The operating activities of the separate legal entities included in our consolidated financial statements are interdependent. The accompanying condensed consolidating financial information presents the statements of comprehensive income (loss), 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 Parent, LLC. These transactions are eliminated in our consolidated results.



	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	$	—		—		3,912		4,093		—		8,005
Operating revenue - affiliates	—			—		226		801		(847	)	180
Total operating revenue	—			—		4,138		4,894		(847	)	8,185
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		1,987		1,812		—		3,799
Selling, general and administrative	(50		)	5		1,438		710		(845	)	1,258
Operating expenses - affiliates	—			—		241		93		—		334
Depreciation and amortization	—			—		652		961		—		1,613
Goodwill impairment	—			—		1,369		2,339		—		3,708
Total operating expenses	(50		)	5		5,687		5,915		(845	)	10,712
OPERATING (LOSS) INCOME	50			(5	)	(1,549	)	(1,021	)	(2	)	(2,527	)
OTHER INCOME (EXPENSE)
Interest income	—			—		7		2		—		9
Interest income (expense) - affiliates, net	3,888			658		(5,829	)	1,343		1		61
Interest expense	(29		)	(468	)	13		(18	)	—		(502	)
Equity in net (losses) earnings of subsidiaries	(7,109		)	(7,352	)	570		—		13,891		—
Gain (loss) on modification and extinguishment of debt	10			(5	)	—		—		—		5
Other (expense) income, net	(8		)	—		8		8		—		8
Total other income (expense), net	(3,248		)	(7,167	)	(5,231	)	1,335		13,892		(419	)
INCOME (LOSS) BEFORE INCOME TAX BENEFIT (EXPENSE)	(3,198		)	(7,172	)	(6,780	)	314		13,890		(2,946	)
Income tax benefit (expense)	(3		)	63		30		(345	)	—		(255	)
NET INCOME (LOSS)	(3,201		)	(7,109	)	(6,750	)	(31	)	13,890		(3,201	)
Other comprehensive loss, net of income taxes	(8		)	—		—		(8	)	8		(8	)
COMPREHENSIVE INCOME (LOSS)	$	(3,209	)	(7,109	)	(6,750	)	(39	)	13,898		(3,209	)



	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	$	—		—		3,884		4,229		—		8,113
Operating revenue - affiliates	—			—		130		285		(308	)	107
Total operating revenue	—			—		4,014		4,514		(308	)	8,220
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		2,209		1,728		—		3,937
Selling, general and administrative	12			3		392		1,255		(308	)	1,354
Operating expenses - affiliates	—			—		176		81		—		257
Depreciation and amortization	—			—		688		1,016		—		1,704
Total operating expenses	12			3		3,465		4,080		(308	)	7,252
OPERATING (LOSS) INCOME	(12		)	(3	)	549		434		—		968
OTHER INCOME (EXPENSE)
Interest income	—			—		3		1		—		4
Interest income (expense) - affiliates, net	2,430			1,562		(3,803	)	(126	)	—		63
Interest expense	(33		)	(457	)	(3	)	(16	)	—		(509	)
Equity in net (losses) earnings of subsidiaries	(2,044		)	(3,257	)	254		—		5,047		—
Other (expense) income, net	(9		)	—		1		19		—		11
Total other income (expense), net	344			(2,152	)	(3,548	)	(122	)	5,047		(431	)
INCOME (LOSS) BEFORE INCOME TAX BENEFIT (EXPENSE)	332			(2,155	)	(2,999	)	312		5,047		537
Income tax benefit (expense)	10			111		(232	)	(85	)	—		(196	)
NET INCOME (LOSS)	342			(2,044	)	(3,231	)	227		5,047		341
Other comprehensive loss, net of income taxes	(195		)	—		—		(195	)	195		(195	)
COMPREHENSIVE INCOME (LOSS)	$	147		(2,044	)	(3,231	)	32		5,242		146



	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	$	—		—		748		671		(28	)	1,391
Operating revenue - affiliates	—			—		16		—		—		16
Total operating revenue	—			—		764		671		(28	)	1,407
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		418		300		(28	)	690
Selling, general and administrative	1			3		179		70		—		253
Operating expenses - affiliates	—			—		24		—		—		24
Depreciation and amortization	—			—		117		165		—		282
Total operating expenses	1			3		738		535		(28	)	1,249
OPERATING (LOSS) INCOME	(1		)	(3	)	26		136		—		158
OTHER (EXPENSE) INCOME
Interest income	—			—		1		—		—		1
Interest income (expense) affiliates, net	262			368		(578	)	(41	)	—		11
Interest expense	(5		)	(72	)	—		(3	)	—		(80	)
Equity in net (losses) earnings of subsidiaries	(827		)	(15	)	71		—		771		—
Other income	1			—		2		—		—		3
Total other (expense) income, net	(569		)	281		(504	)	(44	)	771		(65	)
(LOSS) INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT	(570		)	278		(478	)	92		771		93
Income tax benefit (expense)	429			(1,105	)	433		9		—		(234	)
NET (LOSS) INCOME	(141		)	(827	)	(45	)	101		771		(141	)
Other comprehensive income, net of income taxes	18			—		—		18		(18	)	18
COMPREHENSIVE (LOSS) INCOME	$	(123	)	(827	)	(45	)	119		753		(123	)



	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	$	—		—		3,108		3,891		(129	)	6,870
Total operating revenue	—			—		3,108		3,891		(129	)	6,870
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		1,942		1,680		(129	)	3,493
Selling, general and administrative	4			3		942		259		—		1,208
Depreciation and amortization	—			—		356		662		—		1,018
Total operating expenses	4			3		3,240		2,601		(129	)	5,719
OPERATING (LOSS) INCOME	(4		)	(3	)	(132	)	1,290		—		1,151
OTHER INCOME (EXPENSE)
Interest income	—			—		12		1		—		13
Interest income (expense) - affiliates, net	1,260			1,890		(2,896	)	(254	)	—		—
Interest expense	(30		)	(397	)	(2	)	(12	)	—		(441	)
Loss on modification and extinguishment of debt	—			(44	)	—		—		—		(44	)
Equity in net (losses) earnings of subsidiaries	(815		)	(2,138	)	692		—		2,261		—
Other (expense) income, net	3			—		15		(4	)	—		14
Total other income (expense), net	418			(689	)	(2,179	)	(269	)	2,261		(458	)
INCOME (LOSS) BEFORE INCOME TAX BENEFIT (EXPENSE)	414			(692	)	(2,311	)	1,021		2,261		693
Income tax benefit (expense)	11			(123	)	(2	)	(154	)	—		(268	)
NET INCOME (LOSS)	425			(815	)	(2,313	)	867		2,261		425
Other comprehensive income, net of income taxes	80			—		—		—		—		80
COMPREHENSIVE INCOME (LOSS)	$	505		(815	)	(2,313	)	867		2,261		505



	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	—	231	82	—		316
Restricted cash - current	—		—	—	3	—		3
Accounts receivable	—		—	44	623	—		667
Advances to affiliates	19,302		24,293	7,634	2,830	(54,059	)	—
Note receivable - affiliate	1,590		—	—	—	—		1,590
Other	1		—	105	160	—		266
Total current assets	20,896		24,293	8,014	3,698	(54,059	)	2,842
NET PROPERTY, PLANT AND EQUIPMENT	—		—	3,688	6,248	—		9,936
GOODWILL AND OTHER ASSETS
Goodwill	—		—	252	7,163	—		7,415
Operating lease assets	—		—	1,210	324	(474	)	1,060
Restricted cash	12		—	5	2	—		19
Customer relationships, net	—		—	3,383	3,482	—		6,865
Other intangible assets, net	—		—	447	22	—		469
Investment in subsidiaries	8,432		10,564	4,431	—	(23,427	)	—
Other, net	272		1,485	88	201	(1,554	)	492
Total goodwill and other assets	8,716		12,049	9,816	11,194	(25,455	)	16,320
TOTAL ASSETS	$	29,612	36,342	21,518	21,140	(79,514	)	29,098

LIABILITIES AND MEMBER'S EQUITY (DEFICIT)
CURRENT LIABILITIES
Current maturities of long-term debt	—		—	3	8	—		11
Accounts payable	—		15	350	289	—		654
Accounts payable - affiliates	80		17	569	3	—		669
Accrued expenses and other liabilities
Salaries and benefits	—		—	192	48	—		240
Income and other taxes	—		7	95	50	—		152
Current operating lease liabilities	—		—	254	89	(94	)	249
Interest	—		81	1	3	—		85
Other	1		1	22	53	—		77
Advance billings and customer deposits	—		—	169	140	—		309



Due to affiliates	—		—	50,865		3,194	(54,059	)	—
Total current liabilities	81		121	52,520		3,877	(54,153	)	2,446
LONG-TERM DEBT	—		10,196	15		145	—		10,356
DEFERRED REVENUE AND OTHER LIABILITES
Deferred revenue	—		—	1,137		206	—		1,343
Deferred tax liability	56		—	739		1,000	(1,554	)	241
Noncurrent operating lease liabilities	—		—	986		248	(380	)	854
Other	1		—	154		158	—		313
Total deferred revenue and other liabilities	57		—	3,016		1,612	(1,934	)	2,751
COMMITMENTS AND CONTINGENCIES
MEMBER'S EQUITY (DEFICIT)	29,474		26,025	(34,033	)	15,506	(23,427	)	13,545
TOTAL LIABILITIES AND MEMBER'S EQUITY (DEFICIT)	$	29,612	36,342	21,518		21,140	(79,514	)	29,098



	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 - current	—		—	—	4	—		4
Accounts receivable	—		—	70	642	—		712
Advances to affiliates	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
NET PROPERTY, PLANT AND EQUIPMENT	—		—	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 (DEFICIT)
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
Other	3		1	8		66	—		78
Current portion of deferred revenue	—		—	168		142	—		310
Due to affiliates	—		—	45,347		5,913	(51,260	)	—
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 LIABILITES
Deferred revenue	—		—	971		210	—		1,181
Deferred tax liability	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
COMMITMENTS AND CONTINGENCIES
MEMBER'S EQUITY (DEFICIT)	33,766		33,134	(27,256	)	15,550	(37,317	)	17,877
TOTAL LIABILITIES AND MEMBER'S EQUITY (DEFICIT)	$	34,511	43,296	21,088		23,305	(89,909	)	32,291



	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	$	313		(151		)	1,952		569		—		2,683
INVESTING ACTIVITIES
Capital expenditures	—			—			(782	)	(559	)	—		(1,341	)
Proceeds from the sale of property, plant and equipment and other assets	50			—			(23	)	1		—		28
Note receivable - affiliate	235			—			—		—		—		235
Net cash provided by (used in) investing activities	285			—			(805	)	(558	)	—		(1,078	)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt	—			2,479			—		—		—		2,479
Payments of long-term debt	(600		)	(2,300		)	—		(6	)	—		(2,906	)
Distributions	(1,084		)	—			—		—		—		(1,084	)
Increase (decrease) due to from affiliates, net	1,084			—			(1,084	)	—		—		—
Other	—			(28		)	—		—		—		(28	)
Net cash used in financing activities	(600		)	151			(1,084	)	(6	)	—		(1,539	)
Net decrease in cash, cash equivalents and restricted cash and securities	(2		)	—			63		5		—		66
Cash, cash equivalents and restricted cash and securities at beginning of period	17			—			173		82		—		272
Cash, cash equivalents and restricted cash and securities at end of period	$	15		$	—		236		87		$	—	338



	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	$	(98	)	—	2,059		436		—	2,397
INVESTING ACTIVITIES
Capital expenditures	—			—	(527	)	(511	)	—	(1,038	)
Proceeds from the sale of property, plant and equipment and other assets	83			—	—		51		—	134
Net cash provided by (used in) investing activities	83			—	(527	)	(460	)	—	(904	)
FINANCING ACTIVITIES
Payments of long-term debt	—			—	—		(7	)	—	(7	)
Distributions	(1,545		)	—	—		—		—	(1,545	)
Increase (decrease) due to from affiliates, net	1,545			—	(1,545	)	—		—	—
Net cash used in financing activities	—			—	(1,545	)	(7	)	—	(1,552	)
Net decrease in cash, cash equivalents and restricted cash and securities	(15		)	—	(13	)	(31	)	—	(59	)
Cash, cash equivalents and restricted cash and securities at beginning of period	32			—	186		113		—	331
Cash, cash equivalents and restricted cash and securities at end of period	$	17		—	173		82		—	272



	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	$	(1	)	—	172		137		—	308
INVESTING ACTIVITIES
Capital expenditures	—			—	(110	)	(97	)	—	(207	)
Note receivable - affiliate	—			—	(1,825	)	—		—	(1,825	)
Net cash used in investing activities	—			—	(1,935	)	(97	)	—	(2,032	)
FINANCING ACTIVITIES
Payments of long-term debt	—			—	—		(1	)	—	(1	)
Distributions	(250		)	—	—		—		—	(250	)
Increase (decrease) due from/to affiliates, net	250			—	(250	)	—		—	—
Other	—			—	—		(2	)	—	(2	)
Net cash used in financing activities	—			—	(250	)	(3	)	—	(253	)
Net increase (decrease) in cash, cash equivalents, and restricted cash and securities	(1		)	—	(2,013	)	37		—	(1,977	)
Cash, cash equivalents and restricted cash and securities at beginning of period	33			—	2,199		76		—	2,308
Cash, cash equivalents and restricted cash and securities at end of period	$	32		—	186		113		—	331



	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	$	(61	)	(401	)	1,615		761		—	1,914
INVESTING ACTIVITIES
Capital expenditures	—			—		(667	)	(452	)	—	(1,119	)
Purchase of marketable securities	—			—		(1,127	)	—		—	(1,127	)
Maturity of marketable securities	—			—		1,127		—		—	1,127
Proceeds from sale of property, plant and equipment and other assets	—			—		1		—		—	1
Net cash used in investing activities	—			—		(666	)	(452	)	—	(1,118	)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt	—			4,569		—		—		—	4,569
Payments of long-term debt	—			(4,911	)	1		(7	)	—	(4,917	)
Increase (decrease) due from/to affiliates, net	57			743		(460	)	(340	)	—	—
Other	—			—		—		3		—	3
Net cash provided by (used in) financing activities	57			401		(459	)	(344	)	—	(345	)
Net (decrease) increase in cash, cash equivalents, and restricted cash and securities	(4		)	—		490		(35	)	—	451
Cash, cash equivalents and restricted cash and securities at beginning of period	37			—		1,710		110		—	1,857
Cash, cash equivalents and restricted cash and securities at end of period	$	33		—		2,200		75		—	2,308