Quarterly Financial Data (Unaudited)

9 Months Ended

Dec. 31, 2011

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

(15) Quarterly Financial Data (Unaudited)

	Quarterly Financial Data
	Predecessor		Successor
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Nine Months Total
	(Dollars in millions)
2011
Operating revenues	$	2,268		2,231		2,190		2,214		6,635
Operating income		638		370		412		417		1,199
Income tax expense		191		116		118		115		349
Net income		299		165		199		179		543

	Quarterly Financial Data
	Predecessor
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Total
	(Dollars in millions)
2010
Operating revenues	$	2,347		2,313		2,311		2,300		9,271
Operating income		661		649		616		557		2,483
Income tax expense		253		187		181		170		791
Net income		252		304		286		240		1,082

Second Quarter 2011

        We recognized $123 million of certain expenses associated with activities related to CenturyLink's indirect acquisition of us during the successor three months ended June 30, 2011. These expenses were comprised primarily of severance of $98 million, retention bonuses of $12 million, share-based compensation of $11 million allocated to us by QCII and system integration consulting of $1 million.

Fourth Quarter 2010

        Net income for the fourth quarter of 2010 was affected by an increase in stock-based compensation expense of $63 million due to QCII's decision to accelerate the vesting of certain restricted stock and performance share awards issued under its Equity Incentive Plan in order to preserve certain economic benefits to its stockholders that otherwise would have been lost in connection with CenturyLink's indirect acquisition of us.

        Income tax expense for the fourth quarter of 2010 was affected by the tax treatment of the expenses incurred when QCII accelerated the vesting of certain stock-based compensation.

First Quarter 2010

        Income tax expense for the first quarter of 2010 increased by $55 million as a result of the March 2010 enactments of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. Among other things, these laws disallow, beginning in 2013, federal income tax deductions for retiree prescription drug benefits to the extent we receive reimbursements for those benefits under the Medicare Part D program.