Financial Statements Of Guarantors (Tables)

9 Months Ended

Sep. 30, 2011

Financial Statements Of Guarantors

Condensed Consolidating Statements Of Income

Qwest Communications International Inc.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2011

SUCCESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
OPERATING REVENUES
Operating revenues	$	—			—			2,744			—			2,744
Operating revenues—affiliates		—			2			29			(10	)		21
Total operating revenues		—			2			2,773			(10	)		2,765
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)		—			—			1,185			—			1,185
Selling, general and administrative		3			2			520			—			525
Operating expenses—affiliates		—			—			46			(10	)		36
Depreciation and amortization		20			—			776			—			796
Total operating expenses		23			2			2,527			(10	)		2,542
OPERATING (LOSS) INCOME		(23	)		—			246			—			223
OTHER INCOME (EXPENSE)
Interest expense		(43	)		(17	)		(98	)		—			(158	)
Interest expense—affiliates		(4	)		(22	)		—			26			—
Interest income—affiliates		—			26			—			(26	)		—
Income (loss) from equity investments in subsidiaries		90			18			—			(108	)		—
Other (expense) income		(1	)		(1	)		2			—			—
Total other income (expense)		42			4			(96	)		(108	)		(158	)
INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE		19			4			150			(108	)		65
Income tax (benefit) expense		(13	)		(84	)		130			—			33
NET INCOME	$	32			88			20			(108	)		32

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Qwest Communications International Inc.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

SIX MONTHS ENDED SEPTEMBER 30, 2011

SUCCESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
OPERATING REVENUES
Operating revenues	$	—			—			5,507			—			5,507
Operating revenues—affiliates		—			5			44			(22	)		27
Total operating revenues		—			5			5,551			(22	)		5,534
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)		—			—			2,326			—			2,326
Selling, general and administrative		8			5			1,168			—			1,181
Operating expenses—affiliates		—			—			90			(22	)		68
Depreciation and amortization		42			—			1,556			—			1,598
Total operating expenses		50			5			5,140			(22	)		5,173
OPERATING (LOSS) INCOME		(50	)		—			411			—			361
OTHER INCOME (EXPENSE)
Interest expense		(87	)		(35	)		(186	)		—			(308	)
Interest expense—affiliates		(8	)		(45	)		1			52			—
Interest income—affiliates		—			52			—			(52	)		—
Loss on early retirement of debt		—			—			(1	)		—			(1	)
Income (loss) from equity investments in subsidiaries		157			(34	)		—			(123	)		—
Other (expense) income		(1	)		(1	)		2			—			—
Total other income (expense)		61			(63	)		(184	)		(123	)		(309	)
INCOME (LOSS) BEFORE INCOME TAX (BENEFIT) EXPENSE		11			(63	)		227			(123	)		52
Income tax (benefit) expense		(8	)		(215	)		256			—			33
NET INCOME (LOSS)	$	19			152			(29	)		(123	)		19

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Qwest Communications International Inc.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2011

PREDECESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
OPERATING REVENUES
Operating revenues	$	—			—			2,846			—			2,846
Operating revenues—affiliates		—			2			9			(11	)		—
Total operating revenues		—			2			2,855			(11	)		2,846
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)		—			—			1,178			—			1,178
Selling, general and administrative		3			2			551			—			556
Operating expenses—affiliates		—			—			11			(11	)		—
Depreciation and amortization		—			—			533			—			533
Total operating expenses		3			2			2,273			(11	)		2,267
OPERATING (LOSS) INCOME		(3	)		—			582			—			579
OTHER INCOME (EXPENSE)
Interest expense		(56	)		(19	)		(152	)		—			(227	)
Interest expense—affiliates		(1	)		(26	)		(1	)		28			—
Interest income—affiliates		—			28			—			(28	)		—
Income from equity investments in subsidiaries		272			226			—			(498	)		—
Other (expense) income		—			(1	)		6			—			5
Total other income (expense)		215			208			(147	)		(498	)		(222	)
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)		212			208			435			(498	)		357
Income tax expense (benefit)		1			(64	)		209			—			146
NET INCOME	$	211			272			226			(498	)		211

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2010

PREDECESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
OPERATING REVENUES
Operating revenues	$	—			—			2,935			—			2,935
Operating revenues—affiliates		—			—			8			(8	)		—
Total operating revenues		—			—			2,943			(8	)		2,935
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)		—			—			1,286			—			1,286
Selling, general and administrative		9			1			590			—			600
Operating expenses—affiliates		—			—			8			(8	)		—
Depreciation and amortization		—			—			552			—			552
Total operating expenses		9			1			2,436			(8	)		2,438
OPERATING (LOSS) INCOME		(9	)		(1	)		507			—			497
OTHER INCOME (EXPENSE)
Interest expense		(82	)		(22	)		(151	)		—			(255	)
Interest expense—affiliates		—			(71	)		—			71			—
Interest income—affiliates		—			71			—			(71	)		—
Loss on early retirement of debt		(3	)		—			—			—			(3	)
Loss on embedded option in convertible debt		(229	)		—			—			—			(229	)
Income from equity investments in subsidiaries		214			159			—			(373	)		—
Other income (expense)		—			6			2			—			8
Total other income (expense)		(100	)		143			(149	)		(373	)		(479	)
(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE		(109	)		142			358			(373	)		18
Income tax (benefit) expense		(19	)		(72	)		199			—			108
NET (LOSS) INCOME	$	(90	)		214			159			(373	)		(90	)

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Qwest Communications International Inc.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2010

PREDECESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
OPERATING REVENUES
Operating revenues	$	—			—			8,831			—			8,831
Operating revenues—affiliates		—			2			16			(18	)		—
Total operating revenues		—			2			8,847			(18	)		8,831
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)		—			—			3,773			—			3,773
Selling, general and administrative		48			2			1,789			—			1,839
Operating expenses—affiliates		—			—			18			(18	)		—
Depreciation and amortization		—			—			1,645			—			1,645
Total operating expenses		48			2			7,225			(18	)		7,257
OPERATING (LOSS) INCOME		(48	)		—			1,622			—			1,574
OTHER INCOME (EXPENSE)
Interest expense		(250	)		(80	)		(469	)		—			(799	)
Interest expense—affiliates		—			(226	)		—			226			—
Interest income—affiliates		—			226			—			(226	)		—
Loss on early retirement of debt		(5	)		(40	)		—			—			(45	)
Loss on embedded option in convertible debt		(208	)		—			—			—			(208	)
Income from equity investments in subsidiaries		580			494			—			(1,074	)		—
Other income (expense)		—			7			2			—			9
Total other income (expense)		117			381			(467	)		(1,074	)		(1,043	)
INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE		69			381			1,155			(1,074	)		531
Income tax (benefit) expense		(37	)		(203	)		665			—			425
NET INCOME	$	106			584			490			(1,074	)		106

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Condensed Consolidating Balance Sheets

Qwest Communications International Inc.

CONDENSED CONSOLIDATING BALANCE SHEETS

SEPTEMBER 30, 2011

SUCCESSOR

(UNAUDITED)

	QCII(1)		QSC(2) & QCF(3)		Subsidiary Non- Guarantors		Eliminations			QCII Consolidated
	(Dollars in millions)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—		60		10		—			70
Accounts receivable, less allowance		27		16		1,177		—			1,220
Accounts receivable—affiliates, net		213		534		74		(821	)		—
Short-term affiliate loans		—		1,767		982		(1,525	)		1,224
Deferred income taxes, net		—		37		157		(11	)		183
Other		—		3		269		(19	)		253
Total current assets		240		2,417		2,669		(2,376	)		2,950
Net property, plant and equipment		—		—		9,381		—			9,381
Goodwill		—		—		10,135		—			10,135
Customer relationships, net		—		—		7,108		—			7,108
Other intangible assets, net		145		—		1,541		—			1,686
Investments in subsidiaries		15,130		13,570		—		(28,700	)		—
Deferred income taxes, net		833		1,769		11		(2,613	)		—
Prepaid pension, post-retirement and other post-employment benefits—affiliate		2,835		74		940		(3,849	)		—
Other		37		7		296		—			340
TOTAL ASSETS	$	19,220		17,837		32,081		(37,538	)		31,600
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—		—		672		—			672
Current debt—affiliates		267		1,258		—		(1,525	)		—
Accounts payable		5		1		980		—			986
Accounts payable—affiliates		47		2		31		(33	)		47
Dividends payable—affiliates		200		—		510		(510	)		200
Accrued expenses and other liabilities		273		12		808		(2	)		1,091
Accrued expenses and other—affiliates		2		98		195		(295	)		—
Deferred income taxes, net		11		—		—		(11	)		—
Advance billings and customer deposits		—		—		374		—			374
Total current liabilities		805		1,371		3,570		(2,376	)		3,370
LONG-TERM DEBT		2,773		1,009		8,454		—			12,236
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred revenues		—		—		118		—			118
Benefit plan obligations, net		2,801		—		—		—			2,801
Pension, post-retirement and other post-employment benefits obligations and other—affiliates		1,014		332		2,503		(3,849	)		—
Deferred income taxes		—		—		3,181		(2,613	)		568
Other		134		30		650		—			814
Total deferred credits and other liabilities		3,949		362		6,452		(6,462	)		4,301
Stockholders' equity		11,693		15,095		13,605		(28,700	)		11,693
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	19,220		17,837		32,081		(37,538	)		31,600

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Qwest Communications International Inc.

CONDENSED CONSOLIDATING BALANCE SHEETS

DECEMBER 31, 2010

PREDECESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)		Subsidiary Non- Guarantors		Eliminations			QCII Consolidated
	(Dollars in millions)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—			148		224		—			372
Accounts receivable, less allowance		16			22		1,226		—			1,264
Accounts receivable—affiliates, net		296			277		154		(727	)		—
Notes receivable—affiliates		—			1,568		110		(1,678	)		—
Deferred income taxes, net		—			36		208		(10	)		234
Other		9			26		353		(28	)		360
Total current assets		321			2,077		2,275		(2,443	)		2,230
Property, plant and equipment, net		—			—		11,857		—			11,857
Other intangible assets, net		50			—		888		—			938
Investments in subsidiaries		1,355			429		—		(1,784	)		—
Deferred income taxes, net		840			2,045		139		(1,338	)		1,686
Prepaid pension, post-retirement and other post-employment benefits—affiliate		2,848			71		914		(3,833	)		—
Other		75			45		389		—			509
TOTAL ASSETS	$	5,489			4,667		16,462		(9,398	)		17,220
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—			179		910		—			1,089
Current debt—affiliates		118			1,560		—		(1,678	)		—
Accounts payable		8			4		1,021		—			1,033
Accounts payable—affiliates		26			20		186		(232	)		—
Accrued expenses and other liabilities		296			58		842		(7	)		1,189
Accrued expenses and other—affiliates		—			175		320		(495	)		—
Deferred income taxes, net		10			—		—		(10	)		—
Advance billings and customer deposits		—			—		572		(21	)		551
Total current liabilities		458			1,996		3,851		(2,443	)		3,862
LONG-TERM DEBT		2,598			978		7,282		—			10,858
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred revenues		—			—		459		—			459
Benefit plan obligations, net		2,979			—		—		—			2,979
Pension, post-retirement and other post-employment benefits obligations and other—affiliates		985			356		2,492		(3,833	)		—
Deferred income taxes		—			11		1,327		(1,338	)		—
Other		124			2		591		—			717
Total deferred credits and other liabilities		4,088			369		4,869		(5,171	)		4,155
Stockholders' (deficit) equity		(1,655	)		1,324		460		(1,784	)		(1,655	)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,489			4,667		16,462		(9,398	)		17,220

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Condensed Consolidating Statements Of Cash Flows

Qwest Communications International Inc.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED SEPTEMBER 30, 2011

SUCCESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
Net cash (used in) provided by operating activities	$	(130	)		188			1,486			—			1,544
INVESTING ACTIVITIES
Payments for property, plant and equipment and capitalized software		—			—			(748	)		—			(748	)
Cash infusion to subsidiaries		—			(348	)		—			348			—
Changes in short-term affiliate loans		—			(351	)		(822	)		28			(1,145	)
Dividends received from subsidiaries		400			790			—			(1,190	)		—
Other, net		—			—			3			—			3
Net cash provided by (used in) investing activities		400			91			(1,567	)		(814	)		(1,890	)
FINANCING ACTIVITIES
Payments of long-term debt		—			—			(877	)		—			(877	)
Net proceeds from (repayments of) short-term affiliate debt		30			(2	)		—			(28	)		—
Net proceeds from issuance of long-term debt		—			—			1,200			—			1,200
Cash infusion from parent		—			—			348			(348	)		—
Dividends paid to parent		(300	)		(400	)		(790	)		1,190			(300	)
Early retirement of debt costs		—			—			(13	)		—			(13	)
Other, net		—			—			(18	)		—			(18	)
Net cash used in financing activities		(270	)		(402	)		(150	)		814			(8	)
Net decrease in cash and cash equivalents		—			(123	)		(231	)		—			(354	)
Cash and cash equivalents at beginning of period		—			183			241			—			424
Cash and cash equivalents at end of period	$	—			60			10			—			70

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Qwest Communications International Inc.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2011

PREDECESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
Net cash provided by (used in) operating activities	$	7			(62	)		828			4			777
INVESTING ACTIVITIES
Payments for property, plant and equipment and capitalized software		—			—			(410	)		—			(410	)
Changes in interest in investments managed by QSC		—			(3	)		3			—			—
Cash infusion to subsidiaries		—			(191	)		—			191			—
Changes in short-term affiliate loans		—			180			1			(181	)		—
Dividends received from subsidiaries		—			590			—			(590	)		—
Other, net		—			—			2			—			2
Net cash provided by (used in) investing activities		—			576			(404	)		(580	)		(408	)
FINANCING ACTIVITIES
Payments of long-term debt		—			(179	)		(24	)		—			(203	)
Net proceeds from (repayments of) short-term affiliate debt		119			(300	)		—			181			—
Dividends paid		(141	)		—			—			—			(141	)
Net proceeds from issuance of common stock		14			—			—			—			14
Cash infusion from parent		—			—			191			(191	)		—
Dividends paid to parent		—			—			(590	)		590			—
Other, net		1			—			16			(4	)		13
Net cash used in financing activities		(7	)		(479	)		(407	)		576			(317	)
Net increase in cash and cash equivalents		—			35			17			—			52
Cash and cash equivalents at beginning of period		—			148			224			—			372
Cash and cash equivalents at end of period	$	—			183			241			—			424

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.

Qwest Communications International Inc.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2010

PREDECESSOR

(UNAUDITED)

	QCII(1)			QSC(2) & QCF(3)			Subsidiary Non- Guarantors			Eliminations			QCII Consolidated
	(Dollars in millions)
Net cash (used in) provided by operating activities	$	(203	)		598			2,126			43			2,564
INVESTING ACTIVITIES
Payments for property, plant and equipment and capitalized software		—			—			(1,090	)		—			(1,090	)
Proceeds from sales or maturities of investment securities		—			943			—			—			943
Purchases of investment securities		—			(944	)		—			—			(944	)
Changes in interest in investments managed by QSC		7			(34	)		27			—			—
Cash infusion to subsidiaries		—			(435	)		—			435			—
Changes in short-term affiliate loans		—			1,302			22			(1,324	)		—
Dividends received from subsidiaries		324			1,650			—			(1,974	)		—
Other, net		—			—			1			—			1
Net cash provided by (used in) investing activities		331			2,482			(1,040	)		(2,863	)		(1,090	)
FINANCING ACTIVITIES
Payments of long-term debt		(672	)		(1,025	)		(540	)		—			(2,237	)
Net proceeds from issuance of long-term debt		775			—			—			—			775
Net repayments of short-term affiliate debt		(22	)		(1,302	)		—			1,324			—
Dividends paid		(416	)		—			—			—			(416	)
Net proceeds from issuance of common stock		41			—			—			—			41
Cash infusion from parent		—			—			435			(435	)		—
Dividends paid to parent		—			(324	)		(1,650	)		1,974			—
Settlement of embedded option in convertible debt		(24	)		—			—			—			(24	)
Early retirement of debt costs		(1	)		(40	)		—			—			(41	)
Other, net		35			—			(3	)		(43	)		(11	)
Net cash used in financing activities		(284	)		(2,691	)		(1,758	)		2,820			(1,913	)
Net (decrease) increase in cash and cash equivalents		(156	)		389			(672	)		—			(439	)
Cash and cash equivalents at beginning of period		194			987			1,225			—			2,406
Cash and cash equivalents at end of period	$	38			1,376			553			—			1,967

(1) QCII is the issuer of the QCII Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.

(2) QSC is a guarantor of the QCII Guaranteed Notes.

(3) QCF is the issuer of the QCF Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.