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QWEST CORP

CIK:0000068622|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
OPERATING REVENUE
Total operating revenue	$ 1,051	$ 1,222
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	294	354
Selling, general and administrative	93	104
Net loss on sale of business	242	0
Operating expenses—affiliates	225	185
Depreciation and amortization	150	191
Total operating expenses	1,004	834
OPERATING INCOME	47	388
OTHER (EXPENSE) INCOME
Interest expense	(24)	(22)
Other income, net	4	4
Total other income (expense), net	15	(5)
INCOME BEFORE INCOME TAX EXPENSE	62	383
Income tax expense	288	99
NET (LOSS) INCOME	(226)	284
Non-affiliates
OPERATING REVENUE
Total operating revenue	609	740
Affiliates
OPERATING REVENUE
Total operating revenue	442	482
OTHER (EXPENSE) INCOME
Interest income—affiliate, net	$ 35	$ 13

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
OPERATING ACTIVITIES
Net (loss) income	$ (226)	$ 284
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	150	191
Net loss on sale of business	242	0
Deferred income taxes	(298)	8
Provision for uncollectible accounts	3	10
Changes in current assets and liabilities:
Accounts receivable	13	(7)
Accounts payable	(32)	(61)
Accrued income and other taxes	6	22
Other current assets and liabilities, net	(11)	(4)
Changes in other assets and liabilities, net	433	12
Changes in affiliate obligations, net	(11)	(12)
Other, net	(5)	10
Net cash provided by operating activities	264	453
INVESTING ACTIVITIES
Capital expenditures	(115)	(203)
Proceeds from sale of business	2,366	0
Changes in advances to affiliates	(1,960)
Changes in advances to affiliates		658
Net increase in note receivable - affiliates	(539)	(900)
Proceeds from sale of property, plant and equipment and other assets	1	6
Net cash used in investing activities	(247)	(439)
Net increase in cash, cash equivalents and restricted cash	17	14
Cash, cash equivalents and restricted cash at beginning of period	40	28
Cash, cash equivalents and restricted cash at end of period	57	42
Supplemental cash flow information:
Income taxes paid, net	(580)	(84)
Interest paid, including affiliate interest (net of capitalized interest of $5 and $10)	(22)	(25)
Cash, cash equivalents, and restricted cash:
Cash and cash equivalents	56	40
Restricted cash included in Other assets, net	1	2
Total	$ 57	$ 42

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions	Mar. 31, 2026	Dec. 31, 2025
CURRENT ASSETS
Cash and cash equivalents	$ 56	$ 39
Accounts receivable, net of allowance of $38 and $37	185	199
Assets held for sale	0	2,587
Other current assets, net	110	77
Total current assets	4,453	4,505
Property, plant and equipment, net of accumulated depreciation of $9,050 and $8,910	7,395	7,446
GOODWILL AND OTHER ASSETS
Goodwill	3,638	3,638
Intangible assets, net	119	111
Other assets, net	112	120
Total goodwill and other assets	3,869	3,869
TOTAL ASSETS	15,717	15,820
CURRENT LIABILITIES
Current maturities of long-term debt	1	0
Accounts payable	115	152
Accrued expenses and other liabilities
Salaries and benefits	93	129
Income and other taxes	115	110
Other current liabilities	138	109
Liabilities held for sale	0	10
Current portion of deferred revenue	178	143
Total current liabilities	640	653
LONG-TERM DEBT	1,688	1,688
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net	1,163	1,461
Other liabilities	1,148	703
Total deferred credits and other liabilities	2,699	2,563
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDER'S EQUITY
Common stock - one share without par value, owned by Qwest Services Corporation	10,050	10,050
Retained earnings	640	866
Total stockholder's equity	10,690	10,916
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	15,717	15,820
Affiliates
CURRENT ASSETS
Advances to affiliates	2,626	666
Note receivable - affiliates	1,476	937
DEFERRED CREDITS AND OTHER LIABILITIES
Affiliate obligations, net	$ 388	$ 399