CenturyLink 2015 Annual Report Download - page 158

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.
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