Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended June 30, 2019



	Level 3 Parent, LLC			Level 3 Financing, Inc.		Level 3 Communications, LLC		Other Non-Guarantor Subsidiaries		Eliminations		Total
	(Dollars in millions)
OPERATING REVENUE
Operating revenue	$	—		—		953		1,023		—		1,976
Operating revenue - affiliates	—			—		54		215		(231	)	38
Total operating revenue	—			—		1,007		1,238		(231	)	2,014
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		464		455		—		919
Selling, general and administrative	—			2		393		183		(231	)	347
Operating expenses - affiliates	—			—		65		22		—		87
Depreciation and amortization	—			—		163		226		—		389
Goodwill Impairment						—		—				—
Total operating expenses	—			2		1,085		886		(231	)	1,742
OPERATING (LOSS) INCOME	—			(2	)	(78	)	352		—		272
OTHER INCOME (EXPENSE)
Interest income - affiliate	16			—		—		—		—		16
Interest (expense) income	(8		)	(120	)	3		(5	)	—		(130	)
Interest income (expense) - intercompany, net	948			162		(1,786	)	675		1		—
Equity in net (losses) earnings of subsidiaries	(848		)	(918	)	561		—		1,205		—
Other income (expense), net	6			—		(5	)	2		—		3
Total other income (expense), net	114			(876	)	(1,227	)	672		1,206		(111	)
INCOME (LOSS) BEFORE INCOME TAXES	114			(878	)	(1,305	)	1,024		1,206		161
Income tax expense (benefit)	3			(30	)	(18	)	96		—		51
NET INCOME (LOSS)	111			(848	)	(1,287	)	928		1,206		110
Other comprehensive (loss), net of income taxes	(8		)	—		—		(8	)	8		(8	)
COMPREHENSIVE INCOME (LOSS)	$	103		(848	)	(1,287	)	920		1,214		102

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended June 30, 2018



	Level 3 Parent, LLC			Level 3 Financing, Inc.		Level 3 Communications, LLC		Other Non-Guarantor Subsidiaries		Eliminations		Total
	(Dollars in millions)
OPERATING REVENUE
Operating revenue	$	—		—		977		1,048		—		2,025
Operating revenue - affiliates	—			—		6		64		(43	)	27
Total operating revenue	—			—		983		1,112		(43	)	2,052
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		600		380		—		980
Selling, general and administrative expenses	—			2		286		143		(43	)	388
Operating expenses - affiliates	—			—		37		18		—		55
Depreciation and amortization	—			—		174		259		—		433
Total operating expenses	—			2		1,097		800		(43	)	1,856
OPERATING (LOSS) INCOME	—			(2	)	(114	)	312		—		196
OTHER INCOME (EXPENSE)
Interest income - affiliate	16			—		—		—		—		16
Interest expense	(8		)	(113	)	—		(4	)	1		(124	)
Interest income (expense) - intercompany, net	348			604		(878	)	(74	)	—		—
Equity in net losses of subsidiaries	(316		)	(832	)	—		—		1,148		—
Other income (expense), net	—			—		3		(6	)	(1	)	(4	)
Total other income (expense), net	40			(341	)	(875	)	(84	)	1,148		(112	)
INCOME (LOSS) BEFORE INCOME TAXES	40			(343	)	(989	)	228		1,148		84
Income tax (benefit) expense	—			(27	)	(13	)	84		—		44
NET INCOME (LOSS)	40			(316	)	(976	)	144		1,148		40
Other comprehensive loss, net of income taxes	(235		)	—		—		(235	)	235		(235	)
COMPREHENSIVE LOSS	$	(195	)	(316	)	(976	)	(91	)	1,383		(195	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Six Months Ended June 30, 2019



	Level 3 Parent, LLC			Level 3 Financing, Inc.		Level 3 Communications, LLC		Other Non-Guarantor Subsidiaries		Eliminations		Total
	(Dollars in millions)
OPERATING REVENUE
Operating revenue	$	—		—		1,908		2,059		—		3,967
Operating revenue - affiliates	—			—		109		417		(433	)	93
Total operating revenue	—			—		2,017		2,476		(433	)	4,060
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		968		918		—		1,886
Selling, general and administrative	—			3		762		343		(433	)	675
Operating expenses - affiliates	—			—		87		46		—		133
Depreciation and amortization	—			—		308		471		—		779
Goodwill Impairment	—			—		1,369		2,339		—		3,708
Total operating expenses	—			3		3,494		4,117		(433	)	7,181
OPERATING (LOSS) INCOME	—			(3	)	(1,477	)	(1,641	)	—		(3,121	)
OTHER (EXPENSE) INCOME
Interest income - affiliate	32			—		—		—		—		32
Interest expense (income)	(16		)	(239	)	3		(9	)	—		(261	)
Interest income (expense) - intercompany, net	1,881			326		(3,546	)	1,338		1		—
Equity in net losses of subsidiaries	(5,367		)	(5,511	)	(1,236	)	—		12,114		—
Other (expense) income, net	(2		)	—		8		9		—		15
Total other (expense) income, net	(3,472		)	(5,424	)	(4,771	)	1,338		12,115		(214	)
(LOSS) INCOME BEFORE INCOME TAXES	(3,472		)	(5,427	)	(6,248	)	(303	)	12,115		(3,335	)
Income tax expense (benefit)	3			(60	)	—		197		—		140
NET (LOSS) INCOME	(3,475		)	(5,367	)	(6,248	)	(500	)	12,115		(3,475	)
Other comprehensive (loss) income, net of income taxes	(5		)	—		—		(5	)	5		(5	)
COMPREHENSIVE (LOSS) INCOME	$	(3,480	)	(5,367	)	(6,248	)	(505	)	12,120		(3,480	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Six Months Ended June 30, 2018



	Level 3 Parent, LLC			Level 3 Financing, Inc.		Level 3 Communications, LLC		Other Non-Guarantor Subsidiaries		Eliminations		Total
	(Dollars in millions)
OPERATING REVENUE
Operating revenue	$	—		—		1,933		2,154		—		4,087
Operating revenue - affiliates	—			—		31		104		(83	)	52
Total operating revenue	—			—		1,964		2,258		(83	)	4,139
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		1,189		789		—		1,978
Selling, general and administrative	—			3		545		267		(83	)	732
Operating expenses - affiliates	—			—		90		18		—		108
Depreciation and amortization	—			—		344		520		—		864
Total operating expenses	—			3		2,168		1,594		(83	)	3,682
OPERATING (LOSS) INCOME	—			(3	)	(204	)	664		—		457
OTHER (EXPENSE) INCOME
Interest income - affiliate	32			—		—		—		—		32
Interest expense	(16		)	(221	)	(1	)	(7	)	1		(244	)
Interest income (expense) - intercompany, net	703			1,212		(1,759	)	(156	)	—		—
Equity in net (losses) earnings of subsidiaries	(631		)	(1,671	)	(1	)	—		2,303		—
Other income (expense), net	—			—		4		—		(1	)	3
Total other income (expense), net	88			(680	)	(1,757	)	(163	)	2,303		(209	)
INCOME (LOSS) BEFORE INCOME TAXES	88			(683	)	(1,961	)	501		2,303		248
Income tax (benefit) expense	(14		)	(52	)	34		178		—		146
NET INCOME (LOSS)	102			(631	)	(1,995	)	323		2,303		102
Other comprehensive loss, net of income taxes	(163		)	—		—		(163	)	163		(163	)
COMPREHENSIVE (LOSS) INCOME	$	(61	)	(631	)	(1,995	)	160		2,466		(61	)

Condensed Consolidating Balance Sheets

June 30, 2019



	Level 3 Parent, LLC		Level 3 Financing, Inc.	Level 3 Communications, LLC	Other Non-Guarantor Subsidiaries		Eliminations		Total
	(Dollars in millions)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3	—	157	68		—		228
Restricted cash	—		—	—	3		—		3
Accounts receivable	—		—	103	668		—		771
Intercompany advances	18,195		24,063	7,783	2,940		(52,981	)	—
Note receivable - affiliate	1,825		—	—	—		—		1,825
Other	—		—	137	174		—		311
Total current assets	20,023		24,063	8,180	3,853		(52,981	)	3,138
Property, plant, and equipment, net	—		—	3,384	6,270		—		9,654
GOODWILL AND OTHER ASSETS
Goodwill	—		—	423	6,985		—		7,408
Operating lease assets	—		—	1,302	414		(533	)	1,183
Restricted cash	12		—	8	2		—		22
Customer relationships, net	—		—	3,546	3,673		—		7,219
Other intangible assets, net	—		—	429	3		—		432
Investment in subsidiaries	10,175		12,404	2,625	—		(25,204	)	—
Other, net	271		1,482	118	146		(1,390	)	627
Total goodwill and other assets	10,458		13,886	8,451	11,223		(27,127	)	16,891
TOTAL ASSETS	$	30,481	37,949	20,015	21,346		(80,108	)	29,683

LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—	—	—	7		—		7
Accounts payable	—		31	387	359		—		777
Accounts payable - affiliates	80		16	371	(9	)	—		458
Accrued expenses and other liabilities
Salaries and benefits	—		—	160	37		—		197
Income and other taxes	—		6	39	72		—		117
Current operating lease liabilities	—		—	272	90		(93	)	269
Interest	12		75	1	3		—		91



Intercompany payables	—		—	49,046		3,934	(52,980	)	—
Other	—		—	4		63	—		67
Current portion of deferred revenue	—		—	140		157	—		297
Total current liabilities	92		128	50,420		4,713	(53,073	)	2,280
LONG-TERM DEBT	612		10,054	6		148	—		10,820

DEFERRED REVENUE AND OTHER LIABILITIES
Deferred revenue	—		—	1,044		192	—		1,236
Deferred income taxes, net	56		—	817		774	(1,390	)	257
Noncurrent operating lease liabilities	—		—	1,077		325	(440	)	962
Other	—		—	152		144	—		296
Total deferred revenue and other liabilities	56		—	3,090		1,435	(1,830	)	2,751
MEMBER'S EQUITY (DEFICIT)	29,721		27,767	(33,501	)	15,050	(25,205	)	13,832
TOTAL LIABILITIES AND MEMBER'S EQUITY	$	30,481	37,949	20,015		21,346	(80,108	)	29,683

Condensed Consolidating Balance Sheets

December 31, 2018



	Level 3 Parent, LLC		Level 3 Financing, Inc.	Level 3 Communications, LLC	Other Non-Guarantor Subsidiaries	Eliminations		Total
	(Dollars in millions)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2	—	164	77	—		243
Restricted cash	—		—	—	4	—		4
Accounts receivable	—		—	70	642	—		712
Intercompany advances	16,852		23,957	7,744	2,707	(51,260	)	—
Note receivable - affiliate	1,825		—	—	—	—		1,825
Other	1		3	97	133	—		234
Total current assets	18,680		23,960	8,075	3,563	(51,260	)	3,018
Property, plant, and equipment, net	—		—	3,136	6,317	—		9,453

GOODWILL AND OTHER ASSETS
Goodwill	—		—	1,665	9,454	—		11,119
Restricted cash	15		—	9	1	—		25
Customer relationships, net	—		—	3,823	3,744	—		7,567
Other intangible assets, net	—		—	409	1	—		410
Investment in subsidiaries	15,541		17,915	3,861	—	(37,317	)	—
Other, net	275		1,421	110	225	(1,332	)	699
Total goodwill and other assets	15,831		19,336	9,877	13,425	(38,649	)	19,820
TOTAL ASSETS	$	34,511	43,296	21,088	23,305	(89,909	)	32,291

LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—	—	1	5	—		6
Accounts payable	—		—	380	346	—		726
Accounts payable - affiliates	62		11	162	11	—		246
Accrued expenses and other liabilities
Salaries and benefits	—		—	189	44	—		233
Income and other taxes	—		4	72	54	—		130
Interest	11		78	1	5	—		95
Intercompany payables	—		—	45,347	5,913	(51,260	)	—
Other	3		1	8	66	—		78



Current portion of deferred revenue	—		—	168		142	—		310
Total current liabilities	76		94	46,328		6,586	(51,260	)	1,824
LONG-TERM DEBT	613		10,068	7		150	—		10,838
DEFERRED REVENUE AND OTHER LIABILITIES
Deferred revenue	—		—	971		210	—		1,181
Deferred income taxes, net	56		—	841		637	(1,332	)	202
Other	—		—	197		172	—		369
Total deferred revenue and other liabilities	56		—	2,009		1,019	(1,332	)	1,752
MEMBER'S EQUITY (DEFICIT)	33,766		33,134	(27,256	)	15,550	(37,317	)	17,877
TOTAL LIABILITIES AND MEMBER'S EQUITY	$	34,511	43,296	21,088		23,305	(89,909	)	32,291

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2019



	Level 3 Parent, LLC			Level 3 Financing, Inc.	Level 3 Communications, LLC		Other Non-Guarantor Subsidiaries		Eliminations	Total
	(Dollars in millions)
OPERATING ACTIVITIES
Net cash provided by operating activities	$	(2	)	—	891		234		—	1,123
INVESTING ACTIVITIES
Capital expenditures	—			—	(335	)	(241	)	—	(576	)
Proceeds from sale of property, plant and equipment and other assets	—			—	1		—		—	1
Net cash used in investing activities	—			—	(334	)	(241	)	—	(575	)
FINANCING ACTIVITIES
Distributions	(565		)	—	—		—		—	(565	)
Other	—			—	—		(2	)	—	(2	)
Increase (decrease) due from affiliate, net	565			—	(565	)	—		—	—
Net cash used in financing activities	—			—	(565	)	(2	)	—	(567	)
Net increase (decrease) in cash, cash equivalents and restricted cash	(2		)	—	(8	)	(9	)	—	(19	)
Cash, cash equivalents and restricted cash at beginning of period	17			—	173		82		—	272
Cash, cash equivalents and restricted cash at end of period	$	15		—	165		73		—	253

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2018



	Level 3 Parent, LLC			Level 3 Financing, Inc.	Level 3 Communications, LLC		Other Non-Guarantor Subsidiaries		Eliminations	Total
	(Dollars in millions)
OPERATING ACTIVITIES
Net cash (used in) provided by operating activities	$	(85	)	—	899		204		—	1,018
INVESTING ACTIVITIES
Capital expenditures	—			—	(289	)	(257	)	—	(546	)
Proceeds from sale of property, plant and equipment and other assets	68			—	—		51		—	119
Net cash provided by (used in) investing activities	68			—	(289	)	(206	)	—	(427	)
FINANCING ACTIVITIES
Distributions	(605		)	—	—		—		—	(605	)
Other	—			—	—		(5	)	—	(5	)
Increase (decrease) due from/to affiliates, net	605			—	(605	)	—		—	—
Net cash used in financing activities	—			—	(605	)	(5	)	—	(610	)
Net (decrease) increase in cash, cash equivalents and restricted cash	(17		)	—	5		(7	)	—	(19	)
Cash, cash equivalents and restricted cash at beginning of period	32			—	186		113		—	331
Cash, cash equivalents and restricted cash at end of period	$	15		—	191		106		—	312