Condensed Consolidating Financial Information

12 Months Ended

Dec. 31, 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 Level 3 Financing, Inc. Senior Notes, other than the Floating Rate Senior Notes due 2018 and the 6.125% Senior Notes due 2021, 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 statements of operations, balance sheets and statements of 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 Operations

For the year ended December 31, 2013

	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
(dollars in millions)
Revenue	$	—		$	—		$	2,825		$	3,734		$	(246	)	$	6,313
Costs and Expenses:
Cost of Revenue	—			—			1,068			1,649			(246		)	2,471
Depreciation and Amortization	—			—			289			511			—			800
Selling, General and Administrative	3			1			1,544			828			—			2,376
Total Costs and Expenses	3			1			2,901			2,988			(246		)	5,647
Operating Income (Loss)	(3		)	(1		)	(76		)	746			—			666
Other Income (Expense):
Interest income	—			—			—			—			—			—
Interest expense	(151		)	(497		)	(3		)	2			—			(649		)
Interest income (expense) affiliates, net	1,091			1,706			(2,679		)	(118		)	—			—
Equity in net earnings (losses) of subsidiaries	(1,039		)	(2,164		)	550			—			2,653			—
Other, net	—			(85		)	4			(7		)	—			(88		)
Total Other Expense	(99		)	(1,040		)	(2,128		)	(123		)	2,653			(737		)
Income (Loss) before Income Taxes	(102		)	(1,041		)	(2,204		)	623			2,653			(71		)
Income Tax Expense	(7		)	2			—			(33		)	—			(38		)
Net Income (Loss)	(109		)	(1,039		)	(2,204		)	590			2,653			(109		)
Other Comprehensive Loss, Net of Income Taxes	10			10			—			10			(20		)	10
Comprehensive Income (Loss)	$	(99	)	$	(1,029	)	$	(2,204	)	$	600		$	2,633		$	(99	)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2012

	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
(dollars in millions)
Revenue	$	—		$	—		$	2,657		$	3,975		$	(256	)	$	6,376
Costs and Expenses:
Cost of Revenue	—			—			996			1,854			(248		)	2,602
Depreciation and Amortization	—			—			260			489			—			749
Selling, General and Administrative	2			1			1,559			896			(8		)	2,450
Total Costs and Expenses	2			1			2,815			3,239			(256		)	5,801
Operating Income (Loss)	(2		)	(1		)	(158		)	736			—			575
Other Income (Expense):
Interest income	—			—			1			1			—			2
Interest expense	(168		)	(535		)	(3		)	(27		)	—			(733		)
Interest income (expense) affiliates, net	976			1,598			(2,233		)	(341		)	—			—
Equity in net earnings (losses) of subsidiaries	(1,188		)	(2,066		)	92			—			3,162			—
Other, net	(39		)	(184		)	6			(1		)	—			(218		)
Total Other Expense	(419		)	(1,187		)	(2,137		)	(368		)	3,162			(949		)
Income (Loss) before Income Taxes	(421		)	(1,188		)	(2,295		)	368			3,162			(374		)
Income Tax Expense	(1		)	—			(4		)	(43		)	—			(48		)
Net Income (Loss)	(422		)	(1,188		)	(2,299		)	325			3,162			(422		)
Other Comprehensive Income, Net of Income Taxes	106			106			—			16			(122		)	106
Comprehensive Income (Loss)	$	(316	)	$	(1,082	)	$	(2,299	)	$	341		$	3,040		$	(316	)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2011

	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
(dollars in millions)
Revenue	$	—		$	—		$	2,367		$	2,196		$	(230	)	$	4,333
Costs and Expenses:
Cost of Revenue	—			—			888			1,036			(218		)	1,706
Depreciation and Amortization	—			—			376			429			—			805
Selling, General and Administrative	2			19			1,270			491			(12		)	1,770
Total Costs and Expenses	2			19			2,534			1,956			(230		)	4,281
Operating Income (Loss)	(2		)	(19		)	(167		)	240			—			52
Other Income (Expense):
Interest income	—			—			—			1			—			1
Interest expense	(211		)	(471		)	(3		)	(31		)	—			(716		)
Interest income (expense) affiliates, net	865			1,423			(2,065		)	(223		)	—			—
Equity in net earnings (losses) of subsidiaries	(1,346		)	(2,241		)	122			—			3,465			—
Other, net	(62		)	(38		)	9			(32		)	—			(123		)
Total Other Expense	(754		)	(1,327		)	(1,937		)	(285		)	3,465			(838		)
Loss before Income Taxes	(756		)	(1,346		)	(2,104		)	(45		)	3,465			(786		)
Income Tax Expense	—			—			(15		)	(26		)	—			(41		)
Loss from Continuing Operations	(756		)	(1,346		)	(2,119		)	(71		)	3,465			(827		)
Income From Discontinued Operations, Net	—			—			—			71			—			71
Net Loss	(756		)	(1,346		)	(2,119		)	—			3,465			(756		)
Other Comprehensive Income (Loss), Net of Income Taxes	18			18			—			—			(18		)	18
Comprehensive Loss	$	(738	)	$	(1,328	)	$	(2,119	)	$	—		$	3,447		$	(738	)

Condensed Consolidating Balance Sheets

December 31, 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	$	8	$	6	$	347		$	270	$	—		$	631
Restricted cash and securities	—		—		1			6		—			7
Receivables, less allowances for doubtful accounts	—		—		79			594		—			673
Due from affiliates	15,507		16,886		—			—		(32,393		)	—
Other	2		15		47			79		—			143
Total Current Assets	15,517		16,907		474			949		(32,393		)	1,454
Property, plant, and equipment, net	—		—		3,028			5,212		—			8,240
Restricted cash and securities	3		—		18			2		—			23
Goodwill and other intangibles, net	—		—		395			2,387		—			2,782
Investment in subsidiaries	10,039		27,014		3,735			—		(40,788		)	—
Other assets, net	10		113		11			241		—			375
Total Assets	$	25,569	$	44,034	$	7,661		$	8,791	$	(73,181	)	$	12,874
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	—	$	2	$	42		$	581	$	—		$	625
Current portion of long-term debt	—		—		3			28		—			31
Accrued payroll and employee benefits	—		—		171			38		—			209
Accrued interest	30		129		—			1		—			160
Current portion of deferred revenue	—		—		131			122		—			253
Due to affiliates	—		—		32,165			228		(32,393		)	—
Other	—		13		74			81		—			168
Total Current Liabilities	30		144		32,586			1,079		(32,393		)	1,446
Long-term debt, less current portion	1,370		6,905		17			39		—			8,331
Deferred revenue, less current portion	—		—		603			303		—			906
Other liabilities	15		27		135			603		—			780
Commitments and Contingencies
Stockholders' Equity (Deficit)	24,154		36,958		(25,680		)	6,767		(40,788		)	1,411
Total Liabilities and Stockholders' Equity (Deficit)	$	25,569	$	44,034	$	7,661		$	8,791	$	(73,181	)	$	12,874

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

For the year ended December 31, 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	$	(169	)	$	(557	)	$	710		$	729		$	—	$	713
Cash Flows from Investing Activities:
Capital expenditures	—			—			(312		)	(448		)	—		(760		)
Change in restricted cash and securities, net	9			—			(1		)	5			—		13
Other	—			—			1			1			—		2
Net Cash Provided by (Used in) Investing Activities	9			—			(312		)	(442		)	—		(745		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	—			1,502			—			—			—		1,502
Payments on and repurchases of long-term debt, including current portion and refinancing costs	(173		)	(1,586		)	(4		)	(33		)	—		(1,796		)
Increase (decrease) due from/to affiliates, net	88			642			(433		)	(297		)	—		—
Net Cash Provided by (Used in) Financing Activities	(85		)	558			(437		)	(330		)	—		(294		)
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			(22		)	—		(22		)
Net Change in Cash and Cash Equivalents	(245		)	1			(39		)	(65		)	—		(348		)
Cash and Cash Equivalents at Beginning of Year	253			5			386			335			—		979
Cash and Cash Equivalents at End of Year	$	8		$	6		$	347		$	270		$	—	$	631

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 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	$	(165	)	$	(520	)	$	140		$	1,123		$	—	$	578
Cash Flows from Investing Activities:
Capital expenditures	—			—			(276		)	(467		)	—		(743		)
Change in restricted cash and securities, net	6			—			2			12			—		20
Other	—			—			—			(2		)	—		(2		)
Net Cash Provided by (Used in) Investing Activities	6			—			(274		)	(457		)	—		(725		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	293			4,211			—			—			—		4,504
Payments on and repurchases of long-term debt, including current portion and refinancing costs	—			(4,161		)	—			(141		)	—		(4,302		)
Proceeds from stock options exercised	5			—			—			—			—		5
Increase (decrease) due from affiliates, net	112			469			(98		)	(483		)	—		—
Net Cash Provided by (Used in) Financing Activities	410			519			(98		)	(624		)	—		207
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			1			—		1
Net Change in Cash and Cash Equivalents	251			(1		)	(232		)	43			—		61
Cash and Cash Equivalents at Beginning of Year	2			6			618			292			—		918
Cash and Cash Equivalents at End of Year	$	253		$	5		$	386		$	335		$	—	$	979

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2011

	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 of Continuing Operations	$	(176	)	$	(428	)	$	293		$	699		$	—	$	388
Cash Flows from Investing Activities:
Capital expenditures	—			—			(197		)	(297		)	—		(494		)
Change in restricted cash and securities, net	—			—			3			(57		)	—		(54		)
Other	—			—			1			3			—		4
Investments in Global Crossing, net of cash acquired	—			—			—			146			—		146
Net Cash Used in Investing Activities of Continuing Operations	—			—			(193		)	(205		)	—		(398		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	292			1,586			—			—			—		1,878
Payments on and repurchases of long-term debt, including current portion and refinancing costs	(521		)	(755		)	—			(341		)	—		(1,617		)
Increase (decrease) due from affiliates, net	234			(404		)	168			2			—		—
Net Cash Provided by (Used in) Financing Activities of Continuing Operations	5			427			168			(339		)	—		261
Net Cash Provided by Discontinued Operations	—			—			—			51			—		51
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			—			—		—
Net Change in Cash and Cash Equivalents	(171		)	(1		)	268			206			—		302
Cash and Cash Equivalents at Beginning of Year	173			7			350			86			—		616
Cash and Cash Equivalents at End of Year	$	2		$	6		$	618		$	292		$	—	$	918