Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

(15) Quarterly Financial Data (Unaudited)

	Quarterly Financial Data
	Predecessor		Successor
2011	First Quarter		Second Quarter			Third Quarter		Fourth Quarter			Nine Months Total
	(Dollars in millions)
Operating revenues	$	2,846		2,769			2,765		2,793			8,327
Operating income		579		138			223		182			543
Income tax expense (benefit)		146		—			33		(1	)		32
Net income (loss)		211		(13	)		32		—			19

	Quarterly Financial Data
	Predecessor
2010	First Quarter		Second Quarter		Third Quarter			Fourth Quarter			Total
	(Dollars in millions)
Operating revenues	$	2,966		2,930		2,935			2,899			11,730
Operating income		568		509		497			427			2,001
Income tax expense		209		108		108			80			505
Net income (loss)		38		158		(90	)		(161	)		(55	)

Second Quarter 2011

        We recognized $127 million of certain expenses associated with activities related to CenturyLink's acquisition of us during the successor three months ended June 30, 2011. These expenses were comprised primarily of severance of $99 million, retention bonuses of $14 million, share-based compensation of $11 million and system integration consulting of $1 million.

Fourth Quarter 2010

        Net loss for the fourth quarter of 2010 was affected by a $267 million loss on our embedded option in our convertible debt as well as an increase in stock-based compensation expense of $63 million due to the accelerated vesting of certain restricted stock and performance share awards issued under our Equity Incentive Plan in order to preserve certain economic benefits to our stockholders that otherwise would have been lost in connection with CenturyLink's acquisition of us.

        Income tax expense for the fourth quarter of 2010 was affected by the tax treatment of the premium paid on our convertible debt and the tax treatment of the expenses incurred when we accelerated the vesting of certain stock-based compensation.

Third Quarter 2010

        Net loss for the third quarter of 2010 was affected by a $229 million loss on our embedded option in our convertible debt.

First Quarter 2010

        Income tax expense for the first quarter of 2010 increased by $113 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.