CenturyLink 2015 Annual Report Download - page 168

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
(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
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