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Unaudited Quarterly Financial Data
 12 Months Ended
Dec. 31, 2012
Quarterly Financial Information Disclosure [Abstract]  
Unaudited Quarterly Financial Data
Unaudited Quarterly Financial Data
 
 
Three Months Ended
 
 
March 31,
 
June 30,
 
September 30,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
 
2012
 
2011
 
2012
 
2011
 
 
(dollars in millions except per share data)
Revenue
 
$
1,586

 
$
914

 
$
1,586

 
$
913

 
$
1,590

 
$
927

 
$
1,614

 
$
1,579

Gross Margin
 
929

 
557

 
938

 
566

 
948

 
585

 
959

 
919

Operating Income (Loss)
 
116

 
(3
)
 
133

 
3

 
138

 
7

 
188

 
45

Net Loss
 
(138
)
 
(205
)
 
(62
)
 
(181
)
 
(166
)
 
(207
)
 
(56
)
 
(163
)
Loss per share (Basic and Diluted)
 
$
(0.66
)
 
$
(1.83
)
 
$
(0.29
)
 
$
(1.59
)
 
$
(0.76
)
 
$
(1.75
)
 
$
(0.26
)
 
$
(0.80
)

Loss per share for each quarter is computed using the weighted-average number of shares outstanding during that quarter, while loss per share for the year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the loss per share for each of the four quarters may not equal the loss per share for the year.
During the fourth quarter of 2012, the Company recognized a loss on extinguishment of debt of $50 million in connection with the refinancing of the $650 million Tranche B II Term Loan and $550 million Tranche B III Term Loan. Additionally in the fourth quarter of 2012, the Company recognized $20 million of restructuring charges.
During the fourth quarter of 2012, the Company completed an updated analysis and revised its estimated future cash flows of its asset retirement obligations as a result of a strategic review of the Company's real estate portfolio. As a result, the Company reduced its asset retirement obligations liability by $73 million with an offsetting reduction to property, plant and equipment of $24 million, selling, general and administrative expenses of $47 million and depreciation and amortization of $2 million. (see Note 6 - Asset Retirement Obligations).
During the third quarter of 2012, the Company recognized a loss on extinguishment of debt of $49 million, including $9 million related to the refinancing of the $1.4 billion Tranche A Term Loan and the repayment of existing vendor financing obligations and $40 million as a result of the redemption of the 8.75% Senior Notes due 2017. Also in the third quarter of 2012, the Company recognized a non-cash loss in “other, net” of $60 million on interest rate swap agreements that were deemed "ineffective" under GAAP in connection with the refinancing of the $1.4 billion Tranche A Term Loan.
During the first quarter of 2012, the Company recognized a loss on extinguishment of debt of $61 million, including $22 million related to the redemption of the 9.25% Senior Notes due 2014 and $39 million as a result of the exchange of a portion of the 15% Convertible Senior Notes due 2013 for approximately 5.4 million shares of Level 3 common stock.
In the fourth quarter of 2011, the Company completed the Amalgamation and the disposition of its coal mining business. Operating results have been included through the respective dates of acquisition and sale. As a result of a change in the estimated useful lives of certain of the Company’s property, plant and equipment, the Company had a reduction in depreciation expense of approximately $74 million, which was accounted for as a change in accounting estimate on a prospective basis effective October 1, 2011. The Company also recognized $11 million of restructuring charges and $20 million associated with the impairment of certain wireless spectrum licenses. Additionally in the fourth quarter of 2011, the Company recognized a loss on extinguishment of debt of $27 million related to the redemption of the 3.5% Convertible Senior Notes due 2012 and prepayment of the Tranche B Term Loan that was outstanding under the existing Senior Secured Term Loan.
In the third quarter of 2011, the Company recognized a loss on extinguishment of debt of $30 million related to the conversion of the 15% Convertible Senior Notes due 2013 and the repurchase of the 3.5% Convertible Senior Notes due 2012.
During the second quarter of 2011, the Company recognized a loss on extinguishment of debt of $23 million related to the retirement of its 9.25% Senior Notes due 2014.
During the first quarter of 2011, the Company recognized a loss on extinguishment of debt of $20 million related to the redemption of the 5.25% Convertible Senior Notes due 2011 and the exchange of the 9.0% Convertible Senior Discount Notes due 2013.