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Condensed Consolidating Financial Information (Notes)
 9 Months Ended
Sep. 30, 2013
Condensed Consolidating Financial Information [Abstract]  
Condensed Consolidating Financial Information
Condensed Consolidating Financial Information

Level 3 Financing, Inc., a wholly owned subsidiary of the Company, has issued senior notes that are unsecured obligations of Level 3 Financing, Inc.; however, they are also fully and unconditionally and jointly and severally guaranteed on an unsecured senior basis by Level 3 Communications, Inc. and Level 3 Communications, LLC.

In conjunction with the registration of the senior notes, the accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10 “Financial statements of guarantors and affiliates whose securities collateralize an issue registered or being registered.”

The operating activities of the separate legal entities included in the Company’s consolidated financial statements are interdependent. The accompanying condensed consolidating financial information presents the results of operations, financial position and cash flows of each legal entity and, on an aggregate basis, the other non-guarantor subsidiaries based on amounts incurred by such entities, and is not intended to present the operating results of those legal entities on a stand-alone basis. Level 3 Communications, LLC leases equipment and certain facilities from other wholly owned subsidiaries of Level 3 Communications, Inc. These transactions are eliminated in the consolidated results of the Company.
Condensed Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Revenue
$
—

 
$
—

 
$
711

 
$
919

 
$
(61
)
 
$
1,569

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
264

 
405

 
(61
)
 
608

Depreciation and Amortization
—

 
—

 
73

 
130

 
—

 
203

Selling, General and Administrative
1

 
1

 
385

 
219

 
—

 
606

Total Costs and Expenses
1

 
1

 
722

 
754

 
(61
)
 
1,417

Operating Income (Loss)
(1
)
 
(1
)
 
(11
)
 
165

 
—

 
152

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(38
)
 
(123
)
 
(1
)
 
(3
)
 
—

 
(165
)
Interest income (expense) affiliates, net
274

 
429

 
(670
)
 
(33
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(255
)
 
(542
)
 
122

 
—

 
675

 
—

Other, net
—

 
(18
)
 
1

 
23

 
—

 
6

Total Other Expense
(19
)
 
(254
)
 
(548
)
 
(13
)
 
675

 
(159
)
Income (Loss) before Income Taxes
(20
)
 
(255
)
 
(559
)
 
152

 
675

 
(7
)
Income Tax Expense
(1
)
 
—

 
(1
)
 
(12
)
 
—

 
(14
)
Net Income (Loss)
(21
)
 
(255
)
 
(560
)
 
140

 
675

 
(21
)
Other Comprehensive Income, Net of Income Taxes
42

 
42

 
—

 
42

 
(84
)
 
42

Comprehensive Income (Loss)
$
21

 
$
(213
)
 
$
(560
)
 
$
182

 
$
591

 
$
21

Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Revenue
$
—

 
$
—

 
$
2,090

 
$
2,803

 
$
(182
)
 
$
4,711

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
781

 
1,254

 
(182
)
 
1,853

Depreciation and Amortization
—

 
—

 
215

 
381

 
—

 
596

Selling, General and Administrative
2

 
1

 
1,178

 
634

 
—

 
1,815

Total Costs and Expenses
2

 
1

 
2,174

 
2,269

 
(182
)
 
4,264

Operating Income (Loss)
(2
)
 
(1
)
 
(84
)
 
534

 
—

 
447

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(114
)
 
(374
)
 
(2
)
 
(11
)
 
—

 
(501
)
Interest income (expense) affiliates, net
819

 
1,284

 
(2,008
)
 
(95
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(825
)
 
(1,715
)
 
398

 
—

 
2,142

 
—

Other, net
—

 
(19
)
 
3

 
(14
)
 
—

 
(30
)
Total Other Expense
(120
)
 
(824
)
 
(1,609
)
 
(120
)
 
2,142

 
(531
)
Income (Loss) before Income Taxes
(122
)
 
(825
)
 
(1,693
)
 
414

 
2,142

 
(84
)
Income Tax Expense
(1
)
 
—

 
(2
)
 
(36
)
 
—

 
(39
)
Net Income (Loss)
(123
)
 
(825
)
 
(1,695
)
 
378

 
2,142

 
(123
)
Other Comprehensive Loss, Net of Income Taxes
(21
)
 
(21
)
 
—

 
(21
)
 
42

 
(21
)
Comprehensive Income (Loss)
$
(144
)
 
$
(846
)
 
$
(1,695
)
 
$
357

 
$
2,184

 
$
(144
)
Condensed Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Revenue
$
—

 
$
—

 
$
672

 
$
981

 
$
(63
)
 
$
1,590

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
256

 
447

 
(61
)
 
642

Depreciation and Amortization
—

 
—

 
63

 
122

 
—

 
185

Selling, General and Administrative
1

 
1

 
410

 
215

 
(2
)
 
625

Total Costs and Expenses
1

 
1

 
729

 
784

 
(63
)
 
1,452

Operating Income (Loss)
(1
)
 
(1
)
 
(57
)
 
197

 
—

 
138

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
—

 
—

 
—

Interest expense
(43
)
 
(137
)
 
(1
)
 
(7
)
 
—

 
(188
)
Interest income (expense) affiliates, net
244

 
400

 
(561
)
 
(83
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(365
)
 
(516
)
 
40

 
—

 
841

 
—

Other, net
—

 
(111
)
 
3

 
5

 
—

 
(103
)
Total Other Expense
(164
)
 
(364
)
 
(519
)
 
(85
)
 
841

 
(291
)
Income (Loss) before Income Taxes
(165
)
 
(365
)
 
(576
)
 
112

 
841

 
(153
)
Income Tax Expense
(1
)
 
—

 
(1
)
 
(11
)
 
—

 
(13
)
Net Income (Loss)
(166
)
 
(365
)
 
(577
)
 
101

 
841

 
(166
)
Other Comprehensive Income, Net of Income Taxes
122

 
122

 
—

 
48

 
(170
)
 
122

Comprehensive Income (Loss)
$
(44
)
 
$
(243
)
 
$
(577
)
 
$
149

 
$
671

 
$
(44
)
Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Revenue
$
—

 
$
—

 
$
1,957

 
$
2,995

 
$
(190
)
 
$
4,762

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
736

 
1,393

 
(182
)
 
1,947

Depreciation and Amortization
—

 
—

 
196

 
367

 
—

 
563

Selling, General and Administrative
2

 
1

 
1,207

 
663

 
(8
)
 
1,865

Total Costs and Expenses
2

 
1

 
2,139

 
2,423

 
(190
)
 
4,375

Operating Income (Loss)
(2
)
 
(1
)
 
(182
)
 
572

 
—

 
387

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
1

 
1

 
—

 
2

Interest expense
(123
)
 
(410
)
 
(2
)
 
(23
)
 
—

 
(558
)
Interest income (expense) affiliates, net
734

 
1,202

 
(1,678
)
 
(258
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(935
)
 
(1,593
)
 
101

 
—

 
2,427

 
—

Other, net
(39
)
 
(133
)
 
6

 
4

 
—

 
(162
)
Total Other Expense
(363
)
 
(934
)
 
(1,572
)
 
(276
)
 
2,427

 
(718
)
Income (Loss) before Income Taxes
(365
)
 
(935
)
 
(1,754
)
 
296

 
2,427

 
(331
)
Income Tax Expense
(1
)
 
—

 
(3
)
 
(31
)
 
—

 
(35
)
Net Income (Loss)
(366
)
 
(935
)
 
(1,757
)
 
265

 
2,427

 
(366
)
Other Comprehensive Income, Net of Income Taxes
108

 
108

 
—

 
18

 
(126
)
 
108

Comprehensive Income (Loss)
$
(258
)
 
$
(827
)
 
$
(1,757
)
 
$
283

 
$
2,301

 
$
(258
)
Condensed Consolidating Balance Sheets
September 30, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
9

 
$
6

 
$
289

 
$
203

 
$
—

 
$
507

Restricted cash and securities
—

 
—

 
1

 
6

 
—

 
7

Receivables, less allowances for doubtful accounts
—

 
—

 
107

 
631

 
—

 
738

Due from affiliates
15,285

 
16,647

 
—

 
—

 
(31,932
)
 
—

Other
3

 
15

 
64

 
105

 
—

 
187

Total Current Assets
15,297

 
16,668

 
461

 
945

 
(31,932
)
 
1,439

Property, Plant, and Equipment, net
—

 
—

 
3,004

 
5,226

 
—

 
8,230

Restricted Cash and Securities
3

 
—

 
17

 
3

 
—

 
23

Goodwill and Other Intangibles, net
—

 
—

 
404

 
2,386

 
—

 
2,790

Investment in Subsidiaries
(12,526
)
 
(22,242
)
 
3,921

 
—

 
30,847

 
—

Other Assets, net
13

 
107

 
11

 
239

 
—

 
370

Total Assets
$
2,787

 
$
(5,467
)
 
$
7,818

 
$
8,799

 
$
(1,085
)
 
$
12,852

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
1

 
$
51

 
$
581

 
$
—

 
$
633

Current portion of long-term debt
—

 
—

 
2

 
19

 
—

 
21

Accrued payroll and employee benefits
—

 
—

 
156

 
56

 
—

 
212

Accrued interest
53

 
116

 
—

 
1

 
—

 
170

Current portion of deferred revenue
—

 
—

 
104

 
115

 
—

 
219

Due to affiliates
—

 
—

 
31,511

 
421

 
(31,932
)
 
—

Other
1

 
24

 
76

 
74

 
—

 
175

Total Current Liabilities
54

 
141

 
31,900

 
1,267

 
(31,932
)
 
1,430

Long-Term Debt, less current portion
1,571

 
6,896

 
18

 
52

 
—

 
8,537

Deferred Revenue, less current portion
—

 
—

 
584

 
312

 
—

 
896

Other Liabilities
15

 
26

 
132

 
669

 
—

 
842

Commitments and Contingencies
—

 
—

 
—

 
—

 
—

 
—

Stockholders' Equity (Deficit)
1,147

 
(12,530
)
 
(24,816
)
 
6,499

 
30,847

 
1,147

Total Liabilities and Stockholders' Equity (Deficit)
$
2,787

 
$
(5,467
)
 
$
7,818

 
$
8,799

 
$
(1,085
)
 
$
12,852

Condensed Consolidating Balance Sheets
December 31, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
253

 
$
5

 
$
386

 
$
335

 
$
—

 
$
979

Restricted cash and securities
—

 
—

 
1

 
7

 
—

 
8

Receivables, less allowances for doubtful accounts
—

 
—

 
93

 
621

 
—

 
714

Due from affiliates
14,446

 
15,709

 
—

 
7

 
(30,162
)
 
—

Other
3

 
16

 
49

 
73

 
—

 
141

Total Current Assets
14,702

 
15,730

 
529

 
1,043

 
(30,162
)
 
1,842

Property, Plant, and Equipment, net
—

 
—

 
2,926

 
5,273

 
—

 
8,199

Restricted Cash and Securities
12

 
—

 
17

 
6

 
—

 
35

Goodwill and Other Intangibles, net
—

 
—

 
429

 
2,404

 
—

 
2,833

Investment in Subsidiaries
(11,756
)
 
(20,470
)
 
3,242

 
—

 
28,984

 
—

Other Assets, net
16

 
119

 
11

 
252

 
—

 
398

Total Assets
$
2,974

 
$
(4,621
)
 
$
7,154

 
$
8,978

 
$
(1,178
)
 
$
13,307

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
1

 
$
2

 
$
53

 
$
723

 
$
—

 
$
779

Current portion of long-term debt
172

 
6

 
6

 
32

 
—

 
216

Accrued payroll and employee benefits
—

 
—

 
161

 
50

 
—

 
211

Accrued interest
45

 
163

 
—

 
1

 
—

 
209

Current portion of deferred revenue
—

 
—

 
109

 
142

 
—

 
251

Due to affiliates
—

 
—

 
30,162

 
—

 
(30,162
)
 
—

Other
1

 
1

 
29

 
105

 
—

 
136

Total Current Liabilities
219

 
172

 
30,520

 
1,053

 
(30,162
)
 
1,802

Long-Term Debt, less current portion
1,570

 
6,886

 
20

 
40

 
—

 
8,516

Deferred Revenue, less current portion
—

 
—

 
602

 
285

 
—

 
887

Other Liabilities
14

 
81

 
75

 
761

 
—

 
931

Commitments and Contingencies
—

 
—

 
—

 
—

 
—

 
—

Stockholders' Equity (Deficit)
1,171

 
(11,760
)
 
(24,063
)
 
6,839

 
28,984

 
1,171

Total Liabilities and Stockholders' Equity (Deficit)
$
2,974

 
$
(4,621
)
 
$
7,154

 
$
8,978

 
$
(1,178
)
 
$
13,307

Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(105
)
 
$
(441
)
 
$
298

 
$
575

 
$
—

 
$
327

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(235
)
 
(336
)
 
—

 
(571
)
Decrease in restricted cash and securities, net
9

 
—

 
—

 
4

 
—

 
13

Proceeds from the sale of property, plant and equipment and other assets
—

 
—

 
—

 
16

 
—

 
16

Other
—

 
—

 
—

 
(14
)
 
—

 
(14
)
Net Cash Provided by (Used in) Investing Activities
9

 
—

 
(235
)
 
(330
)
 
—

 
(556
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
590

 
—

 
—

 
—

 
590

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(172
)
 
(607
)
 
(4
)
 
(27
)
 
—

 
(810
)
Increase (decrease) due from/to affiliates, net
24

 
459

 
(156
)
 
(327
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
(148
)
 
442

 
(160
)
 
(354
)
 
—

 
(220
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(23
)
 
—

 
(23
)
Net Change in Cash and Cash Equivalents
(244
)
 
1

 
(97
)
 
(132
)
 
—

 
(472
)
Cash and Cash Equivalents at Beginning of Period
253

 
5

 
386

 
335

 
—

 
979

Cash and Cash Equivalents at End of Period
$
9

 
$
6

 
$
289

 
$
203

 
$
—

 
$
507

Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
 
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(48
)
 
$
(442
)
 
$
80

 
$
588

 
$
—

 
$
178

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(199
)
 
(346
)
 
—

 
(545
)
Decrease in restricted cash and securities, net
3

 
—

 
1

 
11

 
—

 
15

Proceeds from sale of property, plant and equipment and other assets
—

 
—

 
—

 
5

 
—

 
5

Other
—

 
—

 
—

 
(13
)
 
—

 
(13
)
Net Cash Provided by (Used in) Investing Activities
3

 
—

 
(198
)
 
(343
)
 
—

 
(538
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
293

 
3,024

 
—

 
—

 
—

 
3,317

Payments on and repurchases of long-term debt, including current portion and refinancing costs
—

 
(2,960
)
 
—

 
(128
)
 
—

 
(3,088
)
Proceeds from stock options exercised
5

 
—

 
—

 
—

 
—

 
5

Increase (decrease) due from/to affiliates, net
41

 
377

 
(285
)
 
(133
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
339

 
441

 
(285
)
 
(261
)
 
—

 
234

Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
1

 
—

 
1

Net Change in Cash and Cash Equivalents
294

 
(1
)
 
(403
)
 
(15
)
 
—

 
(125
)
Cash and Cash Equivalents at Beginning of Period
2

 
6

 
618

 
292

 
—

 
918

Cash and Cash Equivalents at End of Period
$
296

 
$
5

 
$
215

 
$
277

 
$
—

 
$
793