million of benefits (net of participant contributions and direct subsidies) that are not payable by the trusts.

We expect our health care cost trend rate to decrease between 0.05% to 0.10% per year from 5.00% in 2016 to an ultimate rate of 4.50% in 2025. Our post-retirement benefit expense, for certain eligible legacy Qwest retirees and certain eligible legacy CenturyLink retirees, is capped at a set dollar amount. Therefore, those health care benefit obligations are not subject to increasing health care trends after the effective date of the caps.

A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2015:

	100 Basis Points Change
	Increase		(Decrease)
	(Dollars in millions)
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (consolidated statement of operations)	$	3	(3	)
Effect on benefit obligation (consolidated balance sheet)	73		(68	)

Expected Cash Flows

The qualified pension, non-qualified pension and post-retirement health care benefit payments and premiums and life insurance premium payments are paid by us or distributed from plan assets. The estimated benefit payments provided below are based on actuarial assumptions using the demographics of the employee and retiree populations and have been reduced by estimated participant contributions.

	Pension Plans		Post-Retirement Benefit Plans	Medicare Part D Subsidy Receipts
	(Dollars in millions)
Estimated future benefit payments:
2016	$	1,059	309	(7	)
2017	1,010		300	(7	)
2018	991		290	(7	)
2019	973		283	(7	)
2020	954		276	(7	)
2021 - 2025	4,433		1,256	(30	)

Net Periodic Benefit Expense

The actuarial assumptions used to compute the net periodic benefit expense for our qualified pension, non-qualified pension and post-retirement benefit plans are based upon information available as of the beginning of the year, as presented in the following table.

	Pension Plans						Post-Retirement Benefit Plans
	2015		2014		2013		2015		2014		2013
Actuarial assumptions at beginning of year:
Discount rate	3.50% - 4.10%		4.20% - 5.10%		3.50% - 4.20%		3.80	%	4.50	%	3.60	%
Rate of compensation increase	3.25	%	3.25	%	3.25	%	N/A		N/A		N/A
Expected long-term rate of return on plan assets	7.50	%	7.50	%	7.50	%	7.50	%	6.00% - 7.50%		6.00% - 7.30%
Initial health care cost trend rate	N/A		N/A		N/A		6.00% / 6.50%		6.00% / 6.50%		6.50% / 7.00%
Ultimate health care cost trend rate	N/A		N/A		N/A		4.50	%	4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2025		2024		2022

_______________________________________________________________________________

N/A-Not applicable

Net periodic (income) expense for our qualified and non-qualified pension plans includes the following components:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Service cost	$	83		77		91
Interest cost	568			602		544
Expected return on plan assets	(898		)	(891	)	(896	)
Settlements	—			63		—
Recognition of prior service cost	5			5		5
Recognition of actuarial loss	161			22		84
Net periodic pension benefit income	$	(81	)	(122	)	(172	)

Net periodic expense (income) for our post-retirement benefit plans includes the following components:

	Post-Retirement Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Service cost	$	24		22		24
Interest cost	140			159		140
Expected return on plan assets	(21		)	(33	)	(39	)
Recognition of prior service cost	19			20		—
Recognition of actuarial loss	—			—		4
Net periodic post-retirement benefit expense	$	162		168		129

We report net periodic benefit (income) expense for our qualified pension, non-qualified pension and post-retirement benefit plans in both cost of services and products and selling, general and administrative expenses on our consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013.

Benefit Obligations

The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2015 and 2014 and are as follows:

	Pension Plans				Post-Retirement Benefit Plans
	December 31,				December 31,
	2015		2014		2015		2014
Actuarial assumptions at end of year:
Discount rate	3.50% - 4.50%		3.50% - 4.10%		4.15	%	3.80	%
Rate of compensation increase	3.25	%	3.25	%	N/A		N/A
Initial health care cost trend rate	N/A		N/A		5.00% / 5.25%		6.00% / 6.50%
Ultimate health care cost trend rate	N/A		N/A		4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		2025		2024

_______________________________________________________________________________

N/A-Not applicable

In 2015, we adopted the revised mortality table and projection scale released by the Society of Actuaries ("SOA"), which decreased the projected benefit obligation of our benefit plans by $379 million. In 2014, to better reflect the expected lifetimes of our plan participants, we adopted a new mortality table for our defined benefit plan. The table used was based on SOA tables and increased the projected benefit obligation by approximately $1.3 billion. The 2014 increase in the projected obligation was recognized as part of the net actuarial loss and is included in the other comprehensive loss, a portion of which is subject to be amortized over the remaining estimated life of plan participants (approximately 8 years).

The following tables summarize the change in the benefit obligations for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	15,042		13,401		14,881
Service cost	83			77		91
Interest cost	568			602		544
Plan amendments	(100		)	4		—
Actuarial loss (gain)	(800		)	2,269		(1,179	)
Settlements	—			(460	)	—
Benefits paid by company	(6		)	(6	)	(5	)
Benefits paid from plan assets	(1,438		)	(845	)	(931	)
Benefit obligation at end of year	$	13,349		15,042		13,401

	Post-Retirement Benefit Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	3,830		3,688		4,075
Service cost	24			22		24
Interest cost	140			159		140
Participant contributions	57			69		96
Plan amendments	—			23		141
Direct subsidy receipts	8			9		13
Actuarial loss (gain)	(148		)	245		(399	)
Benefits paid by company	(181		)	(166	)	(266	)
Benefits paid from plan assets	(163		)	(219	)	(136	)
Benefit obligation at end of year	$	3,567		3,830		3,688

Our aggregate benefit obligation as of December 31, 2015, 2014 and 2013 was $16.916 billion, $18.872 billion and $17.089 billion, respectively.

Plan Assets

We maintain plan assets for our qualified pension plan and certain post-retirement benefit plans. The qualified pension plan's assets are used for the payment of pension benefits and certain eligible plan expenses. The post-retirement benefit plan's assets are used to pay health care benefits and premiums on behalf of eligible retirees and to pay certain eligible plan expenses. The expected rate of return on plan assets is the long-term rate of return we expect to earn on the plans' assets, net of administrative expenses paid from plan assets. The rate of return is determined by the strategic allocation of plan assets and the long-term risk and return forecast for each asset class. The forecasts for each asset class are generated primarily from an analysis of the long-term expectations of various third party investment management organizations. The expected rate of return on plan assets is reviewed annually and revised, as necessary, to reflect changes in the financial markets and our investment strategy.

The following tables summarize the change in the fair value of plan assets for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	12,571		12,346		12,321
Return on plan assets	(161		)	1,373		810
Employer contributions	100			157		146
Settlements	—			(460	)	—
Benefits paid from plan assets	(1,438		)	(845	)	(931	)
Fair value of plan assets at end of year	$	11,072		12,571		12,346

	Post-Retirement Benefit Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	353		535		626
Return on plan assets	3			37		45
Benefits paid from plan assets	(163		)	(219	)	(136	)
Fair value of plan assets at end of year	$	193		353		535

Pension Plans: Our investment objective for the qualified pension plan assets is to achieve an attractive risk-adjusted return over time that will provide for the payment of benefits and minimize the risk of large losses. Our pension plan investment strategy is designed to meet this objective by broadly diversifying plan assets across numerous strategies with differing expected returns, volatilities and correlations. The pension plan assets have target allocations of 45% to interest rate sensitive investments and 55% to investments designed to provide higher expected returns than the interest rate sensitive investments. Interest rate sensitive investments include 30% of plan assets targeted primarily to long-duration investment grade bonds, 10% targeted to high yield and emerging market bonds and 5% targeted to diversified strategies, which primarily have exposures to global bonds, as well as some exposures to global stocks and commodities. Assets expected to provide higher returns than the interest rate sensitive assets include broadly diversified equity investments with targets of approximately 15% to U.S. equity markets and 15% to non-U.S. developed and emerging markets. Approximately 7% is targeted to broadly diversified multi-asset class strategies that have the flexibility to adjust exposures to different asset classes. Approximately 10% is allocated to private markets investments including funds primarily invested in private equity, private debt and hedge funds. Real estate investments are targeted at 8% of plan assets. At the beginning of 2016, our expected annual long-term rate of return on pension assets before consideration of administrative expenses is assumed to be 7.5%. However, projected increases in PBGC (Pension Benefit Guaranty Corporation) premium rates have now become large enough to reduce the annual long-term expected return net of administrative expenses to 7.0%.

Our non-qualified pension plans are not funded. We pay benefits directly to the participants of these plans.

Post-Retirement Benefit Plans: Our investment objective for the post-retirement benefit plans' assets is to achieve an attractive risk-adjusted return and minimize the risk of large losses over the expected life of the assets. Investment risk is managed by broadly diversifying assets across numerous strategies with differing expected returns, volatilities and correlations. Our investment strategy is designed to be consistent with the investment objective, with particular focus on providing liquidity for the reimbursement of our union-represented employees' post-retirement health care costs. The liquid post-retirement benefit plan assets (excluding private market investments) have target allocations of 20% to equities and 80% to non-equity investments. Specific target allocations within these broad categories are allowed to vary to meet reimbursement requirements. Liquid equity investments are broadly diversified with exposure to publicly traded U.S., non-U.S. and emerging market stocks. The 80% non-equity allocation includes investment grade bonds, real estate, hedge funds and diversified strategies. While no new private market investments have been made in recent years, the percent allocation to existing private market investments is expected to increase as liquid, publicly traded stocks are drawn down for the reimbursement of health care costs. At the beginning of 2016, our expected annual long-term rate of return on post-retirement benefit plan assets is assumed to be 7.0%.

Permitted investments: Plan assets are managed consistent with the restrictions set forth by the Employee Retirement Income Security Act of 1974, as amended, which requires diversification of assets and also generally prohibits defined benefit and welfare plans from investing more than 10% of their assets in securities issued by the sponsor company. At December 31, 2015 and 2014, the pension and post-retirement benefit plans did not directly own any shares of our common stock or any of our debt.

Derivative instruments: Derivative instruments are used to reduce risk as well as provide return. The pension and post-retirement benefit plans use exchange traded futures and swaps to gain exposure to equity and interest rate markets consistent with target asset allocations and to reduce risk relative to measurement of the benefit obligation, which is sensitive to interest rate changes. Foreign exchange forward contracts are used to manage currency exposures. Credit default swaps are used to manage credit risk exposures in a cost effective and targeted manner relative to transacting with physical corporate fixed income securities. Options are currently used to manage interest rate exposure taking into account the implied volatility and current pricing of the specific underlying market instrument. Some derivative instruments subject the plans to counterparty risk. The external investment managers, along with Plan Management, monitor counterparty exposure and mitigate this risk by diversifying the exposure among multiple high credit quality counterparties, requiring collateral and limiting exposure by periodically settling contracts.

The gross notional exposure of the derivative instruments directly held by the plans is shown below. The notional amount of the derivatives corresponds to market exposure but does not represent an actual cash investment.

	Gross Notional Exposure
	Pension Plans			Post-Retirement Benefit Plans
	Years Ended December 31,
	2015		2014	2015	2014
	(Dollars in millions)
Derivative instruments:
Exchange-traded U.S. equity futures	$	79	134	—	7
Exchange-traded Treasury and other interest rate futures	1,767		2,451	—	—
Interest rate swaps	550		579	—	—
Credit default swaps	189		382	—	—
Foreign exchange forwards	992		1,195	—	13
Options	285		529	—	—

Fair Value Measurements: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB. For additional information on the fair value hierarchy, see Note 10—Fair Value Disclosure.

At December 31, 2015, we used the following valuation techniques to measure fair value for assets. There were no changes to these methodologies during 2015:

• Level 1—Assets were valued using the closing price reported in the active market in which the individual security was traded.

• Level 2—Assets were valued using quoted prices in markets that are not active, broker dealer quotations, net asset value of shares held by the plans and other methods by which all significant inputs were observable at the measurement date.

• Level 3—Assets were valued using unobservable inputs in which little or no market data exists as reported by the respective institutions at the measurement date.

The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2015. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivables, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2015
	Level 1		Level 2		Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	841	1,045		—	$	1,886
High yield bonds (b)	—		544		13	557
Emerging market bonds (c)	208		232		1	441
Convertible bonds (d)	—		2		—	2
U.S. stocks (f)	1,201		—		—	1,201
Non-U.S. stocks (g)	1,127		1		—	1,128
Multi-asset strategies (m)	376		—		—	376
Derivatives (n)	2		(6	)	—	(4		)
Cash equivalents and short-term investments (o)	—		192		—	192
Total investments, excluding investments valued at NAV	$	3,755	2,010		14	5,779
Investments valued at NAV						5,293
Total pension plan assets						$	11,072

	Fair Value of Post-Retirement Plan Assets at December 31, 2015
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	2	1	—	$	3
High yield bonds (b)	—		1	—	1
U.S. stocks (f)	16		—	—	16
Non-U.S. stocks (g)	12		—	—	12
Emerging market stocks (h)	4		—	—	4
Cash equivalents and short-term investments (o)	—		4	—	4
Total investments, excluding investments valued at NAV	$	34	6	—	40
Investments valued at NAV					153
Total post-retirement plan assets					$	193

The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2014. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivable, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2014
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	1,068	1,278	—	$	2,346
High yield bonds (b)	—		647	7	654
Emerging market bonds (c)	208		407	—	615
Convertible bonds (d)	—		4	—	4
U.S. stocks (f)	1,389		1	—	1,390
Non-U.S. stocks (g)	1,169		1	—	1,170
Derivatives (n)	2		15	—	17
Cash equivalents and short-term investments (o)	—		626	—	626
Total investments, excluding investments valued at NAV	$	3,836	2,979	7	6,822
Investments valued at NAV					5,749
Total pension plan assets					$	12,571

	Fair Value of Post-Retirement Plan Assets at December 31, 2014
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	5	1	—	$	6
High yield bonds (b)	—		1	—	1
U.S. stocks (f)	35		—	—	35
Non-U.S. stocks (g)	33		—	—	33
Emerging market stocks (h)	6		—	—	6
Cash equivalents and short-term investments (o)	—		8	—	8
Total investments, excluding investments valued at NAV	$	79	10	—	89
Investments valued at NAV					264
Total post-retirement plan assets					$	353

The table below presents the fair value of plan assets valued at NAV by category for our pension and post-retirement plans at December 31, 2015 and 2014. See Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding the 2015 adoption of ASU 2015-07.

	Fair Value of Plan Assets Valued at NAV
	Pension Plans at December 31,			Post-Retirement Benefit Plans at December 31,
	2015		2014	2015	2014
	(Dollars in millions)
Investment grade bonds (a)	$	115	148	35	71
High yield bonds (b)	512		860	1	14
Emerging market bonds (c)	9		27	—	—
Convertible bonds (d)	—		10	—	—
Diversified strategies (e)	516		718	54	89
U.S. stocks (f)	70		86	—	—
Non-U.S. stocks (g)	289		384	—	—
Emerging market stocks (h)	64		102	—	—
Private equity (i)	526		673	21	28
Private debt (j)	371		394	2	3
Market neutral hedge funds (k)	825		1,026	17	25
Directional hedge funds (k)	594		558	1	1
Real estate (l)	968		699	20	28
Multi-asset strategies (m)	386		—	—	—
Cash equivalents and short-term investments (o)	48		64	2	5
Total investments valued at NAV	$	5,293	5,749	153	264

The plans' assets are invested in various asset categories utilizing multiple strategies and investment managers. For several of the investments in the tables above and discussed below, the plans own units in commingled funds and limited partnerships that invest in various types of assets. Interests in commingled funds are valued using the net asset value ("NAV") per unit of each fund. The NAV reported by the fund manager is based on the market value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding. Commingled funds can be redeemed at NAV within a year of the financial statement date. Investments in limited partnerships represent long-term commitments with a fixed maturity date, typically ten years and are also valued at NAV. Valuation inputs for these limited partnership interests are generally based on assumptions and other information not observable in the market. The assumptions and valuation methodologies of the pricing vendors, account managers, fund managers and partnerships are monitored and evaluated for reasonableness. Below is an overview of the asset categories, the underlying strategies and valuation inputs used to value the assets in the preceding tables:

(a) Investment grade bonds represent investments in fixed income securities as well as commingled bond funds comprised of U.S. Treasury securities, agencies, corporate bonds, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. Treasury securities are valued at the bid price reported in the active market in which the security is traded and are classified as Level 1. The valuation inputs of other investment grade bonds primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. The primary observable inputs include references to the new issue market for similar securities, the secondary trading markets and dealer quotes. Option adjusted spread models are utilized to evaluate securities such as asset backed securities that have early redemption features. These securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying fixed income securities using the same valuation inputs described above.

(b) High yield bonds represent investments in below investment grade fixed income securities as well as commingled high yield bond funds. The valuation inputs for the securities primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. These securities are primarily classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying high yield instruments using the same valuation inputs described above.

(c) Emerging market bonds represent investments in securities issued by governments and other entities located in developing countries as well as registered mutual funds and commingled emerging market bond funds. The valuation inputs for the securities utilize observable market information and are primarily based on dealer quotes or a spread relative to the local government bonds. The registered mutual fund is classified as Level 1 while individual securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying emerging market bonds using the same valuation inputs described above.

(d) Convertible bonds primarily represent investments in corporate debt securities that have features that allow the debt to be converted into equity securities under certain circumstances. The valuation inputs for the individual convertible bonds primarily utilize observable market information including a spread to U.S. Treasuries and the value and volatility of the underlying equity security. Convertible bonds are classified as Level 2.

(e) Diversified strategies represent an investment in a commingled fund that primarily has exposures to global government, corporate and inflation linked bonds, global stocks and commodities. The commingled fund is valued at NAV based on the market value of the underlying investments. The valuation inputs utilize observable market information including published prices for exchange traded securities, bid prices for government bonds, and spreads and yields available for comparable fixed income securities with similar credit ratings.

(f) U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

(g) Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

(h) Emerging market stocks represent investments in a registered mutual fund and commingled funds comprised of stocks of companies located in developing markets. Registered mutual funds trade at the daily NAV, as determined by the market value of the underlying investments, and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described previously for individual stocks.

(i) Private equity represents non-public investments in domestic and foreign buy out and venture capital funds. Private equity funds are structured as limited partnerships and are valued according to the valuation policy of each partnership, subject to prevailing accounting and other regulatory guidelines. The partnerships are valued at NAV using valuation methodologies that give consideration to a range of factors, including but not limited to the price at which investments were acquired, the nature of the investments, market conditions, trading values on comparable public securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investments. These valuation methodologies involve a significant degree of judgment.

(j) Private debt represents non-public investments in distressed or mezzanine debt funds. Mezzanine debt instruments are debt instruments that are subordinated to other debt issues and may include embedded equity instruments such as warrants. Private debt funds are structured as limited partnerships and are valued at NAV according to the valuation policy of each partnership, subject to prevailing accounting and other regulatory guidelines. The valuation of underlying fund investments are based on factors including the issuer's current and projected credit worthiness, the security's terms, reference to the securities of comparable companies, and other market factors. These valuation methodologies involve a significant degree of judgment.

(k) Market neutral hedge funds hold investments in a diversified mix of instruments that are intended in combination to exhibit low correlations to market fluctuations. These investments are typically combined with futures to achieve uncorrelated excess returns over various markets. Directional hedge funds—This asset category represents investments that may exhibit somewhat higher correlations to market fluctuations than the market neutral hedge funds. Investments in hedge funds include both direct investments and investments in diversified funds of funds. Hedge Funds are valued at NAV based on the market value of the underlying investments which include publicly traded equity and fixed income securities and privately negotiated debt securities. The hedge funds are valued by third party administrators using the same valuation inputs previously described.

(l) Real estate represents investments in commingled funds and limited partnerships that invest in a diversified portfolio of real estate properties. These investments are valued at NAV according to the valuation policy of each fund or partnership, subject to prevailing accounting and other regulatory guidelines. The valuation inputs of the underlying properties are generally based on third-party appraisals that use comparable sales or a projection of future cash flows to determine fair value.

(m) Multi-asset strategies is a new allocation in 2015 and represents broadly diversified strategies that have the flexibility to tactically adjust exposures to different asset classes through time. This asset category includes investments in a registered mutual fund which is classified as Level 1 and a commingled fund which is valued at NAV based on the market value of the underlying investments.

(n) Derivatives include exchange traded futures contracts which are classified as Level 1, as well as privately negotiated over-the-counter swaps and options that are valued based on the change in interest rates or a specific market index and are classified as Level 2. The market values represent gains or losses that occur due to fluctuations in interest rates, foreign currency exchange rates, security prices, or other factors.

(o) Cash equivalents and short-term investments represent investments that are used in conjunction with derivatives positions or are used to provide liquidity for the payment of benefits or other purposes. The valuation inputs of securities are based on a spread to U.S. Treasury Bills, the Federal Funds Rate, or London Interbank Offered Rate and consider yields available on comparable securities of issuers with similar credit ratings and are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

Concentrations of Risk: Investments, in general, are exposed to various risks, such as significant world events, interest rate, credit, foreign currency and overall market volatility risk. These risks are managed by broadly diversifying assets across numerous asset classes and strategies with differing expected returns, volatilities and correlations. Risk is also broadly diversified across numerous market sectors and individual companies. Financial instruments that potentially subject the plans to concentrations of counterparty risk consist principally of investment contracts with high quality financial institutions. These investment contracts are typically collateralized obligations and/or are actively managed, limiting the amount of counterparty exposure to any one financial institution. Although the investments are well diversified, the value of plan assets could change materially depending upon the overall market volatility, which could affect the funded status of the plans.

The table below presents a rollforward of the pension plan assets valued using Level 3 inputs:

	Pension Plan Assets Valued Using Level 3 Inputs
	High Yield Bonds			Emerging Market Bonds	Total
	(Dollars in millions)
Balance at December 31, 2013	$	—		—	—
Net transfers	6			—	6
Acquisitions	1			—	1
Dispositions	(3		)	—	(3	)
Actual return on plan assets:
Gains relating to assets sold during the year	4			—	4
(Losses) gains relating to assets still held at year-end	(1		)	—	(1	)
Balance at December 31, 2014	7			—	7
Net transfers	4			1	5
Acquisitions	4			—	4
Dispositions	(2		)	—	(2	)
Actual return on plan assets:
Gains relating to assets sold during the year	—			—	—
(Losses) gains relating to assets still held at year-end	—			—	—
Balance at December 31, 2015	$	13		1	14

Certain gains and losses are allocated between assets sold during the year and assets still held at year-end based on transactions and changes in valuations that occurred during the year. These allocations also impact our calculation of net acquisitions and dispositions.

For the year ended December 31, 2015, the investment program produced actual losses on qualified pension and post-retirement plan assets of $158 million as compared to expected returns of $919 million for a difference of $1.077 billion. For the year ended December 31, 2014, the investment program produced actual gains on pension and post-retirement plan assets of $1.410 billion as compared to the expected returns of $924 million for a difference of $486 million. The short-term annual returns on plan assets will almost always be different from the expected long-term returns and the plans could experience net gains or losses, due primarily to the volatility occurring in the financial markets during any given year.

Unfunded Status

The following table presents the unfunded status of the pensions and post-retirement benefit plans:

	Pension Plans					Post-Retirement Benefit Plans
	Years Ended December 31,					Years Ended December 31,
	2015			2014		2015		2014
	(Dollars in millions)
Benefit obligation	$	(13,349	)	(15,042	)	(3,567	)	(3,830	)
Fair value of plan assets	11,072			12,571		193		353
Unfunded status	(2,277		)	(2,471	)	(3,374	)	(3,477	)
Current portion of unfunded status	$	(5	)	(6	)	(135	)	(134	)
Non-current portion of unfunded status	$	(2,272	)	(2,465	)	(3,239	)	(3,343	)

The current portion of our post-retirement benefit obligations is recorded on our consolidated balance sheets in accrued expenses and other current liabilities-salaries and benefits.

Accumulated Other Comprehensive Loss-Recognition and Deferrals

The following tables present cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2014, items recognized as a component of net periodic benefits expense in 2015, additional items deferred during 2015 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2015. The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss:

	As of and for the Years Ended December 31,
	2014			Recognition of Net Periodic Benefits Expense		Deferrals		Net Change in AOCL		2015
	(Dollars in millions)
Accumulated other comprehensive loss:
Pension plans:
Net actuarial (loss) gain	$	(2,760	)	161		(258	)	(97	)	(2,857	)
Prior service (cost) benefit	(32		)	5		99		104		72
Deferred income tax benefit (expense)	1,072			(63	)	61		(2	)	1,070
Total pension plans	(1,720		)	103		(98	)	5		(1,715	)
Post-retirement benefit plans:
Net actuarial (loss) gain	(277		)	—		130		130		(147	)
Prior service (cost) benefit	(166		)	19		—		19		(147	)
Deferred income tax benefit (expense)	171			(7	)	(50	)	(57	)	114
Total post-retirement benefit plans	(272		)	12		80		92		(180	)
Total accumulated other comprehensive loss	$	(1,992	)	115		(18	)	97		(1,895	)

The following table presents estimated items to be recognized in 2016 as a component of net periodic benefit expense of the pension, non-qualified pension and post-retirement benefit plans:

	Pension Plans			Post-Retirement Plans
	(Dollars in millions)
Estimated recognition of net periodic benefit (cost)/income in 2016:
Net actuarial loss	$	(168	)	—
Prior service (cost)/income	8			(20	)
Deferred income tax benefit	61			8
Estimated net periodic benefit expense to be recorded in 2016 as a component of other comprehensive income (loss)	$	(99	)	(12	)

Medicare Prescription Drug, Improvement and Modernization Act of 2003

We sponsor post-retirement health care plans with several benefit options that provide prescription drug benefits that we deem actuarially equivalent to or exceeding Medicare Part D. We recognize the impact of the federal subsidy received under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 in the calculation of our post-retirement benefit obligation and net periodic post-retirement benefit expense.

Other Benefit Plans

Health Care and Life Insurance

We provide health care and life insurance benefits to essentially all of our active employees. We are largely self-funded for the cost of the health care plan. Our health care benefit expense for current employees was $381 million, $381 million and $362 million for the years ended December 31, 2015, 2014 and 2013, respectively. Union-represented employee benefits are based on negotiated collective bargaining agreements. Employees contributed $125 million, $136 million and $117 million for the years ended December 31, 2015, 2014 and 2013, respectively. Our group basic life insurance plans are fully insured and the premiums are paid by us.

401(k) Plans

We sponsor qualified defined contribution plans covering substantially all of our employees. Under these plans, employees may contribute a percentage of their annual compensation up to certain maximums, as defined by the plans and by the Internal Revenue Service ("IRS"). Currently, we match a percentage of employee contributions in cash. At both December 31, 2015 and 2014, the assets of the plans included approximately 8 million shares of our common stock as a result of the combination of previous employer match and participant directed contributions. We recognized expenses related to these plans of $83 million, $81 million and $89 million and for the years ended December 31, 2015, 2014 and 2013, respectively.

Deferred Compensation Plans

We sponsored non-qualified unfunded deferred compensation plans for various groups that included certain of our current and former highly compensated employees. The value of liabilities related to these plans was not significant.

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Share-based Compensation

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

Share-based Compensation

We maintain equity programs that allow our Board of Directors (through its Compensation Committee or our Chief Executive Officer as its delegate) to grant incentives to certain employees and our outside directors in any one or a combination of several forms, including incentive and non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units and market and performance shares. Stock options generally expire ten years from the date of grant. Until June 30, 2014, we offered an employee stock purchase plan, which allowed eligible employees to purchase our common stock at a 15% discount based on the lower of the beginning or ending stock price during recurring six month offering periods.

Stock Options

The following table summarizes activity involving stock option awards for the year ended December 31, 2015:

	Number of Options		Weighted- Average Exercise Price
	(in thousands)
Outstanding and Exercisable at December 31, 2014	4,106		$	37.99
Exercised	(335	)	26.00
Forfeited/Expired	(246	)	30.33
Outstanding and Exercisable at December 31, 2015	3,525		39.67

The aggregate intrinsic value of our options outstanding and exercisable at December 31, 2015 was $1 million. The weighted average remaining contractual term for such options was 1.9 years.

During 2015, we received net cash proceeds of $9 million in connection with our option exercises. The tax benefit realized from these exercises was $1 million. The total intrinsic value of options exercised for the years ended December 31, 2015, 2014 and 2013, was $4 million, $9 million and $11 million, respectively.

Restricted Stock Awards

For equity based awards that contain only service conditions for vesting, we calculate the award fair value based on the closing stock price on the accounting grant date. For equity based restricted stock awards that contain market conditions, the award fair value is calculated through Monte-Carlo simulations.

During the first quarter of 2015, we granted approximately 496 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 198 thousand contained only service conditions and will vest on a straight-line basis on February 23, 2016, 2017 and 2018. The remaining awards contain market and service conditions and are scheduled to vest on February 23, 2018. These shares, with market and service conditions, represent only the target for the award, as each recipient has the opportunity to ultimately receive a number of shares between 0% and 200% of the target restricted stock award depending on our total shareholder return versus that of selected peer companies for 2015, 2016 and 2017.

At the end of the first quarter of 2015, we granted approximately 1.2 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions and will vest on a straight-line basis on March 12, 2016, 2017 and 2018. During the third quarter of 2015 we granted shares to certain key employees as part of our long-term equity retention program. These awards will vest over a three to seven year period with approximately 193 thousand, 423 thousand and 230 thousand shares vesting on August 14, 2018, 2020 and 2022, respectively, and 55 thousand shares vesting equally on August 14, 2017, 2019, and 2021. The remaining awards granted throughout 2015 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period.

During the first quarter of 2014, we granted approximately 440 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 250 thousand contained only service conditions and will vest on a straight-line basis on February 20, 2015, 2016 and 2017. The remaining awards contain market and service conditions and are scheduled to vest on February 20, 2017. These shares, with market and service conditions, represent only the target for the award, as each recipient has the opportunity to ultimately receive a number of shares between 0% and 200% of the target restricted stock award depending on our total shareholder return versus that of selected peer companies for 2014, 2015 and 2016.

During the second quarter of 2014, we granted approximately 1.5 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions and will vest on a straight-line basis on March 26, 2015, 2016 and 2017. During the third quarter of 2014 we granted shares to certain key employees as part of our long-term equity retention program. These awards will vest over a three to seven year period with approximately 105 thousand, 325 thousand and 220 thousand vesting on August 4, 2017, 2019 and 2021, respectively. The remaining awards granted throughout 2014 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period.

During the second quarter of 2013, we granted approximately 335 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 223 thousand contained only service conditions and are scheduled to vest on a straight-line basis on May 23, 2014, 2015 and 2016. The remaining awards contain market and service conditions and will vest on May 23, 2016. These shares, with market and service conditions, represent only the target for the award as each recipient has the opportunity to ultimately receive a number of shares between 0% and 200% of the target restricted stock award depending on, our total shareholder return versus that of selected peer companies for 2013, 2014 and 2015.

In addition, during the first and second quarter of 2013, we granted approximately 1.2 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions. The remaining awards granted throughout 2013 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period.

The following table summarizes activity involving restricted stock and restricted stock unit awards for the year ended December 31, 2015:

	Number of Shares		Weighted- Average Grant Date Fair Value
	(in thousands)
Non-vested at December 31, 2014	4,400		$	36.59
Granted	2,904		31.83
Vested	(1,724	)	35.71
Forfeited	(678	)	38.95
Non-vested at December 31, 2015	4,902		33.86

During 2014, we granted 2.9 million shares of restricted stock and restricted stock unit awards at a weighted-average price of $35.87. The total fair value of restricted stock that vested during 2015, 2014 and 2013, was $59 million, $53 million and $52 million, respectively.

Compensation Expense and Tax Benefit

We recognize compensation expense related to our market and performance share-based awards with graded vesting that only have a service condition on a straight-line basis over the requisite service period for the entire award. Total compensation expense for all share-based payment arrangements for the years ended December 31, 2015, 2014 and 2013, was $73 million, $75 million and $63 million, respectively. Our tax benefit recognized in the consolidated statements of operations for our share-based payment arrangements for the years ended December 31, 2015, 2014 and 2013, was $28 million, $29 million and $25 million, respectively. At December 31, 2015, there was $113 million of total unrecognized compensation expense related to our share-based payment arrangements, which we expect to recognize over a weighted-average period of 2.5 years.

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Earnings (Loss) Per Common Share

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Earnings (Loss) Per Common Share

Earnings (Loss) Per Common Share

Basic and diluted earnings (loss) per common share for the years ended December 31, 2015, 2014 and 2013 were calculated as follows:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions, except per share amounts, shares in thousands)
Income (Loss) (Numerator):
Net income (loss)	$	878		772		(239	)
Earnings applicable to non-vested restricted stock	—			—		—
Net income (loss) applicable to common stock for computing basic earnings (loss) per common share	878			772		(239	)
Net income (loss) as adjusted for purposes of computing diluted earnings (loss) per common share	$	878		772		(239	)
Shares (Denominator):
Weighted average number of shares:
Outstanding during period	559,260			572,748		604,404
Non-vested restricted stock	(4,982		)	(4,313	)	(3,512	)
Weighted average shares outstanding for computing basic earnings (loss) per common share	554,278			568,435		600,892
Incremental common shares attributable to dilutive securities:
Shares issuable under convertible securities	10			10		—
Shares issuable under incentive compensation plans	805			1,294		—
Number of shares as adjusted for purposes of computing diluted earnings (loss) per common share	555,093			569,739		600,892
Basic earnings (loss) per common share	$	1.58		1.36		(0.40	)
Diluted earnings (loss) per common share	$	1.58		1.36		(0.40	)

Our calculation of diluted earnings (loss) per common share excludes shares of common stock that are issuable upon exercise of stock options when the exercise price is greater than the average market price of our common stock. We also exclude unvested restricted stock awards that are antidilutive as a result of unrecognized compensation cost. Such shares averaged 3.1 million, 2.5 million and 2.7 million for 2015, 2014 and 2013, respectively. For the year ended December 31, 2013, due to the net loss position, we excluded from the calculation of diluted loss per share 1.3 million shares which were potentially issuable under incentive compensation plans or convertible securities, as their effect, if included, would have been anti-dilutive.

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Fair Value Disclosure

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosure

Fair Value Disclosure

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt, excluding capital lease obligations. Due to their short-term nature, the carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate their fair values.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB.

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

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

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.

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

		As of December 31, 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	$	19,800	19,473	19,994	21,255

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	Years Ended December 31,
	2015		2014		2013
	(Dollars in millions)
Income tax expense was as follows:
Federal
Current	$	28	18		1
Deferred	329		305		403
State
Current	40		26		62
Deferred	21		(14	)	(8	)
Foreign
Current	16		3		9
Deferred	4		—		(4	)
Total income tax expense	$	438	338		463

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Income tax expense was allocated as follows:
Income tax expense in the consolidated statements of operations:
Attributable to income	$	438		338		463
Stockholders' equity:
Compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes	(5		)	(5	)	(14	)
Tax effect of the change in accumulated other comprehensive loss	59			(744	)	554

The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate:

	Years Ended December 31,
	2015		2014		2013
	(Percentage of pre-tax income)
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal income tax benefit	2.6	%	2.7	%	2.8	%
Impairment of goodwill	—	%	—	%	188.5	%
Change in liability for unrecognized tax position	0.4	%	0.4	%	(24.5	)%
Foreign income taxes	0.7	%	0.4	%	2.7	%
Nondeductible accounting adjustment for life insurance	—	%	—	%	3.1	%
Affiliate debt rationalization	(2.6	)%	—	%	—	%
Release state valuation allowance	—	%	—	%	(2.3	)%
Research and development credits	(2.1	)%	—	%	—	%
Loss on worthless investment in foreign subsidiary	—	%	(5.4	)%	—	%
Other, net	(0.7	)%	(2.6	)%	1.4	%
Effective income tax rate	33.3	%	30.5	%	206.7	%

The 2015 effective tax rate is 33.3% compared to 30.5% for 2014. The 2015 rate reflects a tax benefit of approximately $34 million related to affiliate debt rationalization, research and development tax credits of $28 million for 2011 through 2015 and a $16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating losses ("NOLs"). The 2014 rate reflects a $60 million tax benefit associated with a deduction for tax basis for worthless stock in a wholly-owned foreign subsidiary as a result of developments in bankruptcy proceedings involving its sole asset and a $13 million tax decrease due to changes in the state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of NOLs. The 2013 rate reflects the tax effect of a $1.092 billion non-deductible goodwill impairment charge, a favorable settlement with the Internal Revenue Service of $33 million, a $22 million reduction due to the reversal of an uncertain tax position and the tax effect of a $17 million unfavorable accounting adjustment for non-deductible life insurance costs. Also in 2013, the tax rate was decreased by a $5 million reduction to the valuation allowance due to the estimated ability to utilize more state NOLs than previously expected.

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:

	As of December 31,
	2015			2014
	(Dollars in millions)
Deferred tax assets
Post-retirement and pension benefit costs	$	2,154		2,276
Net operating loss carryforwards	487			1,091
Other employee benefits	182			214
Other	458			602
Gross deferred tax assets	3,281			4,183
Less valuation allowance	(380		)	(409	)
Net deferred tax assets	2,901			3,774
Deferred tax liabilities
Property, plant and equipment, primarily due to depreciation differences	(3,841		)	(3,869	)
Goodwill and other intangible assets	(2,588		)	(2,908	)
Other	(38		)	(147	)
Gross deferred tax liabilities	(6,467		)	(6,924	)
Net deferred tax liability	$	(3,566	)	(3,150	)

Of the $3.566 billion and $3.150 billion net deferred tax liability at December 31, 2015 and 2014, respectively, $3.569 billion and $3.154 billion is reflected as a long-term liability and $3 million and $4 million is reflected as a net noncurrent deferred tax asset at December 31, 2015 and 2014, respectively.

At December 31, 2015, we had federal NOLs of $72 million and state NOLs of $13 billion. If unused, the NOLs will expire between 2016 and 2032; however, no significant amounts expire until 2021. At December 31, 2015, we had federal tax credits of $28 million. Additionally, we had $36 million ($23 million net of federal income tax) of state investment tax credit carryforwards that will expire between 2016 and 2025 if not utilized. In addition, at December 31, 2015, we had $79 million of federal alternative minimum tax, or AMT, credits. Our acquisitions of Qwest and SAVVIS, Inc. ("Savvis") caused "ownership changes" within the meaning of Section 382 of the Internal Revenue Code ("Section 382"). As a result, our ability to use these NOLs and AMT credits are subject to annual limits imposed by Section 382. Despite this, we expect to use substantially all of these tax attributes to reduce our future federal tax liabilities, although the timing of that use will depend upon our future earnings and future tax circumstances.

We establish valuation allowances when necessary to reduce the deferred tax assets to amounts we expect to realize. As of December 31, 2015, a valuation allowance of $380 million was established as it is more likely than not that this amount of net operating loss and tax credit carryforwards will not be utilized prior to expiration. Our valuation allowance at December 31, 2015 and 2014 is primarily related to state NOL carryforwards. This valuation allowance decreased by $29 million during 2015.

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2015 and 2014 is as follows:

	2015			2014
	(Dollars in millions)
Unrecognized tax benefits at beginning of year	$	17		14
Increase in tax positions taken in the current year	1			—
Increase in tax positions taken in the prior year	7			9
Decrease due to the reversal of tax positions taken in a prior year	(9		)	(2	)
Decrease from the lapse of statute of limitations	(1		)	(1	)
Settlements	—			(3	)
Unrecognized tax benefits at end of year	$	15		17

The total amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate was $32 million at both December 31, 2015 and 2014.

Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense. We had accrued interest (presented before related tax benefits) of approximately $33 million and $30 million at December 31, 2015 and 2014, respectively.

We file income tax returns, including returns for our subsidiaries, with federal, state and local jurisdictions. Our uncertain income tax positions are related to tax years that are currently under or remain subject to examination by the relevant taxing authorities.

In 2013, Qwest filed an amended 2009 federal income tax return primarily to report the carryforward impact of prior year settlements. The refund for the 2009 amended return filed in 2013 was received in 2014. In 2014, Qwest filed an amended federal income tax return for 2010. The refund claim filed for 2010 was accepted by the IRS, and the refund was received in 2015. The 2010 amended return released certain general business credits that were required to be carried back to 2009. As a result, a subsequent 2009 federal amended return was filed by Qwest in 2014 to reflect the carrybacks from 2010. The 2009 refund claim filed in 2014 was accepted by the IRS and the refund was received in 2015.

Beginning with the 2012 tax year, our federal consolidated returns are subject to annual examination by the IRS.

Our open income tax years by major jurisdiction are as follows at December 31, 2015:

Jurisdiction	Open Tax Years
Federal	2012—current
State
Arizona	2010—current
Florida	2010—current
Other states	2011—current

Since the period for assessing additional liability typically begins upon the filing of a return, it is possible that certain jurisdictions could assess tax for years prior to the open tax years disclosed above. Additionally, it is possible that certain jurisdictions in which we do not believe we have an income tax filing responsibility, and accordingly did not file a return, may attempt to assess a liability, or that other jurisdictions to which we pay taxes may attempt to assert that we owe additional taxes.

Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement of certain disputed issues, and (iv) the administrative practices of applicable taxing jurisdictions, it is reasonably possible that the related unrecognized tax benefits for uncertain tax positions previously taken may decrease by up to $11 million within the next 12 months. The actual amount of such decrease, if any, will depend on several future developments and events, many of which are outside our control.

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Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

We are organized into operating segments based on customer type, business and consumer. These operating segments are our two reportable segments in our consolidated financial statements:

• Business Segment. Consists generally of providing strategic, legacy and data integration products and services to small, medium and enterprise business, 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 all or part of our network 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; and

• Consumer Segment. 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, video (including our Prism TV services) and wireless services. Our legacy services offered to these customers include local and long-distance voice services.

The following table summarizes our segment results for 2015, 2014 and 2013 based on the segment categorization we were operating under at December 31, 2015.

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment revenues	$	16,668		17,028		17,095
Total segment expenses	8,459			8,509		8,167
Total segment income	$	8,209		8,519		8,928
Total margin percentage	49		%	50	%	52	%
Business segment:
Revenues	$	10,647		11,034		11,091
Expenses	6,034			6,089		5,808
Income	$	4,613		4,945		5,283
Margin percentage	43		%	45	%	48	%
Consumer segment:
Revenues	$	6,021		5,994		6,004
Expenses	2,425			2,420		2,359
Income	$	3,596		3,574		3,645
Margin percentage	60		%	60	%	61	%

Product and Service Categories

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

• 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 16 markets), VoIP and Verizon Wireless and other ancillary services;

• Legacy services, which include primarily local and long-distance voice services, including the sale of UNEs, switched access and Integrated Services Digital Network ("ISDN") services (which use 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 operating revenues, which consist primarily of CAF support payments, USF support payments and USF surcharges. We receive federal support payments from both CAF Phase 1 and CAF Phase 2 programs, and support payments from both federal and state USF programs. These support payments are government subsidies designed to reimburse us for various costs related to certain telecommunications services, including the costs of deploying, maintaining and operating voice and high-speed Internet infrastructure 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.

Our operating revenues for our products and services consisted of the following categories for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015		2014	2013
	(Dollars in millions)
Strategic services
Business high-bandwidth data services (1)	$	2,816	2,579	2,230
Business low-bandwidth data services (2)	2,052		2,345	2,577
Business hosting services (3)	1,281		1,316	1,259
Other business strategic services (4)	162		76	60
Consumer high-speed Internet services (5)	2,611		2,469	2,358
Other consumer strategic services (6)	421		381	292
Total strategic services revenues	9,343		9,166	8,776
Legacy services
Business legacy voice services (7)	2,590		2,780	2,916
Other business legacy services (8)	1,175		1,252	1,398
Consumer legacy voice services (7)	2,676		2,864	3,101
Other consumer legacy services (9)	311		276	248
Total legacy services revenues	6,752		7,172	7,663
Data integration
Business data integration	571		686	651
Consumer data integration	2		4	5
Total data integration revenues	573		690	656
Other revenues
High-cost support revenue (10)	732		528	547
Other revenue (11)	500		475	453
Total other revenues	1,232		1,003	1,000
Total revenues	$	17,900	18,031	18,095

______________________________________________________________________ 

(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

During the first quarter of 2015, we determined that certain products and services associated with our acquisition of Savvis are more closely aligned to legacy services than to strategic services. As a result, these operating revenues are now reflected as legacy services. The revision resulted in a reduction of revenue from strategic services of $34 million and $47 million and a corresponding increase in revenue from legacy services for the years ended December 31, 2014 and 2013, respectively.

We recognize revenues in our consolidated statements of operations for certain USF surcharges and transaction taxes that we bill to our customers. Our consolidated statements of operations also reflect the related expense for the amounts we remit to the government agencies. The total amount of such surcharges that we included in revenues aggregated approximately $544 million, $526 million and $489 million for the years ended December 31, 2015, 2014 and 2013, respectively. Those USF surcharges, where we record revenue, are included in "other" operating revenues and transaction tax surcharges are included in "legacy services" revenues. We also act as a collection agent for certain other USF and transaction taxes that we are required by government agencies to include in our bills to customers, for which we do not record any revenue or expense because we only act as a pass-through agent.

Allocations of Revenues and Expenses

Our segment revenues include all revenues from our strategic, legacy and data integration operations as described in more detail above. Segment revenues are based upon each customer's classification to an individual segment. We report our segment revenues based upon all services provided to that segment's customers. Our segment expenses for our two segments include specific expenses incurred as a direct result of providing services and products to segment customers, along with selling, general and administrative expenses that are directly associated with specific segment customers or activities; and allocated expenses which include network expenses, facilities expenses and other expenses such as fleet and real estate expenses. We do not assign depreciation and amortization expense or impairments to our segments, as the related assets and capital expenditures are centrally managed and are not monitored by or reported to the chief operating decision maker ("CODM") by segment. Generally speaking, severance expenses, restructuring expenses and certain centrally managed administrative functions (such as finance, information technology, legal and human resources) are not assigned to our segments. Interest expense is also excluded from segment results because we manage our financing on a total company basis and have not allocated assets or debt to specific segments. Other income, net is not monitored as a part of our segment operations and is therefore excluded from our segment results.

The following table reconciles segment income to net income for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment income	$	8,209		8,519		8,928
Other operating revenues	1,232			1,003		1,000
Depreciation and amortization	(4,189		)	(4,428	)	(4,541	)
Impairment of goodwill	—			—		(1,092	)
Other unassigned operating expenses	(2,647		)	(2,684	)	(2,842	)
Other expenses, net	(1,289		)	(1,300	)	(1,229	)
Income tax expense	(438		)	(338	)	(463	)
Net income (loss)	$	878		772		(239	)

We do not have any single customer that provides more than 10% of our total consolidated operating revenues. Substantially all of our consolidated revenues come from customers located in the United States.

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Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

	First Quarter		Second Quarter	Third Quarter	Fourth Quarter	Total
	(Dollars in millions, except per share amounts)
2015
Operating revenues	$	4,451	4,419	4,554	4,476	17,900
Operating income	649		549	656	751	2,605
Net income	192		143	205	338	878
Basic earnings per common share	0.34		0.26	0.37	0.62	1.58
Diluted earnings per common share	0.34		0.26	0.37	0.62	1.58
2014
Operating revenues	$	4,538	4,541	4,514	4,438	18,031
Operating income	653		655	619	483	2,410
Net income	203		193	188	188	772
Basic earnings per common share	0.35		0.34	0.33	0.33	1.36
Diluted earnings per common share	0.35		0.34	0.33	0.33	1.36

During the third quarter of 2015, we recognized an incremental $158 million of revenue associated with the FCC's CAF Phase 2 support program, and an additional incremental $57 million in the fourth quarter of 2015. During the fourth quarter of 2015, we also recognized a tax benefit of approximately $34 million related to affiliate debt rationalization, research and development tax credits of $28 million for 2011 through 2015, and a $16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating losses ("NOLs").

During the fourth quarter of 2014, we recognized a $60 million tax benefit associated with a deduction for the tax basis for worthless stock in a wholly-owned foreign subsidiary as a result of developments in bankruptcy proceedings involving its sole asset that occurred in the first quarter of 2014. During the fourth quarter of 2014, we also recognized a pension settlement charge of $63 million.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

We are vigorously defending against all of the matters described below under the headings "Pending Matters" and "Other Proceedings and Disputes." As a matter of course, we are prepared both to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. In this Note, when we refer to a class action as "putative" it is because a class has been alleged, but not certified in that matter. We have established accrued liabilities for these matters described below where losses are deemed probable and reasonably estimable.

PendingMatters

In William Douglas Fulghum, et al. v. Embarq Corporation, et al., filed on December 28, 2007 in the United States District Court for the District of Kansas, a group of retirees filed a class action lawsuit challenging the decision to make certain modifications in retiree benefits programs relating to life insurance, medical insurance and prescription drug benefits, generally effective January 1, 2006 and January 1, 2008 (which, at the time of the modifications, was expected to reduce estimated future expenses for the subject benefits by more than $300 million). Defendants include Embarq, certain of its benefit plans, its Employee Benefits Committee and the individual plan administrator of certain of its benefits plans. Additional defendants include Sprint Nextel and certain of its benefit plans. The Court certified a class on certain of plaintiffs' claims, but rejected class certification as to other claims. On October 14, 2011, the Fulghum lawyers filed a new, related lawsuit, Abbott et al. v. Sprint Nextel et al. In Abbott, approximately 1,500 plaintiffs allege breach of fiduciary duty in connection with the changes in retiree benefits that also are at issue in the Fulghum case. The Abbott plaintiffs are all members of the class that was certified in Fulghum on claims for allegedly vested benefits (Counts I and III), and the Abbott claims are similar to the Fulghum breach of fiduciary duty claim (Count II), on which the Fulghum court denied class certification. The Court has stayed proceedings in Abbott indefinitely, except for limited discovery and motion practice as to approximately 80 of the plaintiffs. On February 14, 2013, the Fulghum court dismissed the majority of the plaintiffs' claims in the case. On interlocutory appeal, the United States Court of Appeals for the Tenth Circuit ruled on February 24, 2015, that the plan documents reviewed do not support any claim for vested benefits, and affirmed the district court's dismissal of claims based on those documents. The Tenth Circuit decision allowed a subset of claims for vested benefits to return to the district court for further proceedings. The Tenth Circuit also affirmed the district court's dismissal of all age discrimination claims. The Tenth Circuit reversed the district court's determination that the statute of repose under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), is a time bar to the breach of fiduciary duty claims of fifteen named plaintiffs. On June 10, 2015, the district court in Fulghum granted summary judgment to defendants on an additional group of claims for vested benefits. On July 27, 2015, pursuant to the terms of a stipulation by the parties, the district court in Fulghum granted judgment in favor of defendants on all remaining and unadjudicated vested benefits claims. This judgment is without prejudice to any rights the parties may have to pursue any additional appellate relief. As to any further proceedings that may occur in the district court, defendants will continue to vigorously contest any remaining claims in Fulghum and Abbott. We have not accrued a liability for these matters because we believe it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability.

On July 16, 2013, Comcast MO Group, Inc. ("Comcast") filed a lawsuit in Colorado state court against Qwest Communications International, Inc. ("Qwest"). Comcast alleges Qwest breached the parties' 1998 tax sharing agreement ("TSA") when it refused to partially indemnify Comcast for a tax liability settlement Comcast reached with the Commonwealth of Massachusetts in a dispute to which we were not a party. Comcast seeks approximately $80 million in damages, excluding interest. Qwest and Comcast are parties to the TSA in their capacities as successors to the TSA's original parties, U S WEST, Inc., a telecommunications company, and MediaOne Group, Inc., a cable television company, respectively. In October 2014, the state court granted summary judgment in Qwest's favor. In December 2015, the Colorado Court of Appeals affirmed the judgment. Comcast has filed a petition with the Colorado Supreme Court to review the Court of Appeals judgment. We have not accrued a liability for this matter because we do not believe that liability is probable.

The local exchange carrier subsidiaries of CenturyLink are among hundreds of defendants nationwide in dozens of lawsuits filed by Sprint Communications Company and affiliates of Verizon Communications Inc. The plaintiffs in these suits have challenged the right of local exchange carriers to bill interexchange carriers for switched access charges for certain calls between mobile and wireline devices that are routed through an interexchange carrier. In the lawsuits, the plaintiffs are seeking refunds of access charges previously paid and relief from future access charges. In addition, these and some other interexchange carriers have ceased paying switched access charges on these calls. These lawsuits involving our local exchange carriers and many other carriers have been consolidated for pretrial purposes in the United States District Court for the District of Northern Texas. In November 2015, the Court dismissed the plaintiffs' federal law claims and granted them leave to file state law claims, if any. Some of the defendants, including our affiliated carriers, have petitioned the Federal Communications Commission to address these issues on an industry-wide basis.

As both an interexchange carrier and a local exchange carrier, we both pay and assess significant amounts of the access charges in question. The outcome of these disputes and suits, as well as any related regulatory proceedings that could ensue, are currently not predictable. If we are required to stop assessing these charges or to pay refunds of any such charges, our financial results could be negatively affected.

Other Proceedings and Disputes

From time to time, we are involved in other proceedings incidental to our business, including patent infringement allegations, administrative hearings of state public utility commissions relating primarily to our rates or services, actions relating to employee claims, various tax issues, environmental law issues, grievance hearings before labor regulatory agencies, and miscellaneous third party tort actions.

We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities, many of whom are seeking substantial recoveries. These cases have progressed to various stages and one or more may go to trial in the coming 24 months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers. As with all litigation, we are vigorously defending these actions and, as a matter of course, are prepared to litigate the matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities.

We are subject to various foreign, federal, state and local environmental protection and health and safety laws. From time to time, we are subject to judicial and administrative proceedings brought by various governmental authorities under these laws. Several such proceedings are currently pending, but none is reasonably expected to exceed $100,000 in fines and penalties.

The outcome of these other proceedings is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these other proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on our financial position, results of operations or cash flows.

Capital Leases

We lease certain facilities and equipment under various capital lease arrangements. Depreciation of assets under capital leases is included in depreciation and amortization expense in our consolidated statements of operations. Payments on capital leases are included in repayments of long-term debt, including current maturities in our consolidated statements of cash flows.

The tables below summarize our capital lease activity:

	Years Ended December 31,
	2015		2014	2013
	(Dollars in millions)
Assets acquired through capital leases	$	17	37	12
Depreciation expense	96		126	136
Cash payments towards capital leases	89		118	119

	As of December 31,
	2015		2014
	(Dollars in millions)
Assets included in property, plant and equipment	$	722	850
Accumulated depreciation	352		393

The future annual minimum payments under capital lease arrangements as of December 31, 2015 were as follows:

	Future Minimum Payments
	(Dollars in millions)
Capital lease obligations:
2016	$	85
2017	78
2018	76
2019	62
2020	47
2021 and thereafter	223
Total minimum payments	571
Less: amount representing interest and executory costs	(153		)
Present value of minimum payments	418
Less: current portion	(56		)
Long-term portion	$	362

Operating Leases

CenturyLink leases various equipment, office facilities, retail outlets, switching facilities, and other network sites. These leases, with few exceptions, provide for renewal options and escalations that are either fixed or based on the consumer price index. Any rent abatements, along with rent escalations, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The lease term for most leases includes the initial non-cancelable term plus any term under renewal options that are reasonably assured. For the years ended December 31, 2015, 2014 and 2013, our gross rental expense was $467 million, $446 million and $455 million, respectively. We also received sublease rental income for the years ended December 31, 2015, 2014 and 2013 of $12 million, $14 million and $16 million, respectively.

At December 31, 2015, our future rental commitments for operating leases were as follows:

	Future Minimum Payments
	(Dollars in millions)
2016	$	301
2017	289
2018	268
2019	235
2020	209
2021 and thereafter	1,075
Total future minimum payments (1)	$	2,377

_______________________________________________________________________________

⁽¹⁾  Minimum payments have not been reduced by minimum sublease rentals of $87 million due in the future under non-cancelable subleases.

Purchase Commitments

We have several commitments primarily for marketing activities and support services from a variety of vendors to be used in the ordinary course of business totaling $625 million at December 31, 2015. Of this amount, we expect to purchase $364 million in 2016, $144 million in 2017 through 2018, $46 million in 2019 through 2020 and $71 million in 2021 and thereafter. These amounts do not represent our entire anticipated purchases in the future, but represent only those items for which we were contractually committed as of December 31, 2015.

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Other Financial Information

12 Months Ended

Dec. 31, 2015

Additional Financial Information Disclosure [Abstract]

Other financial information

Other Financial Information

Other Current Assets

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

	As of December 31,
	2015		2014
	(Dollars in millions)
Prepaid expenses	$	238	260
Materials, supplies and inventory	144		132
Assets held for sale	8		14
Deferred activation and installation charges	105		103
Other	86		71
Total other current assets	$	581	580

Assets held for sale includes several assets that we expect to sell within the next twelve months. During 2014, we sold our remaining 700 MHz A-Block wireless spectrum licenses, which we purchased in 2008 but never placed into service. As a result of changes in market conditions and prevailing spectrum prices, we recorded an impairment charge of $14 million, which is included in other income, net in our consolidated statements of operations for the for the year ended December 31, 2014. The sale closed on November 3, 2014, and we received $39 million in cash in the aggregate.

In January 2013, we sold $43 million of our wireless spectrum assets held for sale. The sale resulted in a gain of $32 million, which is recorded as other income, net on our consolidated statements of operations.

Selected Current Liabilities

Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as follows:

	As of December 31
	2015		2014
	(Dollars in millions)
Accounts payable	$	968	1,226
Other current liabilities:
Accrued rent	$	32	34
Legal reserves	20		27
Other	168		149
Total other current liabilities	$	220	210

Included in accounts payable at December 31, 2015 and 2014, were $68 million and $80 million, respectively, representing book overdrafts and $94 million and $185 million, respectively, associated with capital expenditures.

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Labor Union Contracts

12 Months Ended

Dec. 31, 2015

Labor Union Contracts

Concentration Risk Disclosure

Labor Union Contracts

Approximately 37% of our employees are members of various bargaining units represented by the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). As of December 31, 2015, approximately three hundred, or 2%, of our employees are subject to collective bargaining agreements that expired in 2015. We believe that relations with our employees continue to be generally good. We are currently negotiating the terms of new agreements covering these employees. Approximately one thousand, or 6%, of our employees are subject to collective bargaining agreements that expire in 2016.

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Repurchase of CenturyLink Common Stock

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Repurchase of Common Stock

Repurchase of CenturyLink, Inc. Common Stock

In February 2014, our Board of Directors authorized a 24-month program to repurchase up to an aggregate of $1 billion of our outstanding common stock. This 2014 stock repurchase program took effect on May 29, 2014, immediately upon the completion of our predecessor 2013 stock repurchase program. On December 7, 2015, we completed the 2014 stock repurchase program, repurchasing over the course of the program a total of 32.3 million shares in the open market at an average purchase price of $30.99 per share. During the year ended December 31, 2015, we repurchased 27.1 million shares of our outstanding common stock in the open market. These shares were repurchased for an aggregate market price of $800 million, or an average purchase price of $29.56 per share. The repurchased common stock has been retired.

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Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2015

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Other Comprehensive Earnings

Accumulated Other Comprehensive Loss

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2015:

	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	(98		)	80		(14	)	(32	)
Amounts reclassified from accumulated other comprehensive income	103			12		—		115
Net current-period other comprehensive income (loss)	5			92		(14	)	83
Balance at December 31, 2015	$	(1,715	)	(180	)	(39	)	(1,934	)

The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2015:

Year Ended December 31, 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	$	161		See Note 7—Employee Benefits
Prior service cost	24			See Note 7—Employee Benefits
Total before tax	185
Income tax expense (benefit)	(70		)	Income tax expense
Net of tax	$	115

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2014:

	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 (loss) before reclassifications	(1,107		)	(162	)	(15	)	(1,284	)
Amounts reclassified from accumulated other comprehensive income	56			12		1		69
Net current-period other comprehensive income (loss)	(1,051		)	(150	)	(14	)	(1,215	)
Balance at December 31, 2014	$	(1,720	)	(272	)	(25	)	(2,017	)

The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2014:

Year Ended December 31, 2014	Decrease (Increase) in Net Loss			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	$	85		See Note 7—Employee Benefits
Prior service cost	25			See Note 7—Employee Benefits
Total before tax	110
Income tax expense (benefit)	(42		)	Income tax expense
Insignificant items	1
Net of tax	$	69

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Dividends

12 Months Ended

Dec. 31, 2015

Dividends, Common Stock [Abstract]

Dividends

Dividends

Our Board of Directors declared the following dividends payable in 2015 and 2014:

Date Declared	Record Date	Dividend Per Share		Total Amount		Payment Date
				(in millions)
November 10, 2015	11/24/2015	$	0.540	$	293	12/8/2015
August 25, 2015	9/8/2015	0.540		300		9/22/2015
May 20, 2015	6/2/2015	0.540		303		6/16/2015
February 23, 2015	3/6/2015	0.540		303		3/20/2015
November 11, 2014	11/24/2014	0.540		307		12/5/2014
August 19, 2014	8/29/2014	0.540		308		9/12/2014
May 28, 2014	6/9/2014	0.540		307		6/20/2014
February 24, 2014	3/10/2014	0.540		309		3/21/2014

The declaration of dividends is solely at the discretion of our Board of Directors.

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated.

To simplify the overall presentation of our consolidated financial statements, we report immaterial amounts attributable to noncontrolling interests in certain of our subsidiaries as follows: (i) income attributable to noncontrolling interests in other income, net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities.

Reclassification, Policy [Policy Text Block]

We reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenues and our segment reporting. See Note 12—Segment Information for additional information. These changes had no impact on total revenues, total operating expenses or net income (loss) for any period.

Use of Estimates

Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, investments, long-term contracts, customer retention patterns, allowance for doubtful accounts, depreciation, amortization, asset valuations, internal labor capitalization rates, recoverability of assets (including deferred tax assets), impairment assessments, pension, post-retirement and other post-employment benefits, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenues, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See Note 11—Income Taxes and Note 14—Commitments and Contingencies for additional information.

For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.

For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions.

For all of these and other matters, actual results could differ materially from our estimates.

Revenue Recognition

Revenue Recognition

We recognize revenue for services when the related services are provided. Recognition of certain payments received in advance of services being provided is deferred until the service is provided. These advance payments include activation and installation charges, which we recognize as revenue over the expected customer relationship period, which ranges from eighteen months to over ten years depending on the service. We also defer costs for customer activations and installations. The deferral of customer activation and installation costs is limited to the amount of revenue deferred on advance payments. Costs in excess of advance payments are recorded as expense in the period such costs are incurred. Expected customer relationship periods are estimated using historical experience. In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term.

We offer bundle discounts to our customers who receive certain groupings of services. These bundle discounts are recognized concurrently with the associated revenue and are allocated to the various services in the bundled offering based on the estimated selling price of services included in each bundled combination.

Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with the customer arrangement is allocated to each element based on the relative estimated selling price of the separate elements. We have estimated the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned. For example, if we receive an advance payment when we sell equipment and continuing service together, we immediately recognize as revenue the amount allocated to the equipment as long as all the conditions for revenue recognition have been satisfied. The portion of the advance payment allocated to the service based upon its relative selling price is recognized ratably over the longer of the contractual period or the expected customer relationship period.

We periodically transfer optical capacity assets on our network to other telecommunications service carriers. These transactions are structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 20 years. We account for the cash consideration received on transfers of optical capacity assets and on all of the other elements deliverable under an IRU, as revenue ratably over the term of the agreement. We have not recognized revenue on any contemporaneous exchanges of our optical capacity assets for other optical capacity assets.

In connection with offering products and services provided by third-party vendors, we review the relationship between us, the vendor and the end customer to assess whether revenue should be reported on a gross or net basis. In assessing whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction, take title to the products, have risk and rewards of ownership or act as an agent or broker. Based on our agreements with DIRECTV and Verizon Wireless, we offer these services through sales agency relationships which are reported on a net basis.

We have service level commitments pursuant to contracts with certain of our customers. To the extent that such service levels are not achieved or are otherwise disputed due to performance or service issues or other service interruptions or conditions, we will estimate the amount of credits to be issued and record a reduction to revenues, with a corresponding increase in the credit reserve.

USF, Gross Receipts Taxes and Other Surcharges

USF, Gross Receipts Taxes and Other Surcharges

In determining whether to include in our revenues and expenses the taxes and surcharges collected from customers and remitted to government authorities, including USF charges, sales, use, value added and some excise taxes, we assess, among other things, whether we are the primary obligor or principal taxpayer for the taxes assessed in each jurisdiction where we do business. In jurisdictions where we determine that we are the principal taxpayer, we record the surcharges on a gross basis and include them in our revenues and costs of services and products. In jurisdictions where we determine that we are merely a collection agent for the government authority, we record the taxes on a net basis and do not include them in our revenues and costs of services and products.

Advertising Costs

Advertising Costs

Costs related to advertising are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations. Our advertising expense was $210 million, $214 million and $210 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Legal Costs

Legal Costs

In the normal course of our business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received.

Income Taxes

Income Taxes

We file a consolidated federal income tax return with our eligible subsidiaries. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods, adjustments to our liabilities for uncertain tax positions and amortization of investment tax credits. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating losses ("NOLs"), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.

We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. See Note 11—Income Taxes for additional information.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution.

Book overdrafts occur when checks have been issued but have not been presented to our controlled disbursement bank accounts for payment. Disbursement bank accounts allow us to delay funding of issued checks until the checks are presented for payment. Until the issued checks are presented for payment, the book overdrafts are included in accounts payable on our consolidated balance sheet. This activity is included in the operating activities section in our consolidated statements of cash flows.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recognized based upon the amount due from customers for the services provided or at cost for purchased and other receivables less an allowance for doubtful accounts. The allowance for doubtful accounts receivable reflects our best estimate of probable losses inherent in our receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence. We generally consider our accounts past due if they are outstanding over 30 days. Our collection process varies by the customer segment, amount of the receivable, and our evaluation of the customer's credit risk. Our past due accounts are written off against our allowance for doubtful accounts when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received. The carrying value of accounts receivable net of the allowance for doubtful accounts approximates fair value.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment acquired in connection with our acquisitions was recorded based on its estimated fair value as of its acquisition date plus the estimated value of any associated legally or contractually required retirement obligations. Purchased and constructed property, plant and equipment is recorded at cost, plus the estimated value of any associated legally or contractually required retirement obligations. Property, plant and equipment is depreciated primarily using the straight-line group method. Under the straight-line group method, assets dedicated to providing telecommunications services (which comprise the majority of our property, plant and equipment) that have similar physical characteristics, use and expected useful lives are pooled for purposes of depreciation and tracking. The equal life group procedure is used to establish each pool's average remaining useful life. Generally, under the straight-line group method, when an asset is sold or retired in the course of normal business activities, the cost is deducted from property, plant and equipment and charged to accumulated depreciation without recognition of a gain or loss. A gain or loss is recognized in our consolidated statements of operations only if a disposal is abnormal or unusual. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. Interest is capitalized during the construction phase of network and other internal-use capital projects. Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase. Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items for which cost is based on specific identification.

We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining useful life of our asset base. Our remaining useful life assessments anticipate the loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers leave the network. However, the asset is not retired until all customers no longer utilize the asset and we determine there is no alternative use for the asset.

We have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties and the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred.

We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. We determine fair values by using a combination of comparable market values and discounted cash flows, as appropriate.

Goodwill, Customer Relationships and Other Intangible Assets

Goodwill, Customer Relationships and Other Intangible Assets

Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 10 to 15 years, using either the sum-of-the-years-digits or the straight-line methods, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years, except for approximately $237 million of our capitalized software costs, which represents costs to develop an integrated billing and customer care system which is amortized using the straight-line method over a 20 year period. We amortize our other intangible assets predominantly using the sum-of-the-years-digits method over an estimated life of 4 years. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized.

Internally used software, whether purchased or developed by us, is capitalized and amortized using the straight-line method over its estimated useful life. We have capitalized certain costs associated with software such as costs of employees devoting time to the projects and external direct costs for materials and services. Costs associated with software to be used for internal purposes are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. We review the remaining economic lives of our capitalized software annually. Capitalized software is included in other intangible assets, net, in our consolidated balance sheets.

Our long-lived intangible assets, other than goodwill, with indefinite lives are assessed for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment. These assets are carried at the estimated fair value at the time of acquisition and assets not acquired in acquisitions are recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other indefinite-lived intangible assets are reduced to their estimated fair value through an impairment charge to our consolidated statements of operations.

We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment assessment is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment assessment.

We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. Goodwill is reassigned to the reporting units using a relative fair value approach. We utilize the earnings before interest, taxes, depreciation and amortization as our allocation methodology as it represents a reasonable proxy for the fair value of the operations being reorganized.

See Note 2—Goodwill, Customer Relationships and Other Intangible Assets for additional information.

Pension and Post-Retirement Benefits

Pension and Post-Retirement Benefits

We recognize the funded status of our defined benefit and post-retirement plans as an asset or a liability on our consolidated balance sheet. Each year's actuarial gains or losses are a component of our other comprehensive income (loss), which is then included in our accumulated other comprehensive loss. Pension and post-retirement benefit expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make significant assumptions (including the discount rate, expected rate of return on plan assets, mortality and health care trend rates) in computing the pension and post-retirement benefits expense and obligations. See Note 7—Employee Benefits for additional information.

Foreign Currency

Foreign Currency

Our results of operations include foreign subsidiaries, which are translated from the applicable functional currency to the United States Dollar using the average exchange rates during the reporting period, while assets and liabilities are translated at the reporting date. We include gains or losses from foreign currency remeasurement in other income, net in our consolidated statements of operations. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and we record the translation of their assets and liabilities into U.S. Dollars at the balance sheet date as translation adjustments and include them as a component of accumulated other comprehensive loss in our consolidated balance sheets.

Common Stock and Preferred Stock

Common Stock

At December 31, 2015, we had 4 million unissued shares of CenturyLink, Inc. common stock reserved for acquisitions. In addition, we had 25 million shares authorized for future issuance under our equity incentive plans.

Preferred stock

Holders of outstanding CenturyLink, Inc. preferred stock are entitled to receive cumulative dividends, receive preferential distributions equal to $25 per share plus unpaid dividends upon CenturyLink, Inc.'s liquidation and vote as a single class with the holders of common stock.

Dividends

We pay dividends out of retained earnings to the extent we have retained earnings on the date the dividend is declared. If the dividend is in excess of our retained earnings on the declaration date, then the excess is drawn from our additional paid-in capital.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

In 2015, we adopted Accounting Standards Update (“ASU”) 2015-03 “Simplifying the Presentation of Debt Issuance Costs” (ASU 2015-03) and ASU 2015-17 “Balance Sheet Classification of Deferred Taxes” (ASU 2015-17). Both ASUs are intended to simplify the presentation of financial information. ASU 2015-03 requires that debt issuance costs be presented as a reduction in the associated debt rather than as an other asset, net. ASU 2015-17 requires that deferred taxes be presented on a net basis by jurisdiction as either a net noncurrent asset or liability. The ASUs affect neither the timing of expense recognition related to the debt issuance costs nor the timing of income and expense recognition related to deferred income taxes.

We adopted both ASU 2015-03 and 2015-17 by retrospectively applying the requirements of the ASUs to our previously issued consolidated financial statements. The retrospective application had no impact on our net income (loss) or earnings (loss) per share for the years ended December 31, 2014 and 2013, but resulted in the following changes in our previously reported consolidated balance sheet as of December 31, 2014:

• A decrease of $880 million in Total current assets;

• A decrease of $164 million in Other assets, net;

• A decrease of $168 million in Long-term debt; and

• A decrease of $876 million in Deferred income taxes, net.

The adoption of the ASUs had no impact on our net cash provided by operating activities, but did change the presentation of the adjustments to reconcile net income and changes in other noncurrent assets and liabilities, net for the years ended December 31, 2014 and 2013.

In 2015, we adopted Accounting Standards Update (“ASU”) 2015-07 (“ASU 2015-07”), which retrospectively changed the disclosure requirements for certain investments that are valued based upon net asset value (“NAV”) as a practical expedient. ASU 2015-07 was issued to eliminate diversity among entities on what level in the fair value hierarchy such investments were assigned. Under ASU 2015-07, investments valued using NAV as a practical expedient are no longer assigned to a level in the fair value hierarchy rather the value associated with the investments is disclosed in a reconciliation of the total investments measured at fair value.

For us, the change in disclosure requirements as a result of the adoption of ASU 2015-07, only affects the disclosure of the fair value of our pension and post-retirement plan assets included in footnote 7, “Employee Benefits”. ASU 2015-07 results in $5.749 billion and $264 million of pension plan and post-retirement plan assets, respectively as of December 31, 2014, not being assigned to a level in the fair value hierarchy but rather disclosed as a separate line added to the fair value hierarchy table to present total plan assets. There was no change in total pension or post-retirement plan assets as of December 31, 2014 due to the adoption of ASU 2015-07.

Recent Accounting Pronouncements

Revenue Recognition

On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “new standard”). The new standard replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract fulfillment costs only up to the extent of any revenue deferred.

On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, 2018. Early adoption is permitted as of January 1, 2017. ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2017, if adopting early, otherwise in the first quarter of 2018. We have not yet decided which implementation method we will adopt. We are studying the new standard and are in the early stages of assessing the impact the new standard will have on us and our consolidated financial statements. We cannot at this time, however, provide any estimate of the impact of adopting the new standard.

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Goodwill, Customer Relationships and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill and other intangible assets

Goodwill, customer relationships and other intangible assets consisted of the following:

	As of December 31,
	2015		2014
	(Dollars in millions)
Goodwill	$	20,742	20,755
Customer relationships, less accumulated amortization of $5,648 and $4,682	3,928		4,893
Indefinite-life intangible assets	269		268
Other intangible assets subject to amortization
Capitalized software, less accumulated amortization of $1,778 and $1,533	1,248		1,338
Trade names and patents, less accumulated amortization of $20 and $196	38		41
Total other intangible assets, net	$	1,555	1,647

Schedule of estimated amortization expense for intangible assets

We estimate that total amortization expense for intangible assets for the years ending December 31, 2016 through 2020 will be as follows:

	(Dollars in millions)
2016	$	1,161
2017	1,056
2018	944
2019	827
2020	726

Schedule of goodwill attributable to segments

The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2013 through December 31, 2015.

	Business			Consumer		Wholesale		Hosting		Total
	(Dollars in millions)
As of December 31, 2013	$	6,363		10,348		3,274		689		20,674
Purchase accounting adjustments	—			—		—		(11	)	(11	)
November 1, 2014 reorganization	4,022			(70	)	(3,274	)	(678	)	—
Acquisitions	92			—		—		—		92
As of December 31, 2014	$	10,477		10,278		—		—		20,755
Purchase accounting and other adjustments	(13		)	—		—		—		(13	)
As of December 31, 2015	$	10,464		10,278		—		—		20,742

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Long-Term Debt and Credit Facilities (Tables)

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule of long-term debt including unamortized discounts and premiums

Long-term debt, including unamortized discounts and premiums and unamortized debt issuance costs, consisted of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including Qwest Corporation, Qwest Capital Funding, Inc. and Embarq Corporation and subsidiaries ("Embarq"), were as follows:

			As of December 31,
	Interest Rates	Maturities	2015			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)	2.010% - 4.250%	2019	410			725
Term loan	2.180%	2019	358			380
Subsidiaries
Qwest Corporation
Senior notes	6.125% - 8.375%	2016 - 2055	7,229			7,311
Term loan	2.180%	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	425			509
Unamortized discounts, net			(125		)	(111	)
Unamortized debt issuance costs			(179		)	(168	)
Total long-term debt			20,225			20,503
Less current maturities			(1,503		)	(550	)
Long-term debt, excluding current maturities			$	18,722		19,953

_______________________________________________________________________________

⁽¹⁾  The aggregate amount outstanding on our Credit Facility and revolving line of credit borrowings at December 31, 2015 and 2014 was $410 million and $725 million, respectively, with weighted average interest rates of 2.756% and 2.270%, respectively. These amounts change on a regular basis.

Schedule of maturities of long-term debt

Set forth below is the aggregate principal amount of our long-term debt (excluding unamortized discounts, net and unamortized debt issuance costs) maturing during the following years:

	(Dollars in millions)(1)
2016	$	1,503
2017	1,501
2018	251
2019	1,160
2020	1,032
2021 and thereafter	15,082
Total long-term debt	$	20,529

_______________________________________________________________________________

⁽¹⁾  Actual principal paid in all years may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.

Schedule of amount of gross interest expense, net of capitalized interest

Interest expense includes interest on long-term debt. The following table presents the amount of gross interest expense, net of capitalized interest:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Interest expense:
Gross interest expense	$	1,364		1,358		1,339
Capitalized interest	(52		)	(47	)	(41	)
Total interest expense	$	1,312		1,311		1,298

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Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2015

Receivables [Abstract]

Schedule of components of accounts receivable

The following table presents details of our accounts receivable balances:

	As of December 31,
	2015			2014
	(Dollars in millions)
Trade and purchased receivables	$	1,789		1,821
Earned and unbilled receivables	288			307
Other	18			22
Total accounts receivable	2,095			2,150
Less: allowance for doubtful accounts	(152		)	(162	)
Accounts receivable, less allowance	$	1,943		1,988

Schedule of details of allowance for doubtful accounts

The following table presents details of our allowance for doubtful accounts:

	Beginning Balance		Additions	Deductions		Ending Balance
	(Dollars in millions)
2015	$	162	177	(187	)	152
2014	$	155	159	(152	)	162
2013	$	158	152	(155	)	155

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Schedule of net property, plant and equipment

Net property, plant and equipment is composed of the following:

	Depreciable Lives	As of December 31,
		2015			2014
		(Dollars in millions)
Land	n/a	$	571		575
Fiber, conduit and other outside plant (1)	15-45	16,166			15,151
Central office and other network electronics (2)	3-10	14,144			13,248
Support assets (3)	3-30	7,000			6,578
Construction in progress (4)	n/a	904			1,166
Gross property, plant and equipment		38,785			36,718
Accumulated depreciation		(20,716		)	(18,285	)
Net property, plant and equipment		$	18,069		18,433

_______________________________________________________________________________

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

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

⁽³⁾  Support assets consist of buildings, data centers, computers and other administrative and support equipment.

⁽⁴⁾  Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction.

Schedule of changes to asset retirement obligations

The following table provides asset retirement obligation activity:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Balance at beginning of year	$	107		106		106
Accretion expense	7			7		7
Liabilities incurred	—			6		—
Liabilities settled	(2		)	(2	)	(4	)
Change in estimate	(21		)	(10	)	(3	)
Balance at end of year	$	91		107		106

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Severance and Leased Real Estate (Tables)

12 Months Ended

Dec. 31, 2015

Restructuring and Related Activities [Abstract]

Schedule of changes in accrued liabilities for severance expenses and leased real estate

Changes in our accrued liabilities for severance expenses and leased real estate were as follows:

	Severance			Real Estate
	(Dollars in millions)
Balance at December 31, 2013	$	17		113
Accrued to expense	87			1
Payments, net	(78		)	(16	)
Reversals and adjustments	—			(2	)
Balance at December 31, 2014	26			96
Accrued to expense	96			—
Payments, net	(108		)	(13	)
Reversals and adjustments	—			(3	)
Balance at December 31, 2015	$	14		80

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2015

Dec. 31, 2014

Employee Benefits

Schedule of estimated future benefit payments

The estimated benefit payments provided below are based on actuarial assumptions using the demographics of the employee and retiree populations and have been reduced by estimated participant contributions.

	Pension Plans		Post-Retirement Benefit Plans	Medicare Part D Subsidy Receipts
	(Dollars in millions)
Estimated future benefit payments:
2016	$	1,059	309	(7	)
2017	1,010		300	(7	)
2018	991		290	(7	)
2019	973		283	(7	)
2020	954		276	(7	)
2021 - 2025	4,433		1,256	(30	)

Schedule of actuarial assumptions used to compute net periodic benefit expense

The actuarial assumptions used to compute the net periodic benefit expense for our qualified pension, non-qualified pension and post-retirement benefit plans are based upon information available as of the beginning of the year, as presented in the following table.

	Pension Plans						Post-Retirement Benefit Plans
	2015		2014		2013		2015		2014		2013
Actuarial assumptions at beginning of year:
Discount rate	3.50% - 4.10%		4.20% - 5.10%		3.50% - 4.20%		3.80	%	4.50	%	3.60	%
Rate of compensation increase	3.25	%	3.25	%	3.25	%	N/A		N/A		N/A
Expected long-term rate of return on plan assets	7.50	%	7.50	%	7.50	%	7.50	%	6.00% - 7.50%		6.00% - 7.30%
Initial health care cost trend rate	N/A		N/A		N/A		6.00% / 6.50%		6.00% / 6.50%		6.50% / 7.00%
Ultimate health care cost trend rate	N/A		N/A		N/A		4.50	%	4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2025		2024		2022

_______________________________________________________________________________

N/A-Not applicable

Schedule of actuarial assumptions used to compute the funded status for the plans

The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2015 and 2014 and are as follows:

	Pension Plans				Post-Retirement Benefit Plans
	December 31,				December 31,
	2015		2014		2015		2014
Actuarial assumptions at end of year:
Discount rate	3.50% - 4.50%		3.50% - 4.10%		4.15	%	3.80	%
Rate of compensation increase	3.25	%	3.25	%	N/A		N/A
Initial health care cost trend rate	N/A		N/A		5.00% / 5.25%		6.00% / 6.50%
Ultimate health care cost trend rate	N/A		N/A		4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		2025		2024

_______________________________________________________________________________

N/A-Not applicable

Schedule of change in plan assets

The following tables summarize the change in the fair value of plan assets for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	12,571		12,346		12,321
Return on plan assets	(161		)	1,373		810
Employer contributions	100			157		146
Settlements	—			(460	)	—
Benefits paid from plan assets	(1,438		)	(845	)	(931	)
Fair value of plan assets at end of year	$	11,072		12,571		12,346

Schedule of gross notional exposure of the derivative instruments directly held by the plans

The gross notional exposure of the derivative instruments directly held by the plans is shown below. The notional amount of the derivatives corresponds to market exposure but does not represent an actual cash investment.

	Gross Notional Exposure
	Pension Plans			Post-Retirement Benefit Plans
	Years Ended December 31,
	2015		2014	2015	2014
	(Dollars in millions)
Derivative instruments:
Exchange-traded U.S. equity futures	$	79	134	—	7
Exchange-traded Treasury and other interest rate futures	1,767		2,451	—	—
Interest rate swaps	550		579	—	—
Credit default swaps	189		382	—	—
Foreign exchange forwards	992		1,195	—	13
Options	285		529	—	—

Schedule of the unfunded status of the benefit plans

The following table presents the unfunded status of the pensions and post-retirement benefit plans:

	Pension Plans					Post-Retirement Benefit Plans
	Years Ended December 31,					Years Ended December 31,
	2015			2014		2015		2014
	(Dollars in millions)
Benefit obligation	$	(13,349	)	(15,042	)	(3,567	)	(3,830	)
Fair value of plan assets	11,072			12,571		193		353
Unfunded status	(2,277		)	(2,471	)	(3,374	)	(3,477	)
Current portion of unfunded status	$	(5	)	(6	)	(135	)	(134	)
Non-current portion of unfunded status	$	(2,272	)	(2,465	)	(3,239	)	(3,343	)

Schedule of items not recognized as a component of net periodic benefits expense

The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss:

	As of and for the Years Ended December 31,
	2014			Recognition of Net Periodic Benefits Expense		Deferrals		Net Change in AOCL		2015
	(Dollars in millions)
Accumulated other comprehensive loss:
Pension plans:
Net actuarial (loss) gain	$	(2,760	)	161		(258	)	(97	)	(2,857	)
Prior service (cost) benefit	(32		)	5		99		104		72
Deferred income tax benefit (expense)	1,072			(63	)	61		(2	)	1,070
Total pension plans	(1,720		)	103		(98	)	5		(1,715	)
Post-retirement benefit plans:
Net actuarial (loss) gain	(277		)	—		130		130		(147	)
Prior service (cost) benefit	(166		)	19		—		19		(147	)
Deferred income tax benefit (expense)	171			(7	)	(50	)	(57	)	114
Total post-retirement benefit plans	(272		)	12		80		92		(180	)
Total accumulated other comprehensive loss	$	(1,992	)	115		(18	)	97		(1,895	)

Schedule of estimated items to be recognized in 2013 as a component of net periodic benefit expense

The following table presents estimated items to be recognized in 2016 as a component of net periodic benefit expense of the pension, non-qualified pension and post-retirement benefit plans:

	Pension Plans			Post-Retirement Plans
	(Dollars in millions)
Estimated recognition of net periodic benefit (cost)/income in 2016:
Net actuarial loss	$	(168	)	—
Prior service (cost)/income	8			(20	)
Deferred income tax benefit	61			8
Estimated net periodic benefit expense to be recorded in 2016 as a component of other comprehensive income (loss)	$	(99	)	(12	)

Pension Plan

Employee Benefits

Schedule of components of net periodic pension income and post-retirement benefit expense

Net periodic (income) expense for our qualified and non-qualified pension plans includes the following components:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Service cost	$	83		77		91
Interest cost	568			602		544
Expected return on plan assets	(898		)	(891	)	(896	)
Settlements	—			63		—
Recognition of prior service cost	5			5		5
Recognition of actuarial loss	161			22		84
Net periodic pension benefit income	$	(81	)	(122	)	(172	)

Schedule of change in benefit obligation

The following tables summarize the change in the benefit obligations for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	15,042		13,401		14,881
Service cost	83			77		91
Interest cost	568			602		544
Plan amendments	(100		)	4		—
Actuarial loss (gain)	(800		)	2,269		(1,179	)
Settlements	—			(460	)	—
Benefits paid by company	(6		)	(6	)	(5	)
Benefits paid from plan assets	(1,438		)	(845	)	(931	)
Benefit obligation at end of year	$	13,349		15,042		13,401

Schedule of change in plan assets

	Post-Retirement Benefit Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	353		535		626
Return on plan assets	3			37		45
Benefits paid from plan assets	(163		)	(219	)	(136	)
Fair value of plan assets at end of year	$	193		353		535

Schedule of fair value of the plans' assets by asset category

The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2015. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivables, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2015
	Level 1		Level 2		Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	841	1,045		—	$	1,886
High yield bonds (b)	—		544		13	557
Emerging market bonds (c)	208		232		1	441
Convertible bonds (d)	—		2		—	2
U.S. stocks (f)	1,201		—		—	1,201
Non-U.S. stocks (g)	1,127		1		—	1,128
Multi-asset strategies (m)	376		—		—	376
Derivatives (n)	2		(6	)	—	(4		)
Cash equivalents and short-term investments (o)	—		192		—	192
Total investments, excluding investments valued at NAV	$	3,755	2,010		14	5,779
Investments valued at NAV						5,293
Total pension plan assets						$	11,072

The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2014. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivable, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2014
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	1,068	1,278	—	$	2,346
High yield bonds (b)	—		647	7	654
Emerging market bonds (c)	208		407	—	615
Convertible bonds (d)	—		4	—	4
U.S. stocks (f)	1,389		1	—	1,390
Non-U.S. stocks (g)	1,169		1	—	1,170
Derivatives (n)	2		15	—	17
Cash equivalents and short-term investments (o)	—		626	—	626
Total investments, excluding investments valued at NAV	$	3,836	2,979	7	6,822
Investments valued at NAV					5,749
Total pension plan assets					$	12,571

Summary of changes in fair value of defined benefit plans' Level 3 assets

The table below presents a rollforward of the pension plan assets valued using Level 3 inputs:

	Pension Plan Assets Valued Using Level 3 Inputs
	High Yield Bonds			Emerging Market Bonds	Total
	(Dollars in millions)
Balance at December 31, 2013	$	—		—	—
Net transfers	6			—	6
Acquisitions	1			—	1
Dispositions	(3		)	—	(3	)
Actual return on plan assets:
Gains relating to assets sold during the year	4			—	4
(Losses) gains relating to assets still held at year-end	(1		)	—	(1	)
Balance at December 31, 2014	7			—	7
Net transfers	4			1	5
Acquisitions	4			—	4
Dispositions	(2		)	—	(2	)
Actual return on plan assets:
Gains relating to assets sold during the year	—			—	—
(Losses) gains relating to assets still held at year-end	—			—	—
Balance at December 31, 2015	$	13		1	14

Post-Retirement Benefit Plans

Employee Benefits

Schedule of effects of a 100 basis point change in assumed health care cost rates

A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2015:

	100 Basis Points Change
	Increase		(Decrease)
	(Dollars in millions)
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (consolidated statement of operations)	$	3	(3	)
Effect on benefit obligation (consolidated balance sheet)	73		(68	)

Schedule of components of net periodic pension income and post-retirement benefit expense

Net periodic expense (income) for our post-retirement benefit plans includes the following components:

	Post-Retirement Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Service cost	$	24		22		24
Interest cost	140			159		140
Expected return on plan assets	(21		)	(33	)	(39	)
Recognition of prior service cost	19			20		—
Recognition of actuarial loss	—			—		4
Net periodic post-retirement benefit expense	$	162		168		129

Schedule of change in benefit obligation

	Post-Retirement Benefit Plans Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	3,830		3,688		4,075
Service cost	24			22		24
Interest cost	140			159		140
Participant contributions	57			69		96
Plan amendments	—			23		141
Direct subsidy receipts	8			9		13
Actuarial loss (gain)	(148		)	245		(399	)
Benefits paid by company	(181		)	(166	)	(266	)
Benefits paid from plan assets	(163		)	(219	)	(136	)
Benefit obligation at end of year	$	3,567		3,830		3,688

Schedule of fair value of the plans' assets by asset category

	Fair Value of Post-Retirement Plan Assets at December 31, 2015
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	2	1	—	$	3
High yield bonds (b)	—		1	—	1
U.S. stocks (f)	16		—	—	16
Non-U.S. stocks (g)	12		—	—	12
Emerging market stocks (h)	4		—	—	4
Cash equivalents and short-term investments (o)	—		4	—	4
Total investments, excluding investments valued at NAV	$	34	6	—	40
Investments valued at NAV					153
Total post-retirement plan assets					$	193

	Fair Value of Post-Retirement Plan Assets at December 31, 2014
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	5	1	—	$	6
High yield bonds (b)	—		1	—	1
U.S. stocks (f)	35		—	—	35
Non-U.S. stocks (g)	33		—	—	33
Emerging market stocks (h)	6		—	—	6
Cash equivalents and short-term investments (o)	—		8	—	8
Total investments, excluding investments valued at NAV	$	79	10	—	89
Investments valued at NAV					264
Total post-retirement plan assets					$	353

Pension, Supplemental And Other Postretirement Benefit Plans [Member]

Employee Benefits

Schedule of fair value of the plans' assets by asset category

The table below presents the fair value of plan assets valued at NAV by category for our pension and post-retirement plans at December 31, 2015 and 2014. See Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding the 2015 adoption of ASU 2015-07.

	Fair Value of Plan Assets Valued at NAV
	Pension Plans at December 31,			Post-Retirement Benefit Plans at December 31,
	2015		2014	2015	2014
	(Dollars in millions)
Investment grade bonds (a)	$	115	148	35	71
High yield bonds (b)	512		860	1	14
Emerging market bonds (c)	9		27	—	—
Convertible bonds (d)	—		10	—	—
Diversified strategies (e)	516		718	54	89
U.S. stocks (f)	70		86	—	—
Non-U.S. stocks (g)	289		384	—	—
Emerging market stocks (h)	64		102	—	—
Private equity (i)	526		673	21	28
Private debt (j)	371		394	2	3
Market neutral hedge funds (k)	825		1,026	17	25
Directional hedge funds (k)	594		558	1	1
Real estate (l)	968		699	20	28
Multi-asset strategies (m)	386		—	—	—
Cash equivalents and short-term investments (o)	48		64	2	5
Total investments valued at NAV	$	5,293	5,749	153	264

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Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock option awards activity

The following table summarizes activity involving stock option awards for the year ended December 31, 2015:

	Number of Options		Weighted- Average Exercise Price
	(in thousands)
Outstanding and Exercisable at December 31, 2014	4,106		$	37.99
Exercised	(335	)	26.00
Forfeited/Expired	(246	)	30.33
Outstanding and Exercisable at December 31, 2015	3,525		39.67

Restricted stock and restricted stock unit awards activity

The following table summarizes activity involving restricted stock and restricted stock unit awards for the year ended December 31, 2015:

	Number of Shares		Weighted- Average Grant Date Fair Value
	(in thousands)
Non-vested at December 31, 2014	4,400		$	36.59
Granted	2,904		31.83
Vested	(1,724	)	35.71
Forfeited	(678	)	38.95
Non-vested at December 31, 2015	4,902		33.86

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Earnings (Loss) Per Common Share (Tables)

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per common share

Basic and diluted earnings (loss) per common share for the years ended December 31, 2015, 2014 and 2013 were calculated as follows:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions, except per share amounts, shares in thousands)
Income (Loss) (Numerator):
Net income (loss)	$	878		772		(239	)
Earnings applicable to non-vested restricted stock	—			—		—
Net income (loss) applicable to common stock for computing basic earnings (loss) per common share	878			772		(239	)
Net income (loss) as adjusted for purposes of computing diluted earnings (loss) per common share	$	878		772		(239	)
Shares (Denominator):
Weighted average number of shares:
Outstanding during period	559,260			572,748		604,404
Non-vested restricted stock	(4,982		)	(4,313	)	(3,512	)
Weighted average shares outstanding for computing basic earnings (loss) per common share	554,278			568,435		600,892
Incremental common shares attributable to dilutive securities:
Shares issuable under convertible securities	10			10		—
Shares issuable under incentive compensation plans	805			1,294		—
Number of shares as adjusted for purposes of computing diluted earnings (loss) per common share	555,093			569,739		600,892
Basic earnings (loss) per common share	$	1.58		1.36		(0.40	)
Diluted earnings (loss) per common share	$	1.58		1.36		(0.40	)

Our calculation of diluted

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Fair Value Disclosure (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Schedule of the three input levels in the hierarchy of fair value measurements

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

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.

Schedule of carrying amounts and estimated fair values of long-term debt, excluding capital lease obligations, and input levels to determine fair values

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

		As of December 31, 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	$	19,800	19,473	19,994	21,255

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of components of provision for income tax

	Years Ended December 31,
	2015		2014		2013
	(Dollars in millions)
Income tax expense was as follows:
Federal
Current	$	28	18		1
Deferred	329		305		403
State
Current	40		26		62
Deferred	21		(14	)	(8	)
Foreign
Current	16		3		9
Deferred	4		—		(4	)
Total income tax expense	$	438	338		463

Schedule of income tax expense allocation

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Income tax expense was allocated as follows:
Income tax expense in the consolidated statements of operations:
Attributable to income	$	438		338		463
Stockholders' equity:
Compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes	(5		)	(5	)	(14	)
Tax effect of the change in accumulated other comprehensive loss	59			(744	)	554

Schedule of reconciliation of the statutory federal income tax rate to effective income tax rate

The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate:

	Years Ended December 31,
	2015		2014		2013
	(Percentage of pre-tax income)
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal income tax benefit	2.6	%	2.7	%	2.8	%
Impairment of goodwill	—	%	—	%	188.5	%
Change in liability for unrecognized tax position	0.4	%	0.4	%	(24.5	)%
Foreign income taxes	0.7	%	0.4	%	2.7	%
Nondeductible accounting adjustment for life insurance	—	%	—	%	3.1	%
Affiliate debt rationalization	(2.6	)%	—	%	—	%
Release state valuation allowance	—	%	—	%	(2.3	)%
Research and development credits	(2.1	)%	—	%	—	%
Loss on worthless investment in foreign subsidiary	—	%	(5.4	)%	—	%
Other, net	(0.7	)%	(2.6	)%	1.4	%
Effective income tax rate	33.3	%	30.5	%	206.7	%

Schedule of components of deferred tax assets and deferred tax liabilities

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:

	As of December 31,
	2015			2014
	(Dollars in millions)
Deferred tax assets
Post-retirement and pension benefit costs	$	2,154		2,276
Net operating loss carryforwards	487			1,091
Other employee benefits	182			214
Other	458			602
Gross deferred tax assets	3,281			4,183
Less valuation allowance	(380		)	(409	)
Net deferred tax assets	2,901			3,774
Deferred tax liabilities
Property, plant and equipment, primarily due to depreciation differences	(3,841		)	(3,869	)
Goodwill and other intangible assets	(2,588		)	(2,908	)
Other	(38		)	(147	)
Gross deferred tax liabilities	(6,467		)	(6,924	)
Net deferred tax liability	$	(3,566	)	(3,150	)

Summary of the reconciliation of the change in gross unrecognized tax benefits

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2015 and 2014 is as follows:

	2015			2014
	(Dollars in millions)
Unrecognized tax benefits at beginning of year	$	17		14
Increase in tax positions taken in the current year	1			—
Increase in tax positions taken in the prior year	7			9
Decrease due to the reversal of tax positions taken in a prior year	(9		)	(2	)
Decrease from the lapse of statute of limitations	(1		)	(1	)
Settlements	—			(3	)
Unrecognized tax benefits at end of year	$	15		17

Schedule of open income tax years by major jurisdiction

Our open income tax years by major jurisdiction are as follows at December 31, 2015:

Jurisdiction	Open Tax Years
Federal	2012—current
State
Arizona	2010—current
Florida	2010—current
Other states	2011—current

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Schedule of segment information

The following table summarizes our segment results for 2015, 2014 and 2013 based on the segment categorization we were operating under at December 31, 2015.

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment revenues	$	16,668		17,028		17,095
Total segment expenses	8,459			8,509		8,167
Total segment income	$	8,209		8,519		8,928
Total margin percentage	49		%	50	%	52	%
Business segment:
Revenues	$	10,647		11,034		11,091
Expenses	6,034			6,089		5,808
Income	$	4,613		4,945		5,283
Margin percentage	43		%	45	%	48	%
Consumer segment:
Revenues	$	6,021		5,994		6,004
Expenses	2,425			2,420		2,359
Income	$	3,596		3,574		3,645
Margin percentage	60		%	60	%	61	%

Schedule of operating revenues by products and services

Our operating revenues for our products and services consisted of the following categories for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015		2014	2013
	(Dollars in millions)
Strategic services
Business high-bandwidth data services (1)	$	2,816	2,579	2,230
Business low-bandwidth data services (2)	2,052		2,345	2,577
Business hosting services (3)	1,281		1,316	1,259
Other business strategic services (4)	162		76	60
Consumer high-speed Internet services (5)	2,611		2,469	2,358
Other consumer strategic services (6)	421		381	292
Total strategic services revenues	9,343		9,166	8,776
Legacy services
Business legacy voice services (7)	2,590		2,780	2,916
Other business legacy services (8)	1,175		1,252	1,398
Consumer legacy voice services (7)	2,676		2,864	3,101
Other consumer legacy services (9)	311		276	248
Total legacy services revenues	6,752		7,172	7,663
Data integration
Business data integration	571		686	651
Consumer data integration	2		4	5
Total data integration revenues	573		690	656
Other revenues
High-cost support revenue (10)	732		528	547
Other revenue (11)	500		475	453
Total other revenues	1,232		1,003	1,000
Total revenues	$	17,900	18,031	18,095

Schedule of reconciliation from segment income to consolidated net income

The following table reconciles segment income to net income for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
	2015			2014		2013
	(Dollars in millions)
Total segment income	$	8,209		8,519		8,928
Other operating revenues	1,232			1,003		1,000
Depreciation and amortization	(4,189		)	(4,428	)	(4,541	)
Impairment of goodwill	—			—		(1,092	)
Other unassigned operating expenses	(2,647		)	(2,684	)	(2,842	)
Other expenses, net	(1,289		)	(1,300	)	(1,229	)
Income tax expense	(438		)	(338	)	(463	)
Net income (loss)	$	878		772		(239	)

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Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial information

	First Quarter		Second Quarter	Third Quarter	Fourth Quarter	Total
	(Dollars in millions, except per share amounts)
2015
Operating revenues	$	4,451	4,419	4,554	4,476	17,900
Operating income	649		549	656	751	2,605
Net income	192		143	205	338	878
Basic earnings per common share	0.34		0.26	0.37	0.62	1.58
Diluted earnings per common share	0.34		0.26	0.37	0.62	1.58
2014
Operating revenues	$	4,538	4,541	4,514	4,438	18,031
Operating income	653		655	619	483	2,410
Net income	203		193	188	188	772
Basic earnings per common share	0.35		0.34	0.33	0.33	1.36
Diluted earnings per common share	0.35		0.34	0.33	0.33	1.36

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Schedule of capital lease activity

The tables below summarize our capital lease activity:

	Years Ended December 31,
	2015		2014	2013
	(Dollars in millions)
Assets acquired through capital leases	$	17	37	12
Depreciation expense	96		126	136
Cash payments towards capital leases	89		118	119

	As of December 31,
	2015		2014
	(Dollars in millions)
Assets included in property, plant and equipment	$	722	850
Accumulated depreciation	352		393

Schedule of future annual minimum payments under capital lease arrangements

The future annual minimum payments under capital lease arrangements as of December 31, 2015 were as follows:

	Future Minimum Payments
	(Dollars in millions)
Capital lease obligations:
2016	$	85
2017	78
2018	76
2019	62
2020	47
2021 and thereafter	223
Total minimum payments	571
Less: amount representing interest and executory costs	(153		)
Present value of minimum payments	418
Less: current portion	(56		)
Long-term portion	$	362

Schedule of future rental commitments for operating leases

At December 31, 2015, our future rental commitments for operating leases were as follows:

	Future Minimum Payments
	(Dollars in millions)
2016	$	301
2017	289
2018	268
2019	235
2020	209
2021 and thereafter	1,075
Total future minimum payments (1)	$	2,377

_______________________________________________________________________________

⁽¹⁾  Minimum payments have not been reduced by minimum sublease rentals of $87 million due in the future under non-cancelable subleases.

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Other Financial Information (Tables)

12 Months Ended

Dec. 31, 2015

Additional Financial Information Disclosure [Abstract]

Schedule of components of other current assets

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

	As of December 31,
	2015		2014
	(Dollars in millions)
Prepaid expenses	$	238	260
Materials, supplies and inventory	144		132
Assets held for sale	8		14
Deferred activation and installation charges	105		103
Other	86		71
Total other current assets	$	581	580

Schedule of current liabilities including accounts payable and other current liabiities

Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as follows:

	As of December 31
	2015		2014
	(Dollars in millions)
Accounts payable	$	968	1,226
Other current liabilities:
Accrued rent	$	32	34
Legal reserves	20		27
Other	168		149
Total other current liabilities	$	220	210

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Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2015

Dec. 31, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Summary of the entity's accumulated other comprehensive income (loss) by component

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2015:

	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	(98		)	80		(14	)	(32	)
Amounts reclassified from accumulated other comprehensive income	103			12		—		115
Net current-period other comprehensive income (loss)	5			92		(14	)	83
Balance at December 31, 2015	$	(1,715	)	(180	)	(39	)	(1,934	)

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2014:

	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 (loss) before reclassifications	(1,107		)	(162	)	(15	)	(1,284	)
Amounts reclassified from accumulated other comprehensive income	56			12		1		69
Net current-period other comprehensive income (loss)	(1,051		)	(150	)	(14	)	(1,215	)
Balance at December 31, 2014	$	(1,720	)	(272	)	(25	)	(2,017	)

Schedule of reclassifications out of accumulated other comprehensive income (loss) by component

The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2015:

Year Ended December 31, 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	$	161		See Note 7—Employee Benefits
Prior service cost	24			See Note 7—Employee Benefits
Total before tax	185
Income tax expense (benefit)	(70		)	Income tax expense
Net of tax	$	115

The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2014:

Year Ended December 31, 2014	Decrease (Increase) in Net Loss			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	$	85		See Note 7—Employee Benefits
Prior service cost	25			See Note 7—Employee Benefits
Total before tax	110
Income tax expense (benefit)	(42		)	Income tax expense
Insignificant items	1
Net of tax	$	69

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Dividends (Tables)

12 Months Ended

Dec. 31, 2015

Dividends, Common Stock [Abstract]

Schedule of dividends declared

Our Board of Directors declared the following dividends payable in 2015 and 2014:

Date Declared	Record Date	Dividend Per Share		Total Amount		Payment Date
				(in millions)
November 10, 2015	11/24/2015	$	0.540	$	293	12/8/2015
August 25, 2015	9/8/2015	0.540		300		9/22/2015
May 20, 2015	6/2/2015	0.540		303		6/16/2015
February 23, 2015	3/6/2015	0.540		303		3/20/2015
November 11, 2014	11/24/2014	0.540		307		12/5/2014
August 19, 2014	8/29/2014	0.540		308		9/12/2014
May 28, 2014	6/9/2014	0.540		307		6/20/2014
February 24, 2014	3/10/2014	0.540		309		3/21/2014

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Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Millions		3 Months Ended		12 Months Ended
	Aug. 27, 2015 USD ($)	Dec. 31, 2015 USD ($) state	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) state
Operating revenues by products and services
Incremental increase in other operating revenues		$ 57	$ 158
CAF Phase 2 Support [Member]
Operating revenues by products and services
Federal support, total amount per agreement	$ 500
Contract or agreement term	6
Number of rural households and businesses	1,200,000
Number of states in which service is provided (states) | state		33		33
Incremental increase in other operating revenues				$ 215

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Basis of Presentation and Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Change in accounting estimates
Depreciation									$ 2,836	$ 2,958	$ 2,952
Net income (loss)	$ 338	$ 205	$ 143	$ 192	$ 188	$ 188	$ 193	$ 203	878	772	$ (239)
Service life | Switch, circuit and cable network equipment
Change in accounting estimates
Depreciation										78
Net income (loss)										$ 48
Earnings per share, basic and diluted										$ 0.08
Service life | Network assets, future abandonment
Change in accounting estimates
Depreciation									48	$ 12
Net income (loss)									$ 32	$ 7
Earnings per share, basic and diluted									$ 0.06	$ 0.01

XML

Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue Recognition
Term of indefeasible rights of use (in years)	20 years
Advertising Costs
Advertising expense	$ 210	$ 214	$ 210
Accounts Receivable and Allowance for Doubtful Accounts
Period of accounts past due	30 days
Activation and installation charges | Minimum
Revenue Recognition
Customer relationship period for revenue recognition (from eighteen months to over ten years)	18 months
Activation and installation charges | Maximum
Revenue Recognition
Customer relationship period for revenue recognition (from eighteen months to over ten years)	10 years

XML

Basis of Presentation and Summary of Significant Accounting Policies (Details 4) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($)
Customer relationships | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	10 years
Customer relationships | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	15 years
Capitalized software
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	7 years
Integrated billing and customer care system
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	20 years
Finite-lived intangible assets, gross	$ 237
Other
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	4 years

XML

Basis of Presentation and Summary of Significant Accounting Policies (Details 5) shares in Millions	Dec. 31, 2015 $ / shares shares
Common Stock
Class of Stock [Line Items]
Unissued shares of CenturyLink common stock	4
Common Stock | Stock compensation plan
Class of Stock [Line Items]
Unissued shares of CenturyLink common stock	25
Preferred Stock
Class of Stock [Line Items]
Preferential preferred stock distribution (in dollars per share) | $ / shares	$ 25

XML

Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Sumnary of Significant Accounting Policies (Details 6) - USD ($) $ / shares in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
New Accounting Pronouncement, Early Adoption [Line Items]
Net income (loss)	$ 338,000,000	$ 205,000,000	$ 143,000,000	$ 192,000,000	$ 188,000,000	$ 188,000,000	$ 193,000,000	$ 203,000,000	$ 878,000,000	$ 772,000,000	$ (239,000,000)
Total current assets	(2,650,000,000)				(2,696,000,000)				(2,650,000,000)	(2,696,000,000)
Other, net	(660,000,000)				(679,000,000)				(660,000,000)	(679,000,000)
Long-term debt	(18,722,000,000)				(19,953,000,000)				(18,722,000,000)	(19,953,000,000)
Deferred income taxes, net	(3,569,000,000)				(3,154,000,000)				(3,569,000,000)	(3,154,000,000)
Pension Plan
New Accounting Pronouncement, Early Adoption [Line Items]
Fair value of plan assets valued at NAV	5,293,000,000				5,749,000,000				5,293,000,000	5,749,000,000
Fair value of plan assets	11,072,000,000				12,571,000,000				11,072,000,000	12,571,000,000	12,346,000,000	$ 12,321,000,000
Post-Retirement Benefit Plans
New Accounting Pronouncement, Early Adoption [Line Items]
Fair value of plan assets valued at NAV	153,000,000				264,000,000				153,000,000	264,000,000
Fair value of plan assets	$ 193,000,000				353,000,000				$ 193,000,000	353,000,000	535,000,000	$ 626,000,000
Restatement adjustment | New Accounting Pronouncement, Early Adoption, Effect
New Accounting Pronouncement, Early Adoption [Line Items]
Net income (loss)										$ 0	$ 0
Earnings per share, basic and diluted										$ 0	$ 0
Total current assets					880,000,000					$ 880,000,000
Other, net					164,000,000					164,000,000
Long-term debt					168,000,000					168,000,000
Deferred income taxes, net					876,000,000					876,000,000
Net cash provided by operating activities										0	$ 0
Restatement adjustment | New Accounting Pronouncement, Early Adoption, Effect | Pension Plan
New Accounting Pronouncement, Early Adoption [Line Items]
Fair value of plan assets					0					0
Restatement adjustment | New Accounting Pronouncement, Early Adoption, Effect | Post-Retirement Benefit Plans
New Accounting Pronouncement, Early Adoption [Line Items]
Fair value of plan assets					$ 0					$ 0

XML

Goodwill, Customer Relationships and Other Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, net	$ 1,555	$ 1,647
Goodwill	20,742	20,755	$ 20,674
Indefinite-life intangible assets	269	268
Amortization expense for intangible assets	1,353	1,470	$ 1,589
Gross carrying amount of intangible assets	33,671
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, net	3,928	4,893
Accumulated amortization	5,648	4,683
Capitalized software
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, net	1,248	1,338
Accumulated amortization	1,778	1,533
Tradenames and patents
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, net	38	41
Accumulated amortization	$ 20	$ 196

XML

Goodwill, Customer Relationships and Other Intangible Assets (Details 2) $ in Millions	Dec. 31, 2015 USD ($)
Expected amortization expense
2016	$ 1,161
2017	1,056
2018	944
2019	827
2020	$ 726

XML

Goodwill, Customer Relationships and Other Intangible Assets Goodwill, Customer Relationships and Other Intangible Assets (Details 3) $ in Millions				12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014	Sep. 30, 2013	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Goodwill [Line Items]
Percentage of reasonable implied control premium (percent)				24.60%
Number of reporting units	3	4	1
Impairment of goodwill				$ 0	$ 0	$ 1,092
Consumer and Wholesale reportable units
Goodwill [Line Items]
Discount rate (percent)	6.00%
Fair value inputs after tax cost of debt rate (percent)	3.30%
Fair value inputs cost of equity rate (percent)	7.60%
Business reporting unit
Goodwill [Line Items]
Discount rate (percent)	7.00%
Fair value inputs after tax cost of debt rate (percent)	3.30%
Fair value inputs cost of equity rate (percent)	8.60%

XML

Goodwill, Customer Relationships and Other Intangible Assets (Details 4) - USD ($) $ in Millions		12 Months Ended
	Nov. 01, 2014	Dec. 31, 2015	Dec. 31, 2014
Goodwill [rollforward]
Goodwill at the beginning of the period		$ 20,755	$ 20,674
Purchase accounting adjustments		(13)	(11)
November 1, 2014 reorganization	$ 0
Acquisitions			92
Goodwill at the end of the period		20,742	20,755
Business
Goodwill [rollforward]
Goodwill at the beginning of the period		10,477	6,363
Purchase accounting adjustments		(13)	0
November 1, 2014 reorganization	4,022
Acquisitions			92
Goodwill at the end of the period		10,464	10,477
Consumer
Goodwill [rollforward]
Goodwill at the beginning of the period		10,278	10,348
Purchase accounting adjustments		0	0
November 1, 2014 reorganization	(70)
Acquisitions			0
Goodwill at the end of the period		10,278	10,278
Wholesale
Goodwill [rollforward]
Goodwill at the beginning of the period		0	3,274
Purchase accounting adjustments		0	0
November 1, 2014 reorganization	(3,274)
Acquisitions			0
Goodwill at the end of the period		0	0
Hosting
Goodwill [rollforward]
Goodwill at the beginning of the period		0	689
Purchase accounting adjustments		0	(11)
November 1, 2014 reorganization	$ (678)
Acquisitions			0
Goodwill at the end of the period		$ 0	$ 0

XML

Goodwill, Customer Relationships and Other Intangible Assets Goodwill, Customer Relationships and Other Intangible Assets (Details 5) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Goodwill acquired during period		$ 92
Goodwill purchase accounting adjustment	$ (13)	$ (11)
Various Business Acquisitions [Member]
Business Acquisition [Line Items]
Number of businesses acquired		2
Payments to acquire businesses, net of cash acquired		$ 95
Cash acquired from business acquisition		2
Goodwill acquired during period		$ 92
Goodwill purchase accounting adjustment	(14)
Finite-Lived intangible assets purchase accounting adjustment	13
Deferred tax assets purchase accounting adjustment	$ (1)

XML

Long-Term Debt and Credit Facilities (Details) - USD ($) $ in Millions		Dec. 31, 2015	Dec. 31, 2014
Long-term Debt and Credit Facilities
Capital lease and other obligations		$ 425	$ 509
Total long-term debt	[1]	20,529
Unamortized premiums, discounts and other, net		125	111
Unamortized Debt Issuance Expense		(179)	(168)
Total long-term debt		20,225	20,503
Current maturities of long-term debt		(1,503)	(550)
Long-term debt, excluding current maturities		18,722	19,953
CenturyLink, Inc. | Senior notes
Long-term Debt and Credit Facilities
Total long-term debt		7,975	7,825
CenturyLink, Inc. | Credit facility
Long-term Debt and Credit Facilities
Total long-term debt		$ 410	$ 725
Weighted average interest rate (as a percent)		2.756%	2.27%
CenturyLink, Inc. | Medium-term notes
Long-term Debt and Credit Facilities
Total long-term debt		$ 358	$ 380
Term loan interest rate at period end (as a percent)		2.18%
Qwest Corporation | Senior notes
Long-term Debt and Credit Facilities
Total long-term debt		$ 7,229	7,311
Qwest Corporation | Medium-term notes
Long-term Debt and Credit Facilities
Total long-term debt		$ 100	0
Term loan interest rate at period end (as a percent)		2.18%
Qwest Capital Funding, Inc | Senior notes
Long-term Debt and Credit Facilities
Total long-term debt		$ 981	981
Embarq Corporation | Senior notes
Long-term Debt and Credit Facilities
Total long-term debt		2,669	2,669
Embarq Corporation | First mortgage bonds
Long-term Debt and Credit Facilities
Total long-term debt		232	232
Embarq Corporation | Other
Long-term Debt and Credit Facilities
Total long-term debt		$ 150	$ 150
Interest rate, stated percentage (as a percent)		9.00%
Minimum | CenturyLink, Inc. | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		5.15%
Minimum | CenturyLink, Inc. | Credit facility
Long-term Debt and Credit Facilities
Credit facility interest rate at period end (as a percent)		2.01%
Minimum | Qwest Corporation | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		6.125%
Minimum | Qwest Capital Funding, Inc | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		6.50%
Minimum | Embarq Corporation | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		7.082%
Minimum | Embarq Corporation | First mortgage bonds
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		7.125%
Maximum | CenturyLink, Inc. | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		7.65%
Maximum | CenturyLink, Inc. | Credit facility
Long-term Debt and Credit Facilities
Credit facility interest rate at period end (as a percent)		4.25%
Maximum | Qwest Corporation | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		8.375%
Maximum | Qwest Capital Funding, Inc | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		7.75%
Maximum | Embarq Corporation | Senior notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		7.995%
Maximum | Embarq Corporation | First mortgage bonds
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)		8.77%

[1] Actual principal paid in all years may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.

XML

Long-Term Debt and Credit Facilities (Details 2) $ in Millions								1 Months Ended	12 Months Ended
		Jan. 31, 2016 USD ($)	Sep. 21, 2015 USD ($)	Mar. 19, 2015 USD ($)	Feb. 20, 2015 USD ($)	Dec. 03, 2014 USD ($) lender	Sep. 29, 2014 USD ($)	Jan. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Oct. 13, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 15, 2015 USD ($)	Feb. 15, 2015 USD ($)	Oct. 01, 2014 USD ($)	Apr. 01, 2014 USD ($)	Apr. 30, 2011 USD ($)
Long-term Debt and Credit Facilities
Total long-term debt	[1]								$ 20,529.0
Interest expense:
Gross interest expense									1,364.0	$ 1,358.0	$ 1,339.0
Capitalized interest									(52.0)	(47.0)	(41.0)
Total interest expense									1,312.0	1,311.0	1,298.0
Repayments of long-term debt									$ 966.0	800.0	$ 2,010.0
Qwest Corporation | Revolving credit facility
Interest expense:
Debt to EBITDA ratio to be maintained under the Credit Facility									2.85
CenturyLink, Inc. | Revolving credit facility
Interest expense:
Debt to EBITDA ratio to be maintained under the Credit Facility									4.0
Senior notes | Qwest Corporation
Long-term Debt and Credit Facilities
Total long-term debt									$ 7,229.0	7,311.0
Senior notes | Qwest Corporation | Minimum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									6.125%
Senior notes | Qwest Corporation | Maximum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									8.375%
Senior notes | Qwest Corporation | 6.625% Notes due 2055
Long-term Debt and Credit Facilities
Aggregate principal amount of debt issuance			$ 400.0										$ 10.0
Interest rate, stated percentage (as a percent)			6.625%
Net proceeds from issuance of debt			$ 386.0
Senior notes | Qwest Corporation | 6.875% Notes due 2054
Long-term Debt and Credit Facilities
Aggregate principal amount of debt issuance							$ 500.0
Interest rate, stated percentage (as a percent)							6.875%
Net proceeds from issuance of debt							$ 483.0
Senior notes | Qwest Corporation | 7.200% Note due 2026
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)												7.20%
Repurchased face amount of Senior notes												$ 250.0
Senior notes | Qwest Corporation | 6.875% Noted due 2033
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)												6.875%
Repurchased face amount of Senior notes												$ 150.0
Senior notes | Qwest Corporation | 7.625 % Notes Due 2015
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)														7.625%
Repurchased face amount of Senior notes														$ 92.0
Senior notes | Qwest Corporation | 7.500% Notes due 2014
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)																7.50%
Repurchased face amount of Senior notes																$ 600.0
Senior notes | CenturyLink, Inc.
Long-term Debt and Credit Facilities
Total long-term debt									$ 7,975.0	7,825.0
Senior notes | CenturyLink, Inc. | Minimum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									5.15%
Senior notes | CenturyLink, Inc. | Maximum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									7.65%
Senior notes | CenturyLink, Inc. | 5.625% Notes due 2025
Long-term Debt and Credit Facilities
Aggregate principal amount of debt issuance				$ 500.0
Interest rate, stated percentage (as a percent)				5.625%
Net proceeds from issuance of debt				$ 494.0
Senior notes | CenturyLink, Inc. | Series M 5.00% Notes
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)															5.00%
Repurchased face amount of Senior notes															$ 350.0
Senior notes | Embarq Corporation
Long-term Debt and Credit Facilities
Total long-term debt									$ 2,669.0	2,669.0
Interest expense:
Percentage of net tangible assets allowed to secure senior notes (percent)									15.00%
Senior notes | Embarq Corporation | Minimum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									7.082%
Senior notes | Embarq Corporation | Maximum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									7.995%
Medium-term notes | Qwest Corporation
Long-term Debt and Credit Facilities
Total long-term debt									$ 100.0	0.0
Medium-term notes | Qwest Corporation | Term loan
Long-term Debt and Credit Facilities
Aggregate principal amount of debt issuance					$ 100.0
Total long-term debt									100.0
Medium-term notes | Qwest Corporation | Term loan | Minimum | Base Rate
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)					0.50%
Medium-term notes | Qwest Corporation | Term loan | Minimum | London Interbank Offered Rate (LIBOR)
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)					1.50%
Medium-term notes | Qwest Corporation | Term loan | Maximum | Base Rate
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)					1.50%
Medium-term notes | Qwest Corporation | Term loan | Maximum | London Interbank Offered Rate (LIBOR)
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)					2.50%
Medium-term notes | CenturyLink, Inc.
Long-term Debt and Credit Facilities
Total long-term debt									358.0	380.0
Line of credit | CenturyLink, Inc.
Long-term Debt and Credit Facilities
Total long-term debt									410.0	725.0
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility
Long-term Debt and Credit Facilities
Number of subsidiary Guarantors for Credit Facility						9
Maximum borrowing capacity						$ 2,000.0
Number of lenders of Credit Facility | lender						16
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Minimum
Long-term Debt and Credit Facilities
Lender commitment						$ 3.5
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Minimum | Base Rate
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)						0.00%
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Minimum | London Interbank Offered Rate (LIBOR)
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)						1.00%
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Maximum
Long-term Debt and Credit Facilities
Lender commitment						$ 198.5
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Maximum | Base Rate
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)						1.25%
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Maximum | London Interbank Offered Rate (LIBOR)
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)						2.25%
Line of credit | CenturyLink, Inc. | Credit Facility | Letter of credit
Long-term Debt and Credit Facilities
Maximum borrowing capacity						$ 400.0
Line of credit | CenturyLink, Inc. | Uncommitted revolving line of credit | Line of credit
Long-term Debt and Credit Facilities
Total long-term debt									80.0
Maximum borrowing capacity								$ 100.0
Number of lenders of revolving line of credit								1
Line of credit | CenturyLink, Inc. | Uncommitted revolving line of credit | Line of credit | Minimum | London Interbank Offered Rate (LIBOR)
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)								1.00%
Line of credit | CenturyLink, Inc. | Uncommitted revolving line of credit | Line of credit | Maximum | London Interbank Offered Rate (LIBOR)
Long-term Debt and Credit Facilities
Interest rate margin (as a percent)								2.25%
First mortgage bonds | Embarq Corporation
Long-term Debt and Credit Facilities
Total long-term debt									$ 232.0	232.0
Interest expense:
Percentage of subsidiary property, plant and equipment securing debt, (percent)									10.00%
First mortgage bonds | Embarq Corporation | Minimum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									7.125%
First mortgage bonds | Embarq Corporation | Maximum
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									8.77%
First mortgage bonds | Embarq Corporation | 7.460% Notes Due 2014
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)																	7.46%
Repurchased face amount of Senior notes																	$ 30.0
Other | Embarq Corporation
Long-term Debt and Credit Facilities
Interest rate, stated percentage (as a percent)									9.00%
Total long-term debt									$ 150.0	150.0
Letter of credit | CenturyLink, Inc. | Uncommitted revolving letter of credit facility | Letter of credit
Long-term Debt and Credit Facilities
Maximum borrowing capacity																		$ 160.0
Letters of credit outstanding									$ 109.0	$ 124.0
Subsequent Event | Senior notes | Qwest Corporation | 7.00% Notes due 2056
Long-term Debt and Credit Facilities
Aggregate principal amount of debt issuance		$ 235.0
Interest rate, stated percentage (as a percent)		7.00%
Net proceeds from issuance of debt		$ 227.0

[1] Actual principal paid in all years may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.

XML

Long-Term Debt and Credit Facilities Long-Term Debt and Credit Facilities (Details 3) - Senior notes	Jan. 31, 2016	Sep. 21, 2015	Mar. 19, 2015	Sep. 29, 2014
6.625% Notes due 2055 | Debt Instrument, Redemption, Period One [Member] | Qwest Corporation
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage		100.00%
5.625% Notes due 2025 | Debt Instrument, Redemption, Period One [Member] | CenturyLink, Inc.
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption, Description			greater of 100% of the principal amount of the Notes or the sum of the present value of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date in the manner described in the Notes
5.625% Notes due 2025 | Debt Instrument, Redemption, Period Two [Member] | CenturyLink, Inc.
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption, Description			redeem the Notes at par
5.625% Notes due 2025 | Debt Instrument, Redemption, Period Three [Member] | CenturyLink, Inc.
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage			105.625%
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemable			35.00%
5.625% Notes due 2025 | Debt Instrument, Redemption, Period Four [Member] | CenturyLink, Inc.
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage			101.00%
6.875% Notes due 2054 | Debt Instrument, Redemption, Period One [Member] | Qwest Corporation
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage				100.00%
Subsequent Event | 7.00% Notes due 2056 | Debt Instrument, Redemption, Period One [Member] | Qwest Corporation
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage	100.00%

XML

Long-Term Debt and Credit Facilities (Details 4) $ in Millions	Dec. 31, 2015 USD ($)	[1]
Long-term Debt, Fiscal Year Maturity [Abstract]
2016	$ 1,503
2017	1,501
2018	251
2019	1,160
2020	1,032
2021 and thereafter	15,082
Total long-term debt	$ 20,529

[1] Actual principal paid in all years may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.

XML

Accounts Receivable (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other receivables	$ 18	$ 22
Total accounts receivable	2,095	2,150
Less: allowance for doubtful accounts	(152)	(162)
Accounts receivable, less allowance	1,943	1,988
Allowance for Doubtful Accounts Receivable [Roll Forward]
Beginning balance	162	155	$ 158
Additions	177	159	152
Deductions	(187)	(152)	(155)
Ending balance	152	162	$ 155
Earned and unbilled receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	288	307
Trade and purchased receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 1,789	$ 1,821

XML

Property, Plant and Equipment (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Property, plant and equipment
Gross property, plant and equipment		$ 38,785	$ 36,718
Accumulated depreciation		(20,716)	(18,285)
Net property, plant and equipment		18,069	18,433
Depreciation, Depletion and Amortization [Abstract]
Depreciation expense		2,836	2,958	$ 2,952
Land
Property, plant and equipment
Gross property, plant and equipment		571	575
Fiber, conduit and other outside plant
Property, plant and equipment
Gross property, plant and equipment	[1]	$ 16,166	15,151
Fiber, conduit and other outside plant | Minimum
Depreciation, Depletion and Amortization [Abstract]
Depreciable Lives		15 years
Fiber, conduit and other outside plant | Maximum
Depreciation, Depletion and Amortization [Abstract]
Depreciable Lives		45 years
Central office and other network electronics
Property, plant and equipment
Gross property, plant and equipment	[2]	$ 14,144	13,248
Central office and other network electronics | Minimum
Depreciation, Depletion and Amortization [Abstract]
Depreciable Lives		3 years
Central office and other network electronics | Maximum
Depreciation, Depletion and Amortization [Abstract]
Depreciable Lives		10 years
Support assets
Property, plant and equipment
Gross property, plant and equipment	[3]	$ 7,000	6,578
Support assets | Minimum
Depreciation, Depletion and Amortization [Abstract]
Depreciable Lives		3 years
Support assets | Maximum
Depreciation, Depletion and Amortization [Abstract]
Depreciable Lives		30 years
Construction in progress
Property, plant and equipment
Gross property, plant and equipment	[4]	$ 904	1,166
Qwest Corporation | Office building
Depreciation, Depletion and Amortization [Abstract]
Impairment of office building			17
CenturyLink, Inc. | Office building
Depreciation, Depletion and Amortization [Abstract]
Proceeds from sale of office building			$ 12

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

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

[3] Support assets consist of buildings, data centers, computers and other administrative and support equipment.

[4] Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction.

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Property, Plant and Equipment (Details 2) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Asset Retirement Obligation
Balance at beginning of year	$ 107	$ 106	$ 106
Accretion expense	7	7	7
Liabilities incurred	0	6	0
Liabilities settled	(2)	(2)	(4)
Change in estimate	(21)	(10)	(3)
Balance at end of year	$ 91	$ 107	$ 106

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Severance and Leased Real Estate (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Severance
Restructuring reserve
Balance at the beginning of the period	$ 26	$ 17
Accrued to expense	96	87
Payments, net	(108)	(78)
Reversals and adjustments	0	0
Balance at the end of the period	14	26
Qwest Communications International Inc | Leased real estate
Severance and Leased Real Estate
Current portion of leased real estate accrual	9
Noncurrent portion of leased real estate accrual	$ 71
Weighted average lease terms (in years)	8 years
Restructuring reserve
Balance at the beginning of the period	$ 96	113
Accrued to expense	0	1
Payments, net	(13)	(16)
Reversals and adjustments	3	(2)
Balance at the end of the period	$ 80	$ 96
Qwest Communications International Inc | Leased real estate | Minimum
Severance and Leased Real Estate
Remaining lease terms	4 months
Qwest Communications International Inc | Leased real estate | Maximum
Severance and Leased Real Estate
Remaining lease terms	10 years

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Employee Benefits (Details) - USD ($) $ in Millions					3 Months Ended			12 Months Ended
		Jan. 02, 2016		Dec. 08, 2014	Dec. 31, 2015		Dec. 31, 2014	Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2015		Dec. 31, 2014	Dec. 31, 2013
Employee Benefits
Benefit obligation		$ 16,916			$ 16,916		$ 18,872	$ 18,872		$ 17,089		$ 17,089		$ 16,916		$ 18,872	$ 17,089
Defined Benefit Plan, assumed health care cost trend rates
Ultimate health care cost trend rate (as a percent)								4.50%
Year that health care cost rate reaches ultimate trend rate														2025		2024	2022
Effect of change of 100 basis points in the assumed initial health care cost trend rate
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (statements of operations) - Increase								$ 3
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (statements of operations) - Decrease								(3)
Effect of one-percentage point increase on postretirement benefit obligation								73
Effect of one-percentage point decrease on postretirement benefit obligation								$ (68)
Actuarial assumptions at beginning of year:
Ultimate health care cost trend rate (as a percent)								4.50%
Year that health care cost rate reaches ultimate trend rate														2025		2024	2022
Components of net periodic benefit (income) expense
Expected return on plan assets								$ (919)		(924)
Settlements							(63)
Actuarial assumptions at end of year:
Ultimate health care cost trend rate (as a percent)								4.50%
Year that health care cost rate reaches ultimate trend rate														2025		2024	2022
Change in benefit obligation
Benefit obligation at beginning of year		16,916						$ 18,872		17,089
Benefit obligation at end of year					16,916		18,872	$ 16,916		18,872		17,089
Projected benefit obligation increase due to adoption of new mortality table														$ (379)		$ 1,300
Remaining estimated life of plan participants								8 years
Change in plan assets
Return on plan assets								$ (158)		1,410
Settlements								$ 0		460		0
Pension Plan
Employee Benefits
Amortization period of the plan shortfall								7 years
Unfunded status														2,277		2,471
Employer contributions								$ 100		157		146
Benefits paid by company								6		6		5
Benefits paid from plan assets					356			1,438	[1]	845	[1]	931	[1]
Lump sum pension settlements				$ 460				0		460		0
Termination pension settlement threshold				$ 418
Pension settlement charge										63
Fair value of plan assets		11,072			11,072		12,571	12,571		12,346		12,321		11,072		12,571	$ 12,346
Benefit obligation		13,349			13,349		15,042	$ 15,042		$ 13,401		$ 14,881		13,349		$ 15,042	13,401
Estimated future benefit payments:
2016														1,059
2017														1,010
2018														991
2019														973
2020														954
2021 - 2025														$ 4,433
Actuarial assumptions at beginning of year:
Rate of compensation increase (as a percent)								3.25%		3.25%		3.25%
Expected long-term rate of return on plan assets (as a percent)								7.50%		7.50%		7.50%
Components of net periodic benefit (income) expense
Service cost								$ 83		$ 77		$ 91
Interest cost								568		602		544
Expected return on plan assets								(898)		(891)		(896)
Settlements								0		63		0
Recognition of prior service cost								5		5		5
Recognition of actuarial loss								161		22		84
Net periodic pension benefit income								(81)		(122)		(172)
Actuarial assumptions at end of year:
Rate of compensation increase (as a percent)														3.25%		3.25%
Change in benefit obligation
Benefit obligation at beginning of year		13,349						15,042		13,401		14,881
Service cost								83		77		91
Interest cost								568		602		544
Plan amendments								(100)		4		0
Actuarial loss (gain)								(800)		2,269		(1,179)
Benefits paid by company								6		6		5
Benefits paid from plan assets					356			1,438	[1]	845	[1]	931	[1]
Benefit obligation at end of year					13,349		15,042	13,349		15,042		13,401
Change in plan assets
Fair value of plan assets at beginning of year		11,072						12,571		12,346		12,321
Return on plan assets								(161)		1,373		810
Employer contributions								100		157		146
Benefits paid from plan assets					356			1,438	[1]	845	[1]	931	[1]
Fair value of plan assets at end of year					11,072		12,571	$ 11,072		$ 12,571		$ 12,346
Target allocation of plan assets
Expected long-term rate of return on plan assets (as a percent)								7.50%		7.50%		7.50%
Pension Plan | Interest rate sensitive investments
Target allocation of plan assets
Target asset allocation percentage (as a percent)								45.00%
Pension Plan | Investment grade bonds
Target allocation of plan assets
Target asset allocation percentage (as a percent)								30.00%
Pension Plan | High yield and emerging market bonds
Target allocation of plan assets
Target asset allocation percentage (as a percent)								10.00%
Pension Plan | Diversified strategies
Target allocation of plan assets
Target asset allocation percentage (as a percent)								5.00%
Pension Plan | Interest rate investments with higher returns
Target allocation of plan assets
Target asset allocation percentage (as a percent)								55.00%
Pension Plan | U.S. stocks
Employee Benefits
Fair value of plan assets	[2]	1,201			1,201		1,390	$ 1,390		$ 1,390				$ 1,201		$ 1,390
Change in plan assets
Fair value of plan assets at beginning of year	[2]	1,201						1,390
Fair value of plan assets at end of year	[2]				1,201		1,390	$ 1,201		1,390
Target allocation of plan assets
Target asset allocation percentage (as a percent)								15.00%
Pension Plan | Developed market Non-U.S. stocks
Employee Benefits
Fair value of plan assets	[1]	1,128			1,128		1,170	$ 1,170		1,170				$ 1,128		$ 1,170
Change in plan assets
Fair value of plan assets at beginning of year	[1]	1,128						1,170
Fair value of plan assets at end of year	[1]				1,128		1,170	$ 1,128		$ 1,170
Target allocation of plan assets
Target asset allocation percentage (as a percent)								15.00%
Pension Plan | Diversified multi-asset classes
Target allocation of plan assets
Target asset allocation percentage (as a percent)								7.00%
Pension Plan | Other
Target allocation of plan assets
Target asset allocation percentage (as a percent)								10.00%
Pension Plan | Real estate
Target allocation of plan assets
Target asset allocation percentage (as a percent)								8.00%
Pension Plan | Minimum
Actuarial assumptions at beginning of year:
Discount rate (as a percent)								3.50%		4.20%		3.50%
Actuarial assumptions at end of year:
Discount rate (as a percent)														3.50%		4.20%
Pension Plan | Maximum
Actuarial assumptions at beginning of year:
Discount rate (as a percent)								4.10%		5.10%		4.20%
Actuarial assumptions at end of year:
Discount rate (as a percent)														4.10%		5.10%
Qualified Pension Plan
Employee Benefits
Unfunded status														$ 2,215		$ 2,403
Employer contributions								$ 100
Change in plan assets
Employer contributions								100
Non-qualified Pension Plan
Employee Benefits
Benefits paid by company								6
Estimated future benefit payments:
2016														5
Change in benefit obligation
Benefits paid by company								6
Post-Retirement Benefit Plans
Employee Benefits
Unfunded status														3,374		3,477
Employer contributions								0
Benefits paid by company								181		$ 166		$ 266
Benefits paid from plan assets								163		219		136
Fair value of plan assets		193			193		353	353		535		626		193		353	535
Benefits paid, net of participant contributions and direct subsidy receipts								116
Benefit obligation		3,567			3,567		3,830	$ 3,830		$ 3,688		$ 4,075		$ 3,567		$ 3,830	$ 3,688
Defined Benefit Plan, assumed health care cost trend rates
Decrease in health care cost trend rate per year								decrease between 0.05% to 0.10% per year
Health care cost trend rate (as a percent)								5.00%
Ultimate health care cost trend rate (as a percent)								4.50%		4.50%		4.50%
Year that health care cost rate reaches ultimate trend rate														2025		2024
Estimated future benefit payments:
2016														$ 309
2017														300
2018														290
2019														283
2020														276
2021 - 2025														1,256
Medicare Part D Subsidy Receipts
2016														(7)
2017														(7)
2018														(7)
2019														(7)
2020														(7)
2021 - 2025														$ (30)
Actuarial assumptions at beginning of year:
Discount rate (as a percent)								3.80%		4.50%
Expected long-term rate of return on plan assets (as a percent)								7.50%
Ultimate health care cost trend rate (as a percent)								4.50%		4.50%		4.50%
Year that health care cost rate reaches ultimate trend rate														2025		2024
Components of net periodic benefit (income) expense
Service cost								$ 24		$ 22		$ 24
Interest cost								140		159		140
Expected return on plan assets								(21)		(33)		(39)
Recognition of prior service cost								19		20		0
Recognition of actuarial loss								0		0		4
Net periodic pension benefit income								$ 162		$ 168		$ 129
Actuarial assumptions at end of year:
Discount rate (as a percent)														4.15%		3.80%
Initial health care cost trend rate (as a percent)												6.50%
Ultimate health care cost trend rate (as a percent)								4.50%		4.50%		4.50%
Year that health care cost rate reaches ultimate trend rate														2025		2024
Change in benefit obligation
Benefit obligation at beginning of year		3,567						$ 3,830		$ 3,688		$ 4,075
Service cost								24		22		24
Interest cost								140		159		140
Participant contributions								57		69		96
Plan amendments								0		23		141
Direct subsidy receipts								8		9		13
Actuarial loss (gain)								(148)		245		(399)
Benefits paid by company								181		166		266
Benefits paid from plan assets								163		219		136
Benefit obligation at end of year					3,567		3,830	3,567		3,830		3,688
Change in plan assets
Fair value of plan assets at beginning of year		193						353		535		626
Return on plan assets								3		37		45
Employer contributions								0
Benefits paid from plan assets								163		219		136
Fair value of plan assets at end of year					193		353	$ 193		353		$ 535
Target allocation of plan assets
Expected long-term rate of return on plan assets (as a percent)								7.50%
Post-Retirement Benefit Plans | U.S. stocks
Employee Benefits
Fair value of plan assets		16	[2]		16	[2]	35	$ 35		35				$ 16	[2]	$ 35
Change in plan assets
Fair value of plan assets at beginning of year		16	[2]					35
Fair value of plan assets at end of year					16	[2]	35	16	[2]	35
Post-Retirement Benefit Plans | Developed market Non-U.S. stocks
Employee Benefits
Fair value of plan assets		12	[1]		12	[1]	33	33		33				$ 12	[1]	$ 33
Change in plan assets
Fair value of plan assets at beginning of year		$ 12	[1]					33
Fair value of plan assets at end of year					$ 12	[1]	$ 33	$ 12	[1]	$ 33
Post-Retirement Benefit Plans | Equity Securities
Target allocation of plan assets
Target asset allocation percentage (as a percent)								20.00%
Post-Retirement Benefit Plans | Non-equity investments
Target allocation of plan assets
Target asset allocation percentage (as a percent)								80.00%
Post-Retirement Benefit Plans | Minimum
Actuarial assumptions at beginning of year:
Discount rate (as a percent)												3.60%
Expected long-term rate of return on plan assets (as a percent)										6.00%		6.00%
Actuarial assumptions at end of year:
Initial health care cost trend rate (as a percent)								5.00%		6.00%
Target allocation of plan assets
Expected long-term rate of return on plan assets (as a percent)										6.00%		6.00%
Post-Retirement Benefit Plans | Maximum
Actuarial assumptions at beginning of year:
Discount rate (as a percent)
Expected long-term rate of return on plan assets (as a percent)										7.50%		7.30%
Actuarial assumptions at end of year:
Initial health care cost trend rate (as a percent)								5.25%		6.50%
Target allocation of plan assets
Expected long-term rate of return on plan assets (as a percent)										7.50%		7.30%
Scenario, Forecast [Member] | Pension Plan
Actuarial assumptions at beginning of year:
Expected long-term rate of return on plan assets (as a percent)		7.50%
Target allocation of plan assets
Expected long-term rate of return on plan assets (as a percent)		7.50%
Expected long-term return on assets, net of administrative expenses		7.00%
Scenario, Forecast [Member] | Post-Retirement Benefit Plans
Employee Benefits
Benefits paid, net of participant contributions and direct subsidy receipts		$ 137
Actuarial assumptions at beginning of year:
Expected long-term rate of return on plan assets (as a percent)		7.00%
Target allocation of plan assets
Expected long-term rate of return on plan assets (as a percent)		7.00%

[1] Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

[2] U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

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Employee Benefits (Details 2) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2013	Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2013	Dec. 31, 2012
Actual return on plan assets:
Actual gains (losses) on pension and post retirement plan assets		$ (158)		$ 1,410
Expected return		919		924
Difference between the actual and expected returns on pension and post-retirement plan assets		1,077		486
Unfunded Status
Benefit obligation							$ (16,916)		$ (18,872)		$ (17,089)
Non-current portion of unfunded status							(5,511)		(5,808)
Accumulated other comprehensive (loss) income
Total							(1,895)		(1,992)
Recognition of Net Periodic Benefits Expense
Net periodic (income) expense		115
Deferrals
Total		(18)
Net Change in AOCI
Total		97
Health Care and Life Insurance
Active health care benefit expenses		381		381		$ 362
Participating employees' contribution to health care plan		125		136		117
Pension Plan
Employee Benefits
Fair value of plan assets valued at NAV							5,293		5,749
Total investments, excluding investments valued at NAV							5,779		6,822
Fair value of plan assets		12,571		12,346		12,321	11,072		12,571		12,346	$ 12,321
Change in plan assets
Fair value of plan assets at beginning of year		12,571		12,346		12,321
Actual return on plan assets:
Fair value of plan assets at end of year		11,072		12,571		12,346
Actual gains (losses) on pension and post retirement plan assets		(161)		1,373		810
Expected return		898		891		896
Unfunded Status
Benefit obligation							(13,349)		(15,042)		(13,401)	(14,881)
Fair value of plan assets		12,571		12,346		12,321	11,072		12,571		12,346	12,321
Unfunded status							(2,277)		(2,471)
Current portion of unfunded status							(5)		(6)
Non-current portion of unfunded status							(2,272)		(2,465)
Accumulated other comprehensive (loss) income
Net actuarial (loss) gain							(2,857)		(2,760)
Prior service (cost) benefit							72		(32)
Deferred income tax benefit (expense)							1,070		1,072
Total							(1,715)		(1,720)
Recognition of Net Periodic Benefits Expense
Net actuarial (loss) gain		161		22		84
Recognition of prior service cost		5		5		5
Deferred income tax benefit (expense)		(63)
Net periodic (income) expense		103
Deferrals
Net actuarial (loss) gain		(258)
Prior service (cost) benefit		99
Deferred income tax benefit (expense)		61
Total		(98)
Net Change in AOCI
Net actuarial (loss) gain		(97)
Prior service (cost) benefit		104
Deferred income tax benefit (expense)		(2)
Total		5
Estimated recognition of net periodic benefit expense in 2016:
Net actuarial loss		(168)
Prior service (cost)/income		8
Deferred income tax benefit		61
Estimated ner periodic benefit expense to be recorded in 2016 as a component of other comprehensive income (loss)		(99)
Pension Plan | Level 1
Employee Benefits
Total investments, excluding investments valued at NAV							3,755		3,836
Pension Plan | Level 2
Employee Benefits
Total investments, excluding investments valued at NAV							2,010		2,979
Pension Plan | Level 3
Employee Benefits
Total investments, excluding investments valued at NAV							14		7
Fair value of plan assets		7		0		0	14		7		0
Change in plan assets
Fair value of plan assets at beginning of year		7		0
Net transfers		5		6
Acquisitions		4		1
Dispositions		(2)		(3)
Actual return on plan assets:
Gains relating to assets sold during the year		0		4
(Losses) gains relating to assets still held at year-end		0		(1)
Fair value of plan assets at end of year		14		7		0
Unfunded Status
Fair value of plan assets		7		0		0	14		7		0
Pension Plan | Exchange-traded U.S. equity futures
Employee Benefits
Gross notional exposure							79		134
Pension Plan | Exchange-traded Treasury and other interest rate futures
Employee Benefits
Gross notional exposure							1,767		2,451
Pension Plan | Interest rate swaps
Employee Benefits
Gross notional exposure							550		579
Pension Plan | Credit default swaps
Employee Benefits
Gross notional exposure							189		382
Pension Plan | Foreign exchange forwards
Employee Benefits
Gross notional exposure							992		1,195
Pension Plan | Options
Employee Benefits
Gross notional exposure							285		529
Pension Plan | Investment grade bonds
Employee Benefits
Fair value of plan assets valued at NAV							115		148
Fair value of plan assets	[1]	2,346		2,346			1,886		2,346
Change in plan assets
Fair value of plan assets at beginning of year	[1]	2,346
Actual return on plan assets:
Fair value of plan assets at end of year	[1]	1,886		2,346
Unfunded Status
Fair value of plan assets	[1]	2,346		2,346			1,886		2,346
Pension Plan | Investment grade bonds | Level 1
Employee Benefits
Fair value of plan assets	[1]	1,068		1,068			841		1,068
Change in plan assets
Fair value of plan assets at beginning of year	[1]	1,068
Actual return on plan assets:
Fair value of plan assets at end of year	[1]	841		1,068
Unfunded Status
Fair value of plan assets	[1]	1,068		1,068			841		1,068
Pension Plan | Investment grade bonds | Level 2
Employee Benefits
Fair value of plan assets	[1]	1,278		1,278			1,045		1,278
Change in plan assets
Fair value of plan assets at beginning of year	[1]	1,278
Actual return on plan assets:
Fair value of plan assets at end of year	[1]	1,045		1,278
Unfunded Status
Fair value of plan assets	[1]	1,278		1,278			1,045		1,278
Pension Plan | Investment grade bonds | Level 3
Employee Benefits
Fair value of plan assets	[1]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[1]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[1]	0		0
Unfunded Status
Fair value of plan assets	[1]	0		0			0		0
Pension Plan | High yield bonds
Employee Benefits
Fair value of plan assets valued at NAV							512		860
Fair value of plan assets	[2]	654		654			557		654
Change in plan assets
Fair value of plan assets at beginning of year	[2]	654
Actual return on plan assets:
Fair value of plan assets at end of year	[2]	557		654
Unfunded Status
Fair value of plan assets	[2]	654		654			557		654
Pension Plan | High yield bonds | Level 1
Employee Benefits
Fair value of plan assets	[2]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[2]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[2]	0		0
Unfunded Status
Fair value of plan assets	[2]	0		0			0		0
Pension Plan | High yield bonds | Level 2
Employee Benefits
Fair value of plan assets	[2]	647		647			544		647
Change in plan assets
Fair value of plan assets at beginning of year	[2]	647
Actual return on plan assets:
Fair value of plan assets at end of year	[2]	544		647
Unfunded Status
Fair value of plan assets	[2]	647		647			544		647
Pension Plan | High yield bonds | Level 3
Employee Benefits
Fair value of plan assets		7	[2]	0		0	13	[2]	7	[2]	0
Change in plan assets
Fair value of plan assets at beginning of year		7	[2]	0
Net transfers		4		6
Acquisitions		4		1
Dispositions		(2)		(3)
Actual return on plan assets:
Gains relating to assets sold during the year		0		4
(Losses) gains relating to assets still held at year-end		0		(1)
Fair value of plan assets at end of year		13	[2]	7	[2]	0
Unfunded Status
Fair value of plan assets		7	[2]	0		0	13	[2]	7	[2]	0
Pension Plan | Emerging market bonds
Employee Benefits
Fair value of plan assets valued at NAV							9		27
Fair value of plan assets	[3]	615		615			441		615
Change in plan assets
Fair value of plan assets at beginning of year	[3]	615
Actual return on plan assets:
Fair value of plan assets at end of year	[3]	441		615
Unfunded Status
Fair value of plan assets	[3]	615		615			441		615
Pension Plan | Emerging market bonds | Level 1
Employee Benefits
Fair value of plan assets	[3]	208		208			208		208
Change in plan assets
Fair value of plan assets at beginning of year	[3]	208
Actual return on plan assets:
Fair value of plan assets at end of year	[3]	208		208
Unfunded Status
Fair value of plan assets	[3]	208		208			208		208
Pension Plan | Emerging market bonds | Level 2
Employee Benefits
Fair value of plan assets	[3]	407		407			232		407
Change in plan assets
Fair value of plan assets at beginning of year	[3]	407
Actual return on plan assets:
Fair value of plan assets at end of year	[3]	232		407
Unfunded Status
Fair value of plan assets	[3]	407		407			232		407
Pension Plan | Emerging market bonds | Level 3
Employee Benefits
Fair value of plan assets		0	[3]	0		0	1	[3]	0	[3]	0
Change in plan assets
Fair value of plan assets at beginning of year		0	[3]	0
Net transfers		1		0
Acquisitions		0		0
Dispositions		0		0
Actual return on plan assets:
Gains relating to assets sold during the year		0		0
(Losses) gains relating to assets still held at year-end		0		0
Fair value of plan assets at end of year		1	[3]	0	[3]	0
Unfunded Status
Fair value of plan assets		0	[3]	0		0	1	[3]	0	[3]	0
Pension Plan | Convertible bonds
Employee Benefits
Fair value of plan assets valued at NAV							0		10
Fair value of plan assets	[4]	4		4			2		4
Change in plan assets
Fair value of plan assets at beginning of year	[4]	4
Actual return on plan assets:
Fair value of plan assets at end of year	[4]	2		4
Unfunded Status
Fair value of plan assets	[4]	4		4			2		4
Pension Plan | Convertible bonds | Level 1
Employee Benefits
Fair value of plan assets	[4]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[4]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[4]	0		0
Unfunded Status
Fair value of plan assets	[4]	0		0			0		0
Pension Plan | Convertible bonds | Level 2
Employee Benefits
Fair value of plan assets	[4]	4		4			2		4
Change in plan assets
Fair value of plan assets at beginning of year	[4]	4
Actual return on plan assets:
Fair value of plan assets at end of year	[4]	2		4
Unfunded Status
Fair value of plan assets	[4]	4		4			2		4
Pension Plan | Convertible bonds | Level 3
Employee Benefits
Fair value of plan assets	[4]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[4]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[4]	0		0
Unfunded Status
Fair value of plan assets	[4]	0		0			0		0
Pension Plan | Diversified strategies
Employee Benefits
Fair value of plan assets valued at NAV							516		718
Pension Plan | U.S. stocks
Employee Benefits
Fair value of plan assets valued at NAV							70		86
Fair value of plan assets	[5]	1,390		1,390			1,201		1,390
Change in plan assets
Fair value of plan assets at beginning of year	[5]	1,390
Actual return on plan assets:
Fair value of plan assets at end of year	[5]	1,201		1,390
Unfunded Status
Fair value of plan assets	[5]	1,390		1,390			1,201		1,390
Pension Plan | U.S. stocks | Level 1
Employee Benefits
Fair value of plan assets	[5]	1,389		1,389			1,201		1,389
Change in plan assets
Fair value of plan assets at beginning of year	[5]	1,389
Actual return on plan assets:
Fair value of plan assets at end of year	[5]	1,201		1,389
Unfunded Status
Fair value of plan assets	[5]	1,389		1,389			1,201		1,389
Pension Plan | U.S. stocks | Level 2
Employee Benefits
Fair value of plan assets	[5]	1		1			0		1
Change in plan assets
Fair value of plan assets at beginning of year	[5]	1
Actual return on plan assets:
Fair value of plan assets at end of year	[5]	0		1
Unfunded Status
Fair value of plan assets	[5]	1		1			0		1
Pension Plan | U.S. stocks | Level 3
Employee Benefits
Fair value of plan assets	[5]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[5]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[5]	0		0
Unfunded Status
Fair value of plan assets	[5]	0		0			0		0
Pension Plan | Non-U.S. stocks
Employee Benefits
Fair value of plan assets valued at NAV							289		384
Fair value of plan assets	[6]	1,170		1,170			1,128		1,170
Change in plan assets
Fair value of plan assets at beginning of year	[6]	1,170
Actual return on plan assets:
Fair value of plan assets at end of year	[6]	1,128		1,170
Unfunded Status
Fair value of plan assets	[6]	1,170		1,170			1,128		1,170
Pension Plan | Non-U.S. stocks | Level 1
Employee Benefits
Fair value of plan assets	[6]	1,169		1,169			1,127		1,169
Change in plan assets
Fair value of plan assets at beginning of year	[6]	1,169
Actual return on plan assets:
Fair value of plan assets at end of year	[6]	1,127		1,169
Unfunded Status
Fair value of plan assets	[6]	1,169		1,169			1,127		1,169
Pension Plan | Non-U.S. stocks | Level 2
Employee Benefits
Fair value of plan assets	[6]	1		1			1		1
Change in plan assets
Fair value of plan assets at beginning of year	[6]	1
Actual return on plan assets:
Fair value of plan assets at end of year	[6]	1		1
Unfunded Status
Fair value of plan assets	[6]	1		1			1		1
Pension Plan | Non-U.S. stocks | Level 3
Employee Benefits
Fair value of plan assets	[6]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[6]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[6]	0		0
Unfunded Status
Fair value of plan assets	[6]	0		0			0		0
Pension Plan | Multi-asset strategies
Employee Benefits
Fair value of plan assets valued at NAV							386		0
Fair value of plan assets	[7]	376					376
Actual return on plan assets:
Fair value of plan assets at end of year	[7]	376
Unfunded Status
Fair value of plan assets	[7]	376					376
Pension Plan | Multi-asset strategies | Level 1
Employee Benefits
Fair value of plan assets	[6]	376					376
Actual return on plan assets:
Fair value of plan assets at end of year	[6]	376
Unfunded Status
Fair value of plan assets	[6]	376					376
Pension Plan | Multi-asset strategies | Level 2
Employee Benefits
Fair value of plan assets	[6]	0					0
Actual return on plan assets:
Fair value of plan assets at end of year	[6]	0
Unfunded Status
Fair value of plan assets	[6]	0					0
Pension Plan | Multi-asset strategies | Level 3
Employee Benefits
Fair value of plan assets	[6]	0					0
Actual return on plan assets:
Fair value of plan assets at end of year	[6]	0
Unfunded Status
Fair value of plan assets	[6]	0					0
Pension Plan | Emerging market stocks
Employee Benefits
Fair value of plan assets valued at NAV							64		102
Pension Plan | Private equity
Employee Benefits
Fair value of plan assets valued at NAV							526		673
Pension Plan | Private debt
Employee Benefits
Fair value of plan assets valued at NAV							371		394
Pension Plan | Market Neutral Hedge Funds
Employee Benefits
Fair value of plan assets valued at NAV							825		1,026
Pension Plan | Directional Hedge Funds
Employee Benefits
Fair value of plan assets valued at NAV							594		558
Pension Plan | Real Estate
Employee Benefits
Fair value of plan assets valued at NAV							968		699
Pension Plan | Derivatives
Employee Benefits
Fair value of plan assets	[8]	17		17			(4)		17
Change in plan assets
Fair value of plan assets at beginning of year	[8]	17
Actual return on plan assets:
Fair value of plan assets at end of year	[8]	(4)		17
Unfunded Status
Fair value of plan assets	[8]	17		17			(4)		17
Pension Plan | Derivatives | Level 1
Employee Benefits
Fair value of plan assets	[8]	2		2			2		2
Change in plan assets
Fair value of plan assets at beginning of year	[8]	2
Actual return on plan assets:
Fair value of plan assets at end of year	[8]	2		2
Unfunded Status
Fair value of plan assets	[8]	2		2			2		2
Pension Plan | Derivatives | Level 2
Employee Benefits
Fair value of plan assets	[8]	15		15			(6)		15
Change in plan assets
Fair value of plan assets at beginning of year	[8]	15
Actual return on plan assets:
Fair value of plan assets at end of year	[8]	(6)		15
Unfunded Status
Fair value of plan assets	[8]	15		15			(6)		15
Pension Plan | Derivatives | Level 3
Employee Benefits
Fair value of plan assets	[8]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[8]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[8]	0		0
Unfunded Status
Fair value of plan assets	[8]	0		0			0		0
Pension Plan | Cash equivalents and short-term investment funds
Employee Benefits
Fair value of plan assets valued at NAV							48		64
Fair value of plan assets	[9]	626		626			192		626
Change in plan assets
Fair value of plan assets at beginning of year	[9]	626
Actual return on plan assets:
Fair value of plan assets at end of year	[9]	192		626
Unfunded Status
Fair value of plan assets	[9]	626		626			192		626
Pension Plan | Cash equivalents and short-term investment funds | Level 1
Employee Benefits
Fair value of plan assets	[9]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[9]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[9]	0		0
Unfunded Status
Fair value of plan assets	[9]	0		0			0		0
Pension Plan | Cash equivalents and short-term investment funds | Level 2
Employee Benefits
Fair value of plan assets	[9]	626		626			192		626
Change in plan assets
Fair value of plan assets at beginning of year	[9]	626
Actual return on plan assets:
Fair value of plan assets at end of year	[9]	192		626
Unfunded Status
Fair value of plan assets	[9]	626		626			192		626
Pension Plan | Cash equivalents and short-term investment funds | Level 3
Employee Benefits
Fair value of plan assets	[9]	0		0			0		0
Change in plan assets
Fair value of plan assets at beginning of year	[9]	0
Actual return on plan assets:
Fair value of plan assets at end of year	[9]	0		0
Unfunded Status
Fair value of plan assets	[9]	0		0			0		0
Post-Retirement Benefit Plans
Employee Benefits
Fair value of plan assets valued at NAV							153		264
Total investments, excluding investments valued at NAV							40		89
Fair value of plan assets		353		535		626	193		353		535	626
Change in plan assets
Fair value of plan assets at beginning of year		353		535		626
Actual return on plan assets:
Fair value of plan assets at end of year		193		353		535
Actual gains (losses) on pension and post retirement plan assets		3		37		45
Expected return		21		33		39
Unfunded Status
Benefit obligation							(3,567)		(3,830)		(3,688)	(4,075)
Fair value of plan assets		353		535		626	193		353		$ 535	$ 626
Unfunded status							(3,374)		(3,477)
Current portion of unfunded status							(135)		(134)
Non-current portion of unfunded status							(3,239)		(3,343)
Accumulated other comprehensive (loss) income
Net actuarial (loss) gain							(147)		(277)
Prior service (cost) benefit							(147)		(166)
Deferred income tax benefit (expense)							114		171
Total							(180)		(272)
Recognition of Net Periodic Benefits Expense
Net actuarial (loss) gain		0		0		4
Recognition of prior service cost		19		20		$ 0
Deferred income tax benefit (expense)		(7)
Net periodic (income) expense		12
Deferrals
Net actuarial (loss) gain		130
Prior service (cost) benefit		0
Deferred income tax benefit (expense)		(50)
Total		80
Net Change in AOCI
Net actuarial (loss) gain		130
Prior service (cost) benefit		19
Deferred income tax benefit (expense)		(57)
Total		92
Estimated recognition of net periodic benefit expense in 2016:
Net actuarial loss		0
Prior service (cost)/income		(20)
Deferred income tax benefit		8
Estimated ner periodic benefit expense to be recorded in 2016 as a component of other comprehensive income (loss)		(12)
Post-Retirement Benefit Plans | Level 1
Employee Benefits
Total investments, excluding investments valued at NAV							34		79
Post-Retirement Benefit Plans | Level 2
Employee Benefits
Total investments, excluding investments valued at NAV							6		10
Post-Retirement Benefit Plans | Level 3
Employee Benefits
Total investments, excluding investments valued at NAV							0		0
Post-Retirement Benefit Plans | Exchange-traded U.S. equity futures
Employee Benefits
Gross notional exposure							0		7
Post-Retirement Benefit Plans | Exchange-traded Treasury and other interest rate futures
Employee Benefits
Gross notional exposure							0		0
Post-Retirement Benefit Plans | Interest rate swaps
Employee Benefits
Gross notional exposure							0		0
Post-Retirement Benefit Plans | Credit default swaps
Employee Benefits
Gross notional exposure							0		0
Post-Retirement Benefit Plans | Foreign exchange forwards
Employee Benefits
Gross notional exposure							0		13
Post-Retirement Benefit Plans | Options
Employee Benefits
Gross notional exposure							0		0
Post-Retirement Benefit Plans | Investment grade bonds
Employee Benefits
Fair value of plan assets valued at NAV							35		71
Fair value of plan assets		6		6			3	[1]	6
Change in plan assets
Fair value of plan assets at beginning of year		6
Actual return on plan assets:
Fair value of plan assets at end of year		3	[1]	6
Unfunded Status
Fair value of plan assets		6		6			3	[1]	6
Post-Retirement Benefit Plans | Investment grade bonds | Level 1
Employee Benefits
Fair value of plan assets		5		5			2	[1]	5
Change in plan assets
Fair value of plan assets at beginning of year		5
Actual return on plan assets:
Fair value of plan assets at end of year		2	[1]	5
Unfunded Status
Fair value of plan assets		5		5			2	[1]	5
Post-Retirement Benefit Plans | Investment grade bonds | Level 2
Employee Benefits
Fair value of plan assets		1		1			1	[1]	1
Change in plan assets
Fair value of plan assets at beginning of year		1
Actual return on plan assets:
Fair value of plan assets at end of year		1	[1]	1
Unfunded Status
Fair value of plan assets		1		1			1	[1]	1
Post-Retirement Benefit Plans | Investment grade bonds | Level 3
Employee Benefits
Fair value of plan assets		0		0			0	[1]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[1]	0
Unfunded Status
Fair value of plan assets		0		0			0	[1]	0
Post-Retirement Benefit Plans | High yield bonds
Employee Benefits
Fair value of plan assets valued at NAV							1		14
Fair value of plan assets		1		1			1	[2]	1
Change in plan assets
Fair value of plan assets at beginning of year		1
Actual return on plan assets:
Fair value of plan assets at end of year		1	[2]	1
Unfunded Status
Fair value of plan assets		1		1			1	[2]	1
Post-Retirement Benefit Plans | High yield bonds | Level 1
Employee Benefits
Fair value of plan assets		0		0			0	[2]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[2]	0
Unfunded Status
Fair value of plan assets		0		0			0	[2]	0
Post-Retirement Benefit Plans | High yield bonds | Level 2
Employee Benefits
Fair value of plan assets		1		1			1	[2]	1
Change in plan assets
Fair value of plan assets at beginning of year		1
Actual return on plan assets:
Fair value of plan assets at end of year		1	[2]	1
Unfunded Status
Fair value of plan assets		1		1			1	[2]	1
Post-Retirement Benefit Plans | High yield bonds | Level 3
Employee Benefits
Fair value of plan assets		0		0			0	[2]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[2]	0
Unfunded Status
Fair value of plan assets		0		0			0	[2]	0
Post-Retirement Benefit Plans | Emerging market bonds
Employee Benefits
Fair value of plan assets valued at NAV							0		0
Post-Retirement Benefit Plans | Convertible bonds
Employee Benefits
Fair value of plan assets valued at NAV							0		0
Post-Retirement Benefit Plans | Diversified strategies
Employee Benefits
Fair value of plan assets valued at NAV							54		89
Post-Retirement Benefit Plans | U.S. stocks
Employee Benefits
Fair value of plan assets valued at NAV							0		0
Fair value of plan assets		35		35			16	[5]	35
Change in plan assets
Fair value of plan assets at beginning of year		35
Actual return on plan assets:
Fair value of plan assets at end of year		16	[5]	35
Unfunded Status
Fair value of plan assets		35		35			16	[5]	35
Post-Retirement Benefit Plans | U.S. stocks | Level 1
Employee Benefits
Fair value of plan assets		35		35			16	[5]	35
Change in plan assets
Fair value of plan assets at beginning of year		35
Actual return on plan assets:
Fair value of plan assets at end of year		16	[5]	35
Unfunded Status
Fair value of plan assets		35		35			16	[5]	35
Post-Retirement Benefit Plans | U.S. stocks | Level 2
Employee Benefits
Fair value of plan assets		0		0			0	[5]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[5]	0
Unfunded Status
Fair value of plan assets		0		0			0	[5]	0
Post-Retirement Benefit Plans | U.S. stocks | Level 3
Employee Benefits
Fair value of plan assets		0		0			0	[5]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[5]	0
Unfunded Status
Fair value of plan assets		0		0			0	[5]	0
Post-Retirement Benefit Plans | Non-U.S. stocks
Employee Benefits
Fair value of plan assets valued at NAV							0		0
Fair value of plan assets		33		33			12	[6]	33
Change in plan assets
Fair value of plan assets at beginning of year		33
Actual return on plan assets:
Fair value of plan assets at end of year		12	[6]	33
Unfunded Status
Fair value of plan assets		33		33			12	[6]	33
Post-Retirement Benefit Plans | Non-U.S. stocks | Level 1
Employee Benefits
Fair value of plan assets		33		33			12	[6]	33
Change in plan assets
Fair value of plan assets at beginning of year		33
Actual return on plan assets:
Fair value of plan assets at end of year		12	[6]	33
Unfunded Status
Fair value of plan assets		33		33			12	[6]	33
Post-Retirement Benefit Plans | Non-U.S. stocks | Level 2
Employee Benefits
Fair value of plan assets		0		0			0	[6]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[6]	0
Unfunded Status
Fair value of plan assets		0		0			0	[6]	0
Post-Retirement Benefit Plans | Non-U.S. stocks | Level 3
Employee Benefits
Fair value of plan assets		0		0			0	[6]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[6]	0
Unfunded Status
Fair value of plan assets		0		0			0	[6]	0
Post-Retirement Benefit Plans | Multi-asset strategies
Employee Benefits
Fair value of plan assets valued at NAV							0		0
Post-Retirement Benefit Plans | Emerging market stocks
Employee Benefits
Fair value of plan assets valued at NAV							0		0
Fair value of plan assets		6		6			4	[10]	6
Change in plan assets
Fair value of plan assets at beginning of year		6
Actual return on plan assets:
Fair value of plan assets at end of year		4	[10]	6
Unfunded Status
Fair value of plan assets		6		6			4	[10]	6
Post-Retirement Benefit Plans | Emerging market stocks | Level 1
Employee Benefits
Fair value of plan assets		6		6			4	[10]	6
Change in plan assets
Fair value of plan assets at beginning of year		6
Actual return on plan assets:
Fair value of plan assets at end of year		4	[10]	6
Unfunded Status
Fair value of plan assets		6		6			4	[10]	6
Post-Retirement Benefit Plans | Emerging market stocks | Level 2
Employee Benefits
Fair value of plan assets		0		0			0	[10]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[10]	0
Unfunded Status
Fair value of plan assets		0		0			0	[10]	0
Post-Retirement Benefit Plans | Emerging market stocks | Level 3
Employee Benefits
Fair value of plan assets		0		0			0	[10]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[10]	0
Unfunded Status
Fair value of plan assets		0		0			0	[10]	0
Post-Retirement Benefit Plans | Private equity
Employee Benefits
Fair value of plan assets valued at NAV							21		28
Post-Retirement Benefit Plans | Private debt
Employee Benefits
Fair value of plan assets valued at NAV							2		3
Post-Retirement Benefit Plans | Market Neutral Hedge Funds
Employee Benefits
Fair value of plan assets valued at NAV							17		25
Post-Retirement Benefit Plans | Directional Hedge Funds
Employee Benefits
Fair value of plan assets valued at NAV							1		1
Post-Retirement Benefit Plans | Real Estate
Employee Benefits
Fair value of plan assets valued at NAV							20		28
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds
Employee Benefits
Fair value of plan assets valued at NAV							2		5
Fair value of plan assets		8		8			4	[9]	8
Change in plan assets
Fair value of plan assets at beginning of year		8
Actual return on plan assets:
Fair value of plan assets at end of year		4	[9]	8
Unfunded Status
Fair value of plan assets		8		8			4	[9]	8
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds | Level 1
Employee Benefits
Fair value of plan assets		0		0			0	[9]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[9]	0
Unfunded Status
Fair value of plan assets		0		0			0	[9]	0
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds | Level 2
Employee Benefits
Fair value of plan assets		8		8			4	[9]	8
Change in plan assets
Fair value of plan assets at beginning of year		8
Actual return on plan assets:
Fair value of plan assets at end of year		4	[9]	8
Unfunded Status
Fair value of plan assets		8		8			4	[9]	8
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds | Level 3
Employee Benefits
Fair value of plan assets		0		0			0	[9]	0
Change in plan assets
Fair value of plan assets at beginning of year		0
Actual return on plan assets:
Fair value of plan assets at end of year		0	[9]	0
Unfunded Status
Fair value of plan assets		$ 0		$ 0			$ 0	[9]	$ 0

[1] Investment grade bonds represent investments in fixed income securities as well as commingled bond funds comprised of U.S. Treasury securities, agencies, corporate bonds, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. Treasury securities are valued at the bid price reported in the active market in which the security is traded and are classified as Level 1. The valuation inputs of other investment grade bonds primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. The primary observable inputs include references to the new issue market for similar securities, the secondary trading markets and dealer quotes. Option adjusted spread models are utilized to evaluate securities such as asset backed securities that have early redemption features. These securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying fixed income securities using the same valuation inputs described above.

[2] High yield bonds represent investments in below investment grade fixed income securities as well as commingled high yield bond funds. The valuation inputs for the securities primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. These securities are primarily classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying high yield instruments using the same valuation inputs described above.

[3] Emerging market bonds represent investments in securities issued by governments and other entities located in developing countries as well as registered mutual funds and commingled emerging market bond funds. The valuation inputs for the securities utilize observable market information and are primarily based on dealer quotes or a spread relative to the local government bonds. The registered mutual fund is classified as Level 1 while individual securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying emerging market bonds using the same valuation inputs described above.

[4] Convertible bonds primarily represent investments in corporate debt securities that have features that allow the debt to be converted into equity securities under certain circumstances. The valuation inputs for the individual convertible bonds primarily utilize observable market information including a spread to U.S. Treasuries and the value and volatility of the underlying equity security. Convertible bonds are classified as Level 2.

[5] U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

[6] Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

[7] Real estate represents investments in commingled funds and limited partnerships that invest in a diversified portfolio of real estate properties. These investments are valued at NAV according to the valuation policy of each fund or partnership, subject to prevailing accounting and other regulatory guidelines. The valuation inputs of the underlying properties are generally based on third-party appraisals that use comparable sales or a projection of future cash flows to determine fair value.

[8] Derivatives include exchange traded futures contracts which are classified as Level 1, as well as privately negotiated over-the-counter swaps and options that are valued based on the change in interest rates or a specific market index and are classified as Level 2. The market values represent gains or losses that occur due to fluctuations in interest rates, foreign currency exchange rates, security prices, or other factors.

[9] Cash equivalents and short-term investments represent investments that are used in conjunction with derivatives positions or are used to provide liquidity for the payment of benefits or other purposes. The valuation inputs of securities are based on a spread to U.S. Treasury Bills, the Federal Funds Rate, or London Interbank Offered Rate and consider yields available on comparable securities of issuers with similar credit ratings and are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

[10] Emerging market stocks represent investments in a registered mutual fund and commingled funds comprised of stocks of companies located in developing markets. Registered mutual funds trade at the daily NAV, as determined by the market value of the underlying investments, and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described previously for individual stocks.

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Employee Benefits (Details 3) - 401(k) Defined Contribution Plan - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Defined Contribution Plan Disclosure [Line Items]
Company common stock included in the assets of the 401(k) Plan (in shares)	8	8
Expenses related to the 401(k) Plan	$ 83	$ 81	$ 89

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Share-based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions		3 Months Ended						6 Months Ended	12 Months Ended
	Mar. 30, 2015	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2013	Jun. 30, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Summary of stock options weighted-average exercise price activity
Exercisable at December 31, 2015 (in dollars per share)									$ 39.67
Weighted-Average Grant Date Fair Value
Compensation cost									$ 73	$ 75	$ 63
Share-based compensation, aggregate disclosures
Tax benefit recognized in the income statement for share-based payment arrangements									28	$ 29	25
Unrecognized compensation cost									$ 113
Weighted-average recognition period									2 years 6 months
Stock options
Share-based compensation
Option expiration term (in years)									10 years
Summary of stock options activity
Outstanding at December 31, 2014 (in shares)			4,106						4,106
Exercised (in shares)									(335)
Forfeited/Expired (in shares)									(246)
Outstanding at December 31, 2015 (in shares)									3,525	4,106
Exercisable at December 31, 2015 (in shares)									3,525
Summary of stock options weighted-average exercise price activity
Outstanding at December 31, 2014 (in dollars per share)			$ 37.99						$ 37.99
Exercised (in dollars per share)									26.00
Forfeited/Expired (in dollars per share)									30.33
Outstanding at December 31, 2015 (in dollars per share)									$ 39.67	$ 37.99
Stock options aggregate intrinsic value
Outstanding at the end of the period									$ 1
Weighted-average remaining contractual term									1 year 11 months
Net cash proceeds received in connection with option exercises									$ 9
Tax benefit realized from option exercises									1
Total intrinsic value of options exercised									$ 4	$ 9	11
Restricted Stock
Summary of restricted stock and restricted stock unit activity
Nonvested at the beginning of the period (in shares)			4,400						4,400
Granted (in shares)			496			440	335		2,904	2,900
Vested (in shares)									(1,724)
Forfeited (in shares)									(678)
Nonvested at the end of the period (in shares)									4,902	4,400
Weighted-Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)			$ 36.59						$ 36.59
Granted (in dollars per share)									31.83	$ 35.87
Vested (in dollars per share)									35.71
Forfeited (in dollars per share)									38.95
Nonvested at the end of the period (in dollars per share)									$ 33.86	$ 36.59
Total fair value of awards vested during the period									$ 59	$ 53	$ 52
Employee Stock Purchase Plan
Share-based compensation
Discount given to employees on common stock (as a percent)									15.00%
Period during which lower of beginning and ending stock price is considered for purchase of common stock at discount (in months)									6 months
Service conditions | Restricted Stock
Restricted stock awards
Period over which total shareholder return will be considered for determining satisfaction of specific performance conditions		3 years							3 years	3 years	3 years
Summary of restricted stock and restricted stock unit activity
Granted (in shares)	1,200		198		1,500	250	223	1,200
Service conditions | Restricted Stock | Awards vesting on August 14, 2018
Summary of restricted stock and restricted stock unit activity
Granted (in shares)		193
Service conditions | Restricted Stock | Awards vesting on August 14, 2020
Summary of restricted stock and restricted stock unit activity
Granted (in shares)		423
Service conditions | Restricted Stock | Awards vesting on August 14, 2022
Summary of restricted stock and restricted stock unit activity
Granted (in shares)		230
Service conditions | Restricted Stock | Awards vesting equally on August 14, 2017, 2019 and 2021
Summary of restricted stock and restricted stock unit activity
Granted (in shares)		55
Service conditions | Restricted Stock | Awards vesting on August 4, 2017
Summary of restricted stock and restricted stock unit activity
Granted (in shares)				105
Service conditions | Restricted Stock | Awards vesting on August 4, 2019
Summary of restricted stock and restricted stock unit activity
Granted (in shares)				325
Service conditions | Restricted Stock | Awards vesting on August 4, 2021
Summary of restricted stock and restricted stock unit activity
Granted (in shares)				220
Service conditions | Restricted Stock | Minimum
Restricted stock awards
Period over which total shareholder return will be considered for determining satisfaction of specific performance conditions		3 years
Service conditions | Restricted Stock | Maximum
Restricted stock awards
Period over which total shareholder return will be considered for determining satisfaction of specific performance conditions		7 years		7 years
Market and service conditions | Minimum
Restricted stock awards
Percentage of target award (as a percent)			0.00%			0.00%
Market and service conditions | Maximum
Restricted stock awards
Percentage of target award (as a percent)			200.00%			200.00%
Market and service conditions | Restricted Stock | Minimum
Restricted stock awards
Percentage of target award (as a percent)							0.00%
Market and service conditions | Restricted Stock | Maximum
Restricted stock awards
Percentage of target award (as a percent)							200.00%

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Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income (Loss) (Numerator):
Net income (loss)	$ 338	$ 205	$ 143	$ 192	$ 188	$ 188	$ 193	$ 203	$ 878	$ 772	$ (239)
Earnings applicable to non-vested restricted stock									0	0	0
Net income (loss) applicable to common stock for computing basic earnings (loss) per common share									878	772	(239)
Net income (loss) as adjusted for purposes of computing diluted earnings (loss) per common share									$ 878	$ 772	$ (239)
Weighted average number of shares:
Weighted average shares outstanding for computing basic earnings (loss) per common share (in shares)									554,278	568,435	600,892
Incremental common shares attributable to dilutive securities:
Number of shares as adjusted for purposes of computing diluted earnings (loss) per common share (in shares)									555,093	569,739	600,892
Basic earnings (loss) per common share (in dollars per share)	$ 0.62	$ 0.37	$ 0.26	$ 0.34	$ 0.33	$ 0.33	$ 0.34	$ 0.35	$ 1.58	$ 1.36	$ (0.40)
Diluted earnings (loss) per common share (in dollars per share)	$ 0.62	$ 0.37	$ 0.26	$ 0.34	$ 0.33	$ 0.33	$ 0.34	$ 0.35	$ 1.58	$ 1.36	$ (0.40)
Number of shares of common stock excluded from the computation of diluted earnings per share									3,100	2,500	2,700
Share-based payments and convertible debt securities
Incremental common shares attributable to dilutive securities:
Number of shares of common stock excluded from the computation of diluted earnings per share											1,300
Common Class A
Weighted average number of shares:
Outstanding during period (in shares)									559,260	572,748	604,404
Non-vested restricted stock (in shares)									(4,982)	(4,313)	(3,512)
Weighted average shares outstanding for computing basic earnings (loss) per common share (in shares)									554,278	568,435	600,892
Incremental common shares attributable to dilutive securities:
Shares issuable under convertible securities (in shares)									10	10	0
Shares issuable under incentive compensation plans (in shares)									805	1,294	0
Number of shares as adjusted for purposes of computing diluted earnings (loss) per common share (in shares)									555,093	569,739	600,892

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Fair Value Disclosure (Details) - Fair Value Measurements valued on recurring basis - Fair value, Input Level 2 - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Reported Value Measurement [Member]
Liabilities
Liabilities-Long-term debt excluding capital lease and other obligations	$ 19,800	$ 19,994
Estimate of Fair Value Measurement [Member]
Liabilities
Liabilities-Long-term debt excluding capital lease and other obligations	$ 19,473	$ 21,255

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Federal
Current			$ 28	$ 18	$ 1
Deferred			329	305	403
State
Current			40	26	62
Deferred			21	(14)	(8)
Foreign
Current			16	3	9
Deferred			4	0	(4)
Total income tax expense			438	338	463
Income tax expense allocation
Attributable to income			438	338	463
Stockholders' equity:
Compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes			(5)	(5)	(14)
Tax effect of the change in accumulated other comprehensive loss			$ 59	$ (744)	$ 554
Reconciliation of the statutory federal income tax rate to effective income tax rate
Statutory federal income tax rate (as a percent)			35.00%	35.00%	35.00%
State income taxes, net of federal income tax benefit (as a percent)			2.60%	2.70%	2.80%
Impairment of goodwill (as a percent)			0.00%	0.00%	188.50%
Change in liability for unrecognized tax position (as a percent)			0.40%	0.40%	(24.50%)
Foreign income taxes (as a percent)			0.70%	0.40%	2.70%
Nondeductible accounting adjustment for life insurance (as a percent)			0.00%	0.00%	3.10%
Affiliate debt rationalization, (as a percent)			(2.60%)	(0.00%)	(0.00%)
Release state valuation allowance (as a percent)			0.00%	0.00%	(2.30%)
Research and development credits (as a percent)			(2.10%)	(0.00%)	(0.00%)
Loss on worthless investment in foreigh subsidiary (as a percent)			0.00%	(5.40%)	0.00%
Other, net (as a percent)			(0.70%)	(2.60%)	1.40%
Effective income tax rate (as a percent)			33.30%	30.50%	206.70%
Affiliate debt rationalization	$ 34		$ 34
Research and development credits	28		28
Changes affecting state income taxes	(16)		16	$ 13
Loss on worthless investment in foreign subsidiary		$ (60)
Impairment of goodwill					$ 1,092
Tax settlement with domestic tax authority					(33)
Reversal of liability for unrecognized tax position					22
Nondeductible accounting adjustment for life insurance					17
Release state valuation allowance					5
Deferred tax assets
Post-retirement and pension benefit costs	2,154	2,276	2,154	2,276
Net operating loss carryforwards	487	1,091	487	1,091
Other employee benefits	182	214	182	214
Other	458	602	458	602
Gross deferred tax assets	3,281	4,183	3,281	4,183
Less valuation allowance	(380)	(409)	(380)	(409)
Net deferred tax assets	2,901	3,774	2,901	3,774
Deferred tax liabilities
Property, plant and equipment, primarily due to depreciation differences	(3,841)	(3,869)	(3,841)	(3,869)
Goodwill and other intangible assets	(2,588)	(2,908)	(2,588)	(2,908)
Other	(38)	(147)	(38)	(147)
Gross deferred tax liabilities	(6,467)	(6,924)	(6,467)	(6,924)
Net deferred tax liabilities	(3,566)	(3,150)	(3,566)	(3,150)
Long-term deferred tax liability, net	3,569	3,154	3,569	3,154
Noncurrent deferred tax asset, net	3	4	3	4
Summary of reconciliation of the change in gross unrecognized tax benefits activity
Unrecognized tax benefits, beginning of year			17	14
Increase in tax positions taken in current year			1	0
Increase in tax positions taken in the prior year			7	9
Decrease due to the reversal of tax positions taken in a prior year			(9)	(2)
Decrease from the lapse of statute of limitations			(1)	(1)
Settlements			0	(3)
Unrecognized tax benefits, end of year	15	17	15	17	$ 14
Unrecognized tax benefits that would impact effective tax rate	32	32	32	32
Interest on income taxes accrued	33	$ 30	33	$ 30
Significant change in unrecorded benefit	11		11
Federal
NOLs
Operating loss carryforward	72		72
State
NOLs
Operating loss carryforward	$ 13,000		$ 13,000

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Income Taxes (Details 2) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Income taxes
Valuation allowance	$ 380	$ 409
Deferred tax asset valuation allowance adjustment	29
Federal
Income taxes
Tax credit carryforwards	28
Investment tax credits | State
Income taxes
Tax credit carryforwards	36
Tax credit carryforwards, net of federal income tax	23
Alternative minimum tax credits
Income taxes
Tax credit carryforwards	$ 79

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Segment Information (Details) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2015 USD ($) segment	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Segment Reporting Information [Line Items]
Operating revenues	$ 4,476	$ 4,554	$ 4,419	$ 4,451	$ 4,438	$ 4,514	$ 4,541	$ 4,538	$ 17,900	$ 18,031	$ 18,095
Expenses									15,295	15,621	16,642
OPERATING INCOME	$ 751	$ 656	$ 549	$ 649	$ 483	$ 619	$ 655	$ 653	$ 2,605	2,410	1,453
Number of reportable segments (segments) | segment									2
Operating segments (segments)
Segment Reporting Information [Line Items]
Operating revenues									$ 16,668	17,028	17,095
Expenses									8,459	8,509	8,167
OPERATING INCOME									$ 8,209	$ 8,519	$ 8,928
Margin percentage (percent)									49.00%	50.00%	52.00%
Business
Segment Reporting Information [Line Items]
Operating revenues									$ 10,647	$ 11,034	$ 11,091
Expenses									6,034	6,089	5,808
OPERATING INCOME									$ 4,613	$ 4,945	$ 5,283
Margin percentage (percent)									43.00%	45.00%	48.00%
Consumer
Segment Reporting Information [Line Items]
Operating revenues									$ 6,021	$ 5,994	$ 6,004
Expenses									2,425	2,420	2,359
OPERATING INCOME									$ 3,596	$ 3,574	$ 3,645
Margin percentage (percent)									60.00%	60.00%	61.00%

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Segment Information (Details 2) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2015 USD ($) category	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Operating revenues by products and services
Operating revenues	$ 4,476	$ 4,554	$ 4,419	$ 4,451	$ 4,438	$ 4,514	$ 4,541	$ 4,538	$ 17,900	$ 18,031	$ 18,095
Surcharge amount on customers' bills									$ 544	526	489
Number of categories of products and services (categories) | category									4
Strategic services
Operating revenues by products and services
Operating revenues									$ 9,343	9,166	8,776
Strategic services | Products and services revenue reclassification | Restatement adjustment
Operating revenues by products and services
Operating revenues										(34)	(47)
Facilities-based video services
Operating revenues by products and services
Number of markets	16								16
Legacy services
Operating revenues by products and services
Operating revenues									$ 6,752	7,172	7,663
Legacy services | Products and services revenue reclassification | Restatement adjustment
Operating revenues by products and services
Operating revenues										34	47
Data integration
Operating revenues by products and services
Operating revenues									573	690	656
High-cost support revenue
Operating revenues by products and services
Operating revenues									732	528	547
Other revenue
Operating revenues by products and services
Operating revenues									500	475	453
Total other revenues
Operating revenues by products and services
Operating revenues									1,232	1,003	1,000
Business
Operating revenues by products and services
Operating revenues									10,647	11,034	11,091
Business | Data integration
Operating revenues by products and services
Operating revenues									571	686	651
Business | High-bandwidth data services
Operating revenues by products and services
Operating revenues									2,816	2,579	2,230
Business | Low-bandwidth data services
Operating revenues by products and services
Operating revenues									2,052	2,345	2,577
Business | Hosting services
Operating revenues by products and services
Operating revenues									1,281	1,316	1,259
Business | Other business strategic services
Operating revenues by products and services
Operating revenues									162	76	60
Business | Voice services
Operating revenues by products and services
Operating revenues									2,590	2,780	2,916
Business | Other business legacy services
Operating revenues by products and services
Operating revenues									1,175	1,252	1,398
Consumer
Operating revenues by products and services
Operating revenues									6,021	5,994	6,004
Consumer | Data integration
Operating revenues by products and services
Operating revenues									2	4	5
Consumer | High-speed Internet services
Operating revenues by products and services
Operating revenues									2,611	2,469	2,358
Consumer | Other consumer strategic services
Operating revenues by products and services
Operating revenues									421	381	292
Consumer | Voice services
Operating revenues by products and services
Operating revenues									2,676	2,864	3,101
Consumer | Other consumer legacy services
Operating revenues by products and services
Operating revenues									$ 311	$ 276	$ 248

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Segment Information (Details 3) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total segment income	$ 751	$ 656	$ 549	$ 649	$ 483	$ 619	$ 655	$ 653	$ 2,605	$ 2,410	$ 1,453
Depreciation and amortization									(4,189)	(4,428)	(4,541)
Impairment of goodwill									0	0	(1,092)
Other unassigned operating expenses									(3,328)	(3,347)	(3,502)
Income tax expense									(438)	(338)	(463)
Other expenses, net									(1,289)	(1,300)	(1,229)
Net income (loss)	$ 338	$ 205	$ 143	$ 192	$ 188	$ 188	$ 193	$ 203	878	772	(239)
Operating segments (segments)
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total segment income									8,209	8,519	8,928
Unallocated amount to segment
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Other operating revenues									1,232	1,003	1,000
Depreciation and amortization									(4,189)	(4,428)	(4,541)
Impairment of goodwill									0	0	(1,092)
Other unassigned operating expenses									(2,647)	(2,684)	(2,842)
Income tax expense									(438)	(338)	(463)
Other expenses, net									$ (1,289)	$ (1,300)	$ (1,229)

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Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Operating revenues	$ 4,476	$ 4,554	$ 4,419	$ 4,451	$ 4,438	$ 4,514	$ 4,541	$ 4,538	$ 17,900	$ 18,031	$ 18,095
OPERATING INCOME	751	656	549	649	483	619	655	653	2,605	2,410	1,453
Net income (loss)	$ 338	$ 205	$ 143	$ 192	$ 188	$ 188	$ 193	$ 203	$ 878	$ 772	$ (239)
Basic earnings (loss) per common share (in dollars per share)	$ 0.62	$ 0.37	$ 0.26	$ 0.34	$ 0.33	$ 0.33	$ 0.34	$ 0.35	$ 1.58	$ 1.36	$ (0.40)
Diluted earnings (loss) per common share (in dollars per share)	$ 0.62	$ 0.37	$ 0.26	$ 0.34	$ 0.33	$ 0.33	$ 0.34	$ 0.35	$ 1.58	$ 1.36	$ (0.40)
Incremental increase in other operating revenues	$ 57	$ 158
Affiliate debt rationalization	34								$ 34
Research and development credits	28								28
Changes affecting state income taxes	$ 16								$ (16)	$ (13)
Loss on worthless investment in foreign subsidiary					$ 60
Settlements					$ (63)

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Commitments and Contingencies (Details)			12 Months Ended			24 Months Ended
	Jul. 16, 2013 USD ($)	Oct. 14, 2011 plaintiff	Dec. 31, 2015 USD ($) plaintiff	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2007 USD ($)
Commitments and Contingencies
Number of patents allegedly infringed, minimum			1
Capital lease activity
Assets acquired through capital leases			$ 17,000,000	$ 37,000,000	$ 12,000,000
Depreciation expense			96,000,000	126,000,000	136,000,000
Cash payments towards capital leases			89,000,000	118,000,000	119,000,000
Assets included in property, plant and equipment			722,000,000	850,000,000
Accumulated depreciation			352,000,000	393,000,000
Future annual minimum payments under capital lease arrangements
2016			85,000,000
2017			78,000,000
2018			76,000,000
2019			62,000,000
2020			47,000,000
2021 and thereafter			223,000,000
Total minimum payments			571,000,000
Less: amount representing interest and executory costs			(153,000,000)
Present value of minimum payments			418,000,000
Less: current portion			(56,000,000)
Long-term portion			362,000,000
Operating Leases
Rent expense			467,000,000	446,000,000	455,000,000
Sublease rental income			12,000,000	$ 14,000,000	$ 16,000,000
Future rental commitments
2016			301,000,000
2017			289,000,000
2018			268,000,000
2019			235,000,000
2020			209,000,000
2021 and thereafter			1,075,000,000
Total future minimum payments			2,377,000,000
Minimum sublease rentals due in the future under non-cancelable subleases			87,000,000
Purchase obligations maturities
Total purchase commitments			625,000,000
2016			364,000,000
2017 and 2018			144,000,000
2019 and 2020			46,000,000
2021 and thereafter			$ 71,000,000
William Douglas Fulghum, et al. v. Embarq Corporation
Commitments and Contingencies
Effect of modifications made to Embarq's benefits program, greater than						$ 300,000,000
Number of plaintiffs have alleged breach of fiduciary duty (plaintiffs) | plaintiff			15
Abbott et al. v. Sprint Nextel et al.
Commitments and Contingencies
Number of plaintiffs have alleged breach of fiduciary duty (plaintiffs)		1,500
Number of Plaintiffs, Limited Discovery | plaintiff		80
Comcast MO Group, Inc. | Qwest Communications International Inc
Litigation Matters Assumed in Qwest Acquisition
Damages sought by plaintiff	$ 80,000,000
Unfavorable regulatory action
Litigation Matters Assumed in Qwest Acquisition
Reasonable expectation of loss, maximum per proceeding			$ 100,000

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Other Financial Information Other Financial Information (Details) - USD ($) $ in Millions		1 Months Ended	12 Months Ended
	Nov. 03, 2014	Jan. 31, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Prepaid Expenses and Other Current Assets [Abstract]
Prepaid expenses			$ 238	$ 260
Materials, supplies and inventory			144	132
Assets held for sale			8	14
Deferred activation and installation charges			105	103
Other			86	71
Other Assets, Current			581	580
Assets Held-for-sale, Not Part of Disposal Group, Current [Abstract]
Impairment wireless spectrum licenses				14
Proceeds from sale of wireless spectrum	$ 39
Wireless spectrum licenses		$ 43
Gain sale of wireless spectrum		$ 32	0	0	$ 32
Accounts Payable, Current [Abstract]
Accounts payable			968	1,226
Capital expenditures included in accounts payable			94	185
Book overdraft balance			68	80
Other current liabilities:
Accrued rent			32	34
Legal reserves			20	27
Other			168	149
Total other current liabilities			$ 220	$ 210

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Labor Union Contracts (Details)	12 Months Ended
	Dec. 31, 2015 Employee
Employees subject to collective bargaining arrangements that have expired
Labor Union Contracts
Number of unionized employees	300
Employees subject to collective bargaining arrangements expiring within one year
Labor Union Contracts
Number of unionized employees	1,000
Total number of employees | Unionized employees concentration risk
Labor Union Contracts
Concentration risk (percent)	37.00%
Total number of employees | Unionized employees concentration risk | Employees subject to collective bargaining arrangements that have expired
Labor Union Contracts
Concentration risk (percent)	2.00%
Total number of employees | Unionized employees concentration risk | Employees subject to collective bargaining arrangements expiring within one year
Labor Union Contracts
Concentration risk (percent)	6.00%

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Repurchase of CenturyLink Common Stock (Details) - Share repurchase program authorized February 2014 - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended	18 Months Ended
	Dec. 31, 2015	Dec. 07, 2015	Feb. 28, 2014
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, period in force	24 months
Stock repurchases, aggregate authorized amount			$ 1,000
Stock repurchased and retired during period, shares	27.1	32.3
Stock repurchased and retired during period, value	$ 800
Stock repurchased and retired during period, average cost per share	$ 29.56	$ 30.99

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Accumulated other comprehensive income (loss) by component
Balance at December 31, 2014	$ (2,017)	$ (802)
OCI, before Reclassifications, Net of Tax, Attributable to Parent	(32)	(1,284)
Reclassification from AOCI, Current Period, Net of Tax, Attributable to Parent	115	69
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	83	(1,215)
Balance at December 31, 2015	(1,934)	(2,017)
Foreign Currency Translation Adjustment and Other
Accumulated other comprehensive income (loss) by component
Balance at December 31, 2014	(25)	(11)
OCI, before Reclassifications, Net of Tax, Attributable to Parent	(14)	(15)
Reclassification from AOCI, Current Period, Net of Tax, Attributable to Parent	0	1
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(14)	(14)
Balance at December 31, 2015	(39)	(25)
Defined Benefit Plans | Pension Plan
Accumulated other comprehensive income (loss) by component
Balance at December 31, 2014	(1,720)	(669)
OCI, before Reclassifications, Net of Tax, Attributable to Parent	(98)	(1,107)
Reclassification from AOCI, Current Period, Net of Tax, Attributable to Parent	103	56
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	5	(1,051)
Balance at December 31, 2015	(1,715)	(1,720)
Defined Benefit Plans | Post-Retirement Benefit Plans
Accumulated other comprehensive income (loss) by component
Balance at December 31, 2014	(272)	(122)
OCI, before Reclassifications, Net of Tax, Attributable to Parent	80	(162)
Reclassification from AOCI, Current Period, Net of Tax, Attributable to Parent	12	12
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	92	(150)
Balance at December 31, 2015	$ (180)	$ (272)

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Accumulated Other Comprehensive Loss (Details 2) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
INCOME BEFORE INCOME TAX EXPENSE									$ (1,316)	$ (1,110)	$ (224)
Income tax expense									(438)	(338)	(463)
Other income, net									23	11	59
NET INCOME (LOSS)	$ 338	$ 205	$ 143	$ 192	$ 188	$ 188	$ 193	$ 203	878	772	$ (239)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net actuarial loss									161	(85)
Prior service cost									24	(25)
INCOME BEFORE INCOME TAX EXPENSE									(185)	110
Income tax expense									(70)	42
Other income, net										1
NET INCOME (LOSS)									$ 115	$ 69

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Dividends (Details) - USD ($)	Nov. 10, 2015	Aug. 25, 2015	May. 20, 2015	Feb. 23, 2015	Nov. 11, 2014	Aug. 19, 2014	May. 28, 2014	Feb. 24, 2014
Dividends, Common Stock [Abstract]
Dividend per share (usd per share)	$ 0.54	$ 0.54	$ 0.54	$ 0.54	$ 0.54	$ 0.54	$ 0.54	$ 0.54
Total amount declared	$ 293,000,000	$ 300,000,000	$ 303,000,000	$ 303,000,000	$ 307,000,000	$ 308,000,000	$ 307,000,000	$ 309,000,000