What the changes say
- Transformation now combines legacy-system modernization, digital self-service, automation, and AI, with execution failures threatening service and savings.
- Revenue declines broaden beyond legacy voice and access services, while lower-margin offerings, elevated debt, and low stock price increase uncertainty.
- Cyberattacks, outages, supplier dependencies, and hyperscaler network substitution receive more detailed operational treatment.
- Regulatory investigations, consent decrees, climate exposure, third-party content, and AI introduce additional legal and reputational concerns.
What changed since the prior 10-K
New
- NewBusiness Risks
Challenges with integrating, modernizing, and digitally transforming our systems could adversely affect our business and financial results
Integrating legacy systems, deploying digital self-service, and using AI may overrun budgets, disrupt service, or prevent expected savings.
- NewBusiness Risks
Our ability to compete could be diminished if we fail to innovate and deliver advanced solutions timely
Rapid technology shifts, AI competition, network bypass, and demand for faster services could erode customers and margins.
- NewBusiness Risks
Talent constraints and evolving work models could significantly impede our ability to attract, develop and retain qualified personnel and may impair execution of our transformation and strategic initiatives
Competition for technical and managerial talent, lower-value equity compensation, and remote work could impair transformation and execution.
- NewBusiness Risks
Declining revenues and financial uncertainty could adversely affect our business
Broader revenue declines and lower-margin new offerings may worsen profitability, debt-related uncertainty, and the ability to meet obligations.
- NewBusiness Risks
Damage to our reputation or brands could have a material adverse effect on our business
Disputes, outages, cyber incidents, misconduct, investigations, criticism, and weak customer scores could damage Lumen and Qwest brands.
- NewBusiness Risks
We and certain of our third-party providers have previously experienced cyberattacks and security incidents. Future attacks could have a material adverse effect on our business, operations, or financial results
Increasingly sophisticated attacks on connected, legacy, open, and third-party systems could expose customer, personal, or health information.
- NewBusiness Risks
Network, platform, or service failures could materially impact us
Network, cloud, hosting, IT, and 911 failures could cause customer losses, refunds, fines, margin pressure, and reputational damage.
- NewBusiness Risks
Our operations, financial performance, and liquidity rely significantly on key suppliers, vendors, licensors, customers, and other third parties. Disruptions or terminations of these relationships could have a material adverse effect on our business, financial condition, or results of operations
Carrier, cloud, supplier, and customer disruptions or terminations could impair service delivery, while hyperscalers may shift traffic to their own networks.
- NewBusiness Risks
Extreme weather and climate change could disrupt operations and increase costs
Severe weather and climate change may damage facilities and networks, disrupt supply chains, and create losses insurance may not cover.
- NewLegal and Regulatory Risks
Complex and evolving regulations could increase operational and compliance costs
Complex authorizations, investigations, fines, consent decrees, and changing service requirements could increase costs and restrict operations.
- NewLegal and Regulatory Risks
We may face legal and reputational risks related to third-party content on our network
Third-party content transmitted or stored on Qwest networks could trigger defamation, privacy, copyright, or prohibited-activity claims.
- NewLegal and Regulatory Risks
Our use of AI technology may create operational, legal, and reputational risks
AI outputs, bias, intellectual-property issues, privacy incidents, cybersecurity weaknesses, and emerging regulations could harm operations or reputation.
- NewLegal and Regulatory Risks
Intellectual property claims could result in significant costs and operational disruptions
- NewLegal and Regulatory Risks
Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security and processing of Personal Information could materially impact our business
- NewLegal and Regulatory Risks
Labor disputes or failure to renew collective bargaining agreements could materially affect our operations
- NewLegal and Regulatory Risks
Allegations regarding lead-sheathed cables could result in regulatory or governmental actions, litigation, significant costs, and reputational harm
- NewFinancial Risks
Our ability to obtain future financing may be limited, and failure to refinance debt could adversely affect us
- NewFinancial Risks
Restrictive covenants and potential defaults under our debt agreements could materially affect our operations and liquidity
- NewFinancial Risks
Funding obligations for employee benefit plans could negatively impact profitability
- NewFinancial Risks
We may not realize the anticipated benefits of the 2026 sale of Lumen's Mass Markets Fiber-to-the-Home business in the Territory
- NewGeneral Risks
Changes in government trade policies could adversely affect our business
Dropped
- DroppedBusiness Risks
Challenges with integrating or modernizing our existing applications and systems could harm our performance
Integrating, simplifying, upgrading, and modernizing applications and legacy systems from past acquisitions.
- DroppedBusiness Risks
We may not be able to create the global digital experience expected by customers
Completing the global digital platform with automated offerings and digital customer self-service.
- DroppedBusiness Risks
Our ability to successfully compete could be hampered if we fail to timely develop and market innovative technology solutions that address changing customer demands
- DroppedBusiness Risks
As we continue to transform our organization, we may be unable to attract, develop and retain leaders and employees with the right skill sets and technical expertise
- DroppedBusiness Risks
For several years we have experienced declining revenues and high debt levels, which has created uncertainties regarding our future prospects and ability to discharge our obligations. Despite recent improvements in our parent company's financial position, these uncertainties persist
Developing and marketing innovative technology solutions as customer demands and competition change.
- DroppedBusiness Risks
We could be harmed if our reputation is damaged
Attracting and retaining leaders and employees with transformation, innovation, and technical expertise.
- DroppedBusiness Risks
We could be harmed by outages in our network or various platforms, or other failures of our services
Declining legacy-service revenues, high debt, workforce reductions, and related employee-retention uncertainty.
- DroppedBusiness Risks
Several of our services continue to experience declining revenue, and our efforts to offset these declines may not be successful
Damage to Lumen and Qwest reputation from outages, cyberattacks, misconduct, investigations, and litigation.
- DroppedBusiness Risks
Our ability to conduct our operations could have a material adverse impact on us if certain of our arrangements with third parties were terminated, including those further described below
- DroppedBusiness Risks
Extreme weather conditions and climate changes could disrupt our operations, cause us to incur substantial additional capital and operating costs or negatively affect our business
Outages in networks, platforms, and services, including customer losses, refunds, and regulatory fines.
- DroppedLegal and Regulatory Risks
We are subject to an extensive, evolving regulatory framework that could create operational or compliance costs
Declining local voice, long-distance, network access, and private-line revenue despite cost-saving efforts.
- DroppedLegal and Regulatory Risks
Third-party content stored or transmitted on our networks could result in liability or otherwise damage our reputation
Termination or disruption of communications-carrier and cloud-provider supply or interconnection arrangements.
- DroppedLegal and Regulatory Risks
Issues related to our use of artificial intelligence (AI) could give rise to legal or regulatory actions, damage our reputation or otherwise materially harm our business
Severe weather and climate events causing operational disruption, capital costs, and property damage.
- DroppedLegal and Regulatory Risks
We have been accused of infringing the intellectual property rights of others and will likely face similar accusations in the future
- DroppedLegal and Regulatory Risks
Failure to extend or renegotiate our collective bargaining agreements or work stoppages could have a material impact on us
- DroppedLegal and Regulatory Risks
Media reports concerning our legacy infrastructure could expose us to governmental actions, removal costs, litigation, compliance costs, penalties or reputational damage
- DroppedFinancial Risks
As of December 31, 2024, we had $2.0 billion of outstanding consolidated unsecured indebtedness (excluding finance lease obligations, unamortized discounts, net and unamortized debt issuance costs, and note payable-affiliate)
Extensive evolving regulation, licensing requirements, and compliance costs across domestic and international operations.
- DroppedFinancial Risks
We expect to periodically require financing, and we cannot assure you we will be able to obtain such financing on terms that are acceptable to us, or at all
Liability and reputational harm from third-party content stored or transmitted over company networks.
- DroppedFinancial Risks
Under our and our affiliates’ consolidated debt and financing arrangements, the issuer of the debt is subject to various covenants and restrictions, the most restrictive of which pertain to the debt of Lumen Technologies, Inc. and Level 3 Financing
- DroppedFinancial Risks
Lumen Technologies, Inc.’s senior secured credit facilities contain financial maintenance covenants
- DroppedFinancial Risks
Our recent debt transactions may not achieve their anticipated benefits
- DroppedFinancial Risks
Increases in costs for pension and healthcare benefits for our active and retired employees may have a material impact on us
- DroppedFinancial Risks
If we are required to record additional intangible asset impairments, we will be required to record a significant charge to earnings and reduce our stockholder's equity
- DroppedFinancial Risks
High inflation could continue to adversely impact us
Reworded
- 100% rewrittenFinancial Risks
Our significant debt levels expose us to a broad range of risks
Adds detailed effects of significant debt, including reduced cash for capital spending, acquisitions, dividends, and strategic initiatives.
- 100% rewrittenBusiness Risks
We could be materially impacted by cyber-attacks
Expands cyber risk from named attacks and recent system access to broad IT-system dependence, third parties, and software vulnerabilities.
Was: We could be harmed by cyber-attacks
- 97% rewrittenBusiness Risks
Our environmental, social, and governance programs and disclosures may expose us to legal, operational, and reputational risks
Adds evolving and conflicting ESG laws, investor expectations, and increasingly divergent criticism of sustainability disclosures and goals.
Was: Our environmental programs and disclosures may expose us to reputational, legal and business risks
- 94% rewrittenBusiness Risks
We operate in an intensely competitive industry, and existing and future competitive pressures could harm our performance
Recasts competition using a more concise list of substitutes, stronger competitors, lower costs, fewer regulatory constraints, and brand advantages.
- 93% rewrittenFinancial Risks
We have a highly complex debt structure, which could impact the rights of our investors
Adds Qwest subsidiary debt and explains that debt priority depends on the assets and earnings of issuing or guaranteeing entities.
Was: We are part of a highly complex debt structure, which could impact the rights of our investors
- 90% rewrittenFinancial Risks
Our cash flows may not adequately fund all of our cash requirements
Removes the specific Quantum Fiber buildout reference and adds debt repayments, interest, taxes, pensions, and other fixed cash commitments.
- 89% rewrittenGeneral Risks
Shareholder or debtholder activism efforts could cause a material disruption to our business
Changes the debt-holder discussion from activism and potential claims to a more general rise in debtholders and debt-agreement claims.
- 88% rewrittenLegal and Regulatory Risks
Our pending legal proceedings involving us and our affiliates could have a material adverse impact on us
Updates the note reference, adds losses exceeding insurance coverage, and changes the securities impact from general securities to debt securities.
Was: Pending legal proceedings against us or our affiliates could have a material adverse impact on us
- 88% rewrittenBusiness Risks
We face other business risks
- 83% rewrittenLegal and Regulatory Risks
We may not be successful in protecting and enforcing our intellectual property rights
- 77% rewrittenBusiness Risks
Our attempts to capitalize on emerging market opportunities — especially AI — may fall short
Was: Our attempts to capitalize on emerging market opportunities may not be as successful as envisioned
- 75% rewrittenFinancial Risks
We face other financial risks
- 67% rewrittenFinancial Risks
We regularly transfer our cash for centralized management by Lumen, which exposes us to certain risks
Was: We regularly transfer our cash for centralized management by Lumen Technologies, which exposes us to certain risks
- 62% rewrittenFinancial Risks
Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect us
All 37 risk factors
Headings as the filing states them, in filing order.
Business Risks
- 01Challenges with integrating, modernizing, and digitally transforming our systems could adversely affect our business and financial resultsNew
- 02Our attempts to capitalize on emerging market opportunities — especially AI — may fall short77% rewritten
- 03We operate in an intensely competitive industry, and existing and future competitive pressures could harm our performance94% rewritten
- 04Our ability to compete could be diminished if we fail to innovate and deliver advanced solutions timelyNew
- 05Talent constraints and evolving work models could significantly impede our ability to attract, develop and retain qualified personnel and may impair execution of our transformation and strategic initiativesNew
- 06Declining revenues and financial uncertainty could adversely affect our businessNew
- 07Damage to our reputation or brands could have a material adverse effect on our businessNew
- 08We could be materially impacted by cyber-attacks100% rewritten
- 09We and certain of our third-party providers have previously experienced cyberattacks and security incidents. Future attacks could have a material adverse effect on our business, operations, or financial resultsNew
- 10Network, platform, or service failures could materially impact usNew
- 11Our operations, financial performance, and liquidity rely significantly on key suppliers, vendors, licensors, customers, and other third parties. Disruptions or terminations of these relationships could have a material adverse effect on our business, financial condition, or results of operationsNew
- 12Extreme weather and climate change could disrupt operations and increase costsNew
- 13Our environmental, social, and governance programs and disclosures may expose us to legal, operational, and reputational risks97% rewritten
- 14Adverse developments impacting our non-consolidated affiliates could indirectly impact us
- 15We face other business risks88% rewritten
Legal and Regulatory Risks
- 16Complex and evolving regulations could increase operational and compliance costsNew
- 17We may face legal and reputational risks related to third-party content on our networkNew
- 18Our pending legal proceedings involving us and our affiliates could have a material adverse impact on us88% rewritten
- 19We may not be successful in protecting and enforcing our intellectual property rights83% rewritten
- 20Our use of AI technology may create operational, legal, and reputational risksNew
- 21Intellectual property claims could result in significant costs and operational disruptionsNew
- 22Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security and processing of Personal Information could materially impact our businessNew
- 23Labor disputes or failure to renew collective bargaining agreements could materially affect our operationsNew
- 24Allegations regarding lead-sheathed cables could result in regulatory or governmental actions, litigation, significant costs, and reputational harmNew
Financial Risks
- 25Our significant debt levels expose us to a broad range of risks100% rewritten
- 26Our ability to obtain future financing may be limited, and failure to refinance debt could adversely affect usNew
- 27We have a highly complex debt structure, which could impact the rights of our investors93% rewritten
- 28Restrictive covenants and potential defaults under our debt agreements could materially affect our operations and liquidityNew
- 29Our cash flows may not adequately fund all of our cash requirements90% rewritten
- 30Funding obligations for employee benefit plans could negatively impact profitabilityNew
- 31We regularly transfer our cash for centralized management by Lumen, which exposes us to certain risks67% rewritten
- 32Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect us62% rewritten
- 33We face other financial risks75% rewritten
- 34We may not realize the anticipated benefits of the 2026 sale of Lumen's Mass Markets Fiber-to-the-Home business in the TerritoryNew
General Risks
- 35Changes in government trade policies could adversely affect our businessNew
- 36Unfavorable general economic, societal, health, or environmental conditions could negatively impact us
- 37Shareholder or debtholder activism efforts could cause a material disruption to our business89% rewritten
Other Qwest 10-Ks
- FY2024 10-K risk factors40 risks
Declining revenues and high debt levels dominate Qwest Corp's risk profile, alongside ongoing network transformations and legacy copper infrastructure liabilities.
Filed Feb 20, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.