Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2018

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended June 30, 2018 (Successor)



	Level 3 Parent, LLC			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
	(Dollars in millions)
OPERATING REVENUES
Operating revenues	$	—		—			977			1,091			(43		)	2,025
Operating revenues - affiliate	—			—			6			21			—			27
Total operating revenues	—			—			983			1,112			(43		)	2,052
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—			600			423			(43		)	980
Selling, general and administrative	—			2			286			100			—			388
Operating expenses - affiliates	—			—			37			18			—			55
Depreciation and amortization	—			—			174			259			—			433
Total operating expenses	—			2			1,097			800			(43		)	1,856
OPERATING INCOME (LOSS)	—			(2		)	(114		)	312			—			196
OTHER INCOME (EXPENSE)
Interest income	—			—			1			—			(1		)	—
Interest income - affiliate	16			—			—			—			—			16
Interest expense	(8		)	(113		)	—			(4		)	1			(124		)
Interest income (expense) - intercompany, net	348			604			(878		)	(74		)	—			—
Equity in net earnings (losses) of subsidiaries	(316		)	(832		)	—			—			1,148			—
Other income, net	—			—			2			(6		)	—			(4		)
Total other income (expense)	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 income (loss), net of income taxes	(235		)	—			—			(235		)	235			(235		)
COMPREHENSIVE INCOME (LOSS)	$	(195	)	$	(316	)	$	(976	)	$	(91	)	$	1,383		$	(195	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended June 30, 2017 (Predecessor)



	Level 3 Parent, LLC			Level 3 Financing, Inc.		Level 3 Communications, LLC		Other Non-Guarantor Subsidiaries		Eliminations		Total
	(Dollars in millions)
OPERATING REVENUES
Operating revenues	$	—		—		934		1,174		(46	)	2,062
Operating revenues - affiliate	—			—		—		—		—		—
Total operating revenues	—			—		934		1,174		(46	)	2,062
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)	—			—		602		479		(46	)	1,035
Selling, general and administrative expenses	1			1		294		71		—		367
Operating expenses - affiliate	—			—		—		—		—		—
Depreciation and amortization	—			—		92		215		—		307
Total operating expenses	1			1		988		765		(46	)	1,709
OPERATING INCOME (LOSS)	(1		)	(1	)	(54	)	409		—		353
OTHER INCOME (EXPENSE)
Interest income	—			—		3		—		—		3
Interest income - affiliate	—			—		—		—		—		—
Interest expense	(9		)	(117	)	(1	)	(4	)	—		(131	)
Interest income (expense) - intercompany, net	378			567		(868	)	(77	)	—		—
Equity in net earnings (losses) of subsidiaries	(216		)	(632	)	200		—		648		—
Other income, net	—			—		(2	)	—		—		(2	)
Total other income (expense)	153			(182	)	(668	)	(81	)	648		(130	)
INCOME (LOSS) BEFORE INCOME TAXES	152			(183	)	(722	)	328		648		223
Income tax benefit (expense)	2			(33	)	(1	)	(37	)	—		(69	)
NET INCOME (LOSS)	154			(216	)	(723	)	291		648		154
Other comprehensive income (loss), net of income taxes	41			—		—		41		(41	)	41
COMPREHENSIVE INCOME (LOSS)	$	195		(216	)	(723	)	332		607		195

Condensed Consolidating Balance Sheets

June 30, 2018 (Successor)



	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	$	21	—	180	81	—		282
Restricted cash and securities	—		—	2	3	—		5
Assets held for sale	—		—	1	14	—		15
Accounts receivable	—		—	65	679	—		744
Accounts receivable - affiliate	—		—	4	31	(31	)	4
Intercompany advances	16,727		23,346	—	4,303	(44,376	)	—
Note receivable - affiliate	1,825		—	—	—	—		1,825
Other	—		3	101	97	—		201
Total current assets	18,573		23,349	353	5,208	(44,407	)	3,076
Property, plant, and equipment, net	—		—	3,147	6,249	—		9,396
Restricted cash and securities	15		—	10	—	—		25
GOODWILL AND OTHER ASSETS
Goodwill	—		—	9,423	1,655	—		11,078
Customer relationships, net	—		—	3,897	4,093	—		7,990
Other intangible assets, net	—		—	396	—	—		396
Investment in subsidiaries	16,955		19,501	3,605	—	(40,061	)	—
Deferred tax assets	281		1,868	167	—	(1,833	)	483
Other, net	—		3	62	43	—		108
Total goodwill and other assets	17,236		21,372	17,550	5,791	(41,894	)	20,055
TOTAL ASSETS	$	35,824	44,721	21,060	17,248	(86,301	)	32,552

LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—	—	2	11	—		13
Accounts payable	—		1	285	295	—		581
Accounts payable - affiliate	48		—	89	—	(31	)	106
Income and other taxes	—		—	43	38	—		81
Salaries and benefits	—		—	162	37	—		199
Interest	11		77	—	6	—		94
Current portion of deferred revenue	—		—	153	132	—		285



Intercompany payables	—		—	44,376		—	(44,376	)	—
Other	—		—	26		19	—		45
Total current liabilities	59		78	45,136		538	(44,407	)	1,404
LONG-TERM DEBT	615		10,082	13		147	—		10,857
DEFERRED REVENUE AND OTHER LIABILITIES
Deferred revenues	—		—	931		207	—		1,138
Deferred income taxes	651		14	839		531	(1,833	)	202
Other	—		—	163		178	—		341
Total deferred revenue and other liabilities	651		14	1,933		916	(1,833	)	1,681
COMMITMENTS AND CONTINGENCIES
MEMBER'S EQUITY (DEFICIT)	34,499		34,547	(26,022	)	15,647	(40,061	)	18,610
TOTAL LIABILITIES AND MEMBER'S EQUITY	$	35,824	44,721	21,060		17,248	(86,301	)	32,552

Condensed Consolidating Balance Sheets

December 31, 2017 (Successor)



	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	$	13	—	175	109	—		297
Restricted cash and securities	—		—	1	4	—		5
Assets held for sale	68		—	5	67	—		140
Accounts receivable	—		—	26	722	—		748
Accounts receivable - affiliate	—		—	60	4	(51	)	13
Intercompany advances	16,251		21,032	—	5,200	(42,483	)	—
Note receivable - affiliate	1,825		—	—	—	—		1,825
Other	—		—	54	63	—		117
Total current assets	18,157		21,032	321	6,169	(42,534	)	3,145
Property, plant, and equipment, net	—		—	3,237	6,175	—		9,412
Restricted cash and securities	19		—	10	—	—		29
GOODWILL AND OTHER ASSETS
Goodwill	—		—	1,200	9,637	—		10,837
Customer relationships, net	—		—	4,324	4,521	—		8,845
Other intangible assets, net	—		—	378	—	—		378
Investment in subsidiaries	16,954		18,403	3,616	—	(38,973	)	—
Deferred tax assets	280		1,795	—	122	(1,771	)	426
Other, net	—		—	32	31	—		63
Total goodwill and other assets	17,234		20,198	9,550	14,311	(40,744	)	20,549
TOTAL ASSETS	$	35,410	41,230	13,118	26,655	(83,278	)	33,135

LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—	—	2	6	—		8
Accounts payable	—		1	323	371	—		695
Accounts payable - affiliate	11		—	—	81	(51	)	41
Accrued expenses and other liabilities
Income and other taxes	—		—	55	45	—		100
Salaries and benefits	—		—	109	27	—		136
Interest	11		91	—	7	—		109



Current portion of deferred revenue	—		—	129		131	—		260
Intercompany payables	—		—	42,483		—	(42,483	)	—
Other	16		—	23		18	—		57
Total current liabilities	38		92	43,124		686	(42,534	)	1,406
LONG-TERM DEBT	616		10,096	13		157	—		10,882
DEFERRED REVENUE AND OTHER LIABILITIES
Deferred revenues	—		—	846		253	—		1,099
Deferred income taxes	648		—	870		465	(1,771	)	212
Other	1		1	98		164	—		264
Total deferred revenue and other liabilities	649		1	1,814		882	(1,771	)	1,575
COMMITMENTS AND CONTINGENCIES
MEMBER'S EQUITY (DEFICIT)	34,107		31,041	(31,833	)	24,930	(38,973	)	19,272
TOTAL LIABILITIES AND MEMBER'S EQUITY	$	35,410	41,230	13,118		26,655	(83,278	)	33,135

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2018 (Successor)



	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 (used in) operating activities	$	(85	)	—	899		204		—	1,018
INVESTING ACTIVITIES
Capital expenditures	—			—	(289	)	(257	)	—	(546	)
Proceeds from the 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
Payments of long-term debt	—			—	—		(3	)	—	(3	)
Distributions	(605		)	—	—		—		—	(605	)
Increase (decrease) due from/to affiliates, net	605			—	(605	)	—		—	—
Net cash provided by (used in) financing activities	—			—	(605	)	(3	)	—	(608	)
Effect of exchange rates on cash, cash equivalents and restricted cash and securities	—			—	—		(2	)	—	(2	)
Net increase (decrease) in cash, cash equivalents and restricted cash and securities	(17		)	—	5		(7	)	—	(19	)
Cash, cash equivalents and restricted cash and securities and beginning of period	32			—	186		113		—	331
Cash, cash equivalents and restricted cash and securities and end of period	$	15		—	191		106		—	312

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2017 (Predecessor)



	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 (Used in) Operating Activities	$	(14	)	(267	)	352		1,029		—	1,100
INVESTING ACTIVITIES
Capital expenditures	—			—		(427	)	(269	)	—	(696	)
Purchase of marketable securities	—			—		(1,127	)	—		—	(1,127	)
Net cash provided by (used in) investing activities	—			—		(1,554	)	(269	)	—	(1,823	)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt	—			4,569		—		—		—	4,569
Payments of long-term debt	—			(4,611	)	(1	)	(3	)	—	(4,615	)
Increase (decrease) due from/to affiliates, net	10			309		442		(761	)	—	—
Net cash provided by (used in) financing activities	10			267		441		(764	)	—	(46	)
Effect of exchange rates on cash, cash equivalents and restricted cash and securities	—			—		—		2		—	2
Net increase (decrease) in cash, cash equivalents and restricted cash and securities	(4		)	—		(761	)	(2	)	—	(767	)
Cash, cash equivalents and restricted cash and securities and beginning of period	37			—		1,710		110		—	1,857
Cash, cash equivalents and restricted cash and securities and end of period	$	33		—		949		108		—	1,090