Quarterly Financial Data (Unaudited)



	First Quarter		Second Quarter	Third Quarter	Fourth Quarter	Total
	(Dollars in millions, except per share amounts)
2017
Operating revenues	$	4,209	4,090	4,034	5,323	17,656
Operating income	631		367	487	524	2,009
Net income	163		17	92	1,117	1,389
Basic earnings per common share	0.30		0.03	0.17	1.26	2.21
Diluted earnings per common share	0.30		0.03	0.17	1.26	2.21
2016
Operating revenues	$	4,401	4,398	4,382	4,289	17,470
Operating income	688		647	593	405	2,333
Net income	236		196	152	42	626
Basic earnings per common share	0.44		0.36	0.28	0.08	1.16
Diluted earnings per common share	0.44		0.36	0.28	0.08	1.16

During the first quarter of 2017, we recognized $10 million of expenses related to our acquisition of Level 3 followed by acquisition-related expenses of $18 million, $37 million and $206 million in the second, third and fourth quarters of 2017, respectively. During the first quarter of 2017, depreciation and amortization expense of $50 million was not recognized on colocation assets held for sale. During the second quarter, we recognized a combined loss of $119 million resulting from the sale of the colocation business and data centers and the accounting treatment of the failed-sale-leaseback. During the second quarter of 2017, we recognized a one-time depreciation charge of $44 million related to the failed-sale-leaseback accounting. During the third and fourth quarters of 2017, we recognized $44 million and $20 million, respectively, of interest expense related to CenturyLink, Inc.'s $6 billion secured term loan utilized in the acquisition of Level 3. In the fourth quarter of 2017, we recognized a tax benefit of approximately $1.1 billion due to the change in the federal corporate tax rate from 35% to 21%.

During the fourth quarter of 2016, we recognized $164 million of severance expenses and other one-time termination benefits associated with our workforce reductions and $52 million of expenses related to our pending acquisition of Level 3.