LEVEL 3 COMMUNICATIONS INC, 10-K filed on 2/27/2014
Annual Report
Document and Entity Information Document (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Feb. 24, 2014
Jun. 30, 2013
Entity Information [Line Items]
 
 
 
Entity Registrant Name
LEVEL 3 COMMUNICATIONS INC 
 
 
Entity Central Index Key
0000794323 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2013 
 
 
Amendment Flag
false 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 2,429 
Entity Common Stock, Shares Outstanding
 
235,236,508 
 
Document Fiscal Year Focus
2013 
 
 
Document Fiscal Period Focus
FY 
 
 
Consolidated Statements of Operations (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Revenue
$ 6,313 
$ 6,376 
$ 4,333 
Total Costs and Expenses Exclusive of Depreciation and Amortization shown separately below:
 
 
 
Cost of Revenue
2,471 
2,602 
1,706 
Depreciation and Amortization
800 
749 
805 
Selling, General and Administrative
2,376 
2,450 
1,770 
Total Costs and Expenses
5,647 
5,801 
4,281 
Operating Income (Loss)
666 
575 
52 
Other Income (Expense):
 
 
 
Interest income
0 
2 
1 
Interest expense
(649)
(733)
(716)
Loss on extinguishment of debt, net
(84)
(160)
(100)
Other, net
(4)
(58)
(23)
Total Other Expense
(737)
(949)
(838)
Loss Before Income Taxes
(71)
(374)
(786)
Income Tax (Expense) Benefit
(38)
(48)
(41)
Loss from Continuing Operations
(109)
(422)
(827)
Income (Loss) from Discontinued Operations, Net
0 
0 
71 
Net Loss
$ (109)
$ (422)
$ (756)
Loss per Share from Continuing Operations, Basic and Diluted
$ (0.49)
$ (1.96)
$ (6.03)
Income (Loss) per Share from Discontinued Operations, Basic and Diluted
$ 0.00 
$ 0.00 
$ 0.52 
Net Loss per Share, Basic and Diluted
$ (0.49)
$ (1.96)
$ (5.51)
Shares Used to Compute Basic and Diluted Loss per Share (in thousands)
222,368 
215,356 
137,176 
Consolidated Statements of Comprehensive Loss (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Net Loss
$ (109)
$ (422)
$ (756)
Other Comprehensive Income (Loss) Before Income Taxes:
 
 
 
Foreign Currency Translation
11 
17 
(16)
Holding Gain (Loss) on Interest Rate Swaps, including Reclassification Gains (Losses)
0 
25 
(28)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax
0 
65 
46 
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax
(1)
(1)
16 
Other Comprehensive Income (Loss) Before Income Taxes
10 
106 
18 
Income Tax Related to Items of Other Comprehensive Income (Loss)
0 
0 
0 
Other Comprehensive Income (Loss), Net of Income Taxes
10 
106 
18 
Comprehensive Loss
$ (99)
$ (316)
$ (738)
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Assets
 
 
Cash and cash equivalents
$ 631 
$ 979 
Restricted cash and securities
7 
8 
Receivables, less allowances for doubtful accounts of $32 and $31, respectively
673 
714 
Other
143 
141 
Total Current Assets
1,454 
1,842 
Property, plant and equipment, net of accumulated depreciation of $9,089 and $8,359, respectively
8,240 
8,199 
Restricted Cash and Securities
23 
35 
Goodwill
2,577 
2,565 
Other Intangibles, net
205 
268 
Other Assets, net
375 
398 
Total Assets
12,874 
13,307 
Current Liabilities:
 
 
Accounts payable
625 
779 
Current portion of long-term debt
31 
216 
Accrued payroll and employee benefits
209 
211 
Accrued interest
160 
209 
Current portion of deferred revenue
253 
251 
Other
168 
136 
Total Current Liabilities
1,446 
1,802 
Long-Term Debt, less current portion
8,331 
8,516 
Deferred Revenue, less current portion
906 
887 
Other Liabilities
780 
931 
Total Liabilities
11,463 
12,136 
Commitments and Contingencies
0 
0 
Stockholders’ Equity:
 
 
Preferred Stock, Value, Issued
0 
0 
Common stock, $.01 par value, authorized 343,333,333 shares in both periods; 234,688,063 shares issued and outstanding at December 31, 2013 and 218,380,070 shares issued and outstanding at December 31, 2012
2 
2 
Additional paid-in capital
14,339 
14,000 
Accumulated other comprehensive income (loss)
36 
26 
Accumulated deficit
(12,966)
(12,857)
Total Stockholders’ Equity
1,411 
1,171 
Total Liabilities and Stockholders’ Equity
$ 12,874 
$ 13,307 
Consolidated Balance Sheets Parentheticals (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Allowance for doubtful accounts
$ 32 
$ 31 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
$ 9,089 
$ 8,359 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
343,333,333 
343,333,333 
Common stock, shares issued
234,688,063 
218,380,070 
Common stock, shares outstanding
234,688,063 
218,380,070 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Cash Flows from Operating Activities:
 
 
 
Net Loss
$ (109)
$ (422)
$ (756)
(Income) loss from discontinued operations
0 
0 
(71)
Loss from Continuing Operations
(109)
(422)
(827)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities of continuing operations:
 
 
 
Depreciation and amortization
800 
749 
805 
Asset retirement obligation adjustment
0 
(47)
0 
Asset Impairment Charges
7 
0 
0 
Non-cash compensation expense attributable to stock awards
151 
135 
101 
Loss on extinguishment of debt, net
84 
160 
100 
Loss on interest rate swaps
0 
60 
0 
Accretion of debt discount and amortization of debt issuance costs
36 
46 
56 
Accrued interest on long-term debt, net
(49)
(5)
82 
Loss on impairment of wireless spectrum licenses
0 
0 
20 
Non-cash tax adjustments [Line Items]
(42)
(14)
0 
Deferred income taxes
(29)
21 
33 
Loss (gain) on sale of property, plant, and equipment and other assets
(2)
(1)
(2)
Other, net
(41)
(23)
5 
Changes in working capital items:
 
 
 
Receivables
30 
(86)
(12)
Other current assets
3 
(5)
(1)
Payables
(162)
18 
30 
Deferred revenue
28 
(10)
(3)
Other current liabilities
8 
2 
1 
Net Cash Provided by Operating Activities of Continuing Operations
713 
578 
388 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(760)
(743)
(494)
Decrease (increase) in restricted cash and securities, net
13 
20 
(54)
Proceeds from the sale of property, plant and equipment and other assets
 
 
4 
Investment in Global Crossing, net of cash acquired
0 
0 
146 
Payments for other investing activities
2 
(2)
4 
Net Cash Used in Investing Activities in Investing Activities of Continuing Operations
(745)
(725)
(398)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
1,502 
4,504 
1,878 
Payments on and repurchases of long-term debt, including current portion and refinancing costs
(1,796)
(4,302)
(1,617)
Proceeds from Stock Options Exercised
0 
5 
0 
Net Cash Provided by (Used in) Financing Activities of Continuing Operations
(294)
207 
261 
Discontinued Operations:
 
 
 
Net cash used in operating activities
0 
0 
(4)
Net cash provided by (used in) investing activities
0 
0 
55 
Net Cash Provided by (Used in) Discontinued Operations
0 
0 
51 
Effect of Exchange Rates on Cash and Cash Equivalents
(22)
1 
0 
Net Change in Cash and Cash Equivalents
(348)
61 
302 
Cash and Cash Equivalents at Beginning of Year
979 
918 
616 
Cash and Cash Equivalents at End of Year
631 
979 
918 
Supplemental Disclosure of Cash Flow Information:
 
 
 
Cash interest paid
674 
695 
576 
Income taxes paid, net of refunds
33 
32 
7 
Non-cash Investing and Financing Activities:
 
 
 
Capital Lease Obligations
13 
0 
0 
Notes Issued
12 
0 
0 
Long-term debt issued in exchange transaction
0 
0 
300 
Non Cash Long Term Debt Retired in Exchange Transaction
0 
0 
295 
Conversion of notes into common stock
200 
100 
128 
Non-cash inducement premium on conversion of debt to equity
0 
39 
0 
Non cash accrued interest payment
3 
2 
0 
Long-term debt issued and proceeds placed in escrow
0 
0 
1,200 
Settlement of Global Crossing debt with escrowed securities
$ 0 
$ 0 
$ 1,254 
Consolidated Statements of Changes In Stockholders' Equity (Deficit) (USD $)
In Millions, except Share data, unless otherwise specified
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Beginning balance at Dec. 31, 2010
$ (157)
$ 17 
$ 11,603 
$ (98)
$ (11,679)
Beginning balance (in shares) at Dec. 31, 2010
 
111,365,226 
 
 
 
Common Stock
 
 
 
 
 
Common stock issued under employee stock benefit plans and other
52 
0 
52 
0 
0 
Common stock issued under employee stock benefit plans and other (in shares)
 
3,273,038 
 
 
 
Stock-based compensation expense
32 
0 
32 
0 
0 
Global Crossing acquisition equity consideration
1,881 
13 
1,868 
0 
0 
Global Crossing acquisition equity consideration (in shares)
 
88,535,830 
 
 
 
Reverse stock split
0 
(29)
29 
0 
0 
Conversion of debt to equity
123 
1 
122 
0 
0 
Conversion of debt to equity (in shares)
 
4,739,334 
 
 
 
Net Loss
(756)
0 
0 
0 
(756)
Other Comprehensive Income (Loss)
18 
0 
0 
18 
0 
Ending balance at Dec. 31, 2011
1,193 
2 
13,706 
(80)
(12,435)
Ending balance (in shares) at Dec. 31, 2011
 
207,913,428 
 
 
 
Common Stock
 
 
 
 
 
Common stock issued under employee stock benefit plans and other
88 
0 
88 
0 
0 
Common stock issued under employee stock benefit plans and other (in shares)
 
5,019,513 
 
 
 
Stock-based compensation expense
67 
0 
67 
0 
0 
Conversion of debt to equity
139 
0 
139 
0 
0 
Conversion of debt to equity (in shares)
 
5,447,129 
 
 
 
Net Loss
(422)
0 
0 
0 
(422)
Other Comprehensive Income (Loss)
106 
0 
0 
106 
0 
Ending balance at Dec. 31, 2012
1,171 
2 
14,000 
26 
(12,857)
Ending balance (in shares) at Dec. 31, 2012
218,380,070 
218,380,070 
 
 
 
Common Stock
 
 
 
 
 
Common stock issued under employee stock benefit plans and other
70 
0 
70 
0 
0 
Common stock issued under employee stock benefit plans and other (in shares)
 
5,493,729 
 
 
 
Stock-based compensation expense
69 
0 
69 
0 
0 
Conversion of debt to equity
200 
0 
200 
0 
0 
Conversion of debt to equity (in shares)
 
10,814,264 
 
 
 
Net Loss
(109)
0 
0 
0 
(109)
Other Comprehensive Income (Loss)
10 
0 
0 
10 
0 
Ending balance at Dec. 31, 2013
$ 1,411 
$ 2 
$ 14,339 
$ 36 
$ (12,966)
Ending balance (in shares) at Dec. 31, 2013
234,688,063 
234,688,063 
 
 
 
Organization and Summary of Significant Accounting Policies
Organization and Summary of Significant Accounting Policies
Organization and Summary of Significant Accounting Policies

Description of Business

Level 3 Communications, Inc. and subsidiaries (the "Company" or "Level 3") is a facilities-based provider (that is, a provider that owns or leases a substantial portion of the plant, property and equipment necessary to provide its services) of a broad range of integrated communications services. The Company created its communications network by constructing its own assets and through a combination of purchasing other companies and purchasing or leasing facilities from others. Level 3's network is an international, facilities-based communications network. The Company designed its network to provide communications services that employ and take advantage of rapidly improving underlying optical, Internet Protocol, computing and storage technologies.

Until November 2011, the Company also was engaged in coal mining through two 50% owned joint-venture surface mines, one each in Montana and Wyoming. The Company completed the sale of its coal mining business on November 14, 2011.

On October 4, 2011, a subsidiary of Level 3 completed its amalgamation with Global Crossing Limited ("Global Crossing"), which thereby became a wholly owned, indirect subsidiary of the Company through a tax free, stock for stock transaction (the "Amalgamation").

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Level 3 Communications, Inc. and subsidiaries in which it has a controlling interest. All significant intercompany accounts and transactions have been eliminated. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").

As part of its consolidation policy, the Company considers its controlled subsidiaries, investments in businesses in which the Company is not the primary beneficiary or does not have effective control but has the ability to significantly influence operating and financial policies, and variable interests resulting from economic arrangements that give the Company rights to economic risks or rewards of a legal entity. The Company does not have variable interests in a variable interest entity where it is required to consolidate the entity as the primary beneficiary or where it has concluded it is not the primary beneficiary.

Foreign Currency Translation

Local currencies of foreign subsidiaries are the functional currencies for financial reporting purposes except for certain foreign subsidiaries in Latin America. For operations outside the U.S. that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using average exchange rates prevailing during the year. A significant portion of the Company's foreign subsidiaries have either the British pound, the euro or the Brazilian real as the functional currency, each of which experienced significant fluctuations against the U.S. dollar during 2013, 2012 and 2011. Foreign currency translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in stockholders' equity (deficit) and in the consolidated statement of comprehensive loss in accordance with accounting guidance for foreign currency translation. The Company considers the majority of its investments in its foreign subsidiaries to be long-term in nature. The Company's foreign exchange transaction gains (losses), including where its investments in its foreign subsidiaries are not considered to be long-term in nature, are included within other income (expense) in Other, net on the consolidated statement of operations.




Reclassifications

Certain amounts in the prior year consolidated financial statements and accompanying footnotes have been reclassified to conform to the current year's presentation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. The accounting estimates that require management's judgments include revenue recognition, revenue reserves, cost of revenue for communications services, cost of revenue dispute reserves, determination of the useful lives of long-lived assets, measurement and recognition of stock-based compensation expense, valuation of long-lived assets, goodwill and acquired indefinite-lived intangible assets for purposes of impairment testing, valuation of asset retirement obligations, allowance for doubtful accounts, measurement of the fair value of assets acquired and liabilities assumed in business combinations, accruals for estimated tax and legal liabilities, valuation allowance for deferred tax assets, and valuation of other assets and liabilities measured at fair value. Actual results could differ from these estimates under different assumptions or conditions and such differences could be material.

Revenue and Cost of Revenue for Communications Services

Revenue for communications services is recognized monthly as the services are provided based on contractual amounts expected to be collected. Management establishes appropriate revenue reserves at the time services are rendered based on an analysis of historical credit activity to address, where significant, situations in which collection is not reasonably assured as a result of credit risk, potential billing disputes or other reasons. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material.

Intercarrier compensation revenue is recognized when an interconnection agreement is in place with another carrier, or if an agreement has expired, when the parties have agreed to continue operating under the previous agreement until a new agreement is negotiated and executed, or at rates mandated by the Federal Communications Commission (the "FCC").

For certain sale and long-term indefeasible right of use, or IRU, contracts involving private line, wavelengths and dark fiber services, the Company may receive upfront payments for services to be delivered for a period of up to 25 years. In these situations, the Company defers the revenue and amortizes it on a straight-line basis to earnings over the term of the contract.

Termination revenue is recognized when a customer discontinues service prior to the end of the contract period for which Level 3 had previously received consideration and for which revenue recognition was deferred. Termination revenue also is recognized when customers are required to make termination penalty payments to Level 3 to settle contractually committed purchase amounts that the customer no longer expects to meet or when a customer and Level 3 renegotiate a contract under which Level 3 is no longer obligated to provide services for consideration previously received and for which revenue recognition has been deferred.

The Company is obligated under dark fiber IRUs and other capacity agreements to maintain its network in efficient working order and in accordance with industry standards. Customers are obligated for the term of the agreement to pay for their allocable share of the costs for operating and maintaining the network. The Company recognizes this revenue monthly as services are provided.

Level 3's customer contracts require the Company to meet certain service level commitments. If Level 3 does not meet the required service levels, it may be obligated to provide credits, usually in the form of free service, for a short period of time. The credits are a reduction to revenue and, to date, have not been material.

Cost of revenue for the communications business includes leased capacity, right-of-way costs, access charges, satellite transponder lease costs and other third-party costs directly attributable to the network, but excludes depreciation and amortization and related impairment expenses.

The Company recognizes the cost of network services as they are incurred in accordance with contractual requirements. The Company disputes incorrect billings from its suppliers of network services. The most prevalent types of disputes include disputes for circuits that are not disconnected by the supplier on a timely basis and usage bills with incorrect or inadequate information. Depending on the type and complexity of the issues involved, it may and often does take several quarters to resolve the disputes. The Company establishes appropriate cost of revenue reserves for disputed supplier billings based on an analysis of historical experience in resolving disputes with its suppliers.

In determining the amount of the cost of network service expenses and related accrued liabilities to reflect in its consolidated financial statements, the Company considers the adequacy of documentation of disconnect notices, compliance with prevailing contractual requirements for submitting these disconnect notices and disputes to the provider of the network services, and compliance with its interconnection agreements with these carriers. Judgment is required in estimating the ultimate outcome of the dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiations or settle any litigation. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material.

Coal Mining

Prior to the sale of its coal mining business in November 2011, the Company sold coal primarily through long-term contracts with public utilities. The long-term contracts for the delivery of coal established the price, volume, and quality requirements of the coal to be delivered. Revenue under these and other contracts was generally recognized when coal was shipped to the customer.

USF and Gross Receipts Taxes

The revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, gross receipts taxes and certain state regulatory fees. The Company records Universal Service Fund ("USF") contributions where the Company is the primary obligor for the taxes assessed in each jurisdiction where it does business on a gross basis in its consolidated statements of operations, but generally records gross receipts taxes and certain state regulatory fees billed to its customers on a net basis in its consolidated statements of operations. Communications revenue and cost of revenue on the consolidated statements of operations includes USF contributions totaling $194 million, $191 million and $107 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Advertising Costs

The Company expenses the cost of advertising as incurred. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying consolidated statements of operations. Advertising expense was $16 million, $20 million and $15 million for the years ended December 31, 2013, 2012 and 2011, respectively.


Stock-Based Compensation

The Company recognizes the estimated fair value of stock-based compensation costs, net of an estimated forfeiture rate, over the requisite service period of the award, which is generally the vesting term or term for restrictions on transfer that lapse, as the case may be. The Company funded a portion of its 2013, 2012 and 2011 discretionary bonus in restricted stock awards that vested upon issuance. The Company estimates forfeiture rates based on its historical experience for the type of award, adjusted for expected activities as necessary.

Income Taxes

The Company recognizes deferred tax assets and liabilities for its domestic and foreign operations, for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes interest and penalty expense associated with uncertain tax positions as a component of income tax expense in the consolidated statements of operations.

Cash and Cash Equivalents

The Company classifies investments as cash equivalents if they are readily convertible to cash and have original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist primarily of highly liquid investments in government and government agency securities and money market funds issued or managed by financial institutions in the U.S., Europe and Latin America and commercial paper depending on liquidity requirements. As of December 31, 2013 and 2012, the carrying value of cash and cash equivalents approximates fair value due to the short period of time to maturity.

Restricted Cash and Securities

Restricted cash and securities consists primarily of cash and investments that serve to collateralize outstanding letters of credit and certain performance and operating obligations of the Company. Restricted cash and securities are recorded as current or non-current assets in the consolidated balance sheets depending on the duration of the restriction and the purpose for which the restriction exists. Restricted cash and securities are stated at cost which approximates fair value as of December 31, 2013 and 2012.

Derivative Financial Instruments

All derivative instruments are measured at fair value and recognized as either assets or liabilities on the Company's consolidated balance sheets. The Company's derivative instruments are valued primarily using models based on readily observable market parameters for all substantial terms of the Company's derivative contracts and thus are classified as Level 2 in the GAAP fair value hierarchy (see Note 10 - Fair Value of Financial Instruments). The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.

For derivative instruments designated as cash flow hedges, the effective portion of the derivative's gain (loss) is initially reported as a component of Accumulated Other Comprehensive Income (Loss) ("AOCI") and is subsequently recognized in earnings in the period the hedged transaction affects earnings or when they are no longer effective. Gains (losses) resulting from hedge ineffectiveness and those resulting from changes in fair values on derivatives not designated as hedging instruments are recognized in other income (expense) in Other, net in the consolidated statements of operations (see Note 11 - Derivative Financial Instruments).

Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and can bear interest. The Company establishes an allowance for doubtful accounts for accounts receivable amounts that may not be collectible. The Company determines the allowance for doubtful accounts based on the aging of its accounts receivable balances, the credit quality of its customers and an analysis of its historical experience of bad debt write-offs. Accounts receivable balances are written off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recognized bad debt expense, net of recoveries, of approximately $17 million in 2013, $15 million in 2012 and $6 million in 2011.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation and amortization for the Company's property, plant and equipment are computed using the straight-line method based on the following estimated useful lives:

Facility and Leasehold Improvements
10
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
4
-
15
years
Furniture, Fixtures, Office Equipment and Other
2
-
7
years


The Company performs internal reviews to evaluate the depreciable lives of its property, plant and equipment annually, or more frequently if new facts and circumstances arise, that may affect management's original estimates. Due to the rapid changes in technology and the competitive environment, selecting the estimated economic life of telecommunications property, plant, and equipment requires a significant amount of judgment. The Company's internal reviews take into account input from the Company's global engineering and network services personnel, actual usage, the physical condition of the Company's property, plant, and equipment, industry data, and other relevant factors. In connection with its annual review of useful lives in the fourth quarter of 2011, the Company determined that the period it expected to use conduit, fiber, and certain transmission equipment was longer than the remaining useful lives originally estimated. In determining the change in estimated useful lives, the Company, with input from its engineering and network services personnel, considered its historical usage and retirements, estimates of technological obsolescence, and expected usage and maintenance. The change in the estimated useful lives of conduit, fiber, and certain transmission equipment resulted in the following decrease in the net loss for the year ended December 31, 2011 (in millions, except per share amounts):

Net Loss
$
74

Basic and Diluted Net Loss per Share
$
0.54



Leasehold improvements are depreciated over the shorter of their estimated useful lives or lease terms that are reasonably assured.

The Company capitalizes costs directly associated with expansions and improvements of the Company's communications network and customer installations, including employee-related costs, and generally capitalizes costs associated with network construction and provisioning of services. The Company amortizes such costs over an estimated useful life of 3 to 7 years.

In addition, the Company continues to develop business support systems required for its business. The external direct costs of software, materials and services, and payroll and payroll-related expenses for employees directly associated with business support systems projects are capitalized. The total cost of the business support system is amortized over an estimated useful life of 3 years.

Capitalized labor and related costs associated with employees and contract labor working on capital projects were approximately $164 million, $146 million and $87 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Asset Retirement Obligations

The Company recognizes a liability for the estimated fair value of legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset in the period incurred. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Increases to the asset retirement obligation liability due to the passage of time are recognized as accretion expense and included within selling, general and administrative expenses and within income (loss) from discontinued operations for reclamation associated with the coal mining business on the Company's consolidated statements of operations prior to the sale of the coal mining business in November 2011. Changes in the liability due to revisions to the amount or timing of future cash flows are recognized by increasing or decreasing the liability with the offset adjusting the carrying amount of the related long-lived asset. To the extent that the downward revisions exceed the carrying amount of the related long-lived asset initially recorded when the asset retirement obligation liability was established, the Company records the remaining adjustment as a reduction to depreciation expense, to the extent of historical depreciation of the related long-lived asset, and then to selling, general and administrative expense.

Goodwill and Acquired Indefinite-Lived Intangible Assets

Accounting guidance prohibits the amortization of goodwill and purchased intangible assets with indefinite useful lives. The Company reviews goodwill and purchased intangible assets with indefinite lives for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

The Company's goodwill impairment review process considers the fair value of each reporting unit relative to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is performed. If the carrying value of the reporting unit exceeds its fair value, then a second step must be performed, and the implied fair value of the reporting unit's goodwill must be determined and compared to the carrying value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then an impairment loss equal to the difference will be recorded. Beginning with the 2011 assessment, in accordance with updated accounting guidance, prior to performing the two step evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the two step goodwill impairment evaluation.

In the second quarter of 2013, the Company changed the date of its annual assessment of goodwill impairment from December 31 to October 1. This was a change in method of applying an accounting principle which management believes is a preferable alternative as the new date of the assessment provides additional time prior to the Company’s year-end to complete the goodwill impairment testing and report the results in the Company's Annual Report on Form 10-K, and is more closely aligned with the Company’s strategic planning process. The change in the assessment date does not delay, accelerate or avoid a potential impairment charge.

In 2013 and 2012, the Company's reporting units consist of its three regional operating units in: North America; Europe, the Middle East and Africa ("EMEA"); and Latin America. In 2011, the Company's reporting units were consistent with its reportable segments of Level 3 and Global Crossing, representing the stand-alone operations of each legacy business.

The Company's indefinite-lived intangible assets impairment review process compares the estimated fair value of the indefinite-lived intangible assets to their respective carrying values. If the fair value of the indefinite-lived intangible assets exceeds their carrying values, then the indefinite-lived intangible assets are not impaired. If the carrying value of the indefinite-lived intangible assets exceeds their fair value, then an impairment loss equal to the difference will be recorded. In accordance with recently issued accounting guidance, an entity may assess qualitative factors to determine whether it is more likely than not that the fair value exceeds the carrying value prior to performing the two step evaluation. If it is determined that it is unlikely the carrying value exceeds the fair value, then the entity is no longer required to complete the two step indefinite-lived intangible assets impairment evaluation.

The Company conducted its goodwill and acquired indefinite-lived intangible assets impairment analysis during 2013, 2012 and 2011 and in each case concluded that its goodwill was not impaired in any of those periods. The Company conducted its indefinite-lived intangible asset impairment analysis at the end of 2013 and 2012 and concluded that there was no impairment. During 2011, the Company determined that the carrying value of certain wireless spectrum licenses that it acquired in a prior acquisition was impaired and the Company recognized a $20 million charge in the fourth quarter that was recognized in Other Expense. The Company concluded that its remaining indefinite-lived intangible assets were not impaired as of December 31, 2011.

Long-Lived Assets Including Finite-Lived Purchased Intangible Assets

The Company amortizes acquired intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 4 to 12 years.

The Company evaluates long-lived assets, such as property, plant and equipment and acquired intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the asset groups are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flows expected to result from the use of the assets plus net proceeds expected from disposition of the assets, if any, are less than the carrying value of the assets. If an asset is deemed to be impaired, the amount of the impairment loss is the excess of the asset's carrying value over its estimated fair value.

The Company conducted a long-lived asset impairment analysis in 2013, 2012 and 2011 and in each case concluded that its long-lived assets, including finite-lived acquired intangible assets, were not impaired.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, accounts receivable, restricted cash and securities and derivatives. The Company maintains its cash equivalents, restricted cash and securities and derivatives with various financial institutions. These financial institutions are primarily located in the United States, Europe and Latin America and the Company's policy is to limit exposure with any one institution. As part of its cash and risk management processes, the Company performs periodic evaluations of the relative credit standing of the financial institutions. The Company also has established guidelines relative to financial instrument credit ratings, diversification and maturities that seek to maintain safety and liquidity. The Company's investment strategy generally results in lower yields on investments but reduces the risk to principal in the short term prior to these funds being used in the Company's business. Notwithstanding the devaluation of the Venezuelan bolivar, the Company has not experienced any material losses on financial instruments held at financial institutions. The Company has used interest rate swap contracts to protect against the effects of interest rate fluctuations. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss.

The Company provides communications services to a wide range of wholesale and enterprise customers, ranging from well capitalized national carriers to small early stage companies primarily in the United States, Europe, and Latin America. Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising Level 3's customer base and their dispersion across many different industries and geographical regions. The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its customers, although letters of credit and deposits are required in certain limited circumstances. The Company has from time to time entered into agreements with value-added resellers and other channel partners to reach consumer and enterprise markets for voice services. The Company has policies and procedures in place to evaluate the financial condition of these resellers prior to initiating service to the final customer. The Company maintains an allowance for doubtful accounts based upon the expected collectability of accounts receivable. Due to the Company's credit evaluation and collection process, bad debt expenses have not been significant; however, the Company is not able to predict changes in the financial stability of its customers. Any material change in the financial status of any one or a particular group of customers may cause the Company to adjust its estimate of the recoverability of receivables and could have a material adverse effect on the Company's results of operations. Fair values of accounts receivable approximate carrying amount due to the short period of time to collection.

A relatively small number of customers account for a significant percentage of the Company's revenue. The Company's top ten customers accounted for approximately 17%, 17% and 24% of Level 3's communications revenue for the years ended December 31, 2013, 2012 and 2011, respectively.

Recently Issued Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The guidance in this ASU requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. Public companies are required to comply with the requirements of this ASU prospectively for all reporting periods (interim and annual) beginning after December 15, 2012. The Company adopted this amendment in the first quarter of 2013. The impact of its adoption was limited to disclosure requirements.

In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Under current GAAP, there is no explicit guidance on the presentation of unrecognized tax benefits when such carryforwards exist, which has led to diversity in practice. ASU 2013-11 requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss ("NOL") carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. The ASU is effective for fiscal years beginning after December 15, 2013, and interim periods within those years. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated results of operations or financial condition.
Events Associated with the Amalgamation of Global Crossing
Events Associated with the Amalgamation of Global Crossing
Events Associated with the Amalgamation of Global Crossing

On October 4, 2011, a subsidiary of Level 3 completed the Amalgamation with Global Crossing, which became a wholly owned indirect subsidiary of the Company through a tax free, stock for stock transaction. As a result of the Amalgamation, (i) each issued and outstanding common share of Global Crossing was exchanged for 16 shares of Level 3 common stock (unadjusted for the 1 for 15 reverse stock split completed on October 19, 2011), including the associated rights under the Company’s Rights Agreement with Wells Fargo Bank, N.A., as rights agent (the "Amalgamation Consideration") and (ii) each issued and outstanding share of Global Crossing’s 2% cumulative senior convertible preferred stock was exchanged for the Amalgamation Consideration, plus an amount equal to the aggregate accrued and unpaid dividends thereon. In addition, (i) the outstanding vested options to purchase Global Crossing common shares were modified into vested options to purchase a number of shares of Level 3 common stock equal to 16 times (unadjusted for the 1 for 15 reverse stock split completed on October 19, 2011) the number of Global Crossing common shares covered by such Global Crossing options, and (ii) the issued and outstanding restricted stock units covering Global Crossing common shares, to the extent applicable in accordance with their terms, vested and settled for a number of shares of Level 3 common stock equal to 16 times (unadjusted for the 1 for 15 reverse stock split completed on October 19, 2011) the number of Global Crossing common shares covered by such restricted stock units.

In connection with the closing of the Amalgamation, Level 3 Financing, Inc. amended its existing credit agreement to incur an additional $650 million of borrowings through an additional tranche (the "Tranche B II Term Loan."). In addition, the $1.2 billion of proceeds from the initial and additional issuance of 8.125% Senior Notes due 2019 in June and July 2011 (see Note 12 - Long-Term Debt) by an indirect wholly owned subsidiary were deposited into an escrow account. On October 4, 2011, following the consummation of the Amalgamation and the satisfaction of certain escrow release conditions, the 8.125% Senior Notes were assumed by Level 3 Financing, Inc. (the "Notes Assumption"), and the funds were released from the escrow account. The net aggregate proceeds from the Tranche B II Term Loan and 8.125% Senior Notes were used to refinance certain existing indebtedness of Global Crossing in connection with the closing of the Amalgamation and for general corporate purposes.

As a result of the Amalgamation, the Company issued approximately 88.53 million shares of common stock, adjusted for the October 19, 2011, 1 for 15 reverse stock split, to former holders of Global Crossing common shares and Global Crossing’s 2% cumulative senior convertible preferred stock, and Level 3 caused the refinancing of approximately $1.36 billion of Global Crossing's outstanding consolidated debt.

Based on (i) the number of Level 3 shares issued (88.53 million as adjusted for the 1 for 15 reverse stock split completed on October 19, 2011), (ii) the closing stock price of Level 3 common stock as of October 3, 2011 ($21.15 as adjusted for the 1 for 15 reverse stock split completed on October 19, 2011), and (iii) the debt of Global Crossing refinanced ($1.36 billion), the Company determined that the aggregate consideration for acquisition accounting, including assumed debt, approximated $3.4 billion. The restricted stock units covering Global Crossing common shares settled for Level 3 shares of common stock were reduced in settlement of employee income and payroll tax withholding obligations and the corresponding amounts of approximately $81 million were paid in cash. The premium paid by Level 3 in this transaction is attributable to strategic benefits, including a significantly expanded IP/optical network with global reach including Latin America, Asia and the Pacific region, an improved credit profile and reduced financial leverage attributed to enhanced financial and operational scale, and the opportunity for investment and network expansion. The Company has a comprehensive portfolio of voice, video, and data services, which operates on a unique global services platform anchored by subsea and terrestrial fiber optic networks in North America, Europe, and Latin America. The goodwill associated with this transaction is not expected to be deductible for income tax purposes.

The combined results of operations of Level 3 and Global Crossing are included in the Company's consolidated results of operations beginning in October 2011. The assets acquired and liabilities assumed of Global Crossing were recognized at their acquisition date fair value. The purchase price allocation of acquired assets and assumed liabilities, including the assignment of goodwill to reporting units, was completed in October 2012. The following is the final allocation of the purchase price.

 
Purchase Price Allocation
 
(dollars in millions)
Assets:
 
Cash, Cash Equivalents, and Restricted Cash
$
226

Property, Plant, and Equipment
3,098

Goodwill
1,123

Identifiable Intangibles
106

Other Assets
651

Total Assets
5,204

 
 
Liabilities:
 
Long-term Debt
(1,554
)
Other Liabilities
(1,688
)
Total Liabilities
(3,242
)
Total Estimated Consideration
$
1,962



Level 3 entered into certain transactions with Global Crossing prior to completing the Amalgamation, whereby Level 3 received cash for communications services to be provided in the future, which it accounted for as deferred revenue. As a result of the Amalgamation, Level 3 could no longer amortize this deferred revenue into earnings and accordingly, reduced the purchase price applied to the net assets acquired in the Amalgamation by $77 million, the amount of the unamortized deferred revenue as of the acquisition date.

As a result of refinements to the preliminary purchase price allocation that were made during the nine months ended September 30, 2012, there were changes to the initial amount of goodwill determined in the fourth quarter of 2011, which have been reflected in the above table. The refinements were primarily a result of changes in the purchase price allocation for estimated tax valuation allowances and reserves. These changes are the result of additional information obtained since the filing of the Company's Form 10-K for the year ended December 31, 2011. The effect of the adjustments did not result in a material change to previously reported amounts.

The following unaudited pro forma financial information presents the combined results of Level 3 and Global Crossing as if the completion of the Amalgamation had occurred as of the beginning of the period (dollars in millions, except per share data).

 
Year Ended December 31, 2011
Total Revenue
$
6,335

Net Loss
(727
)
Net Loss per share
$
(3.56
)


These results include certain adjustments, primarily due to a net decrease in depreciation and amortization expense due to the Company, in connection with the Amalgamation, increasing the estimated useful lives of the acquired conduit, fiber and certain transmission equipment while increasing the fair value of tangible and intangible assets, decreasing interest expense due to Level 3's issuance of incremental debt in order to redeem and refinance Global Crossing debt that had higher interest rates than the incremental financing, and to eliminate historical transactions between Level 3 and Global Crossing. The unaudited pro forma financial information is not intended to represent or be indicative of the actual results of operations of Level 3 that would have been reported had the Amalgamation been completed as of the beginning of the period, nor is it representative of future operating results of the Company. The unaudited pro forma information does not include any operating efficiencies or cost savings that Level 3 may achieve with respect to combining the companies.

Acquisition related costs include transaction costs such as legal, accounting, valuation, and other professional services as well as integration costs such as severance and retention. Acquisition related costs have been recorded in selling, general and administrative expense in the Company's consolidated statements of operations during the period that such costs were incurred. Since the acquisition date, Level 3 incurred total acquisition related transaction costs of approximately $49 million through December 31, 2013 which is unchanged from December 31, 2011. In 2012 and 2011, Level 3 incurred total acquisition related integration costs of approximately $81 million and $32 million, respectively.

In April 2011, Level 3 adopted a Stockholder Rights Plan to protect its U.S. federal net operating loss carry forwards from certain Internal Revenue Code Section 382 limitations. On May 24, 2012, the stockholders of the Company ratified such adoption. This plan was designed to deter trading that would result in a change of control (as defined in that Code Section), and therefore protect the Company's ability to use its historical U.S. federal net operating loss carry forwards in the future.


Loss Per Share
Loss Per Share
Loss Per Share

The Company computes basic net loss per share by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the period and including the dilutive effect of common stock that would be issued assuming conversion or exercise of outstanding convertible notes and stock-based compensation awards. No such items were included in the computation of diluted loss per share in the years ended 2013, 2012 and 2011 because the Company incurred a loss from continuing operations in each of these periods and the effect of inclusion would have been anti-dilutive.

The effect of approximately 18 million, 35 million and 39 million shares issuable pursuant to the various series of convertible notes outstanding at December 31, 2013, 2012 and 2011, respectively, have not been included in the computation of diluted loss per share because their inclusion would have been anti-dilutive to the computation. In addition, the effect of the approximately 6 million, 7 million and 4 million stock options, outperform stock appreciation rights ("OSO"), restricted stock units and shares ("RSU") and warrants outstanding at December 31, 2013, 2012 and 2011, respectively, have not been included in the computation of diluted loss per share because their inclusion would have been anti-dilutive to the computation.
Dispositions
Dispositions
Dispositions

Level 3, through two 50% owned joint-venture surface mines, one each in Montana and Wyoming, sold coal primarily through long-term contracts with public utilities. In November 2011, Level 3 completed the sale of its coal mining business to Ambre Energy Limited as part of its long-term strategy to focus on core business operations. As a result of the transaction, all of the assets and liabilities associated with the coal mining business have been removed from Level 3's balance sheet and the Company recognized a gain on the transaction of approximately $72 million which was included in the consolidated statements of operations within "Income from Discontinued Operations" in the fourth quarter of 2011. Results for 2011, exclusive of the gain on the transaction in 2011, were not significant. The financial results of the coal mining business were included in the Company's consolidated results of operations through the date of sale, and the year ended December 31, 2011 has been revised to reflect the presentation within discontinued operations.
Property, Plant and Equipment
Property, Plant and Equipment
Property, Plant and Equipment

The components of the Company's property, plant and equipment as of December 31, 2013 and 2012 are as follows (dollars in millions):
 
 
Cost
 
Accumulated
Depreciation
 
Net
December 31, 2013
 
 
 
 
 
 
Land
 
$
193

 
$
—

 
$
193

Land Improvements
 
72

 
(47
)
 
25

Facility and Leasehold Improvements
 
2,207

 
(1,193
)
 
1,014

Network Infrastructure
 
8,505

 
(3,279
)
 
5,226

Operating Equipment
 
6,057

 
(4,381
)
 
1,676

Furniture, Fixtures and Office Equipment
 
196

 
(168
)
 
28

Other
 
22

 
(21
)
 
1

Construction-in-Progress
 
77

 
—

 
77

 
 
$
17,329

 
$
(9,089
)
 
$
8,240

December 31, 2012
 
 
 
 
 
 
Land
 
$
195

 
$
—

 
$
195

Land Improvements
 
73

 
(43
)
 
30

Facility and Leasehold Improvements
 
2,093

 
(1,085
)
 
1,008

Network Infrastructure
 
8,342

 
(3,058
)
 
5,284

Operating Equipment
 
5,506

 
(3,997
)
 
1,509

Furniture, Fixtures and Office Equipment
 
206

 
(155
)
 
51

Other
 
21

 
(21
)
 
—

Construction-in-Progress
 
122

 
—

 
122

 
 
$
16,558

 
$
(8,359
)
 
$
8,199



Depreciation expense was $727 million in 2013, $659 million in 2012 and $706 million in 2011.
Asset Retirement Obligations
Asset Retirement Obligations
Asset Retirement Obligations

The Company's asset retirement obligations consist of legal requirements to remove certain of its network infrastructure at the expiration of the underlying right-of-way ("ROW") term and restoration requirements for leased facilities. The Company recognizes its estimate of the fair value of its asset retirement obligations in the period incurred in other long-term liabilities. The fair value of the asset retirement obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset.

As a result of a strategic review of the Company's real estate portfolio in the fourth quarter of 2012, the Company completed an updated analysis and revised its estimated future cash flows of its asset retirement obligations. The analysis required estimating the probability or likelihood that the Company will be required to remove certain of its network infrastructure and restore leased properties, and the timing and amount of eventual costs. The analysis resulted in the downward revision of the Company's asset retirement obligation liability. This change in the estimated cash flows resulted in a non-cash gain of $49 million recorded within selling, general and administrative expense, and depreciation expense, or $0.23 basic and diluted net loss per share.

In conjunction with its review of the ROW asset retirement obligation, the Company identified an error in its assumptions used to estimate its ROW asset retirement obligation related to the extension of the useful lives of its conduit assets effective October 1, 2011 (See Note 1 - Organization and Summary of Significant Accounting Policies). The Company recorded a non-cash benefit of approximately $21 million within selling, general and administrative expense, or $0.10 basic and diluted net loss per share during the fourth quarter of 2012 for the change in the ROW term used to estimate its ROW asset retirement obligation. The reduction in the asset retirement obligations liability includes the change in estimate of the ROW term that arose in prior periods, which did not materially affect any of the Company's previously reported results of operations or financial condition, or the current period results of operations or financial condition.

In 2012, as a result of the revisions in estimated amount and timing of cash flows for asset retirement obligations, 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. The Company first reduced property, plant and equipment to the extent of the carrying amount of the related asset initially recorded when the asset retirement obligations were established. The amount of the remaining reduction to the asset retirement obligations were recorded as a reduction to depreciation expense to the extent of historical deprecation of the related asset and then to selling, general and administrative expenses.

The following table provides asset retirement obligation activity for the years ended December 31, 2013 and 2012 (dollars in millions):
 
 
2013
 
2012
Asset retirement obligation at January 1
 
$
55

 
$
121

Accretion expense
 
7

 
11

Liabilities settled
 
(6
)
 
(4
)
Revision in estimated cash flows
 
—

 
(73
)
Effect of foreign currency rate change
 
—

 
—

Asset retirement obligation at December 31
 
$
56

 
$
55

Goodwill
Goodwill
Goodwill

The changes in the carrying amount of goodwill during the years ended December 31, 2013 and 2012 are as follows (dollars in millions):
 
Total
Balance as of January 1, 2012
$
2,541

Goodwill adjustments
24

Balance as of December 31, 2012
2,565

Goodwill adjustments
12

Balance as of December 31, 2013
$
2,577



The Company conducted its annual goodwill impairment analysis in the fourth quarter of 2013 and 2012. As a result of the Company's annual assessment, Level 3 concluded that its goodwill was not impaired in 2013 or 2012.
Acquired Intangible Assets
Acquired Intangible Assets
Acquired Intangible Assets

Identifiable acquisition-related intangible assets as of December 31, 2013 and December 31, 2012 were as follows (dollars in millions):

 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
December 31, 2013
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
786

 
$
(678
)
 
$
108

Trademarks
55

 
(31
)
 
24

Patents and Developed Technology
158

 
(117
)
 
41

 
999

 
(826
)
 
173

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Vyvx Trade Name
32

 
—

 
32

 
$
1,031

 
$
(826
)
 
$
205

December 31, 2012
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
776

 
$
(633
)
 
$
143

Trademarks
55

 
(17
)
 
38

Patents and Developed Technology
158

 
(103
)
 
55

 
989

 
(753
)
 
236

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Vyvx Trade Name
32

 
—

 
32

 
$
1,021

 
$
(753
)
 
$
268



During the fourth quarter of 2013 and 2012, the Company conducted its long-lived assets and indefinite-lived intangible assets impairment analysis and concluded that there was no impairment in both periods.

During the fourth quarter of 2011, the Company conducted its long-lived assets impairment analysis and determined that the carrying value of certain wireless spectrum licenses acquired in a prior acquisition was impaired and recognized a $20 million charge in Other, net.

Acquired finite-lived intangible assets amortization expense was $73 million in 2013, $90 million in 2012 and $99 million in 2011.

At December 31, 2013, the weighted average remaining useful lives of the Company's acquired finite-lived intangible assets was 2.3 years for customer contracts and relationships, 1.7 years for trademarks and 3 years for patents and developed technology.

As of December 31, 2013, estimated amortization expense for the Company’s finite-lived acquisition-related intangible assets over the next five years and thereafter is as follows (dollars in millions):

2014
$
64

2015
48

2016
30

2017
15

2018
13

Thereafter
3

 
$
173




Restructuring Charges
Restructuring Charges
Restructuring Charges

Employee Separations

Changing economic and business conditions as well as organizational structure optimization efforts have caused the Company to initiate from time to time various workforce reductions resulting in involuntary employee terminations. The Company also has initiated workforce reductions resulting from the integration of previously acquired companies. During 2013, 2012 and 2011, the Company initiated workforce reductions primarily focused on labor cost savings and organizational effectiveness. Restructuring charges totaled $47 million, $34 million and $11 million in 2013, 2012 and 2011, respectively, recorded in selling, general and administrative. As of December 31, 2013 and 2012, the Company had $8 million and $16 million, respectively, of employee termination liabilities.

Facility Closings

The Company also has accrued contract termination costs of $31 million and $35 million as of December 31, 2013 and December 31, 2012, respectively, for facility lease costs that the Company continues to incur without economic benefit. Accrued contract termination costs are recorded in other liabilities (current and non-current) in the consolidated balance sheets. The Company expects to pay the majority of these costs through 2025. The Company recognized a charge of approximately $7 million, a benefit of $2 million and a charge of $3 million in 2013, 2012 and 2011, respectively, as a result of facility lease costs. The Company records charges for contract termination costs within selling, general and administrative expenses in the consolidated statements of operations.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, restricted cash and securities, accounts receivable, accounts payable, capital leases, other liabilities, interest rate swaps and long-term debt (including the current portion). The carrying values of cash and cash equivalents, restricted cash and securities, accounts receivable, accounts payable, capital leases and other liabilities approximated their fair values at December 31, 2013 and 2012. The interest rate swaps are recorded in the consolidated balance sheets at fair value (see Note 11 - Derivative Financial Instruments).

GAAP defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements and disclosures for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as interest and foreign exchange rates, transfer restrictions, and risk of nonperformance.

Fair Value Hierarchy

GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value measurement of each class of assets and liabilities is dependent upon its categorization within the fair value hierarchy, based upon the lowest level of input that is significant to the fair value measurement of each class of asset and liability. GAAP establishes three levels of inputs that may be used to measure fair value:

Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2— Unadjusted quoted prices for similar assets or liabilities in active markets, or
unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3— Unobservable inputs for the asset or liability.

The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the fair value hierarchy during each of the years ended December 31, 2013 and 2012.

The table below presents the fair values for the Company’s interest rate swaps and long-term debt as well as the input levels used to determine these fair values as of December 31, 2013 and 2012:

 
 
 
 
 
 
Fair Value Measurement Using
 
 
Total Carrying Value in Consolidated Balance Sheets
 
Unadjusted Quoted Prices in Active
Markets for Identical Assets or Liabilities (Level 1)
 
Significant Other Observable Inputs (Level 2)
(dollars in millions)
 
December 31,
2013
 
December 31,
2012
 
December 31,
2013
 
December 31,
2012
 
December 31,
2013
 
December 31,
2012
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Swap Liabilities (included in other current and non-current liabilities)
 
$
12

 
$
56

 
$
—

 
$
—

 
$
12

 
$
56

Total Derivative Liabilities Recorded at Fair Value in the Financial Statements
 
$
12

 
$
56

 
$
—

 
$
—

 
$
12

 
$
56

Liabilities Not Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, including the current portion:
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
$
2,604

 
$
2,603

 
$
2,633

 
$
2,631

 
$
—

 
$
—

Senior Notes
 
5,198

 
5,185

 
5,673

 
5,712

 
—

 
—

Convertible Notes
 
474

 
846

 
—

 
286

 
647

 
748

Capital Leases and Other
 
86

 
98

 
—

 
—

 
86

 
98

Total Long-term Debt, including the current portion:
 
$
8,362

 
$
8,732

 
$
8,306

 
$
8,629

 
$
733

 
$
846



The Company does not have any assets or liabilities where the fair value is measured using significant unobservable inputs (Level 3).

Derivatives

The fair value of interest rate swaps is estimated using discounted cash flow techniques that use observable market inputs, such as LIBOR-based forward yield curves, forward rates, non-performance risk adjustment and the specific swap rate stated in each of the swap agreements.

Term Loans

The fair value of the Term Loans referenced above was approximately $2.6 billion at both December 31, 2013 and 2012. The fair value of each loan is based on quoted prices for identical terms and maturities. Each loan tranche is actively traded.

Senior Notes

The fair value of the Senior Notes referenced above was approximately $5.7 billion at both December 31, 2013 and 2012, based on quoted prices for identical terms and maturities. Each series of notes is actively traded.

Convertible Notes

The Company completed the redemption of its 6.5% Convertible Senior Notes due 2016 during the fourth quarter 2013. The fair value of the Company’s actively traded 6.5% Convertible Senior Notes due 2016 was approximately $286 million at December 31, 2012. The fair value of the Company’s actively traded Convertible Notes referenced above is based on the trading quotes for identical notes. The fair value of the Company’s Convertible Notes that are not actively traded, which includes the 7% Convertible Senior Notes due 2015, the 7% Convertible Senior Notes due 2015, Series B, and the 15% Convertible Senior Notes due 2013 that were repaid in full at maturity in the first quarter of 2013, was approximately $647 million and $748 million at December 31, 2013 and 2012, respectively. The estimated fair value of the Convertible Notes that are not actively traded is based on a Black-Scholes valuation model and an income approach using discounted cash flows. The most significant inputs affecting the valuation are the pricing quotes provided by market participants that incorporate spreads to the Treasury curve, security coupon (ranging from 7% to 15%), convertible optionality, corporate and security credit ratings, maturity date (ranging from 2013 to 2015), liquidity, and other equity option inputs, such as the risk-free rate, underlying stock price, strike price of the embedded derivative, estimated volatility and maturity inputs for the option component and for the bond component, among other security characteristics and relative value at both the borrower entity level and across other securities with similar terms. The fair value of each instrument is obtained by adding together the value derived by discounting the security’s coupon or interest payment using a risk-adjusted discount rate and the value calculated from the embedded equity option based on the estimated volatility of the Company’s stock price, conversion rate of the particular Convertible Note, remaining time to maturity, and risk-free rate. The Convertible Notes are unsecured obligations of Level 3 Communications, Inc. No subsidiary of Level 3 Communications, Inc. has provided a guarantee of the Convertible Notes.

Capital Leases

The fair value of the Company's capital leases are determined by discounting anticipated future cash flows derived from the contractual terms of the obligations and observable market interest and foreign exchange rates.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company has floating rate long-term debt (see Note 12 - Long-Term Debt). Such debt exposes the Company to variability in interest payments due to changes in interest rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense also generally decreases. The Company uses interest rate swaps, in an attempt to manage its exposure to fluctuations in interest rate movements. The Company’s primary objective in managing interest rate risk is to decrease the volatility of its earnings and cash flows affected by changes in the underlying rates. The Company does not use derivative financial instruments for speculative purposes.

In March 2007, Level 3 Financing, Inc. entered into two interest rate swap agreements to hedge the interest payments on $1 billion principal amount of floating rate debt. The Company had designated these interest rate swap agreements as cash flow hedges. The two interest rate swap agreements are with different counterparties and are for $500 million each. The arrangements began in April 2007 and mature in January 2014. Under the terms of these arrangements, the Company receives interest payments based on rolling three month LIBOR and pays interest at the fixed rate of 4.93% under one arrangement and approximately 4.92% under the other.

Interest Rate Derivative
 
Number of
Instruments
 
Notional
(dollars in millions)
Interest rate swaps
 
Two
 
$
1,000



On a quarterly basis through August 6, 2012, the Company evaluated the effectiveness of the hedges by measuring the extent to which the change in the variable portion of the interest rate swaps offset the changes in interest expense paid due to fluctuations in the LIBOR-based interest rate. Prior to August 6, 2012, these derivatives were deemed effective cash flow hedges and hedge ineffectiveness was not material in any periods presented. As a result, the change in the fair value of the interest rate swap agreements was reflected in Accumulated Other Comprehensive Income (Loss) ("AOCI") and was subsequently reclassified into earnings through an interest expense yield adjustment, as interest expense on the hedged debt obligation was incurred.

As a result of the refinancing of the Tranche A Term Loan on August 6, 2012, the two interest rate swap agreements maturing in early 2014 that had effectively hedged changes in the interest rate on a portion of the Tranche A Term Loan were deemed "ineffective" under GAAP and cash flow hedge accounting was discontinued. The Company recognized a non-cash loss on these agreements of approximately $60 million (excluding accrued interest) in the third quarter of 2012, which represented the cumulative loss recorded in AOCI at the date the instruments ceased to qualify as hedges (see Note 12 - Long-Term Debt). After August 6, 2012, the Company has recorded the change in the fair value of the swaps in Other, net in its Consolidated Statement of Operations until maturity of the swaps in early 2014. The Company recognized a loss of $2 million and $4 million for the years ended December 31, 2013 and 2012, respectively.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets (dollars in millions):

 
 
Liability Derivatives
 
 
December 31, 2013
 
December 31, 2012
Derivatives not designated as
hedging instruments
 
Balance Sheet
Location
 
Fair
Value
 
Balance Sheet
Location
 
Fair
Value
Interest rate swap agreements
 
Other current liabilities
 
$
12

 
Other non-current liabilities
 
$
56



The amount of net gains recognized in AOCI, including reclassifications, consists of the following (dollars in millions):

 
 
Year Ended December 31,
Derivatives designated as hedging instruments
 
2013
 
2012
 
2011
Cash flow hedging contracts
 
$
—

 
$
90

 
$
18



The amount of losses reclassified from AOCI to earnings (effective portions) consists of the following (dollars in millions):

 
 
 
 
Year Ended December 31,
Derivatives designated as hedging instruments
 
Statement of Operations Location
 
2013
 
2012
Cash flow hedging contracts
 
Interest Expense
 
$
—

 
$
(26
)


The effect of the Company’s derivatives not designated as hedging instruments on net loss is as follows (dollars in millions):

 
 
 
 
Year Ended December 31,
Derivatives not designated as hedging instruments
 
Statement of Operations Location
 
2013
 
2012
 
2011
Interest rate swaps
 
Other Expense - Other, net
 
$
(2
)
 
$
(64
)
 
$
—



The Company is exposed to credit related losses in the event of non-performance by counterparties. The counterparties to the financial derivatives the Company has entered into are major institutions with investment grade credit ratings. The Company evaluates counterparty credit risk before entering into any hedge transaction and continues to closely monitor the financial market and the risk that its counterparties will default on their obligations. This credit risk is generally limited to the unrealized gains in such contracts, should any of these counterparties fail to perform as contracted.
Long-Term Debt
Long-Term Debt
Long-Term Debt

As of December 31, 2013 and December 31, 2012, long-term debt was as follows:

(dollars in millions)
 
December 31,
2013
 
December 31,
2012
Senior Secured Term Loan*
 
$
2,611

 
$
2,614

Floating Rate Senior Notes due 2015 (4.469% as of December 31, 2012)
 
—

 
300

10% Senior Notes due 2018
 
—

 
640

Floating Rate Senior Notes due 2018 (3.846% as of December 31, 2013)
 
300

 
—

11.875% Senior Notes due 2019
 
605

 
605

9.375% Senior Notes due 2019
 
500

 
500

8.125% Senior Notes due 2019
 
1,200

 
1,200

8.875% Senior Notes due 2019
 
300

 
300

8.625% Senior Notes due 2020
 
900

 
900

7% Senior Notes due 2020
 
775

 
775

6.125% Senior Notes due 2021
 
640

 
—

15% Convertible Senior Notes due 2013
 
—

 
172

7% Convertible Senior Notes due 2015
 
200

 
200

7% Convertible Senior Notes due 2015 Series B
 
275

 
275

6.5% Convertible Senior Notes due 2016
 
—

 
201

Capital Leases
 
73

 
86

Other
 
13

 
12

Total Debt Obligations
 
8,392

 
8,780

Unamortized Discount:
 
 
 
 
Discount on Senior Secured Term Loan
 
(7
)
 
(11
)
Discount on 10% Senior Notes due 2018
 
—

 
(10
)
Discount on 11.875% Senior Notes due 2019
 
(8
)
 
(9
)
Discount on 9.375% Senior Notes due 2019
 
(7
)
 
(8
)
Discount on 8.125% Senior Notes due 2019
 
(7
)
 
(8
)
Discount on 7% Convertible Senior Notes due 2015
 
(1
)
 
(2
)
Total Unamortized Discount
 
(30
)
 
(48
)
Carrying Value of Debt
 
8,362

 
8,732

Less current portion
 
(31
)
 
(216
)
Long-term Debt, less current portion
 
$
8,331

 
$
8,516


* The $815 million Tranche B-III 2019 Term Loan due 2019 and the $1.796 billion Tranche B 2020 Term Loan due 2020 each had an interest rate of 4.00% as of December 31, 2013. The $599 million Tranche B 2016 Term Loan due 2016, the $815 million Tranche B 2019 Term Loan due 2019 and the $1.2 billion Tranche B-II 2019 Term Loan due 2019, that were prepaid in 2013, had interest rates of 4.75%, 5.25% and 4.75%, respectively, as of December 31, 2012.



Senior Secured Term Loans

On March 13, 2007, Level 3 Communications, as guarantor, Level 3 Financing, as borrower, Merrill Lynch Capital Corporation, as administrative agent and collateral agent, and certain other agents and certain lenders entered into a Credit Agreement, pursuant to which the lenders extended a $1.4 billion senior secured term loan to Level 3 Financing. The $1.4 billion senior secured term loan (the "Tranche A Term Loan") had an interest rate of LIBOR plus an applicable margin of 2.25% per annum. In addition, during the second quarter of 2009, Level 3 Financing amended and restated its existing senior secured Credit Agreement to increase the borrowings through the creation of a $280 million Tranche B Term Loan (the "Tranche B Term Loan") and had an interest rate of LIBOR plus 8.50% per annum, with LIBOR set at a minimum of 3.00%. The Tranche A Term Loan and Tranche B Term Loan, which were to mature on March 13, 2014, were prepaid in August 2012 and November 2011, respectively. The $1.4 billion Tranche A Term Loan had an effective interest rate of 2.65% as of December 31, 2011, excluding the effect of the $1 billion notional amount interest rate swaps.

The Company used a portion of the original net proceeds after transaction costs to repay Level 3 Financing's $730 million Senior Secured Term Loan due 2011 under that certain Credit Agreement dated June 27, 2006. In addition, the Company used a portion of the net proceeds to fund the purchase of certain of its existing debt securities.

On October 4, 2011, in connection with the closing of the Amalgamation, Level 3 Financing amended its existing Credit Agreement to incur an additional $650 million of borrowings through an additional tranche. The Company borrowed the Tranche B-II Term Loan from investors at a price of 99% of its principal amount. Debt issuance discount of approximately $7 million was reflected as a reduction in long-term debt. The Tranche B-II Term Loan accrued interest at 4.25% plus LIBOR, with a minimum LIBOR of 1.5%, with interest payments due quarterly. The Tranche B-II Term Loan, which was to mature on September 1, 2018, was prepaid in October 2012. The net proceeds from the Tranche B-II Term Loan were used to refinance certain existing indebtedness of Global Crossing in connection with the consummation of the Amalgamation and for general corporate purposes.

Additionally, on November 10, 2011, Level 3 Financing amended its existing Credit Agreement to incur an additional $550 million of borrowings through an additional tranche. The Company borrowed the Tranche B-III Term Loan from investors at a price of 95% of its principal amount. Debt issuance discount of approximately $28 million was reflected as a reduction in long-term debt. The Tranche B-III Term Loan accrued interest at 4.25% plus LIBOR, with a minimum LIBOR of 1.5%, with interest payments due quarterly. The Tranche B-III Term Loan which was to mature on September 1, 2018, was prepaid in October 2012. The net proceeds from the Tranche B-III Term Loan were used along with cash on hand to prepay the $280 million Tranche B Term Loan that was outstanding under the existing senior secured credit facility and the $274 million aggregate principal amount of Level 3 Communications' 3.5% Convertible Senior Notes due 2012.

On August 6, 2012, Level 3 Financing refinanced its existing $1.4 billion Tranche A Term Loan under its existing senior secured credit facility through the creation of new term loans in the aggregate principal amount of $1.415 billion and cash on hand. The New Term Loans were borrowed pursuant to an amended and restated Credit Agreement. The New Term Loans consist of: (a) $600 million senior secured term loan (the "Tranche B 2016 Term Loan) due February 1, 2016, and (b) $815 million senior secured term loan (the "Tranche B 2019 Term Loan) due August 1, 2019. Both tranches were prepaid in August 2013. The Tranche B 2016 Term Loan required repayment of 0.25% of the aggregate principal amount on the last day of each March, June, September and December, beginning with December 31, 2012 and ending with such last day to occur prior to maturity. The interest rates on the loans were LIBOR plus 3.25% for the Tranche B 2016 Term Loan and LIBOR plus 3.75% for the Tranche B 2019 Term Loan, with LIBOR set at a minimum of 1.5% on both loans. The Tranche B 2016 Term Loan and the Tranche B 2019 Term Loan were priced at 99.5% and 99.0% of par, respectively. Debt issuance discounts of approximately $3 million and $8 million were reflected as a reduction in long-term debt. The Company used the net proceeds from the New Term Loans, along with cash on hand, to prepay Level 3 Financing's $1.4 billion Tranche A Term Loan under the existing Credit Agreement that was to mature in March 2014 and used remaining net proceeds to repay $15 million in principal amount plus premium for existing vendor financing obligations. Debt issuance costs for the Tranche B 2016 Term Loan and the Tranche B 2019 Term Loan of approximately $9 million and $12 million, respectively, were capitalized and amortized over the respective terms of those term loans as interest expense using the effective interest method until prepayment. The Company recognized a loss on extinguishment of debt of $9 million as a result of refinancing the Tranche A Term Loan. In connection with the refinancing of the Tranche A Term Loan, the Company recognized a $60 million non-cash loss on two interest rate swap agreements that had previously hedged changes in the interest rate on $1 billion notional amount of floating rate debt.

On October 4, 2012, Level 3 Financing refinanced its existing $650 million Tranche B-II Term Loan and $550 million Tranche B-III Term Loan under its existing senior secured credit facility through the creation of a new term loan in the aggregate principal amount of $1.2 billion. The Tranche B-II 2019 Term Loan was borrowed pursuant to an amended and restated Credit Agreement. The Tranche B-II 2019 Term Loan consisted of a $1.2 billion senior secured term loan that was to mature on August 1, 2019 and was prepaid in October 2013. The interest rate on the loan was LIBOR plus 3.25%, with LIBOR set at a minimum of 1.5%. The Tranche B-II 2019 Term Loan was priced at par. The Company used the net proceeds from the Tranche B-II 2019 Term Loan, along with cash on hand, to prepay Level 3 Financing's $650 million Tranche B-II Term Loan and $550 million Tranche B-III Term Loan under the existing Credit Agreement which were to mature in September 2018. Debt issuance costs of approximately $13 million were capitalized and amortized over the term of the Tranche B-II 2019 Term Loan as interest expense using the effective interest method until prepayment. The Company recognized a loss on extinguishment of debt of $50 million as a result of refinancing the Tranche B-II and Tranche B-III Term Loans.

On August 12, 2013, Level 3 Financing refinanced its existing $815 million Tranche B 2019 Term Loan under its existing senior credit facility through the creation of a new term loan in the aggregate principal amount of $815 million (the "Tranche B-III 2019 Term Loan"). The Tranche B-III 2019 Term Loan was borrowed pursuant to an amended and restated Credit Agreement. The Tranche B-III 2019 Term Loan has an interest rate of LIBOR plus 3.00%, with a minimum LIBOR of 1.00%, and will mature on August 1, 2019. The Tranche B-III 2019 Term Loan was priced to lenders at par. Debt issuance costs related to the Tranche B 2019 Term Loan of approximately $10 million were allocated to the Tranche B-III 2019 Term Loan and continue to be amortized as interest expense using the new effective interest rate over its new term. The Company expensed debt issuance costs of approximately $9 million as of result of this transaction.

Additionally on August 16, 2013, Level 3 Financing refinanced its existing $595.5 million Tranche B 2016 Term Loan under its existing senior credit facility through the creation of a new term loan in the aggregate principal amount of $595.5 million (the "Tranche B 2020 Term Loan"). The Tranche B 2020 Term Loan was borrowed pursuant to an amended and restated Credit Agreement. The Tranche B 2020 Term Loan has an interest rate of LIBOR plus 3.00%, with a minimum LIBOR of 1.00%, and will mature on January 15, 2020. The Tranche B 2020 Term Loan was priced to lenders at par. Debt issuance costs for the Tranche B 2020 Term Loan of approximately $7 million were capitalized and are being amortized as interest expense using the effective interest method over its term. The Company recognized a loss on extinguishment of debt of $8 million as of result of this transaction.

On October 4, 2013, Level 3 Financing refinanced its existing $1.2 billion Tranche B-II 2019 Term Loan under its existing senior credit facility by increasing the borrowings under the Tranche B 2020 Term Loan by an aggregate principal amount of $1.2 billion. The Tranche B 2020 Term Loan new aggregate principal amount is $1.796 billion. The $1.796 billion Tranche B 2020 Term Loan will continue to bear interest at LIBOR plus 3.00%, with a minimum LIBOR of 1.00%, and will mature on January 15, 2020. The additional portion of the Tranche B 2020 Term Loan was priced to lenders at par, with the payment to the lenders of an upfront 0.25% fee at closing. As a result of this transaction, the Company recognized a loss on the refinancing of approximately $10 million, additional debt discount costs of $3 million that are being amortized as interest expense using the effective interest method over its term and debt issuance costs related to the Tranche B-II 2019 Term Loan of approximately $11 million were assigned to the Tranche B 2020 Term Loan and continue to be amortized as interest expense using the new effective interest rate over its new term.

As a result of amortization, the capitalized debt issuance costs have been reduced to $9 million and $20 million for the Tranche B-III 2019 and Tranche B 2020 Term Loans, respectively, at December 31, 2013.

Level 3 Financing has the option of electing one, two, three or six month LIBOR at the end of each interest period and may elect different options with respect to different portions of the Senior Secured Term Loan. Interest is payable in cash at the end of each LIBOR period elected in arrears, provided that in the case of a six month interest period, interim interest payments are required at the end of the first three months.

The Senior Secured Term Loan is secured by a pledge of the equity interests in certain U.S.-based subsidiaries of Level 3 Financing, Inc.; 65% of the equity interests in each of Level 3 Financing, Inc.'s Canadian subsidiary and its Bermudan subsidiary that indirectly owns Global Crossing's non-U.S. subsidiaries; and liens on the assets of Level 3 Communications, Inc. and certain U.S.-based subsidiaries of Level 3 Financing, Inc. In addition, Level 3 Communications, Inc. and certain U.S.-based subsidiaries of Level 3 Financing, Inc. have provided full and unconditional guarantees of the obligations under the Senior Secured Term Loan.

The Senior Secured Term Loan includes certain negative covenants which restrict the ability of the Company, Level 3 Financing and any restricted subsidiary to engage in certain activities. The Senior Secured Term Loan also contains certain events of default. It does not require the Company or Level 3 Financing to maintain specific financial ratios or other financial metrics.

Floating Rate Senior Notes due 2018

On November 26, 2013, Level 3 Financing completed the offering of $300 million aggregate principal amount of its Floating Rate Senior Notes due 2018 (the "2018 Floating Rate Notes"). Debt issuance costs of approximately $5 million were capitalized and are being amortized over the term of the 2018 Floating Rate Notes as interest expense using the effective interest method. The net proceeds from the offering, together with cash on hand, were used to redeem all of Level 3 Financing’s outstanding Floating Rate Senior Notes due 2015, including accrued interest and expenses. The Company recognized a loss on extinguishment of debt of $1 million as a result of this transaction. The 2018 Floating Rate Notes were priced at 100% of their principal amount and will mature on January 15, 2018. Interest on the notes will be payable on May 15 and November 15 of each year, beginning on May 15, 2014. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company. In addition, each of Level 3 Communications, Inc. and Level 3 Financing has agreed to endeavor in good faith using commercially reasonable efforts to cause Level 3 Communications, LLC to obtain all material governmental authorizations and consents required in order for it to guarantee the Floating Rate Senior Notes at the earliest practicable date and to enter into a guarantee of the Floating Rate Senior Notes promptly thereafter.

The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes.

As a result of amortization, the capitalized debt issuance costs have been reduced to $4 million at December 31, 2013.

Prior to May 15, 2015, at the option of Level 3 Financing, the 2018 Floating Rate Notes will be subject to redemption, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice, at 100% of the principal amount of 2018 Floating Rate Notes so redeemed plus (i) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (ii) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date. The 2018 Floating Rate Notes will be redeemable at the option of Level 3 Financing, in whole or in part, on or after May 15, 2015, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as percentages of the principal amount), plus accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, if redeemed during the periods set forth below:

Period
Redemption
Price
May 15, 2015 - May 14, 2016
102.00
%
May 15, 2016 - November 14, 2016
101.00
%
November 15, 2016 and thereafter
100.00
%

In addition, at any time or from time to time on or prior to May 15, 2015, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 2018 Floating Rate Notes at a redemption price equal to 100% of the principal amount of the 2018 Floating Rate Notes so redeemed, plus a premium equal to the interest rate per annum on the 2018 Floating Rate Notes in effect on the date that notice of redemption is given, plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, with the net cash proceeds contributed to the capital of Level 3 Financing from one or more private placements of common stock of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 2018 Floating Rate Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption is required to be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

The offering of the 2018 Floating Rate Notes has not been registered under the Securities Act of 1933, as amended, and the 2018 Floating Rate Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The 2018 Floating Rate Notes were sold to persons reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended, and non-U.S. persons outside the United States under Regulation S under the Securities Act of 1933, as amended. Level 3 Financing and the initial purchasers of the 2018 Floating Rate Notes entered into a registration rights agreement regarding the 2018 Floating Rate Notes pursuant to which Level 3 and Level 3 Financing agreed, among other things, to file an exchange offer registration statement with the Securities and Exchange Commission.

11.875% Senior Notes due 2019

In January 2011, in two separate transactions, Level 3 Communications issued a total of $605 million aggregate principal amount of its 11.875% Senior Notes due 2019. The Company issued its 11.875% Senior Notes due 2019 to investors at a price of 98.173% of their principal amount. Debt issuance costs of approximately $8 million were capitalized and are being amortized over the term of the 11.875% Senior Notes as interest expense using the effective interest method. The net proceeds from the issuance of the 11.875% Senior Notes were used to redeem the Company’s 5.25% Convertible Senior Notes due 2011 and exchange the 9% Convertible Senior Discount Notes due 2013 during the first quarter of 2011. Debt issuance discount of approximately $11 million was reflected as a reduction in long-term debt and is being amortized as interest expense over the term of the 11.875% Senior Notes using the effective interest method. The 11.875% Senior Notes will mature on February 1, 2019 and are not guaranteed by the Company’s subsidiaries. Interest on the notes accrues at 11.875% per year and is payable on April 1 and October 1 of each year, beginning April 1, 2011.

As of December 31, 2013, debt issuance discount remaining was $8 million. As a result of amortization, the capitalized debt issuance costs have been reduced to $6 million at December 31, 2013.

The 11.875% Senior Notes are subject to redemption at the option of Level 3 Communications in whole or in part, at any time or from time to time, prior to February 1, 2015, at 100% of the principal amount of 11.875% Senior Notes so redeemed plus (A) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (B) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, and on or after February 1, 2015 at the redemption prices (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest thereon to the redemption date, if redeemed during the twelve months beginning February 1, of the years indicated below:
Year
Redemption
Price
2015
105.938
%
2016
102.969
%
2017
100.000
%


At any time or from time to time on or prior to February 1, 2014, the Company may redeem up to 35% of the original aggregate principal amount of the 11.875% Senior Notes at a redemption price equal to 111.875% of the principal amount of the 11.875% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, with the net cash proceeds contributed to the capital of Level 3 from one or more private placements of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 11.875% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

The offering of the 11.875% Senior Notes was not originally registered under the Securities Act of 1933, as amended, and included a registration rights agreement. In July 2011, all of the originally placed notes were exchanged for a new issue of 11.875% Senior Notes due 2019 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable.

9.375% Senior Notes due 2019

On March 4, 2011, Level 3 Financing issued $500 million aggregate principal amount of its 9.375% Senior Notes due 2019 at a price of 98.001% of their principal amount. Debt issuance discount of approximately $10 million was reflected as a reduction in long-term debt and is being amortized as interest expense over the term of the 9.375% Senior Notes using the effective interest method. Debt issuance costs of approximately $11 million were capitalized and are being amortized over the term of the 9.375% Senior Notes as interest expense using the effective interest method. The net proceeds from the offering, were used to redeem a portion of Level 3 Financing’s outstanding 9.25% Senior Notes due 2014 on April 4, 2011. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC. The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes. The 9.375% Senior Notes will mature on April 1, 2019. Interest on the Notes will be payable on April 1 and October 1 of each year, beginning on October 1, 2011.

As of December 31, 2013, debt issuance discount remaining was $7 million. As a result of amortization, the capitalized debt issuance costs have been reduced to $8 million at December 31, 2013.

The 9.375% Senior Notes Due 2019 are subject to redemption at the option of Level 3 Financing in whole or in part, at any time or from time to time, prior to April 1, 2015, at 100% of the principal amount of 9.375% Senior Notes so redeemed plus (A) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (B) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, and on or after April 1, 2015 at the redemption prices (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest thereon to the redemption date, if redeemed during the twelve months beginning April 1, of the years indicated below:
Year
Redemption
Price
2015
104.688
%
2016
102.344
%
2017
100.000
%


At any time or from time to time on or prior to April 1, 2014, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 9.375% Senior Notes at a redemption price equal to 109.375% of the principal amount of the 9.375% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, with the net cash proceeds contributed to the capital of Level 3 Financing from one or more private placements or underwritten public offerings of common stock of the Company resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 9.375% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

The offering of the 9.375% Senior Notes was not originally registered under the Securities Act of 1933, as amended, and included a registration rights agreement. In July 2011, all of the originally placed notes were exchanged for a new issue of 9.375% Senior Notes due 2019 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable.

8.125% Senior Notes due 2019

On June 9, 2011, Level 3 Escrow, Inc., an indirect, wholly owned subsidiary of Level 3 Communications, issued $600 million in aggregate principal amount of its 8.125% Senior Notes due 2019. Level 3 Escrow, Inc. issued the 8.125% Senior Notes to investors at a price of 99.264% of their principal amount. Debt issuance discount of approximately $4 million was reflected as a reduction in long-term debt and was amortized as interest expense over the beginning initial term of the 8.125% Senior Notes using the effective interest method. As a result of certain conditions that could have required Level 3 Escrow, Inc. to redeem the notes on or before April 10, 2012, discussed further below, the initial term of the 8.125% Senior Notes was deemed to be through April 2012. When the contingency was resolved, the Company reclassified these notes into long-term debt and the remaining related debt issuance discount is being amortized as interest expense over the remaining term of the 8.125% Senior Notes using the effective interest method. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC. The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes. The 8.125% Senior Notes will mature on July 1, 2019. Interest on the notes accrues at 8.125% per year and is payable on January 1 and July 1, beginning on January 1, 2012.

On July 28, 2011, Level 3 Escrow, Inc. issued an additional $600 million in aggregate principal amount of its 8.125% Senior Notes due 2019 ("Series B") under the same indenture as the 8.125% Senior Notes issued in June 9, 2011, which are treated under that indenture as a single series of notes. The new 8.125% Senior Notes due 2019 were priced to investors at 98.545% of their principal amount, plus accrued interest from June 9, 2011 when the original notes were issued, and will mature on July 1, 2019. Debt issuance discount of approximately $9 million was reflected as a reduction in long-term debt and is being amortized as interest expense over the beginning initial term of the 8.125% Senior Notes using the effective interest method. As a result of certain conditions that could have required Level 3 Escrow, Inc. to redeem the $1.2 billion of 8.125% Senior Notes on or before April 10, 2012, the initial term of these notes was deemed to be through April 2012. When the contingency was resolved in connection with the Amalgamation, the Company reclassified these notes into long-term debt and the remaining related debt issuance discount is being amortized as interest expense over the remaining term of the 8.125% Senior Notes using the effective interest method.

The gross proceeds from the offering of the 8.125% Senior Notes were deposited into a segregated escrow account and were to remain in escrow until the date of the satisfaction of certain escrow conditions including, but not limited to, the substantially concurrent consummation of the Amalgamation and the assumption of the 8.125% Senior Notes by Level 3 Financing. In conjunction with the completion of the Amalgamation on October 4, 2011, the escrow conditions were satisfied. Debt issuance costs of approximately $32 million were capitalized and are being amortized over the term of the 8.125% Senior Notes using the effective interest method. Level 3 Financing assumed the obligations under the 8.125% Senior Notes and the notes were reclassified to long-term debt in the third quarter of 2011. Following the release of the escrowed funds in connection with the Notes Assumption, the escrowed funds were used to refinance certain existing indebtedness of Global Crossing in connection with the closing of the Amalgamation.

As of December 31, 2013, debt issuance discount remaining was $7 million. As a result of amortization, the capitalized debt issuance costs have been reduced to $25 million at December 31, 2013.

The 8.125% Senior Notes will be subject to redemption at the option of Level 3 Financing, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice, (i) prior to July 1, 2015, at 100% of the principal amount of 8.125% Senior Notes so redeemed plus (A) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (B) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, and on and after July 1, 2015, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, if redeemed during the twelve months beginning July 1, of the years indicated below:

Year
Redemption
Price
2015
104.063
%
2016
102.031
%
2017
100.000
%


At any time or from time to time after the Notes Assumption and on or prior to July 1, 2014, up to 35% of the original aggregate principal amount of the 8.125% Senior Notes may be redeemed at a redemption price equal to 108.125% of the principal amount of the 8.125% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, with the net cash proceeds contributed from one or more private placements of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 8.125% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

The offering of the 8.125% Senior Notes was not originally registered under the Securities Act of 1933, as amended, and included a registration rights agreement. In April 2012, all of the originally placed notes were exchanged for a new issue of 8.125% Senior Notes due 2019 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable.

8.875% Senior Notes due 2019

On August 1, 2012, Level 3 Communications completed the offering of $300 million aggregate principal amount of its 8.875% Senior Notes due 2019. Debt issuance costs of approximately $7 million were capitalized and are being amortized over the term of the 8.875% Senior Notes as interest expense using the effective interest method. The net proceeds from the offering of the notes was used for general corporate purposes, including the potential repurchase, redemption, repayment or refinancing of the Company's and its subsidiaries' existing indebtedness from time to time. The 8.875% Senior Notes were priced at 100% of their principal amount and will mature on June 1, 2019. Interest on the notes accrues from August 1, 2012 and will be payable on June 1 and December 1 of each year, beginning on December 1, 2012. The notes are senior unsecured obligations of Level 3 Communications, ranking equal in right of payment with all other senior unsecured obligations of Level 3. The notes will not be guaranteed by any of the Company's subsidiaries.

As a result of amortization, the capitalized debt issuance costs have been reduced to $6 million at December 31, 2013.

The 8.875% Senior Notes are subject to redemption at the option of Level 3 in whole or in part, at any time before June 1, 2015 at the redemption price equal to 100% of their principal amount, plus a make-whole premium and accrued and unpaid interest. On and after June 1, 2015, Level 3 may redeem all or part of the 8.875% Senior Notes, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve months beginning June 1, of the years indicated below:
Year
Redemption
Price
2015
104.438
%
2016
102.219
%
2017
100.000
%


In addition, at any time or from time to time on or prior to June 1, 2015, Level 3 may redeem up to 35% of the original aggregate principal amount of the 8.875% Senior Notes (including any additional 8.875% Senior Notes) at a redemption price equal to 108.875% of the principal amount of the 8.875% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds contributed to the capital of Level 3 of one or more private placements to persons other than affiliates of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in aggregate; provided, however, that at least 65% of the original aggregate principal amount of the 8.875% Senior Notes (including any additional 8.875% Senior Notes) would remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days of such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

The 8.875% Senior Notes were not originally registered under the Securities Act of 1933, as amended, and included a registration rights agreement. During the second quarter of 2013, all of the originally placed 8.875% Senior Notes due 2019 issued by Level 3 Communications, were exchanged for a new issue of 8.875% Senior Notes due 2019 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable.

8.625% Senior Notes due 2020

On January 13, 2012, Level 3 Financing completed the offering of $900 million aggregate principal amount of its 8.625% Senior Notes due 2020. Debt issuance costs of approximately $20 million were capitalized and are being amortized over the term of the 8.625% Senior Notes as interest expense using the effective interest method. In February 2012, a portion of the net proceeds from the offering of the 8.625% Senior Notes were used to redeem all of Level 3 Financing's outstanding 9.25% Senior Notes due 2014 in aggregate principal amount of $807 million. Level 3 Financing redeemed its 9.25% Senior Notes due 2014 at a price of 102.313% of the principal amount and recognized a loss on extinguishment of debt of $22 million during the first quarter of 2012.

The remaining net proceeds constituted purchase money indebtedness under the existing senior secured credit agreement and indentures of the Company and Level 3 Financing and were used solely to fund the cost of construction, installation, acquisition, lease, development or improvement of any Telecommunications/IS assets (as defined in the existing senior secured credit agreement and indentures of Level 3).

The 8.625% Senior Notes will mature on July 15, 2020. Interest on the notes accrues from January 13, 2012 and will be payable on January 15 and July 15 of each year, beginning on July 15, 2012. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC. The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes.

As a result of amortization, the capitalized debt issuance costs have been reduced to $16 million at December 31, 2013.

The 8.625% Senior Notes are subject to redemption at the option of Level 3 Financing in whole or in part, at any time before January 15, 2016 at the redemption price equal to 100% of their principal amount, plus a make-whole premium and accrued and unpaid interest. On and after January 15, 2016, Level 3 Financing may redeem all or part of the 8.625% Senior Notes, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve months beginning January 15, of the years indicated below:
Year
Redemption
Price
2016
104.313
%
2017
102.156
%
2018
100.000
%


In addition, at any time or from time to time on or prior to January 15, 2015, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 8.625% Senior Notes (including any additional 8.625% Senior Notes) at a redemption price equal to 108.625% of the principal amount of the 8.625% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds contributed to the capital of Level 3 Financing of one or more private placements to persons other than affiliates of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in aggregate; provided, however, that at least 65% of the original aggregate principal amount of the 8.625% Senior Notes (including any additional 8.625% Senior Notes) would remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days of such private placement or public offering upon not less than 30 nor more than 60 days prior notice. The 8.625% Senior Notes due 2020 issued by Level 3 Financing were not originally registered under the Securities Act of 1933, as amended.

During the second quarter of 2012, all of the originally placed notes were exchanged for a new issue of 8.625% Senior Notes due 2020 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable. The 8.625% Senior Notes became fully and unconditionally guaranteed by Level 3 Communications, LLC during the second quarter of 2012.

7% Senior Notes due 2020

On August 6, 2012, Level 3 Financing completed the offering of $775 million aggregate principal amount of its 7% Senior Notes due 2020. Debt issuance costs of approximately $15 million were capitalized and are being amortized over the term of the 7% Senior Notes as interest using the effective interest method. The net proceeds from the offering of the notes, along with cash on hand were used to redeem all of the outstanding 8.75% Senior Notes due 2017 issued by Level 3 Financing, including the payment of accrued interest and applicable premiums, and in connection with that redemption, the indenture relating to the 8.75% Senior Notes due 2017 was discharged. Level 3 Financing redeemed its 8.75% Senior Notes due 2017 at a price of 104.375% of the principal amount and recognized a loss on extinguishment of debt of $40 million. The 7% Senior Notes were priced at 100% of their principal amount and will mature on June 1, 2020. Interest on the notes accrues from August 6, 2012 and will be payable on June 1 and December 1 of each year, beginning on December 1, 2012.The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC. The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes.

As a result of amortization, the capitalized debt issuance costs have been reduced to $13 million at December 31, 2013.

The 7% Senior Notes are subject to redemption at the option of Level 3 Financing in whole or in part, at any time before June 1, 2016 at the redemption price equal to 100% of their principal amount, plus a make-whole premium and accrued and unpaid interest. On or after June 1, 2016, Level 3 Financing may redeem all or part of the 7% Senior Notes, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve months beginning June 1, of the years indicated below:
Year
Redemption
Price
2016
103.500
%
2017
101.750
%
2018
100.000
%


In addition, at any time or from time to time on or prior to June 1, 2015, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 7% Senior Notes (including any additional 7% Senior Notes) at a redemption price equal to 107% of the principal amount of the 7% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds contributed to the capital of Level 3 Financing of one or more private placements to persons other than affiliates of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in aggregate; provided, however, that at least 65% of the original aggregate principal amount of the 7% Senior Notes (including any additional 7% Senior Notes) would remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days of such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

The 7% Senior Notes were not originally registered under the Securities Act of 1933, as amended, and included a registration rights agreement. During the second quarter of 2013, all of the originally placed 7% Senior Notes due 2020 issued by Level 3 Financing, were exchanged for a new issue of 7% Senior Notes due 2020 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable.

6.125% Senior Notes due 2021

On November 14, 2013, Level 3 Financing completed the offering of $640 million aggregate principal amount of its 6.125% Senior Notes due 2021 (the "6.125% Senior Notes"). Debt issuance costs of approximately $12 million were capitalized and are being amortized over the term of the 6.125% Senior Notes as interest using the effective interest method.The net proceeds from the offering, together with cash on hand, were used to redeem all of Level 3 Financing’s outstanding 10% Senior Notes due 2018, including accrued interest, applicable premiums and expenses. The Company recognized a loss on extinguishment of debt of $56 million as a result of this transaction. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company. In addition, each of Level 3 Communications, Inc. and Level 3 Financing has agreed to endeavor in good faith using commercially reasonable efforts to cause Level 3 Communications, LLC to obtain all material governmental authorizations and consents required in order for it to guarantee the 6.125% Senior Notes at the earliest practicable date and to enter into a guarantee of the 6.125% Senior Notes promptly thereafter.

The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes. The 6.125% Senior Notes were priced at 100% of their principal amount and will mature on January 15, 2021. Interest on the Notes will be payable on April 15 and October 15 of each year, beginning on April 15, 2014.

As a result of amortization, the capitalized debt issuance costs have been reduced to $12 million at December 31, 2013.

Prior to November 15, 2016, at the option of Level 3 Financing, the 6.125% Senior Notes will be subject to redemption, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice, at 100% of the principal amount of 6.125% Senior Notes so redeemed plus (i) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (ii) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date. On and after November 15, 2016, at the option of Level 3 Financing, the 6.125% Senior Notes will be subject to redemption, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date. The redemption price for the 6.125% Senior Notes if redeemed during the twelve months beginning November 15, of the years indicated below:

Year
Redemption
Price
2016
103.063
%
2017
101.531
%
2018
100.000
%

In addition, at any time or from time to time on or prior to November 15, 2016, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 6.125% Senior Notes at a redemption price equal to 106.125% of the principal amount of the 6.125% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, with the net cash proceeds contributed to the capital of Level 3 Financing from one or more private placements of common stock of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 6.125% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption is required to be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

The offering of the 6.125% Senior Notes has not been registered under the Securities Act of 1933, as amended, and the 6.125% Senior Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The 6.125% Senior Notes were sold to "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended, and non-U.S. persons outside the United States under Regulation S under the Securities Act of 1933, as amended. Level 3 Financing and the initial purchasers of the 6.125% Senior Notes entered into a registration rights agreement regarding the 6.125% Senior Notes pursuant to which Level 3 and Level 3 Financing agreed, among other things, to file an exchange offer registration statement with the Securities and Exchange Commission.


15% Convertible Senior Notes due 2013

On December 24, 2008, Level 3 Communications, Inc. received gross proceeds of $374 million and on December 31, 2008, the Company received gross proceeds of $26 million from the issuance of its $400 million 15% Convertible Senior Notes due 2013 (the "15% Convertible Senior Notes"). The proceeds from this issuance were primarily used to repurchase, through tender offers, a portion of the Company's 6% Convertible Subordinated Notes due 2009, 6% Convertible Subordinated Notes due 2010 and 2.875% Convertible Senior Notes due 2010. The 15% Convertible Senior Notes were priced at 100% of the principal amount of these notes. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC. The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes.

The 15% Convertible Senior Notes matured on January 15, 2013. Interest on the notes accrued from the date of original issuance at a rate of 15% per year and were payable on January 15 and July 15 of each year, beginning on January 15, 2009. The 15% Convertible Senior Notes contain limited covenants which restrict additional liens on assets of the Company.

The 15% Convertible Senior Notes are convertible by holders into shares of the Company's common stock at a conversion price of $27 per share (which is equivalent to a conversion rate of approximately 37 shares of common stock per $1,000 principal amount of the 15% Convertible Senior Notes), subject to adjustment upon certain events, at any time before the close of business on January 15, 2013. If at any time following the date of original issuance of the 15% Convertible Senior Notes and prior to the close of business on January 15, 2013 the closing per share sale price of the Company's common stock exceeds 222.2% of the conversion price then in effect for at least 20 trading days within any 30 consecutive trading day period, the 15% Convertible Senior Notes will automatically convert into shares of Level 3 common stock, plus accrued and unpaid interest (if any) to, but excluding the automatic conversion date, which date will be designated by the Company following such automatic conversion event.

Holders of the 15% Convertible Senior Notes may require the Company to repurchase all or any part of their notes upon the occurrence of a designated event at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date, if any.

In addition, if a holder elects to convert its 15% Convertible Senior Notes in connection with certain changes in control, the Company could be required to pay a make-whole premium by increasing the number of shares deliverable upon conversion of such notes. Any make-whole premium will have the effect of increasing the number of shares due to holders of the 15% Convertible Senior Notes upon conversion.

On July 6, 2011, certain holders converted approximately $128 million of the 15% Convertible Senior Notes to common equity. Upon conversion, the Company issued an aggregate of approximately 5 million shares of Level 3 common stock, representing the approximately 37 shares per $1,000 note into which the notes were then convertible. The Company also paid an aggregate of approximately $29 million in cash, equivalent to $225 per $1,000 note, representing interest that would have been due from conversion through the maturity date, which was recognized as a loss on inducement and included in the loss on extinguishment of debt.

On March 13, 2012, the Company entered into an exchange agreement for a portion of its 15% Convertible Senior Notes due 2013. Pursuant to the agreement, approximately $100 million aggregate principal amount of Level 3's outstanding 15% Convertible Senior Notes due 2013 was exchanged for approximately 3.7 million shares of Level 3 common stock into which the notes were convertible plus an additional 1.7 million shares for a total of approximately 5.4 million shares. The consideration was based on the market price for these notes which included an inducement premium and included a payment for accrued and unpaid interest from January 15, 2012 through March 15, 2012 of approximately $2 million. This transaction did not include the payment by the Company of any cash. The Company recognized a loss on inducement included in loss on extinguishment of debt of $39 million.

On January 15, 2013, Level 3 Communications repaid at maturity approximately $172 million of its remaining 15% Convertible Senior Notes due 2013.

7% Convertible Senior Notes due 2015

On June 26, 2009, Level 3 Communications issued $200 million aggregate principal amount of 7% Convertible Senior Notes due 2015 under an indenture between Level 3 and The Bank of New York, as trustee. The 7% Convertible Senior Notes due 2015 were issued in conjunction with the exchange of approximately $142 million aggregate principal amount of the Company's 6% Convertible Subordinated Notes due 2010 and approximately $140 million aggregate principal amount of its 2.875% Convertible Senior Notes due 2010. As part of this exchange, Level 3 also paid $78 million in cash, including accrued and unpaid interest for the notes exchanged.

On October 15, 2009, Level 3 issued $275 million aggregate principal amount of 7% Convertible Senior due 2015, Series B under a second supplemental indenture between Level 3 and The Bank of New York, as trustee. The 7% Convertible Senior Notes due 2015, Series B are substantially similar in all respects to the 7% Convertible Senior Notes due 2015. The 7% Convertible Senior Notes due 2015, together with the 7% Convertible Senior Notes due 2015, Series B are referred to as the "7% Convertible Senior Notes due 2015".

The 7% Convertible Senior Notes due 2015 mature on March 15, 2015 and bear interest at a rate of 7% per annum, payable semiannually in arrears on March 15 and September 15. Interest payments commence for the 7% Convertible Senior Notes due 2015 on September 15, 2009 and on March 15, 2010 for the 7% Convertible Senior Notes due 2015, Series B. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC. The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes.

The 7% Convertible Senior Notes due 2015 are convertible into shares of Level 3 common stock, at the option of the holder, at any time prior to maturity, unless previously repurchased or redeemed, or unless Level 3 has caused the conversion rights to expire. The 7% Convertible Senior Notes due 2015 may be converted at the rate of approximately 37 shares of common stock per each $1,000 principal amount of notes, subject to adjustment in certain circumstances. This is equivalent to a conversion price of approximately $27 per share.

Upon the occurrence of a designated event (a change of control or a termination of trading), holders of the 7% Convertible Senior Notes due 2015 will have the right, subject to certain exceptions and conditions, to require Level 3 to repurchase all or any part of the 7% Convertible Senior Notes due 2015 at a repurchase price equal to 100% of the principal amount plus accrued and unpaid interest thereon (if any) to, but excluding, the designated event purchase date. In addition, if an event treated as a change in control of Level 3 occurs, Level 3 will be obligated, subject to certain conditions, to offer to purchase all of the outstanding 7% Convertible Senior Notes due 2015 at a purchase price of 100% of the principal amount, plus a "make-whole" premium, by increasing the conversion rate applicable to such 7% Convertible Senior Notes due 2015.

As of December 31,2013 the debt issuance discount remaining was $1 million. Debt issuance costs of $4 million were originally capitalized and are being amortized over the term of the 7% Convertible Senior Notes due 2015 as interest expense using the effective interest method. The capitalized unamortized debt issuance costs were $1 million at December 31, 2013.

6.5% Convertible Senior Notes due 2016

On September 20, 2010, Level 3 Communications received $170 million of net proceeds after transaction costs, from a public offering of $175 million aggregate principal amount of its 6.5% Convertible Senior Notes due 2016 (the "6.5% Convertible Senior Notes"). On October 5, 2010, in connection with the underwriters' exercise of the $26 million over-allotment option associated with the 6.5% Convertible Senior Notes, the Company received an additional $25.5 million net proceeds after transaction costs of less than $1 million. Debt issuance costs of $6 million were originally capitalized and are being amortized over the term of the 6.5% Convertible Senior Notes as interest expense using the effective interest method. The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC. The notes are unsecured, unsubordinated obligations of Level 3 Financing ranking equal in right of payment with all existing and future unsubordinated indebtedness of Level 3 Financing and are senior in right of payment to all existing and future indebtedness of Level 3 Financing expressly subordinated in right of payment to the notes. The 6.5% Convertible Senior Notes will mature on October 1, 2016. Interest on the notes accrues at 6.5% per year and is payable semiannually on April 1 and October 1, beginning April 1, 2011.

The 6.5% Convertible Senior Notes were convertible by holders into shares of the Company's common stock at any time prior to maturity, unless previously redeemed, repurchased or unless the Company has caused the conversion rights to expire. The conversion rate is approximately 54 shares per each $1,000 principal amount of 6.5% Convertible Senior Notes, subject to adjustment in certain circumstances. This is equivalent to a conversion price of approximately $18.525 per share. In addition, if a designated event (a change in control or a termination of trading) occurs, Level 3 will be obligated, subject to certain conditions, to offer to purchase all of the outstanding 6.5% Convertible Senior Notes due 2016 at a purchase price of 100% of the principal amount, plus accrued and unpaid interest thereon. If an event treated as a change in control occurs, the Company will be obligated, subject to certain conditions, to offer to purchase all of the outstanding 6.5% Convertible Senior Notes at a purchase price of 100% of the principal amount plus a "make-whole" premium, by increasing the conversion rate applicable to such 6.5% Convertible Senior Notes due 2016.

On November 25, 2013, the Company notified the holders of its 6.5% Convertible Senior Notes that the Company would be redeeming these notes on December 26, 2013 for a redemption price equal to 100% of their principal amount, plus accrued but unpaid interest up to, but not including, the redemption date. The holders of the 6.5% Convertible Senior Notes converted approximately $200 million aggregate principal amount of the notes into 10,814,264 shares of Level 3 common stock, par value $0.01 per share. On December 26, 2013, approximately $1 million aggregate principal amount of the remaining 6.5% Convertible Senior Notes was redeemed at a price equal to 100% of the principal amount plus accrued but unpaid interest.

Capital Leases

As of December 31, 2013, the Company had $73 million of capital leases. The Company leases property, equipment, certain dark fiber facilities and metro fiber under non-cancelable IRU agreements that are accounted for as capital leases. Interest rates on these capital leases approximated 8.4% on average as of December 31, 2013.

Other Debt

As of December 31, 2013, the Company had $13 million of other debt with an average interest rate of 0.4%.

Covenant Compliance

At December 31, 2013 and 2012, the Company was in compliance with the covenants on all outstanding debt issuances.

Long-Term Debt Maturities

Aggregate future contractual maturities of long-term debt and capital leases (excluding discounts and fair value adjustments) were as follows as of December 31, 2013 (dollars in millions):

2014
$
31

2015
483

2016
7

2017
6

2018
6

Thereafter
7,859

 
$
8,392




Accumulated Other Comprehensive Income (Loss) (Notes)
Comprehensive Income (Loss) Note [Text Block]
Accumulated Other Comprehensive Income (Loss)

The accumulated balances for each classification of other comprehensive income are as follows:

(dollars in millions)
 
Net Foreign Currency Translation Adjustment
 
Holding Gain (Loss) on Interest Rate Swaps
 
Defined Benefit Pension Plans
 
Total
Balance at January 1, 2011
 
$
55

 
$
(108
)
 
$
(45
)
 
$
(98
)
Other comprehensive income (loss) before reclassifications
 
(16
)
 
(28
)
 
14

 
64

Amounts reclassified from accumulated other comprehensive loss
 
—

 
46

 
2

 
(46
)
Balance at December 31, 2011
 
39

 
(90
)
 
(29
)
 
(80
)
Other comprehensive income (loss) before reclassifications
 
17

 
25

 
(4
)
 
132

Amounts reclassified from accumulated other comprehensive loss
 
—

 
65

 
3

 
(26
)
Balance at December 31, 2012
 
56

 
—

 
(30
)
 
26

Other comprehensive income (loss) before reclassifications
 
11

 
—

 
(3
)
 
8

Amounts reclassified from accumulated other comprehensive loss
 
—

 
—

 
2

 
2

Balance at December 31, 2013
 
$
67

 
$
—

 
$
(31
)
 
$
36

Employee Benefit Benefits and Stock-Based Compensation
Stock-Based Compensation
Employee Benefits and Stock-Based Compensation

The Company records non-cash compensation expense for its outperform stock appreciation rights, restricted stock units and shares, 401(k) matching contributions, and other stock-based compensation associated with the Company's discretionary bonus grants. Total non-cash compensation expense related to these equity awards was $151 million in 2013, $135 million in 2012 and $101 million in 2011.

The following table summarizes non-cash compensation expense and capitalized non-cash compensation for each of the three years ended December 31, 2013, 2012 and 2011 (dollars in millions):

 
2013
 
2012
 
2011
OSO
$
21

 
$
14

 
$
10

Restricted Stock Units and Shares
38

 
40

 
22

401(k) Match Expense
24

 
23

 
13

Restricted Stock Unit Bonus Grant
59

 
46

 
57

Management Incentive and Retention Plan
10

 
13

 
—

 
152

 
136

 
102

Capitalized Non-Cash Compensation
(1
)
 
(1
)
 
(1
)
 
$
151

 
$
135

 
$
101



The Company capitalizes non-cash compensation for those employees directly involved in the construction of the network, installation of services for customers or the development of business support systems.

OSOs and restricted stock units and shares are granted under the Level 3 Communications, Inc. Stock Plan, as amended (the "Stock Plan"), which term extends through May 20, 2020. The Stock Plan provides for accelerated vesting of stock awards upon retirement if an employee meets certain age and years of service requirements and certain other requirements. Under the Stock Compensation guidance, if an employee meets the age and years of service requirements under the accelerated vesting provision, the award would be expensed at grant or expensed over the period from the grant date to the date the employee meets the requirements, even if the employee has not actually retired. The Company recognized non-cash compensation expense for employees that met the age and years of service requirements for accelerated vesting at retirement of $5 million, $9 million and $12 million in 2013, 2012 and 2011, respectively.

Outperform Stock Options

OSOs were awarded through the end of 2013, and will continue to be outstanding through 2016. The Company's OSO program was designed so that the Company's stockholders would receive a market return on their investment before OSO holders receive any return on their OSOs. The Company believes that the OSO program directly aligned management's and stockholders' interests by basing stock option value on the Company's ability to outperform the market in general, as measured by the Standard & Poor's ("S&P") 500® Index. Participants in the OSO program do not realize any value from awards unless the Company's common stock price outperforms the S&P 500® Index during the life of the grant. When the stock price gain is greater than the corresponding gain on the S&P 500® Index, the value received for awards under the OSO plan is based on a formula involving a multiplier related to the level by which the Company's common stock outperforms the S&P 500® Index. To the extent that Level 3's common stock outperforms the S&P 500® Index, the value of OSO units to a holder may exceed the value of non-qualified stock options.

The initial strike price, as determined on the day prior to the OSO grant date, is adjusted over time (the "Adjusted Strike Price"), until the settlement date. The adjustment is an amount equal to the percentage appreciation or depreciation in the value of the S&P 500® Index from the date of grant to the date of exercise. The value of the OSO increased for increasing levels of outperformance. OSO units had a multiplier range from zero to four depending upon the performance of Level 3 common stock relative to the S&P 500® Index as shown in the following table.

If Level 3 Stock Outperforms the S&P 500® Index by:
 
Then the Pre-multiplier Gain Multiplied by a Success Multiplier of:
0% or Less
 
—
More than 0% but Less than 11%
 
Outperformance percentage multiplied by 4/11
11% or More
 
4.00

The Pre-multiplier Gain is the Level 3 common stock price minus the Adjusted Strike Price on the date of settlement.

Upon settlement of an OSO, the Company shall deliver or pay to the grantee the difference between the fair market value of a share of Level 3 common stock as of the day prior to the settlement date, less the Adjusted Strike Price (the "Exercise Consideration"). The Exercise Consideration may be paid in cash, Level 3 common stock or any combination of cash or Level 3 common stock at the Company's discretion. The number of shares of Level 3 common stock to be delivered by the Company to the grantee is determined by dividing the Exercise Consideration to be paid in Level 3 common stock by the fair market value of a share of Level 3 common stock as of the date prior to the settlement date. Fair market value was defined in the OSO agreement as the closing price per share of Level 3 common stock on the national securities exchange on which the common stock is traded. Settlement of the OSO units does not require any cash outlay by the employee.

Beginning with awards made on or after April 1, 2007, OSO units were awarded monthly to employees in mid-management level and higher positions, had a three year life, vested 100% and fully settled on the third anniversary of the date of the award and were valued as of the first day of each month. Recipients have no discretion on the timing to exercise OSO units granted on or after April 1, 2007, thus the expected life of all such OSO units was three years. During the first quarter of 2010, the Company revised the eligibility criteria and grant schedule for its non-cash compensation. Effective April 1, 2010, the Company's OSOs were granted quarterly to certain levels of management. There were no changes to the vesting schedule, or any other aspects of the non-cash compensation plans.

As of December 31, 2013, there was $15 million of unamortized compensation expense related to granted OSO units. The weighted average period over which this cost will be recognized is 1.99 years.

The fair value of the OSO units granted was calculated by applying a modified Black-Scholes model with the assumptions identified below. The Company utilized a modified Black-Scholes model due to the additional variables required to calculate the effect of the market conditions and success multiplier of the OSO program. The Company believes that given the relative short life of the OSOs and the other variables used in the model, the modified Black-Scholes model provides a reasonable estimate of the fair value of the OSO units at the time of grant.

 
 
Year Ended December 31,
 
 
2013
 
2012
 
2011
S&P 500 Expected Dividend Yield Rate
 
2.24%
 
2.05%
 
1.83%
Expected Life
 
3 years
 
3 years
 
3 years
S&P 500 Expected Volatility Rate
 
19%
 
23%
 
30%
Level 3 Common Stock Expected Volatility Rate
 
39%
 
39%
 
44%
Expected S&P 500 Correlation Factor
 
0.44
 
0.32
 
0.39
Calculated Theoretical Value
 
101%
 
110%
 
120%
Estimated Forfeiture Rate
 
15%
 
20%
 
20%


The fair value of each OSO unit equaled the calculated theoretical value multiplied by the Level 3 common stock price on the grant date.

As described above, recipients have no discretion on the timing to exercise OSO units. Thus the expected life of all such OSO units was three years. The Company estimates the stock price volatility using a combination of historical and implied volatility as Level 3 believes it is consistent with the approach most marketplace participants would consider using all available information to estimate expected volatility. The Company has determined that expected volatility is more reflective of market conditions and provides a more accurate indication of volatility than using solely historical volatility. In reaching this conclusion, the Company has considered many factors including the extent to which its future expectations of volatility over the respective term is likely to differ from historical measures.

The fair value for OSO units awarded to participants during the years ended December 31, 2013, 2012 and 2011 was approximately $17 million, $29 million and $12 million, respectively.

Transactions involving OSO units awarded are summarized in the table below. The Option Price Per Unit identified in the table below represents the initial strike price, as determined on the day prior to the OSO grant date for those grants.
 
 
Units
 
Initial Strike Price Per Unit
 
Weighted
Average
Initial
Strike
Price
 
Aggregate
Intrinsic
Value
 
Weighted
Average
Remaining
Contractual
Term (years)
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
Balance January 1, 2011
 
1,056,392

 
$
10.50

-
$
51.60

 
$
22.05

 
$
—

 
1.73
Options granted
 
498,618

 
$
14.70

-
$
36.60

 
$
23.96

 
 
 
 
Options forfeited
 
(96,174
)
 
$
10.50

-
$
51.60

 
$
22.36

 
 
 
 
Options expired
 
(140,655
)
 
$
31.80

-
$
51.60

 
$
44.64

 
 
 
 
Options exercised
 
(29,469
)
 
$
14.10

-
$
15.75

 
$
14.93

 
 
 
 
Balance December 31, 2011
 
1,288,712

 
$
10.50

-
$
36.60

 
$
20.51

 
$
1.8

 
1.53
Options granted
 
1,195,452

 
$
16.99

-
$
27.53

 
$
24.65

 
 
 
 
Options forfeited
 
(72,335
)
 
$
12.00

-
$
36.60

 
$
21.80

 
 
 
 
Options expired
 
(278,111
)
 
$
15.00

-
$
22.65

 
$
18.45

 
 
 
 
Options exercised
 
(67,299
)
 
$
10.50

-
$
13.80

 
$
12.48

 
 
 
 
Balance December 31, 2012
 
2,066,419

 
$
14.10

-
$
36.60

 
$
23.40

 
$
6.6

 
1.73
Options granted
 
748,481

 
$
20.29

-
$
26.69

 
$
22.64

 
 
 
 
Options forfeited
 
(271,883
)
 
$
14.10

-
$
36.60

 
$
22.33

 
 
 
 
Options expired
 
(286,924
)
 
$
16.35

-
$
24.30

 
$
21.48

 
 
 
 
Options exercised
 
(107,228
)
 
$
14.10

-
$
14.10

 
$
14.10

 
 
 
 
Balance December 31, 2013
 
2,148,865

 
$
14.10

-
$
36.60

 
$
23.99

 
$
31.6

 
1.46


 
 
 
 
OSO Units Outstanding
at December 31, 2013
 
OSO units Exercisable
at December 31, 2013
Range of Exercise Prices
 
Number
Outstanding
 
Weighted
Average
Remaining
Life (years)
 
Weighted
Average
Initial
Strike Price
 
Number
Exercisable
 
Weighted
Average
Initial
Strike Price
$
14.10

-
$
16.99

 
227,733

 
0.53
 
$
15.90

 
—

 
$
—

$
20.29

-
$
24.30

 
1,030,279

 
1.69
 
$
21.92

 
—

 
$
—

$
26.69

-
$
36.60

 
890,853

 
1.43
 
$
28.46

 
—

 
$
—

 
 
 
 
2,148,865

 
1.46
 
$
23.99

 
—

 
$
—



In the table above, the weighted average initial strike price represents the values used to calculate the theoretical value of OSO units on the grant date and the intrinsic value represents the value of OSO units that have outperformed the S&P 500® Index as of December 31, 2013, 2012 and 2011, respectively. As noted above, all of the outstanding OSO units granted have an expected life of three years. The total intrinsic value of OSOs outstanding based on the Company's performance against the S&P 500® Index was $31.6 million, $6.6 million, and $1.8 million as of December 31, 2013, 2012 and 2011, respectively.

The total realized value of OSO units settled was $1.5 million, $0.8 million and $0.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. The Company issued 90,879, zero and 13,742 shares of Level 3 common stock upon the exercise of OSO units for the years ended December 31, 2013, 2012 and 2011, respectively. The Company paid cash in lieu of shares of Level 3 common stock for the realized value of OSO units settled for the year ended December 31, 2012. The number of shares of Level 3 common stock issued upon settlement of an OSO unit varies based upon the relative performance of Level 3 stock price and the S&P 500® Index between the initial grant date and settlement date of the OSO unit.

Restricted Stock and Units

Restricted stock units and shares are annually granted on July 1 to certain eligible recipients, including the Board of Directors, at no cost. Restrictions on transfer lapse over one to four year periods. The fair value of restricted stock units and shares awarded totaled $34 million, $69 million and $35 million for the years ended December 31, 2013, 2012 and 2011, respectively. The fair value of these awards was calculated using the value of the Level 3 common stock on the grant date and are being amortized over the periods in which the restrictions lapse. As of December 31, 2013, unamortized compensation cost related to nonvested restricted stock and restricted stock units was $30 million and the weighted average period over which this cost will be recognized is 2.9 years.

The changes in nonvested restricted stock and restricted stock units are shown in the following table:
 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2011
 
2,021,707

 
$
22.95

Stock and units granted
 
1,030,676

 
$
33.99

Lapse of restrictions
 
(845,717
)
 
$
27.79

Stock and units forfeited
 
(175,883
)
 
$
27.06

Nonvested at December 31, 2011
 
2,030,783

 
$
26.25

Stock and units granted
 
2,869,584

 
$
24.13

Lapse of restrictions
 
(1,048,757
)
 
$
26.06

Stock and units forfeited
 
(214,634
)
 
$
24.92

Nonvested at December 31, 2012
 
3,636,976

 
$
24.71

Stock and units granted
 
1,617,592

 
$
21.26

Lapse of restrictions
 
(1,841,757
)
 
$
25.19

Stock and units forfeited
 
(488,461
)
 
$
23.10

Nonvested at December 31, 2013
 
2,924,350

 
$
22.77



The total fair value of restricted stock and restricted stock units whose restrictions lapsed in the years ended December 31, 2013, 2012 and 2011 was $46 million, $27 million and $24 million, respectively.

Management Incentive and Retention Plan

Effective March 2012, the Company adopted a Management Incentive and Retention Plan ("MIRP") as a means of encouraging key management personnel to remain employed with the Company or one of its subsidiaries and to reward the achievement of established performance criteria. The MIRP provides an opportunity to receive two types of awards: a retention award and an incentive award. Participants' retention and incentive awards can have a cash component only or a cash component and an equity component. The equity component is granted in the form of restricted stock units under the Stock Plan.


A summary of the retention restricted stock units granted under the MIRP is shown in the following table:
 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2012
 
—

 
$
—

Stock and units granted
 
465,000

 
$
25.92

Lapse of restrictions
 
—

 
$
—

Stock and units forfeited
 
—

 
$
—

Nonvested at December 31, 2012
 
465,000

 
$
25.92

Stock and units granted
 
—

 
$
—

Lapse of restrictions
 
(270,000
)
 
$
25.92

Stock and units forfeited
 
—

 
$
—

Nonvested at December 31, 2013
 
195,000

 
$
25.92



In addition, the number of restricted stock units that would be granted under the incentive portion of the MIRP based on expected performance would be 429,000 as of December 31, 2013.

The total fair value of retention restricted stock units awarded during the period ended December 31, 2013 under the MIRP was $12 million.

As of December 31, 2013, unamortized compensation cost related to the MIRP was zero. As of December 31, 2013, $15 million had been accrued in other current liabilities for the cash component of the MIRP.

Warrants

As of December 31, 2012, there were warrants to purchase 45,593 shares of Level 3 common stock outstanding with an exercise price of $73.50, which expired in January 2013. All of the warrants were fully vested and compensation expense had been fully recognized in the consolidated statements of operations.

Defined Contribution Plans

The Company sponsors a number of defined contribution plans. The principal defined contribution plans are discussed individually below. Other defined contribution plans are not individually significant and therefore have been summarized in aggregate below.

The Company and its subsidiaries offer their qualified employees the opportunity to participate in a defined contribution retirement plan qualifying under the provisions of Section 401(k) of the Internal Revenue Code ("401(k) Plan"). Each employee is eligible to contribute, on a tax deferred basis, a portion of annual earnings generally not to exceed $17,500 in 2013 and $17,500 in 2014. Effective January 1, 2012, the Company matches 100% of employee contributions up to 4% of eligible earnings or applicable regulatory limits. Between March 6, 2009 and December 31, 2011, the Company matched 100% of employee contributions up to 3% of eligible earnings or applicable regulatory limits.

The Company's matching contributions are made with Level 3 common stock based on the closing stock price on each pay date. The Company's matching contributions are made through units in the Level 3 Stock Fund, which represent shares of Level 3 common stock. The Level 3 Stock Fund is the mechanism that is used for Level 3 to make employer matching and other contributions to employees through the Level 3 401(k) plan. Employees are not able to purchase units in the Level 3 Stock Fund. Employees are able to diversify the Company's matching contribution as soon as it is made, even if they are not fully vested, subject to insider trading rules and regulations. The Company's matching contributions will vest ratably over the first three years of service or over such shorter period until the employee has completed three years of service at such time the employee is then 100% vested in all Company matching contributions, including future contributions. The Company made 401(k) Plan matching contributions of $24 million, $23 million and $13 million for the years ended December 31, 2013, 2012 and 2011, respectively. The Company's matching contributions are recorded as non-cash compensation and included in selling, general and administrative expenses. Former U.S.-based Global Crossing employees became eligible to participate in the Level 3 401(k) plan starting January 1, 2012.

Other defined contribution plans sponsored by the Company are individually not significant. On an aggregate basis the expenses recorded by the Company relating to these plans was approximately $5 million, $7 million and $2 million for the years ended December 31, 2013, 2012 and 2011.

Non-Qualified Stock Options ("NQ Options")

On October 4, 2011, as part of the Amalgamation, the issued and outstanding options to purchase Global Crossing common shares were modified into options to purchase Level 3 common stock. There was no unrecognized compensation expense for NQ Options at the time of the Amalgamation and no additional NQ Options have been granted since the Amalgamation date.

Information regarding NQ Options outstanding is summarized below:
 
Number Outstanding
 
Weighted Average Exercise Price
Balance at October 4, 2011
765,585

 
$
10.82

Exercised
(167,395
)
 
$
10.93

Balance at December 31, 2011
598,190

 
$
10.79

Exercised
(533,717
)
 
$
10.61

Forfeited
(2,149
)
 
$
14.39

Balance at December 31, 2012
62,324

 
$
12.18

Exercised
(35,659
)
 
$
10.50

Balance at December 31, 2013
26,665

 
$
14.43



The following table summarizes information concerning outstanding and exercisable NQ Options at December 31, 2013:
 
 
 
 
Options Outstanding and Exercisable
Exercise Price
 
Number Outstanding
 
Weighted Average Remaining Contractual Life (in years)
 
Weighted Average Exercise Price per Share
$
14.43

 
26,665

 
0.96 years
 
$
14.43

Total
 
26,665

 
0.96 years
 
$
14.43



The weighted average remaining contractual term was 0.96 years for NQ Options exercisable as of December 31, 2013. The total intrinsic value of NQ Options outstanding and exercisable was approximately $0.5 million as of December 31, 2013. The total intrinsic value of NQ Options exercised between January 1, 2013 and December 31, 2013 was $1 million and the Company received less than $1 million proceeds for the exercise of these options. The total intrinsic value of NQ Options exercised between January 1, 2012 and December 31, 2012 was $6 million and the Company received $5 million for the exercise of these options. The total intrinsic value of NQ Options exercised between October 4, 2011 and December 31, 2011 was $1 million and Level 3 received $2 million for the exercise of these options.

Defined Benefit Plans

The Company has certain contributory and non-contributory employee pension plans, which are not significant to the financial position or operating results of the Company. The Company recognizes in its balance sheet the funded status of its defined benefit post-retirement plans, which is measured as the difference between the fair value of the plan assets and the benefit obligation. The Company is also required to recognize changes in the funded status within accumulated other comprehensive income, net of tax to the extent such changes are not recognized in earnings as components of periodic net benefit cost. The fair value of the plan assets was $148 million and $146 million as of December 31, 2013 and 2012, respectively. The total benefit obligation was $165 million and $166 million as of December 31, 2013 and 2012, respectively. Therefore, the total funded status was an obligation of $17 million as of December 31, 2013. The total funded status was an obligation of $20 million as of December 31, 2012.

Annual Discretionary Bonus Grant

The Company's annual discretionary bonus program is intended to retain and motivate employees to achieve the Company's financial and business goals. Each participant is provided a target award expressed as a percentage of base salary. Actual awards under the program are based on corporate results as well as achievement of specific individual performance criteria during the bonus plan period, and may be paid in cash, restricted stock units, or a combination of the two, at the sole discretion of the Compensation Committee of the Board of Directors.

As of December 31, 2013, $124 million had been accrued in other current liabilities for this bonus plan, including employer liability for payroll taxes and charges. The Company generally expects to pay out 40% in cash and 60% in immediately-vested restricted stock units and shares of Level 3 common stock in the first quarter of 2014.

As of December 31, 2012, $103 million was accrued in other current liabilities for this bonus plan, including employer liability for payroll taxes and charges. The Company paid out $50 million cash and 2.1 million immediately-vested restricted stock units in 2013 for this plan.

As of December 31, 2011, $136 million was accrued in other current liabilities for this bonus plan, including employer liability for payroll taxes and charges. The Company paid out $72 million cash and 2.4 million immediately-vested restricted stock units in 2012 for this plan.
Income Taxes
Income Taxes
Income Taxes

The following table summarizes the income tax provision attributable to loss from continuing operations before income taxes for each of the three years ended December 31, 2013, 2012 and 2011:

 
 
2013
 
2012
 
2011
(dollars in millions)
Current:
 
 
 
 
 
 
United States federal
 
$
9

 
$
—

 
$
—

State
 
(1
)
 
(2
)
 
—

Foreign
 
(37
)
 
(36
)
 
(8
)
 
 
(29
)
 
(38
)
 
(8
)
Deferred, net of changes in valuation allowances:
 
 
 
 
 
 
United States federal
 
(3
)
 
(3
)
 
(30
)
State
 
—

 
—

 
(1
)
Foreign
 
(6
)
 
(7
)
 
(2
)
Income tax provision
 
$
(38
)
 
$
(48
)
 
$
(41
)


The United States and Foreign components of loss from continuing operations before income taxes for each of the three years ended December 31, 2013, 2012 and 2011 are as follows:

 
 
2013
 
2012
 
2011
(dollars in millions)
United States
 
$
(122
)
 
$
(434
)
 
$
(692
)
Foreign
 
51

 
60

 
(94
)
 
 
$
(71
)
 
$
(374
)
 
$
(786
)


A reconciliation of the actual income tax provision and the tax computed by applying the U.S. federal rate (35%) to the loss before income taxes for each of the three years ended December 31, 2013, 2012 and 2011 is shown in the following table:

 
 
2013
 
2012
 
2011
 
 
(dollars in millions)
Computed tax benefit at statutory rate
 
$
25

 
$
131

 
$
275

Effect of earnings in jurisdictions outside of US
 
12

 
25

 
(13
)
Change in valuation allowance
 
(27
)
 
(145
)
 
(213
)
Permanent items
 
(44
)
 
(48
)
 
(44
)
Indefinite-lived assets
 
(3
)
 
(3
)
 
(26
)
Uncertain tax positions
 
9

 
(3
)
 
(1
)
Changes in tax rates
 
(7
)
 
(4
)
 
(3
)
Other, net
 
(3
)
 
(1
)
 
(16
)
Income tax provision
 
$
(38
)
 
$
(48
)
 
$
(41
)



The components of the net deferred tax assets (liabilities) as of December 31, 2013 and 2012 are as follows:

 
 
2013
 
2012
 
 
(dollars in millions)
Deferred Tax Assets:
 
 
 
 
Accrued payroll and related benefits
 
$
132

 
$
119

Deferred revenue
 
336

 
271

Unutilized tax net operating loss carry forwards
 
4,791

 
4,611

Fixed assets and intangible assets
 
102

 
134

Intercompany loss
 
139

 
148

Other
 
144

 
162

Total Deferred Tax Assets
 
5,644

 
5,445

Deferred Tax Liabilities:
 
 
 
 
Fixed assets and intangible assets
 
(790
)
 
(702
)
Deferred revenue
 
(76
)
 
(87
)
Other
 
(33
)
 
(45
)
Foreign branch income
 
(163
)
 
(37
)
Total Deferred Tax Liabilities
 
(1,062
)
 
(871
)
Net Deferred Tax Assets before valuation allowance
 
4,582

 
4,574

Valuation Allowance
 
(4,698
)
 
(4,697
)
Net Deferred Tax Liability after Valuation Allowance
 
$
(116
)
 
$
(123
)
Balance sheet classification of deferred taxes:
 
 
 
 
Net current deferred income tax asset
 
$
9

 
$
9

Net current deferred income tax liability
 
(2
)
 
(3
)
Net non-current deferred income tax asset
 
211

 
219

Net non-current deferred income tax liability
 
(334
)
 
(348
)
Net Deferred Tax Liability after Valuation Allowance
 
$
(116
)
 
$
(123
)


Under the rules prescribed by Internal Revenue Code ("IRC") Section 382 and applicable regulations, if certain transactions occur with respect to an entity's capital stock that result in a cumulative ownership shift of more than 50 percentage points by 5% stockholders over a testing period, annual limitations are imposed with respect to the entity's ability to utilize its net operating loss carry forwards and certain current deductions against any taxable income the entity achieves in future periods. During the twelve months ended December 31, 2013, the Company completed an extensive analysis of the IRC Section 382 limitation related to the Global Crossing acquisition that resulted in an increase to the Company’s net operating loss carry forwards in the amount of approximately $0.3 billion on a pre-tax basis. During the twelve months ended December 31, 2012, a similar analysis of the Company's IRC Section 382 limitation resulted in an increase to the Company's net operating loss carry forwards in the amount of approximately $1.0 billion on a pre-tax basis. There was no financial effect in the consolidated statement of operations associated with these increases as a full valuation allowance has been recorded against the additional deferred tax asset.

As of December 31, 2013, the Company had net operating loss carry forwards of approximately $9.1 billion (net of IRC Section 382 limitation) for U.S. federal income tax purposes. These loss carry forwards expire in future years through 2033 and are subject to examination by the tax authorities until three years after the carry forwards are utilized. The U.S. federal tax loss carry forwards expire as follows (dollars in millions):

Expiring December 31,
Amount
2023
$
220

2024
1,302

2025
1,186

2026
1,064

2027
1,644

2028
482

2029
694

2030
687

2031
832

2032
726

2033
221

 
$
9,058



As of December 31, 2013 the Company had state net operating loss carry forwards of approximately $7.2 billion that are subject to limitations on their utilization and have various expiration periods through 2033. The Company had approximately $6.5 billion of foreign jurisdiction net operating loss carry forwards that are subject to limitations on their utilization. The majority of these foreign jurisdiction tax loss carry forwards have no expiration period.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance has been recorded against U.S. and certain foreign jurisdiction deferred tax assets for which the Company has concluded under relevant accounting standards that it is not more likely than not that the deferred tax assets are realizable. The valuation allowance for deferred tax assets was approximately $4.7 billion as of both December 31, 2013 and December 31, 2012.

The Company provides for U.S. income taxes on the undistributed earnings and the other outside basis temporary differences of foreign corporations unless they are considered indefinitely reinvested outside the United States. The amount of temporary differences related to undistributed earnings and other outside basis temporary differences of investments in foreign subsidiaries upon which U.S. income taxes have not been provided was immaterial.

The Company's liability for uncertain tax positions totaled $13 million at December 31, 2013 and $18 million at December 31, 2012. If the remaining balance of unrecognized tax benefits were realized in a future period, it would result in a tax benefit of $13 million ($18 million as of December 31, 2012) and a reduction in the effective tax rate. The Company expects that the liability for uncertain tax positions will decrease by approximately $2 million (plus $4 million of associated interest and penalty) during the twelve months ended December 31, 2014. A reconciliation of the beginning and ending balance of unrecognized tax benefits follows (dollars in millions):

 
Amount
Balance as of January 1, 2011
$
6

Gross increases - Global Crossing tax positions of prior years
11

Gross decreases - tax positions of prior years
(1
)
Gross decreases - settlement with taxing authorities
(1
)
Balance as of December 31, 2011
15

Gross increases - tax positions of prior years
4

Gross increases - tax positions during 2012
1

Gross decreases - lapse of statute of limitations
(1
)
Gross decreases - settlement with taxing authorities
(1
)
Balance as of December 31, 2012
18

Gross increases - tax positions of prior years
—

Gross increases - tax positions during 2013
1

Gross decreases - lapse of statute of limitations
(6
)
Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2013
$
13



The unrecognized tax benefits in the table above do not include accrued interest and penalties of $18 million, $22 million and $20 million as of December 31, 2013, 2012 and 2011, respectively. The Company's policy is to record interest and penalties related to uncertain tax positions in income tax expense. The Company recognized accrued interest and penalties related to uncertain tax positions in income tax expense in its consolidated statements of operations of a benefit of approximately $4 million and charges of approximately $3 million and zero for the years ended December 31, 2013, 2012 and 2011, respectively.
Segment Information
Segment Information
Segment Information

Operating segments are defined under GAAP as components of an enterprise for which separate financial information is available and evaluated regularly by the Company's chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. Through the end of the third quarter of 2013, the Company was comprised of one reportable segment representing its communications services business, which was consistent with how the Company’s previous CODM, James Q. Crowe, evaluated results and allocated resources. Effective April 11, 2013, the Company announced that Jeff K. Storey had been appointed by the Board of Directors to be the Company's president and Chief Executive Officer. As a result, the Company has realigned its segment reporting structure to reflect how its new CODM, Mr. Storey, monitors performance and allocates resources based on the three separate geographic regions in which the Company operates. Accordingly, the Company's reportable segments consist of 1) North America, 2) Europe, the Middle East and Africa (EMEA), 3) and Latin America. Other separate business interests that are not segments include interest, certain corporate assets and overhead costs, and certain other general and administrative costs that are not allocated to any of the operating segments. Historical presentation of segment information has been retrospectively reclassified to conform to the new geographical presentation.

The CODM measures and evaluates segment performance primarily based upon revenue, revenue growth and Adjusted EBITDA. Adjusted EBITDA, as defined by the Company, is equal to net income (loss) from the consolidated statements of operations before (1) income tax benefit (expense), (2) total other income (expense), (3) non-cash impairment charges included within selling, general and administrative expenses, (4) depreciation and amortization expense, and (5) non-cash stock compensation expense included within selling, general and administrative expenses.

Adjusted EBITDA is not a measurement under GAAP and may not be used in the same way by other companies. Management believes that Adjusted EBITDA is an important part of the Company's internal reporting and is a key measure used by management to evaluate profitability and operating performance of the Company and to make resource allocation decisions. Management believes such measurement is especially important in a capital-intensive industry such as telecommunications. Management also uses Adjusted EBITDA to compare the Company's performance to that of its competitors and to eliminate certain non-cash and non-operating items in order to consistently measure from period to period its ability to fund capital expenditures, fund growth, service debt and determine bonuses.

Adjusted EBITDA excludes non-cash impairment charges and non-cash stock compensation expense because of the non-cash nature of these items. Adjusted EBITDA also excludes interest income, interest expense and income tax benefit (expense) because these items are associated with the Company's capitalization and tax structures. Adjusted EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the effect of capital investments which management believes are better evaluated through cash flow measures. Adjusted EBITDA excludes net other income (expense) because these items are not related to the primary operations of the Company.

There are limitations to using non-GAAP financial measures such as Adjusted EBITDA, including the difficulty associated with comparing companies that use similar performance measures whose calculations may differ from the Company's calculations. Additionally, this financial measure does not include certain significant items such as interest income, interest expense, income tax benefit (expense), depreciation and amortization expense, non-cash impairment charges, non-cash stock compensation expense, and net other income (expense). Adjusted EBITDA should not be considered a substitute for other measures of financial performance reported in accordance with GAAP.

Revenue and the related expenses are attributed to regions based on where services are provided. Revenue and costs for services provided in more than one region are allocated equally between the regions, and the Company does not otherwise charge for services between reportable segments. Therefore, segment results do not include any intercompany revenues. The operating activities of the separate regions along with the activities that are not attributable to a segment are interdependent, and the regional results in the tables below do not include all intercompany charges and allocations that would be necessary to report the regional results on a standalone basis.

Total revenue consists of:

•
Core Network Services revenue from colocation and data center services; transport and fiber; IP and data services; and local and enterprise voice services.

•
Wholesale Voice Services and Other revenue from sales to other carriers of long distance voice services, revenue from managed modem and its related intercarrier compensation services and revenue from the SBC Master Services Agreement, which was obtained through an acquisition in 2005.

Core Network Services revenue represents higher margin services and Wholesale Voice Services and Other revenue represents lower margin services. Core Network Services revenue requires different levels of investment and focus and provides different contributions to the Company's operating results than Wholesale Voice Services and Other revenue. Management of the Company believes that growth in revenue from its Core Network Services is critical to the long-term success of its business. The Company also believes it must continue to effectively manage gross margin contribution from the Wholesale Voice Services component and the positive cash flows from the Other revenue component. The Company believes that trends in its communications business are best gauged by analyzing revenue changes in Core Network Services.

The following table presents revenues by segment for each of the years ended December 31,

(dollars in millions)
 
2013
 
2012
 
2011
Core Network Services Revenue:
 
 
 
 
 
 
North America
 
$
3,949

 
$
3,840

 
$
2,915

EMEA
 
888

 
911

 
475

Latin America
 
754

 
712

 
176

Total Core Network Services Revenue
 
$
5,591

 
$
5,463

 
$
3,566

 
 
 
 
 
 
 
Wholesale Voice Services and Other Revenue:
 
 
 
 
 
 
North America
 
$
681

 
$
863

 
$
731

EMEA
 
31

 
40

 
34

Latin America
 
10

 
10

 
2

Total Wholesale Voice Services and Other Revenue
 
$
722

 
$
913

 
$
767

 
 
 
 
 
 
 
Total Consolidated Revenue
 
$
6,313

 
$
6,376

 
$
4,333




The following table presents Adjusted EBITDA by segment and reconciles Adjusted EBITDA to net loss for each of the years ended December 31,

(dollars in millions)
 
2013
 
2012
 
2011
Adjusted EBITDA:
 
 
 
 
 
 
North America
 
$
1,799

 
$
1,708

 
$
1,325

EMEA
 
226

 
195

 
104

Latin America
 
313

 
278

 
70

Unallocated Corporate Expenses
 
(714
)
 
(722
)
 
(541
)
Consolidated Adjusted EBITDA
 
$
1,624

 
$
1,459

 
$
958

Income Tax Expense
 
(38
)
 
(48
)
 
(41
)
Total Other Expense
 
(737
)
 
(949
)
 
(838
)
Depreciation and Amortization
 
(800
)
 
(749
)
 
(805
)
Non-Cash Stock Compensation
 
(151
)
 
(135
)
 
(101
)
Non-Cash Impairment
 
(7
)
 
—

 
—

Income from Discontinued Operations
 
—

 
—

 
71

Total Consolidated Net Loss
 
$
(109
)

$
(422
)

$
(756
)


The following table presents capital expenditures by segment and reconciles capital expenditures to consolidated capital expenditures for each of the years ended December 31,

(dollars in millions)
 
2013
 
2012
 
2011
Capital Expenditures:
 
 
 
 
 
 
North America
 
$
398

 
$
407

 
$
353

EMEA
 
128

 
115

 
66

Latin America
 
134

 
122

 
27

Unallocated Corporate Capital Expenditures
 
100

 
99

 
48

Consolidated Capital Expenditures
 
$
760

 
$
743

 
$
494



The following table presents total assets by segment:

 
 
As of December 31,
(dollars in millions)
 
2013
 
2012
Assets:
 
 
 
 
North America
 
$
8,133

 
$
8,495

EMEA
 
2,030

 
2,015

Latin America
 
2,445

 
2,513

Other
 
266

 
284

Total Consolidated Assets
 
$
12,874

 
$
13,307

Commitments, Contingencies and Other Items
Commitments, Contingencies and Other Items
Commitments, Contingencies and Other Items

The Company is subject to various legal proceedings and other contingent liabilities that individually or in aggregate could materially affect its financial condition, future results of operations or cash flows. Amounts accrued for such contingencies aggregate to $216 million and are included in "Other" current liabilities and "Other Liabilities" in the Company's consolidated balance sheet at December 31, 2013. The establishment of an accrual does not mean that actual funds have been set aside to satisfy a given contingency. Thus, the resolution of a particular contingency for the amount accrued may have no effect on the Company's results of operations but could materially adversely affect its cash flows for the affected period.

In accordance with the accounting guidance for contingencies, the Company accrues its estimate of a contingent liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Where it is probable that a liability has been incurred and there is a range of expected loss for which no amount in the range is more likely than any other amount, the Company accrues at the low end of the range. The Company reviews its accruals at least quarterly and adjusts them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

Below is a description of material legal proceedings and other contingencies pending at December 31, 2013. Although the Company believes it has accrued for these matters in accordance with the accounting guidance for contingencies, contingencies are inherently unpredictable and it is possible that results of operations or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, one or more of these matters. For those contingencies in respect of which the Company believes that it is reasonably possible that a loss may result that is materially in excess of the accrual (if any) established for the matter, the Company has either provided an estimate of such possible loss or range of loss or included a statement that such an estimate cannot be made. In addition to the contingencies described below, the Company is party to many other legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition or future results of operations beyond the amounts accrued.

Rights-of-Way Litigation

The Company is party to a number of purported class action lawsuits involving its right to install fiber optic cable network in railroad right-of-ways adjacent to plaintiffs' land. In general, the Company obtained the rights to construct its networks from railroads, utilities, and others, and has installed its networks along the rights-of-way so granted. Plaintiffs in the purported class actions assert that they are the owners of lands over which the fiber optic cable networks pass, and that the railroads, utilities, and others who granted the Company the right to construct and maintain its network did not have the legal authority to do so. The complaints seek damages on theories of trespass, unjust enrichment and slander of title and property, as well as punitive damages. The Company has also received, and may in the future receive, claims and demands related to rights-of-way issues similar to the issues in these cases that may be based on similar or different legal theories. The Company has defeated motions for class certification in a number of these actions but expects that, absent settlement of these actions, plaintiffs in the pending lawsuits will continue to seek certification of statewide or multi-state classes. The only lawsuit in which a class was certified against the Company, absent an agreed upon settlement, occurred in Koyle, et. al. v. Level 3 Communications, Inc., et. al., a purported two state class action filed in the United States District Court for the District of Idaho. The Koyle lawsuit has been dismissed pursuant to a settlement reached in November 2010 as described further below.

The Company negotiated a series of class settlements affecting all persons who own or owned land next to or near railroad rights of way in which it has installed its fiber optic cable networks. The United States District Court for the District of Massachusetts in Kingsborough v. Sprint Communications Co. L.P. granted preliminary approval of the proposed settlement; however, on September 10, 2009, the court denied a motion for final approval of the settlement on the basis that the court lacked subject matter jurisdiction and dismissed the case.

In November 2010, the Company negotiated revised settlement terms for a series of state class settlements affecting all persons who own or owned land next to or near railroad rights of way in which the Company has installed its fiber optic cable networks. The Company is currently pursuing presentment of the settlement in applicable jurisdictions. The settlements affecting current and former landowners have received final federal court approval in multiple states and the parties are engaged in the claims process for those states. The settlement has also been presented to federal courts in additional states and approval is pending.

Management believes that the Company has substantial defenses to the claims asserted in all of these actions and intends to defend them vigorously if a satisfactory settlement is not ultimately approved for all affected landowners.

Peruvian Tax Litigation

Beginning in 2005, one of the Company's Peruvian subsidiaries received a number of assessments for tax, penalties and interest for calendar years 2001 and 2002. Peruvian tax authorities ("SUNAT") took the position that the Peruvian subsidiary incorrectly documented its importations resulting in additional income tax withholding and value-added taxes ("VAT"). The total amount of the asserted claims, including potential interest and penalties, was $26 million, consisting of $3 million for income tax withholding in connection with the import of services for calendar years 2001 and 2002, $7 million for VAT in connection with the import of services for calendar years 2001 and 2002, and $16 million in connection with the disallowance of VAT credits for periods beginning in 2005. Due to accrued interest and foreign exchange effects, and taking into account the developments described below, the total amount of exposure has increased to $60 million at December 31, 2013.

The Company challenged the tax assessments during 2005 by filing administrative claims before SUNAT. During August 2006 and June 2007, SUNAT rejected the Company's administrative claims, thereby confirming the assessments. Appeals were filed in September 2006 and July 2007 with the Tribunal Fiscal, the highest level of administrative review, which is not part of the Peru judiciary (the "Tribunal"). In October 2011, the Tribunal issued its administrative resolution with respect to the calendar year 2002 tax period regarding VAT, associated penalties and penalties associated with withholding taxes, adjudicating the central issue underlying the assessments in the government's favor, while confirming the assessment in part and denying a portion of the assessment on procedural grounds. During the fourth quarter of 2013, the Company released a reserve of $28 million for tax, penalty and associated interest related to calendar year 2002 due to the expiration of the statute of limitations. In October 2013, the Tribunal notified the Company of its July 2013 administrative resolution with respect to the calendar year 2001 tax period, determining the central issue underlying the assessments in the government's favor, while confirming the assessment in part and denying a portion of the assessment on procedural grounds. Other than an immaterial amount, all assessed items dismissed by the Tribunal in this administrative resolution remain open for reassessment by SUNAT. In December 2013, SUNAT initiated an audit in order to reassess the 2001 amounts declared null by the Tribunal. The Company is contesting SUNAT's authority to conduct an audit of these amounts.

In November 2011, the Tribunal issued a administrative resolution with respect to assessed 2001 withholding tax, holding that the statute of limitations had run prior to assessment by SUNAT. The Company believes that this administrative resolution of the withholding tax issue is likely to be final, and the Company expects to win a similar administrative resolution with respect to assessed 2002 withholding tax. However, penalties with respect to withholding tax are not time-barred, and were confirmed in the Tribunal's October 2011 administrative resolution.

The Company has appealed the Tribunal's October 2011 decision to the judicial court in Peru and intends to file an appeal of the Tribunal's July 2013 decision to the judicial court as well.

Employee Severance and Contractor Termination Disputes

A number of former employees and third-party contractors have asserted a variety of claims in litigation against certain Latin American subsidiaries of the Company for separation pay, severance, commissions, pension benefits, unpaid vacation pay, breach of employment contracts, unpaid performance bonuses, property damages, moral damages and related statutory penalties, fines, costs and expenses (including accrued interest, attorneys fees and statutorily mandated inflation adjustments) as a result of their separation from the Company or termination of service relationships. The Company is vigorously defending itself against the asserted claims, which aggregate to approximately $40 million at December 31, 2013.

Brazilian Tax Claims

In December 2004, March 2009 and April 2009, the São Paulo state tax authorities issued tax assessments against one of the Company's Brazilian subsidiaries for the Tax on Distribution of Goods and Services ("ICMS") with respect to revenue from leasing movable properties (in the case of the December 2004 and March 2009 assessments) and revenue from the provision of Internet access services (in the case of the April 2009 assessment), by treating such activities as the provision of communications services, to which the ICMS tax applies. In September 2002, July 2009 and May 2012, the Rio de Janeiro state tax authorities issued tax assessments to the same Brazilian subsidiary on similar issues. The Company has filed objections to these assessments, arguing that the lease of assets and the provision of Internet access are not communication services subject to ICMS. The objections to the December 2004 and September 2002 assessments were rejected by the respective state administrative courts, and the Company has appealed those decisions to the judicial courts. In October 2012, the Company received a favorable ruling from the lower court on the December 2004 assessment regarding equipment leasing, but that ruling is subject to appeal by the state. No ruling has been obtained with respect to the September 2002 assessment. The objections to the March, April and July 2009 and May 2012 assessments are still pending final administrative decisions.

The Company is vigorously contesting all such assessments in both states, and in particular, views the assessment of ICMS on revenue from leasing movable properties to be without merit. Nevertheless, the Company believes that it is reasonably possible that these assessments could result in a loss of up to $60 million at December 31, 2013 in excess of the accruals established for these matters.

Letters of Credit

It is customary for the Company to use various financial instruments in the normal course of business. These instruments include letters of credit. Letters of credit are conditional commitments issued on behalf of the Company in accordance with specified terms and conditions. As of December 31, 2013 and December 31, 2012, the Company had outstanding letters of credit or other similar obligations of approximately $29 million and $31 million, respectively, of which $25 million and $29 million, are collateralized by cash, that is reflected on the consolidated balance sheets as restricted cash. The Company does not believe exposure to loss related to its letters of credit is material.

Operating Leases

The Company is leasing rights-of-way, facilities and other assets under various operating leases which, in addition to rental payments, may require payments for insurance, maintenance, property taxes and other executory costs related to the lease. Certain leases provide for adjustments in lease cost based upon adjustments in various price indexes and increases in the landlord's management costs.

The right-of-way agreements have various expiration dates through 2088. Payments under these right-of-way agreements were $161 million in 2013, $172 million in 2012 and $135 million in 2011.

The Company has obligations under non-cancelable operating leases for certain colocation, office facilities and other assets, including lease obligations for which facility related restructuring charges have been recorded. The lease agreements have various expiration dates through 2119. Rent expense, including common area maintenance, under non-cancelable lease agreements was $311 million in 2013, $308 million in 2012 and $232 million in 2011.

Certain non-cancelable right of way agreements provide for automatic renewal on a periodic basis. The Company includes payments due during these automatic renewal periods given the significant cost to relocate the Company's network and other facilities.

Future minimum payments for the next five years and thereafter under network and related right-of-way agreements and non-cancelable operating leases for facilities and other assets consist of the following as of December 31, 2013 (dollars in millions):

 
 
Right-of-Way
Agreements
 
Facilities and Other Assets
 
Total
 
Future Minimum Sublease Receipts
2014
 
$
119

 
$
268

 
$
387

 
$
13

2015
 
61

 
238

 
299

 
9

2016
 
56

 
183

 
239

 
8

2017
 
50

 
162

 
212

 
6

2018
 
49

 
163

 
212

 
5

Thereafter
 
365

 
553

 
918

 
6

 
 
$
700

 
$
1,567

 
$
2,267

 
$
47



Certain right-of-way agreements include provisions for increases in payments in future periods based on the rate of inflation as measured by various price indexes. The Company has not included estimates for these increases in future periods in the amounts included above.

Certain other right-of-way agreements are cancelable or can be terminated under certain conditions by the Company. The Company includes the payments under such cancelable right-of-way agreements in the table above for a period of 1 year from January 1, 2014, if the Company does not consider it likely that it will cancel the right of way agreement within the next year.

Cost of Access and Third-Party Maintenance

In addition, the Company has purchase commitments with third-party access vendors that require it to make payments to purchase network services, capacity and telecommunications equipment. Some of these access vendor commitments require the Company to maintain minimum monthly and/or annual billings, in certain cases based on usage. In addition, the Company has purchase commitments with third parties that require it to make payments for maintenance services for certain portions of its network.

The following table summarizes the Company's purchase commitments at December 31, 2013 (dollars in millions):

 
 
Total
 
Less than
1 Year
 
2 - 3
Years
 
4 - 5
Years
 
After 5
Years
Cost of Access Services
 
$
744

 
$
338

 
$
388

 
$
15

 
$
3

Third-Party Maintenance Services
 
232

 
60

 
46

 
33

 
93

 
 
$
976

 
$
398

 
$
434

 
$
48

 
$
96

Condensed Consolidating Financial Information
Condensed Consolidating Financial Information
Condensed Consolidating Financial Information

Level 3 Financing, Inc. a wholly owned subsidiary of the Company, has issued Senior Notes that are unsecured obligations of Level 3 Financing, Inc.; however, they are also fully and unconditionally and jointly and severally guaranteed on an unsecured senior basis by Level 3 Communications, Inc. and Level 3 Communications, LLC.

In conjunction with the registration of the Level 3 Financing, Inc. Senior Notes, other than the Floating Rate Senior Notes due 2018 and the 6.125% Senior Notes due 2021, the accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10 "Financial statements of guarantors and affiliates whose securities collateralize an issue registered or being registered."

The operating activities of the separate legal entities included in the Company’s consolidated financial statements are interdependent. The accompanying condensed consolidating financial information presents the statements of operations, 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 Communications, Inc. These transactions are eliminated in the consolidated results of the Company.
Condensed Consolidating Statements of Operations
For the year ended December 31, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Revenue
$
—

 
$
—

 
$
2,825

 
$
3,734

 
$
(246
)
 
$
6,313

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
1,068

 
1,649

 
(246
)
 
2,471

Depreciation and Amortization
—

 
—

 
289

 
511

 
—

 
800

Selling, General and Administrative
3

 
1

 
1,544

 
828

 
—

 
2,376

Total Costs and Expenses
3

 
1

 
2,901

 
2,988

 
(246
)
 
5,647

Operating Income (Loss)
(3
)
 
(1
)
 
(76
)
 
746

 
—

 
666

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
—

 
—

 
—

Interest expense
(151
)
 
(497
)
 
(3
)
 
2

 
—

 
(649
)
Interest income (expense) affiliates, net
1,091

 
1,706

 
(2,679
)
 
(118
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(1,039
)
 
(2,164
)
 
550

 
—

 
2,653

 
—

Other, net
—

 
(85
)
 
4

 
(7
)
 
—

 
(88
)
Total Other Expense
(99
)
 
(1,040
)
 
(2,128
)
 
(123
)
 
2,653

 
(737
)
Income (Loss) before Income Taxes
(102
)
 
(1,041
)
 
(2,204
)
 
623

 
2,653

 
(71
)
Income Tax Expense
(7
)
 
2

 
—

 
(33
)
 
—

 
(38
)
Net Income (Loss)
(109
)
 
(1,039
)
 
(2,204
)
 
590

 
2,653

 
(109
)
Other Comprehensive Loss, Net of Income Taxes
10

 
10

 
—

 
10

 
(20
)
 
10

Comprehensive Income (Loss)
$
(99
)
 
$
(1,029
)
 
$
(2,204
)
 
$
600

 
$
2,633

 
$
(99
)


Condensed Consolidating Statements of Operations
For the year ended December 31, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Revenue
$
—

 
$
—

 
$
2,657

 
$
3,975

 
$
(256
)
 
$
6,376

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
996

 
1,854

 
(248
)
 
2,602

Depreciation and Amortization
—

 
—

 
260

 
489

 
—

 
749

Selling, General and Administrative
2

 
1

 
1,559

 
896

 
(8
)
 
2,450

Total Costs and Expenses
2

 
1

 
2,815

 
3,239

 
(256
)
 
5,801

Operating Income (Loss)
(2
)
 
(1
)
 
(158
)
 
736

 
—

 
575

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
1

 
1

 
—

 
2

Interest expense
(168
)
 
(535
)
 
(3
)
 
(27
)
 
—

 
(733
)
Interest income (expense) affiliates, net
976

 
1,598

 
(2,233
)
 
(341
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(1,188
)
 
(2,066
)
 
92

 
—

 
3,162

 
—

Other, net
(39
)
 
(184
)
 
6

 
(1
)
 
—

 
(218
)
Total Other Expense
(419
)
 
(1,187
)
 
(2,137
)
 
(368
)
 
3,162

 
(949
)
Income (Loss) before Income Taxes
(421
)
 
(1,188
)
 
(2,295
)
 
368

 
3,162

 
(374
)
Income Tax Expense
(1
)
 
—

 
(4
)
 
(43
)
 
—

 
(48
)
Net Income (Loss)
(422
)
 
(1,188
)
 
(2,299
)
 
325

 
3,162

 
(422
)
Other Comprehensive Income, Net of Income Taxes
106

 
106

 
—

 
16

 
(122
)
 
106

Comprehensive Income (Loss)
$
(316
)
 
$
(1,082
)
 
$
(2,299
)
 
$
341

 
$
3,040

 
$
(316
)
Condensed Consolidating Statements of Operations
For the year ended December 31, 2011

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Revenue
$
—

 
$
—

 
$
2,367

 
$
2,196

 
$
(230
)
 
$
4,333

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
888

 
1,036

 
(218
)
 
1,706

Depreciation and Amortization
—

 
—

 
376

 
429

 
—

 
805

Selling, General and Administrative
2

 
19

 
1,270

 
491

 
(12
)
 
1,770

Total Costs and Expenses
2

 
19

 
2,534

 
1,956

 
(230
)
 
4,281

Operating Income (Loss)
(2
)
 
(19
)
 
(167
)
 
240

 
—

 
52

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(211
)
 
(471
)
 
(3
)
 
(31
)
 
—

 
(716
)
Interest income (expense) affiliates, net
865

 
1,423

 
(2,065
)
 
(223
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(1,346
)
 
(2,241
)
 
122

 
—

 
3,465

 
—

Other, net
(62
)
 
(38
)
 
9

 
(32
)
 
—

 
(123
)
Total Other Expense
(754
)
 
(1,327
)
 
(1,937
)
 
(285
)
 
3,465

 
(838
)
Loss before Income Taxes
(756
)
 
(1,346
)
 
(2,104
)
 
(45
)
 
3,465

 
(786
)
Income Tax Expense
—

 
—

 
(15
)
 
(26
)
 
—

 
(41
)
Loss from Continuing Operations
(756
)
 
(1,346
)
 
(2,119
)
 
(71
)
 
3,465

 
(827
)
Income From Discontinued Operations, Net
—

 
—

 
—

 
71

 
—

 
71

Net Loss
(756
)
 
(1,346
)
 
(2,119
)
 
—

 
3,465

 
(756
)
Other Comprehensive Income (Loss), Net of Income Taxes
18

 
18

 
—

 
—

 
(18
)
 
18

Comprehensive Loss
$
(738
)
 
$
(1,328
)
 
$
(2,119
)
 
$
—

 
$
3,447

 
$
(738
)
Condensed Consolidating Balance Sheets
December 31, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
8

 
$
6

 
$
347

 
$
270

 
$
—

 
$
631

Restricted cash and securities
—

 
—

 
1

 
6

 
—

 
7

Receivables, less allowances for doubtful accounts
—

 
—

 
79

 
594

 
—

 
673

Due from affiliates
15,507

 
16,886

 
—

 
—

 
(32,393
)
 
—

Other
2

 
15

 
47

 
79

 
—

 
143

Total Current Assets
15,517

 
16,907

 
474

 
949

 
(32,393
)
 
1,454

Property, plant, and equipment, net
—

 
—

 
3,028

 
5,212

 
—

 
8,240

Restricted cash and securities
3

 
—

 
18

 
2

 
—

 
23

Goodwill and other intangibles, net
—

 
—

 
395

 
2,387

 
—

 
2,782

Investment in subsidiaries
10,039

 
27,014

 
3,735

 
—

 
(40,788
)
 
—

Other assets, net
10

 
113

 
11

 
241

 
—

 
375

Total Assets
$
25,569

 
$
44,034

 
$
7,661

 
$
8,791

 
$
(73,181
)
 
$
12,874

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
2

 
$
42

 
$
581

 
$
—

 
$
625

Current portion of long-term debt
—

 
—

 
3

 
28

 
—

 
31

Accrued payroll and employee benefits
—

 
—

 
171

 
38

 
—

 
209

Accrued interest
30

 
129

 
—

 
1

 
—

 
160

Current portion of deferred revenue
—

 
—

 
131

 
122

 
—

 
253

Due to affiliates
—

 
—

 
32,165

 
228

 
(32,393
)
 
—

Other
—

 
13

 
74

 
81

 
—

 
168

Total Current Liabilities
30

 
144

 
32,586

 
1,079

 
(32,393
)
 
1,446

Long-term debt, less current portion
1,370

 
6,905

 
17

 
39

 
—

 
8,331

Deferred revenue, less current portion
—

 
—

 
603

 
303

 
—

 
906

Other liabilities
15

 
27

 
135

 
603

 
—

 
780

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit)
24,154

 
36,958

 
(25,680
)
 
6,767

 
(40,788
)
 
1,411

Total Liabilities and Stockholders' Equity (Deficit)
$
25,569

 
$
44,034

 
$
7,661

 
$
8,791

 
$
(73,181
)
 
$
12,874

Condensed Consolidating Balance Sheets
December 31, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
253

 
$
5

 
$
386

 
$
335

 
$
—

 
$
979

Restricted cash and securities
—

 
—

 
1

 
7

 
—

 
8

Receivables, less allowances for doubtful accounts
—

 
—

 
93

 
621

 
—

 
714

Due from affiliates
14,446

 
15,709

 
—

 
7

 
(30,162
)
 
—

Other
3

 
16

 
49

 
73

 
—

 
141

Total Current Assets
14,702

 
15,730

 
529

 
1,043

 
(30,162
)
 
1,842

Property, plant, and equipment, net
—

 
—

 
2,926

 
5,273

 
—

 
8,199

Restricted cash and securities
12

 
—

 
17

 
6

 
—

 
35

Goodwill and other intangibles, net
—

 
—

 
429

 
2,404

 
—

 
2,833

Investment in subsidiaries
(11,756
)
 
(20,470
)
 
3,242

 
—

 
28,984

 
—

Other assets, net
16

 
119

 
11

 
252

 
—

 
398

Total Assets
$
2,974

 
$
(4,621
)
 
$
7,154

 
$
8,978

 
$
(1,178
)
 
$
13,307

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
1

 
$
2

 
$
53

 
$
723

 
$
—

 
$
779

Current portion of long-term debt
172

 
6

 
6

 
32

 
—

 
216

Accrued payroll and employee benefits
—

 
—

 
161

 
50

 
—

 
211

Accrued interest
45

 
163

 
—

 
1

 
—

 
209

Current portion of deferred revenue
—

 
—

 
109

 
142

 
—

 
251

Due to affiliates
—

 
—

 
30,162

 
—

 
(30,162
)
 
—

Other
1

 
1

 
29

 
105

 
—

 
136

Total Current Liabilities
219

 
172

 
30,520

 
1,053

 
(30,162
)
 
1,802

Long-term debt, less current portion
1,570

 
6,886

 
20

 
40

 
—

 
8,516

Deferred revenue, less current portion
—

 
—

 
602

 
285

 
—

 
887

Other liabilities
14

 
81

 
75

 
761

 
—

 
931

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit)
1,171

 
(11,760
)
 
(24,063
)
 
6,839

 
28,984

 
1,171

Total Liabilities and Stockholders' Equity (Deficit)
$
2,974

 
$
(4,621
)
 
$
7,154

 
$
8,978

 
$
(1,178
)
 
$
13,307

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(169
)
 
$
(557
)
 
$
710

 
$
729

 
$
—

 
$
713

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(312
)
 
(448
)
 
—

 
(760
)
Change in restricted cash and securities, net
9

 
—

 
(1
)
 
5

 
—

 
13

Other
—

 
—

 
1

 
1

 
—

 
2

Net Cash Provided by (Used in) Investing Activities
9

 
—

 
(312
)
 
(442
)
 
—

 
(745
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
1,502

 
—

 
—

 
—

 
1,502

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(173
)
 
(1,586
)
 
(4
)
 
(33
)
 
—

 
(1,796
)
Increase (decrease) due from/to affiliates, net
88

 
642

 
(433
)
 
(297
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
(85
)
 
558

 
(437
)
 
(330
)
 
—

 
(294
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(22
)
 
—

 
(22
)
Net Change in Cash and Cash Equivalents
(245
)
 
1

 
(39
)
 
(65
)
 
—

 
(348
)
Cash and Cash Equivalents at Beginning of Year
253

 
5

 
386

 
335

 
—

 
979

Cash and Cash Equivalents at End of Year
$
8

 
$
6

 
$
347

 
$
270

 
$
—

 
$
631


Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(165
)
 
$
(520
)
 
$
140

 
$
1,123

 
$
—

 
$
578

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(276
)
 
(467
)
 
—

 
(743
)
Change in restricted cash and securities, net
6

 
—

 
2

 
12

 
—

 
20

Other
—

 
—

 
—

 
(2
)
 
—

 
(2
)
Net Cash Provided by (Used in) Investing Activities
6

 
—

 
(274
)
 
(457
)
 
—

 
(725
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
293

 
4,211

 
—

 
—

 
—

 
4,504

Payments on and repurchases of long-term debt, including current portion and refinancing costs
—

 
(4,161
)
 
—

 
(141
)
 
—

 
(4,302
)
Proceeds from stock options exercised
5

 
—

 
—

 
—

 
—

 
5

Increase (decrease) due from affiliates, net
112

 
469

 
(98
)
 
(483
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
410

 
519

 
(98
)
 
(624
)
 
—

 
207

Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
1

 
—

 
1

Net Change in Cash and Cash Equivalents
251

 
(1
)
 
(232
)
 
43

 
—

 
61

Cash and Cash Equivalents at Beginning of Year
2

 
6

 
618

 
292

 
—

 
918

Cash and Cash Equivalents at End of Year
$
253

 
$
5

 
$
386

 
$
335

 
$
—

 
$
979

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2011

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
$
(176
)
 
$
(428
)
 
$
293

 
$
699

 
$
—

 
$
388

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(197
)
 
(297
)
 
—

 
(494
)
Change in restricted cash and securities, net
—

 
—

 
3

 
(57
)
 
—

 
(54
)
Other
—

 
—

 
1

 
3

 
—

 
4

Investments in Global Crossing, net of cash acquired
—

 
—

 
—

 
146

 
—

 
146

Net Cash Used in Investing Activities of Continuing Operations
—

 
—

 
(193
)
 
(205
)
 
—

 
(398
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
292

 
1,586

 
—

 
—

 
—

 
1,878

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(521
)
 
(755
)
 
—

 
(341
)
 
—

 
(1,617
)
Increase (decrease) due from affiliates, net
234

 
(404
)
 
168

 
2

 
—

 
—

Net Cash Provided by (Used in) Financing Activities of Continuing Operations
5

 
427

 
168

 
(339
)
 
—

 
261

Net Cash Provided by Discontinued Operations
—

 
—

 
—

 
51

 
—

 
51

Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
—

 
—

 
—

Net Change in Cash and Cash Equivalents
(171
)
 
(1
)
 
268

 
206

 
—

 
302

Cash and Cash Equivalents at Beginning of Year
173

 
7

 
350

 
86

 
—

 
616

Cash and Cash Equivalents at End of Year
$
2

 
$
6

 
$
618

 
$
292

 
$
—

 
$
918

Unaudited Quarterly Financial Data
Unaudited Quarterly Financial Data
Unaudited Quarterly Financial Data
 
 
Three Months Ended
 
 
March 31,
 
June 30,
 
September 30,
 
December 31,
 
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
(dollars in millions except per share data)
Revenue
 
$
1,577

 
$
1,586

 
$
1,565

 
$
1,586

 
$
1,569

 
$
1,590

 
$
1,602

 
$
1,614

Gross Margin
 
948

 
929

 
949

 
938

 
961

 
948

 
984

 
959

Operating Income
 
155

 
116

 
140

 
133

 
152

 
138

 
219

 
188

Net Income (Loss)
 
(78
)
 
(138
)
 
(24
)
 
(62
)
 
(21
)
 
(166
)
 
14

 
(56
)
Income (Loss) per share (Basic and Diluted)
 
$
(0.36
)
 
$
(0.66
)
 
$
(0.11
)
 
$
(0.29
)
 
$
(0.09
)
 
$
(0.76
)
 
$
0.06

 
$
(0.26
)


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 2013, the Company recognized a loss on modification and extinguishment of debt of $67 million, including $10 million related to the refinancing of the Tranche B-II 2019 Term Loan, $56 million related to the refinancing of the 10% Senior Notes due 2018 and $1 million related to the refinancing of the Floating Rate Senior Notes due 2015.

During the third quarter of 2013, the Company recognized a loss on modification and extinguishment of debt of $17 million related to the refinancing of the $595.5 million Tranche B 2016 and the $815 million Tranche B 2019 Term Loans.

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 4 - 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.
Organization and Summary of Significant Accounting Policies (Policies)
Principles of Consolidation and Basis of Presentation 
Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Level 3 Communications, Inc. and subsidiaries in which it has a controlling interest. All significant intercompany accounts and transactions have been eliminated. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").

As part of its consolidation policy, the Company considers its controlled subsidiaries, investments in businesses in which the Company is not the primary beneficiary or does not have effective control but has the ability to significantly influence operating and financial policies, and variable interests resulting from economic arrangements that give the Company rights to economic risks or rewards of a legal entity. The Company does not have variable interests in a variable interest entity where it is required to consolidate the entity as the primary beneficiary or where it has concluded it is not the primary beneficiary.
Foreign Currency Translation 
Foreign Currency Translation

Local currencies of foreign subsidiaries are the functional currencies for financial reporting purposes except for certain foreign subsidiaries in Latin America. For operations outside the U.S. that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using average exchange rates prevailing during the year. A significant portion of the Company's foreign subsidiaries have either the British pound, the euro or the Brazilian real as the functional currency, each of which experienced significant fluctuations against the U.S. dollar during 2013, 2012 and 2011. Foreign currency translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in stockholders' equity (deficit) and in the consolidated statement of comprehensive loss in accordance with accounting guidance for foreign currency translation. The Company considers the majority of its investments in its foreign subsidiaries to be long-term in nature. The Company's foreign exchange transaction gains (losses), including where its investments in its foreign subsidiaries are not considered to be long-term in nature, are included within other income (expense) in Other, net on the consolidated statement of operations.
Reclassifications 
Reclassifications

Certain amounts in the prior year consolidated financial statements and accompanying footnotes have been reclassified to conform to the current year's presentation.
Use of Estimates 
Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. The accounting estimates that require management's judgments include revenue recognition, revenue reserves, cost of revenue for communications services, cost of revenue dispute reserves, determination of the useful lives of long-lived assets, measurement and recognition of stock-based compensation expense, valuation of long-lived assets, goodwill and acquired indefinite-lived intangible assets for purposes of impairment testing, valuation of asset retirement obligations, allowance for doubtful accounts, measurement of the fair value of assets acquired and liabilities assumed in business combinations, accruals for estimated tax and legal liabilities, valuation allowance for deferred tax assets, and valuation of other assets and liabilities measured at fair value. Actual results could differ from these estimates under different assumptions or conditions and such differences could be material.
Revenue and Cost of Revenue for Communications Services 

Revenue and Cost of Revenue for Communications Services

Revenue for communications services is recognized monthly as the services are provided based on contractual amounts expected to be collected. Management establishes appropriate revenue reserves at the time services are rendered based on an analysis of historical credit activity to address, where significant, situations in which collection is not reasonably assured as a result of credit risk, potential billing disputes or other reasons. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material.

Intercarrier compensation revenue is recognized when an interconnection agreement is in place with another carrier, or if an agreement has expired, when the parties have agreed to continue operating under the previous agreement until a new agreement is negotiated and executed, or at rates mandated by the Federal Communications Commission (the "FCC").

For certain sale and long-term indefeasible right of use, or IRU, contracts involving private line, wavelengths and dark fiber services, the Company may receive upfront payments for services to be delivered for a period of up to 25 years. In these situations, the Company defers the revenue and amortizes it on a straight-line basis to earnings over the term of the contract.

Termination revenue is recognized when a customer discontinues service prior to the end of the contract period for which Level 3 had previously received consideration and for which revenue recognition was deferred. Termination revenue also is recognized when customers are required to make termination penalty payments to Level 3 to settle contractually committed purchase amounts that the customer no longer expects to meet or when a customer and Level 3 renegotiate a contract under which Level 3 is no longer obligated to provide services for consideration previously received and for which revenue recognition has been deferred.

The Company is obligated under dark fiber IRUs and other capacity agreements to maintain its network in efficient working order and in accordance with industry standards. Customers are obligated for the term of the agreement to pay for their allocable share of the costs for operating and maintaining the network. The Company recognizes this revenue monthly as services are provided.

Level 3's customer contracts require the Company to meet certain service level commitments. If Level 3 does not meet the required service levels, it may be obligated to provide credits, usually in the form of free service, for a short period of time. The credits are a reduction to revenue and, to date, have not been material.

Cost of revenue for the communications business includes leased capacity, right-of-way costs, access charges, satellite transponder lease costs and other third-party costs directly attributable to the network, but excludes depreciation and amortization and related impairment expenses.

The Company recognizes the cost of network services as they are incurred in accordance with contractual requirements. The Company disputes incorrect billings from its suppliers of network services. The most prevalent types of disputes include disputes for circuits that are not disconnected by the supplier on a timely basis and usage bills with incorrect or inadequate information. Depending on the type and complexity of the issues involved, it may and often does take several quarters to resolve the disputes. The Company establishes appropriate cost of revenue reserves for disputed supplier billings based on an analysis of historical experience in resolving disputes with its suppliers.

In determining the amount of the cost of network service expenses and related accrued liabilities to reflect in its consolidated financial statements, the Company considers the adequacy of documentation of disconnect notices, compliance with prevailing contractual requirements for submitting these disconnect notices and disputes to the provider of the network services, and compliance with its interconnection agreements with these carriers. Judgment is required in estimating the ultimate outcome of the dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiations or settle any litigation. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material.
Coal Mining 
Coal Mining

Prior to the sale of its coal mining business in November 2011, the Company sold coal primarily through long-term contracts with public utilities. The long-term contracts for the delivery of coal established the price, volume, and quality requirements of the coal to be delivered. Revenue under these and other contracts was generally recognized when coal was shipped to the customer.

USF and Gross Receipts Taxes 
USF and Gross Receipts Taxes

The revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, gross receipts taxes and certain state regulatory fees. The Company records Universal Service Fund ("USF") contributions where the Company is the primary obligor for the taxes assessed in each jurisdiction where it does business on a gross basis in its consolidated statements of operations, but generally records gross receipts taxes and certain state regulatory fees billed to its customers on a net basis in its consolidated statements of operations. Communications revenue and cost of revenue on the consolidated statements of operations includes USF contributions totaling $194 million, $191 million and $107 million for the years ended December 31, 2013, 2012 and 2011, respectively.
Advertising Costs 
Advertising Costs

The Company expenses the cost of advertising as incurred. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying consolidated statements of operations. Advertising expense was $16 million, $20 million and $15 million for the years ended December 31, 2013, 2012 and 2011, respectively.
Share-Based Compensation 
Stock-Based Compensation

The Company recognizes the estimated fair value of stock-based compensation costs, net of an estimated forfeiture rate, over the requisite service period of the award, which is generally the vesting term or term for restrictions on transfer that lapse, as the case may be. The Company funded a portion of its 2013, 2012 and 2011 discretionary bonus in restricted stock awards that vested upon issuance. The Company estimates forfeiture rates based on its historical experience for the type of award, adjusted for expected activities as necessary.
Income Taxes 
Income Taxes

The Company recognizes deferred tax assets and liabilities for its domestic and foreign operations, for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes interest and penalty expense associated with uncertain tax positions as a component of income tax expense in the consolidated statements of operations.
Cash and Cash Equivalents 
Cash and Cash Equivalents

The Company classifies investments as cash equivalents if they are readily convertible to cash and have original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist primarily of highly liquid investments in government and government agency securities and money market funds issued or managed by financial institutions in the U.S., Europe and Latin America and commercial paper depending on liquidity requirements. As of December 31, 2013 and 2012, the carrying value of cash and cash equivalents approximates fair value due to the short period of time to maturity.
Restricted Cash and Securities 
Restricted Cash and Securities

Restricted cash and securities consists primarily of cash and investments that serve to collateralize outstanding letters of credit and certain performance and operating obligations of the Company. Restricted cash and securities are recorded as current or non-current assets in the consolidated balance sheets depending on the duration of the restriction and the purpose for which the restriction exists. Restricted cash and securities are stated at cost which approximates fair value as of December 31, 2013 and 2012.
Derivatives Financial Instruments 
Derivative Financial Instruments

All derivative instruments are measured at fair value and recognized as either assets or liabilities on the Company's consolidated balance sheets. The Company's derivative instruments are valued primarily using models based on readily observable market parameters for all substantial terms of the Company's derivative contracts and thus are classified as Level 2 in the GAAP fair value hierarchy (see Note 10 - Fair Value of Financial Instruments). The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.

For derivative instruments designated as cash flow hedges, the effective portion of the derivative's gain (loss) is initially reported as a component of Accumulated Other Comprehensive Income (Loss) ("AOCI") and is subsequently recognized in earnings in the period the hedged transaction affects earnings or when they are no longer effective. Gains (losses) resulting from hedge ineffectiveness and those resulting from changes in fair values on derivatives not designated as hedging instruments are recognized in other income (expense) in Other, net in the consolidated statements of operations (see Note 11 - Derivative Financial Instruments).

Allowance for Doubtful Accounts 

Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and can bear interest. The Company establishes an allowance for doubtful accounts for accounts receivable amounts that may not be collectible. The Company determines the allowance for doubtful accounts based on the aging of its accounts receivable balances, the credit quality of its customers and an analysis of its historical experience of bad debt write-offs. Accounts receivable balances are written off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recognized bad debt expense, net of recoveries, of approximately $17 million in 2013, $15 million in 2012 and $6 million in 2011.
Property, Plant and Equipment 
Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation and amortization for the Company's property, plant and equipment are computed using the straight-line method based on the following estimated useful lives:

Facility and Leasehold Improvements
10
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
4
-
15
years
Furniture, Fixtures, Office Equipment and Other
2
-
7
years


The Company performs internal reviews to evaluate the depreciable lives of its property, plant and equipment annually, or more frequently if new facts and circumstances arise, that may affect management's original estimates. Due to the rapid changes in technology and the competitive environment, selecting the estimated economic life of telecommunications property, plant, and equipment requires a significant amount of judgment. The Company's internal reviews take into account input from the Company's global engineering and network services personnel, actual usage, the physical condition of the Company's property, plant, and equipment, industry data, and other relevant factors. In connection with its annual review of useful lives in the fourth quarter of 2011, the Company determined that the period it expected to use conduit, fiber, and certain transmission equipment was longer than the remaining useful lives originally estimated. In determining the change in estimated useful lives, the Company, with input from its engineering and network services personnel, considered its historical usage and retirements, estimates of technological obsolescence, and expected usage and maintenance. The change in the estimated useful lives of conduit, fiber, and certain transmission equipment resulted in the following decrease in the net loss for the year ended December 31, 2011 (in millions, except per share amounts):

Net Loss
$
74

Basic and Diluted Net Loss per Share
$
0.54



Leasehold improvements are depreciated over the shorter of their estimated useful lives or lease terms that are reasonably assured.

The Company capitalizes costs directly associated with expansions and improvements of the Company's communications network and customer installations, including employee-related costs, and generally capitalizes costs associated with network construction and provisioning of services. The Company amortizes such costs over an estimated useful life of 3 to 7 years.

In addition, the Company continues to develop business support systems required for its business. The external direct costs of software, materials and services, and payroll and payroll-related expenses for employees directly associated with business support systems projects are capitalized. The total cost of the business support system is amortized over an estimated useful life of 3 years.
Impairment of Finite Lived Intangible Assets and Property Plant and Equipment 
Long-Lived Assets Including Finite-Lived Purchased Intangible Assets

The Company amortizes acquired intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 4 to 12 years.

The Company evaluates long-lived assets, such as property, plant and equipment and acquired intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the asset groups are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flows expected to result from the use of the assets plus net proceeds expected from disposition of the assets, if any, are less than the carrying value of the assets. If an asset is deemed to be impaired, the amount of the impairment loss is the excess of the asset's carrying value over its estimated fair value.
Asset Retirement Obligations 
Asset Retirement Obligations

The Company recognizes a liability for the estimated fair value of legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset in the period incurred. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Increases to the asset retirement obligation liability due to the passage of time are recognized as accretion expense and included within selling, general and administrative expenses and within income (loss) from discontinued operations for reclamation associated with the coal mining business on the Company's consolidated statements of operations prior to the sale of the coal mining business in November 2011. Changes in the liability due to revisions to the amount or timing of future cash flows are recognized by increasing or decreasing the liability with the offset adjusting the carrying amount of the related long-lived asset. To the extent that the downward revisions exceed the carrying amount of the related long-lived asset initially recorded when the asset retirement obligation liability was established, the Company records the remaining adjustment as a reduction to depreciation expense, to the extent of historical depreciation of the related long-lived asset, and then to selling, general and administrative expense.

Goodwill and Acquired Indefinite-Lived Intangible Assets 
Goodwill and Acquired Indefinite-Lived Intangible Assets

Accounting guidance prohibits the amortization of goodwill and purchased intangible assets with indefinite useful lives. The Company reviews goodwill and purchased intangible assets with indefinite lives for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

The Company's goodwill impairment review process considers the fair value of each reporting unit relative to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is performed. If the carrying value of the reporting unit exceeds its fair value, then a second step must be performed, and the implied fair value of the reporting unit's goodwill must be determined and compared to the carrying value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then an impairment loss equal to the difference will be recorded. Beginning with the 2011 assessment, in accordance with updated accounting guidance, prior to performing the two step evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the two step goodwill impairment evaluation.

In the second quarter of 2013, the Company changed the date of its annual assessment of goodwill impairment from December 31 to October 1. This was a change in method of applying an accounting principle which management believes is a preferable alternative as the new date of the assessment provides additional time prior to the Company’s year-end to complete the goodwill impairment testing and report the results in the Company's Annual Report on Form 10-K, and is more closely aligned with the Company’s strategic planning process. The change in the assessment date does not delay, accelerate or avoid a potential impairment charge.

In 2013 and 2012, the Company's reporting units consist of its three regional operating units in: North America; Europe, the Middle East and Africa ("EMEA"); and Latin America. In 2011, the Company's reporting units were consistent with its reportable segments of Level 3 and Global Crossing, representing the stand-alone operations of each legacy business.

The Company's indefinite-lived intangible assets impairment review process compares the estimated fair value of the indefinite-lived intangible assets to their respective carrying values. If the fair value of the indefinite-lived intangible assets exceeds their carrying values, then the indefinite-lived intangible assets are not impaired. If the carrying value of the indefinite-lived intangible assets exceeds their fair value, then an impairment loss equal to the difference will be recorded. In accordance with recently issued accounting guidance, an entity may assess qualitative factors to determine whether it is more likely than not that the fair value exceeds the carrying value prior to performing the two step evaluation. If it is determined that it is unlikely the carrying value exceeds the fair value, then the entity is no longer required to complete the two step indefinite-lived intangible assets impairment evaluation.

The Company conducted its goodwill and acquired indefinite-lived intangible assets impairment analysis during 2013, 2012 and 2011 and in each case concluded that its goodwill was not impaired in any of those periods. The Company conducted its indefinite-lived intangible asset impairment analysis at the end of 2013 and 2012 and concluded that there was no impairment. During 2011, the Company determined that the carrying value of certain wireless spectrum licenses that it acquired in a prior acquisition was impaired and the Company recognized a $20 million charge in the fourth quarter that was recognized in Other Expense. The Company concluded that its remaining indefinite-lived intangible assets were not impaired as of December 31, 2011.
Concentration of Credit Risk 
Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, accounts receivable, restricted cash and securities and derivatives. The Company maintains its cash equivalents, restricted cash and securities and derivatives with various financial institutions. These financial institutions are primarily located in the United States, Europe and Latin America and the Company's policy is to limit exposure with any one institution. As part of its cash and risk management processes, the Company performs periodic evaluations of the relative credit standing of the financial institutions. The Company also has established guidelines relative to financial instrument credit ratings, diversification and maturities that seek to maintain safety and liquidity. The Company's investment strategy generally results in lower yields on investments but reduces the risk to principal in the short term prior to these funds being used in the Company's business. Notwithstanding the devaluation of the Venezuelan bolivar, the Company has not experienced any material losses on financial instruments held at financial institutions. The Company has used interest rate swap contracts to protect against the effects of interest rate fluctuations. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss.

The Company provides communications services to a wide range of wholesale and enterprise customers, ranging from well capitalized national carriers to small early stage companies primarily in the United States, Europe, and Latin America. Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising Level 3's customer base and their dispersion across many different industries and geographical regions. The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its customers, although letters of credit and deposits are required in certain limited circumstances. The Company has from time to time entered into agreements with value-added resellers and other channel partners to reach consumer and enterprise markets for voice services. The Company has policies and procedures in place to evaluate the financial condition of these resellers prior to initiating service to the final customer. The Company maintains an allowance for doubtful accounts based upon the expected collectability of accounts receivable. Due to the Company's credit evaluation and collection process, bad debt expenses have not been significant; however, the Company is not able to predict changes in the financial stability of its customers. Any material change in the financial status of any one or a particular group of customers may cause the Company to adjust its estimate of the recoverability of receivables and could have a material adverse effect on the Company's results of operations. Fair values of accounts receivable approximate carrying amount due to the short period of time to collection.
Organization and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2011
Accounting Policies [Abstract]
 
 
Property, Plant and Equipment
Text Block 
 
Change in Accounting Estimate
 
Text Block 
Property, Plant and Equipment 
Depreciation and amortization for the Company's property, plant and equipment are computed using the straight-line method based on the following estimated useful lives:

Facility and Leasehold Improvements
10
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
4
-
15
years
Furniture, Fixtures, Office Equipment and Other
2
-
7
years
The components of the Company's property, plant and equipment as of December 31, 2013 and 2012 are as follows (dollars in millions):
 
 
Cost
 
Accumulated
Depreciation
 
Net
December 31, 2013
 
 
 
 
 
 
Land
 
$
193

 
$
—

 
$
193

Land Improvements
 
72

 
(47
)
 
25

Facility and Leasehold Improvements
 
2,207

 
(1,193
)
 
1,014

Network Infrastructure
 
8,505

 
(3,279
)
 
5,226

Operating Equipment
 
6,057

 
(4,381
)
 
1,676

Furniture, Fixtures and Office Equipment
 
196

 
(168
)
 
28

Other
 
22

 
(21
)
 
1

Construction-in-Progress
 
77

 
—

 
77

 
 
$
17,329

 
$
(9,089
)
 
$
8,240

December 31, 2012
 
 
 
 
 
 
Land
 
$
195

 
$
—

 
$
195

Land Improvements
 
73

 
(43
)
 
30

Facility and Leasehold Improvements
 
2,093

 
(1,085
)
 
1,008

Network Infrastructure
 
8,342

 
(3,058
)
 
5,284

Operating Equipment
 
5,506

 
(3,997
)
 
1,509

Furniture, Fixtures and Office Equipment
 
206

 
(155
)
 
51

Other
 
21

 
(21
)
 
—

Construction-in-Progress
 
122

 
—

 
122

 
 
$
16,558

 
$
(8,359
)
 
$
8,199

Change in Accounting Estimate 
The change in the estimated useful lives of conduit, fiber, and certain transmission equipment resulted in the following decrease in the net loss for the year ended December 31, 2011 (in millions, except per share amounts):

Net Loss
$
74

Basic and Diluted Net Loss per Share
$
0.54

Events Associated with the Amalgamation of Global Crossing (Tables)
0 Months Ended 12 Months Ended
Oct. 4, 2011
Dec. 31, 2011
Business Combinations [Abstract]
 
 
Schedule of the Final Purchase Price Allocation
Text Block 
 
Schedule of Unaudited Pro Forma Financial Information for the Amalgamation
 
Text Block 
Schedule of the Final Purchase Price Allocation 
The following is the final allocation of the purchase price.

 
Purchase Price Allocation
 
(dollars in millions)
Assets:
 
Cash, Cash Equivalents, and Restricted Cash
$
226

Property, Plant, and Equipment
3,098

Goodwill
1,123

Identifiable Intangibles
106

Other Assets
651

Total Assets
5,204

 
 
Liabilities:
 
Long-term Debt
(1,554
)
Other Liabilities
(1,688
)
Total Liabilities
(3,242
)
Total Estimated Consideration
$
1,962

Schedule of Unaudited Pro Forma Financial Information for the Amalgamation 
The following unaudited pro forma financial information presents the combined results of Level 3 and Global Crossing as if the completion of the Amalgamation had occurred as of the beginning of the period (dollars in millions, except per share data).

 
Year Ended December 31, 2011
Total Revenue
$
6,335

Net Loss
(727
)
Net Loss per share
$
(3.56
)
Property, Plant and Equipment (Tables)
Property, Plant and Equipment
Depreciation and amortization for the Company's property, plant and equipment are computed using the straight-line method based on the following estimated useful lives:

Facility and Leasehold Improvements
10
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
4
-
15
years
Furniture, Fixtures, Office Equipment and Other
2
-
7
years
The components of the Company's property, plant and equipment as of December 31, 2013 and 2012 are as follows (dollars in millions):
 
 
Cost
 
Accumulated
Depreciation
 
Net
December 31, 2013
 
 
 
 
 
 
Land
 
$
193

 
$
—

 
$
193

Land Improvements
 
72

 
(47
)
 
25

Facility and Leasehold Improvements
 
2,207

 
(1,193
)
 
1,014

Network Infrastructure
 
8,505

 
(3,279
)
 
5,226

Operating Equipment
 
6,057

 
(4,381
)
 
1,676

Furniture, Fixtures and Office Equipment
 
196

 
(168
)
 
28

Other
 
22

 
(21
)
 
1

Construction-in-Progress
 
77

 
—

 
77

 
 
$
17,329

 
$
(9,089
)
 
$
8,240

December 31, 2012
 
 
 
 
 
 
Land
 
$
195

 
$
—

 
$
195

Land Improvements
 
73

 
(43
)
 
30

Facility and Leasehold Improvements
 
2,093

 
(1,085
)
 
1,008

Network Infrastructure
 
8,342

 
(3,058
)
 
5,284

Operating Equipment
 
5,506

 
(3,997
)
 
1,509

Furniture, Fixtures and Office Equipment
 
206

 
(155
)
 
51

Other
 
21

 
(21
)
 
—

Construction-in-Progress
 
122

 
—

 
122

 
 
$
16,558

 
$
(8,359
)
 
$
8,199

Asset Retirement Obligations (Tables)
Schedule of Asset Retirement Obligations [Table Text Block]
The following table provides asset retirement obligation activity for the years ended December 31, 2013 and 2012 (dollars in millions):
 
 
2013
 
2012
Asset retirement obligation at January 1
 
$
55

 
$
121

Accretion expense
 
7

 
11

Liabilities settled
 
(6
)
 
(4
)
Revision in estimated cash flows
 
—

 
(73
)
Effect of foreign currency rate change
 
—

 
—

Asset retirement obligation at December 31
 
$
56

 
$
55

Goodwill (Tables)
Schedule of changes in carrying amount of goodwill
The changes in the carrying amount of goodwill during the years ended December 31, 2013 and 2012 are as follows (dollars in millions):
 
Total
Balance as of January 1, 2012
$
2,541

Goodwill adjustments
24

Balance as of December 31, 2012
2,565

Goodwill adjustments
12

Balance as of December 31, 2013
$
2,577

Acquired Intangible Assets (Tables)
Schedule of acquisition-related intangible assets 
Identifiable acquisition-related intangible assets as of December 31, 2013 and December 31, 2012 were as follows (dollars in millions):

 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
December 31, 2013
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
786

 
$
(678
)
 
$
108

Trademarks
55

 
(31
)
 
24

Patents and Developed Technology
158

 
(117
)
 
41

 
999

 
(826
)
 
173

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Vyvx Trade Name
32

 
—

 
32

 
$
1,031

 
$
(826
)
 
$
205

December 31, 2012
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
776

 
$
(633
)
 
$
143

Trademarks
55

 
(17
)
 
38

Patents and Developed Technology
158

 
(103
)
 
55

 
989

 
(753
)
 
236

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Vyvx Trade Name
32

 
—

 
32

 
$
1,021

 
$
(753
)
 
$
268

Schedule of estimated amortization expense of acquired finite-lived intangible asset 
As of December 31, 2013, estimated amortization expense for the Company’s finite-lived acquisition-related intangible assets over the next five years and thereafter is as follows (dollars in millions):

2014
$
64

2015
48

2016
30

2017
15

2018
13

Thereafter
3

 
$
173

Fair Value of Financial Instruments (Tables)
Schedule of fair value of liabilities measured on a recurring basis
The table below presents the fair values for the Company’s interest rate swaps and long-term debt as well as the input levels used to determine these fair values as of December 31, 2013 and 2012:

 
 
 
 
 
 
Fair Value Measurement Using
 
 
Total Carrying Value in Consolidated Balance Sheets
 
Unadjusted Quoted Prices in Active
Markets for Identical Assets or Liabilities (Level 1)
 
Significant Other Observable Inputs (Level 2)
(dollars in millions)
 
December 31,
2013
 
December 31,
2012
 
December 31,
2013
 
December 31,
2012
 
December 31,
2013
 
December 31,
2012
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Swap Liabilities (included in other current and non-current liabilities)
 
$
12

 
$
56

 
$
—

 
$
—

 
$
12

 
$
56

Total Derivative Liabilities Recorded at Fair Value in the Financial Statements
 
$
12

 
$
56

 
$
—

 
$
—

 
$
12

 
$
56

Liabilities Not Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, including the current portion:
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
$
2,604

 
$
2,603

 
$
2,633

 
$
2,631

 
$
—

 
$
—

Senior Notes
 
5,198

 
5,185

 
5,673

 
5,712

 
—

 
—

Convertible Notes
 
474

 
846

 
—

 
286

 
647

 
748

Capital Leases and Other
 
86

 
98

 
—

 
—

 
86

 
98

Total Long-term Debt, including the current portion:
 
$
8,362

 
$
8,732

 
$
8,306

 
$
8,629

 
$
733

 
$
846



The Company does not have any assets or liabilities where the fair value is measured using significant unobservable inputs (Level 3).
Derivative Financial Instruments (Tables)
Schedule of outstanding interest rate derivatives designated as cash flow hedges 
In March 2007, Level 3 Financing, Inc. entered into two interest rate swap agreements to hedge the interest payments on $1 billion principal amount of floating rate debt. The Company had designated these interest rate swap agreements as cash flow hedges. The two interest rate swap agreements are with different counterparties and are for $500 million each. The arrangements began in April 2007 and mature in January 2014. Under the terms of these arrangements, the Company receives interest payments based on rolling three month LIBOR and pays interest at the fixed rate of 4.93% under one arrangement and approximately 4.92% under the other.

Interest Rate Derivative
 
Number of
Instruments
 
Notional
(dollars in millions)
Interest rate swaps
 
Two
 
$
1,000

Schedule of fair value of derivative financial instruments 
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets (dollars in millions):

 
 
Liability Derivatives
 
 
December 31, 2013
 
December 31, 2012
Derivatives not designated as
hedging instruments
 
Balance Sheet
Location
 
Fair
Value
 
Balance Sheet
Location
 
Fair
Value
Interest rate swap agreements
 
Other current liabilities
 
$
12

 
Other non-current liabilities
 
$
56

Schedule of the amount of gains (losses) recognized in Other Comprehensive Loss 
The amount of net gains recognized in AOCI, including reclassifications, consists of the following (dollars in millions):

 
 
Year Ended December 31,
Derivatives designated as hedging instruments
 
2013
 
2012
 
2011
Cash flow hedging contracts
 
$
—

 
$
90

 
$
18

Schedule of the amount of gains (losses) reclassified from AOCI to Income/Loss 
The amount of losses reclassified from AOCI to earnings (effective portions) consists of the following (dollars in millions):

 
 
 
 
Year Ended December 31,
Derivatives designated as hedging instruments
 
Statement of Operations Location
 
2013
 
2012
Cash flow hedging contracts
 
Interest Expense
 
$
—

 
$
(26
)
Schedule of effect of derivatives not designated as hedging instruments on net loss 
The effect of the Company’s derivatives not designated as hedging instruments on net loss is as follows (dollars in millions):

 
 
 
 
Year Ended December 31,
Derivatives not designated as hedging instruments
 
Statement of Operations Location
 
2013
 
2012
 
2011
Interest rate swaps
 
Other Expense - Other, net
 
$
(2
)
 
$
(64
)
 
$
—

Long-Term Debt (Tables)
Schedule of long-term debt 
As of December 31, 2013 and December 31, 2012, long-term debt was as follows:

(dollars in millions)
 
December 31,
2013
 
December 31,
2012
Senior Secured Term Loan*
 
$
2,611

 
$
2,614

Floating Rate Senior Notes due 2015 (4.469% as of December 31, 2012)
 
—

 
300

10% Senior Notes due 2018
 
—

 
640

Floating Rate Senior Notes due 2018 (3.846% as of December 31, 2013)
 
300

 
—

11.875% Senior Notes due 2019
 
605

 
605

9.375% Senior Notes due 2019
 
500

 
500

8.125% Senior Notes due 2019
 
1,200

 
1,200

8.875% Senior Notes due 2019
 
300

 
300

8.625% Senior Notes due 2020
 
900

 
900

7% Senior Notes due 2020
 
775

 
775

6.125% Senior Notes due 2021
 
640

 
—

15% Convertible Senior Notes due 2013
 
—

 
172

7% Convertible Senior Notes due 2015
 
200

 
200

7% Convertible Senior Notes due 2015 Series B
 
275

 
275

6.5% Convertible Senior Notes due 2016
 
—

 
201

Capital Leases
 
73

 
86

Other
 
13

 
12

Total Debt Obligations
 
8,392

 
8,780

Unamortized Discount:
 
 
 
 
Discount on Senior Secured Term Loan
 
(7
)
 
(11
)
Discount on 10% Senior Notes due 2018
 
—

 
(10
)
Discount on 11.875% Senior Notes due 2019
 
(8
)
 
(9
)
Discount on 9.375% Senior Notes due 2019
 
(7
)
 
(8
)
Discount on 8.125% Senior Notes due 2019
 
(7
)
 
(8
)
Discount on 7% Convertible Senior Notes due 2015
 
(1
)
 
(2
)
Total Unamortized Discount
 
(30
)
 
(48
)
Carrying Value of Debt
 
8,362

 
8,732

Less current portion
 
(31
)
 
(216
)
Long-term Debt, less current portion
 
$
8,331

 
$
8,516


* The $815 million Tranche B-III 2019 Term Loan due 2019 and the $1.796 billion Tranche B 2020 Term Loan due 2020 each had an interest rate of 4.00% as of December 31, 2013. The $599 million Tranche B 2016 Term Loan due 2016, the $815 million Tranche B 2019 Term Loan due 2019 and the $1.2 billion Tranche B-II 2019 Term Loan due 2019, that were prepaid in 2013, had interest rates of 4.75%, 5.25% and 4.75%, respectively, as of December 31, 2012.
Schedule of aggregate future contractual maturities of long-term debt and capital leases (excluding issue discounts and fair value adjustments) 
Long-Term Debt Maturities

Aggregate future contractual maturities of long-term debt and capital leases (excluding discounts and fair value adjustments) were as follows as of December 31, 2013 (dollars in millions):

2014
$
31

2015
483

2016
7

2017
6

2018
6

Thereafter
7,859

 
$
8,392

Schedule of redemption prices of Senior Notes 
Prior to May 15, 2015, at the option of Level 3 Financing, the 2018 Floating Rate Notes will be subject to redemption, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice, at 100% of the principal amount of 2018 Floating Rate Notes so redeemed plus (i) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (ii) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date. The 2018 Floating Rate Notes will be redeemable at the option of Level 3 Financing, in whole or in part, on or after May 15, 2015, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as percentages of the principal amount), plus accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, if redeemed during the periods set forth below:

Period
Redemption
Price
May 15, 2015 - May 14, 2016
102.00
%
May 15, 2016 - November 14, 2016
101.00
%
November 15, 2016 and thereafter
100.00
%

In addition, at any time or from time to time on or prior to May 15, 2015, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 2018 Floating Rate Notes at a redemption price equal to 100% of the principal amount of the 2018 Floating Rate Notes so redeemed, plus a premium equal to the interest rate per annum on the 2018 Floating Rate Notes in effect on the date that notice of redemption is given, plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, with the net cash proceeds contributed to the capital of Level 3 Financing from one or more private placements of common stock of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 2018 Floating Rate Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption is required to be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.
Schedule of redemption prices of Senior Notes 
The 11.875% Senior Notes are subject to redemption at the option of Level 3 Communications in whole or in part, at any time or from time to time, prior to February 1, 2015, at 100% of the principal amount of 11.875% Senior Notes so redeemed plus (A) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (B) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, and on or after February 1, 2015 at the redemption prices (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest thereon to the redemption date, if redeemed during the twelve months beginning February 1, of the years indicated below:
Year
Redemption
Price
2015
105.938
%
2016
102.969
%
2017
100.000
%


At any time or from time to time on or prior to February 1, 2014, the Company may redeem up to 35% of the original aggregate principal amount of the 11.875% Senior Notes at a redemption price equal to 111.875% of the principal amount of the 11.875% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, with the net cash proceeds contributed to the capital of Level 3 from one or more private placements of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 11.875% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.

Schedule of redemption prices of Senior Notes 
The 9.375% Senior Notes Due 2019 are subject to redemption at the option of Level 3 Financing in whole or in part, at any time or from time to time, prior to April 1, 2015, at 100% of the principal amount of 9.375% Senior Notes so redeemed plus (A) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (B) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, and on or after April 1, 2015 at the redemption prices (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest thereon to the redemption date, if redeemed during the twelve months beginning April 1, of the years indicated below:
Year
Redemption
Price
2015
104.688
%
2016
102.344
%
2017
100.000
%


At any time or from time to time on or prior to April 1, 2014, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 9.375% Senior Notes at a redemption price equal to 109.375% of the principal amount of the 9.375% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, with the net cash proceeds contributed to the capital of Level 3 Financing from one or more private placements or underwritten public offerings of common stock of the Company resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 9.375% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.
Schedule of redemption prices of Senior Notes 
The 8.125% Senior Notes will be subject to redemption at the option of Level 3 Financing, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice, (i) prior to July 1, 2015, at 100% of the principal amount of 8.125% Senior Notes so redeemed plus (A) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (B) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, and on and after July 1, 2015, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, if redeemed during the twelve months beginning July 1, of the years indicated below:

Year
Redemption
Price
2015
104.063
%
2016
102.031
%
2017
100.000
%


At any time or from time to time after the Notes Assumption and on or prior to July 1, 2014, up to 35% of the original aggregate principal amount of the 8.125% Senior Notes may be redeemed at a redemption price equal to 108.125% of the principal amount of the 8.125% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, with the net cash proceeds contributed from one or more private placements of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 8.125% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.
Schedule of redemption prices of Senior Notes 
The 8.875% Senior Notes are subject to redemption at the option of Level 3 in whole or in part, at any time before June 1, 2015 at the redemption price equal to 100% of their principal amount, plus a make-whole premium and accrued and unpaid interest. On and after June 1, 2015, Level 3 may redeem all or part of the 8.875% Senior Notes, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve months beginning June 1, of the years indicated below:
Year
Redemption
Price
2015
104.438
%
2016
102.219
%
2017
100.000
%


In addition, at any time or from time to time on or prior to June 1, 2015, Level 3 may redeem up to 35% of the original aggregate principal amount of the 8.875% Senior Notes (including any additional 8.875% Senior Notes) at a redemption price equal to 108.875% of the principal amount of the 8.875% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds contributed to the capital of Level 3 of one or more private placements to persons other than affiliates of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in aggregate; provided, however, that at least 65% of the original aggregate principal amount of the 8.875% Senior Notes (including any additional 8.875% Senior Notes) would remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days of such private placement or public offering upon not less than 30 nor more than 60 days prior notice.
Schedule of redemption prices of Senior Notes 
The 8.625% Senior Notes are subject to redemption at the option of Level 3 Financing in whole or in part, at any time before January 15, 2016 at the redemption price equal to 100% of their principal amount, plus a make-whole premium and accrued and unpaid interest. On and after January 15, 2016, Level 3 Financing may redeem all or part of the 8.625% Senior Notes, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve months beginning January 15, of the years indicated below:
Year
Redemption
Price
2016
104.313
%
2017
102.156
%
2018
100.000
%


In addition, at any time or from time to time on or prior to January 15, 2015, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 8.625% Senior Notes (including any additional 8.625% Senior Notes) at a redemption price equal to 108.625% of the principal amount of the 8.625% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds contributed to the capital of Level 3 Financing of one or more private placements to persons other than affiliates of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in aggregate; provided, however, that at least 65% of the original aggregate principal amount of the 8.625% Senior Notes (including any additional 8.625% Senior Notes) would remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days of such private placement or public offering upon not less than 30 nor more than 60 days prior notice.
Schedule of redemption prices of Senior Notes 
The 7% Senior Notes are subject to redemption at the option of Level 3 Financing in whole or in part, at any time before June 1, 2016 at the redemption price equal to 100% of their principal amount, plus a make-whole premium and accrued and unpaid interest. On or after June 1, 2016, Level 3 Financing may redeem all or part of the 7% Senior Notes, upon not less than 30 nor more than 60 days prior notice, at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve months beginning June 1, of the years indicated below:
Year
Redemption
Price
2016
103.500
%
2017
101.750
%
2018
100.000
%


In addition, at any time or from time to time on or prior to June 1, 2015, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 7% Senior Notes (including any additional 7% Senior Notes) at a redemption price equal to 107% of the principal amount of the 7% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds contributed to the capital of Level 3 Financing of one or more private placements to persons other than affiliates of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in aggregate; provided, however, that at least 65% of the original aggregate principal amount of the 7% Senior Notes (including any additional 7% Senior Notes) would remain outstanding immediately after giving effect to such redemption. Any such redemption shall be made within 90 days of such private placement or public offering upon not less than 30 nor more than 60 days prior notice.
Schedule of redemption prices of Senior Notes 
Prior to November 15, 2016, at the option of Level 3 Financing, the 6.125% Senior Notes will be subject to redemption, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice, at 100% of the principal amount of 6.125% Senior Notes so redeemed plus (i) the applicable make-whole premium set forth in the Indenture, as of the redemption date and (ii) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date. On and after November 15, 2016, at the option of Level 3 Financing, the 6.125% Senior Notes will be subject to redemption, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior notice at the redemption prices set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date. The redemption price for the 6.125% Senior Notes if redeemed during the twelve months beginning November 15, of the years indicated below:

Year
Redemption
Price
2016
103.063
%
2017
101.531
%
2018
100.000
%

In addition, at any time or from time to time on or prior to November 15, 2016, Level 3 Financing may redeem up to 35% of the original aggregate principal amount of the 6.125% Senior Notes at a redemption price equal to 106.125% of the principal amount of the 6.125% Senior Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but not including the redemption date, with the net cash proceeds contributed to the capital of Level 3 Financing from one or more private placements of common stock of Level 3 or underwritten public offerings of common stock of Level 3 resulting, in each case, in gross proceeds of at least $100 million in the aggregate. However, at least 65% of the original aggregate principal amount of the 6.125% Senior Notes must remain outstanding immediately after giving effect to such redemption. Any such redemption is required to be made within 90 days following such private placement or public offering upon not less than 30 nor more than 60 days prior notice.
Accumulated Other Comprehensive Income (Loss) (Tables)
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
The accumulated balances for each classification of other comprehensive income are as follows:

(dollars in millions)
 
Net Foreign Currency Translation Adjustment
 
Holding Gain (Loss) on Interest Rate Swaps
 
Defined Benefit Pension Plans
 
Total
Balance at January 1, 2011
 
$
55

 
$
(108
)
 
$
(45
)
 
$
(98
)
Other comprehensive income (loss) before reclassifications
 
(16
)
 
(28
)
 
14

 
64

Amounts reclassified from accumulated other comprehensive loss
 
—

 
46

 
2

 
(46
)
Balance at December 31, 2011
 
39

 
(90
)
 
(29
)
 
(80
)
Other comprehensive income (loss) before reclassifications
 
17

 
25

 
(4
)
 
132

Amounts reclassified from accumulated other comprehensive loss
 
—

 
65

 
3

 
(26
)
Balance at December 31, 2012
 
56

 
—

 
(30
)
 
26

Other comprehensive income (loss) before reclassifications
 
11

 
—

 
(3
)
 
8

Amounts reclassified from accumulated other comprehensive loss
 
—

 
—

 
2

 
2

Balance at December 31, 2013
 
$
67

 
$
—

 
$
(31
)
 
$
36

Employee Benefit Benefits and Stock-Based Compensation (Tables)
Schedule of non-cash compensation expense and capitalized non-cash compensation 
The following table summarizes non-cash compensation expense and capitalized non-cash compensation for each of the three years ended December 31, 2013, 2012 and 2011 (dollars in millions):

 
2013
 
2012
 
2011
OSO
$
21

 
$
14

 
$
10

Restricted Stock Units and Shares
38

 
40

 
22

401(k) Match Expense
24

 
23

 
13

Restricted Stock Unit Bonus Grant
59

 
46

 
57

Management Incentive and Retention Plan
10

 
13

 
—

 
152

 
136

 
102

Capitalized Non-Cash Compensation
(1
)
 
(1
)
 
(1
)
 
$
151

 
$
135

 
$
101

Schedule of performance benchmark 
ility to outperform the market in general, as measured by the Standard & Poor's ("S&P") 500® Index. Participants in the OSO program do not realize any value from awards unless the Company's common stock price outperforms the S&P 500® Index duri
Schedule of OSO valuation assumptions 
The Company believes that given the relative short life of the OSOs and the other variables used in the model, the modified Black-Scholes model provides a reasonable estimate of the fair value of the OSO units at the time of grant.

 
 
Year Ended December 31,
 
 
2013
 
2012
 
2011
S&P 500 Expected Dividend Yield Rate
 
2.24%
 
2.05%
 
1.83%
Expected Life
 
3 years
 
3 years
 
3 years
S&P 500 Expected Volatility Rate
 
19%
 
23%
 
30%
Level 3 Common Stock Expected Volatility Rate
 
39%
 
39%
 
44%
Expected S&P 500 Correlation Factor
 
0.44
 
0.32
 
0.39
Calculated Theoretical Value
 
101%
 
110%
 
120%
Estimated Forfeiture Rate
 
15%
 
20%
 
20%
Schedule of restricted stock and restricted stock units 
The changes in nonvested restricted stock and restricted stock units are shown in the following table:
 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2011
 
2,021,707

 
$
22.95

Stock and units granted
 
1,030,676

 
$
33.99

Lapse of restrictions
 
(845,717
)
 
$
27.79

Stock and units forfeited
 
(175,883
)
 
$
27.06

Nonvested at December 31, 2011
 
2,030,783

 
$
26.25

Stock and units granted
 
2,869,584

 
$
24.13

Lapse of restrictions
 
(1,048,757
)
 
$
26.06

Stock and units forfeited
 
(214,634
)
 
$
24.92

Nonvested at December 31, 2012
 
3,636,976

 
$
24.71

Stock and units granted
 
1,617,592

 
$
21.26

Lapse of restrictions
 
(1,841,757
)
 
$
25.19

Stock and units forfeited
 
(488,461
)
 
$
23.10

Nonvested at December 31, 2013
 
2,924,350

 
$
22.77

Schedule OSO activity 
Transactions involving OSO units awarded are summarized in the table below. The Option Price Per Unit identified in the table below represents the initial strike price, as determined on the day prior to the OSO grant date for those grants.
 
 
Units
 
Initial Strike Price Per Unit
 
Weighted
Average
Initial
Strike
Price
 
Aggregate
Intrinsic
Value
 
Weighted
Average
Remaining
Contractual
Term (years)
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
Balance January 1, 2011
 
1,056,392

 
$
10.50

-
$
51.60

 
$
22.05

 
$
—

 
1.73
Options granted
 
498,618

 
$
14.70

-
$
36.60

 
$
23.96

 
 
 
 
Options forfeited
 
(96,174
)
 
$
10.50

-
$
51.60

 
$
22.36

 
 
 
 
Options expired
 
(140,655
)
 
$
31.80

-
$
51.60

 
$
44.64

 
 
 
 
Options exercised
 
(29,469
)
 
$
14.10

-
$
15.75

 
$
14.93

 
 
 
 
Balance December 31, 2011
 
1,288,712

 
$
10.50

-
$
36.60

 
$
20.51

 
$
1.8

 
1.53
Options granted
 
1,195,452

 
$
16.99

-
$
27.53

 
$
24.65

 
 
 
 
Options forfeited
 
(72,335
)
 
$
12.00

-
$
36.60

 
$
21.80

 
 
 
 
Options expired
 
(278,111
)
 
$
15.00

-
$
22.65

 
$
18.45

 
 
 
 
Options exercised
 
(67,299
)
 
$
10.50

-
$
13.80

 
$
12.48

 
 
 
 
Balance December 31, 2012
 
2,066,419

 
$
14.10

-
$
36.60

 
$
23.40

 
$
6.6

 
1.73
Options granted
 
748,481

 
$
20.29

-
$
26.69

 
$
22.64

 
 
 
 
Options forfeited
 
(271,883
)
 
$
14.10

-
$
36.60

 
$
22.33

 
 
 
 
Options expired
 
(286,924
)
 
$
16.35

-
$
24.30

 
$
21.48

 
 
 
 
Options exercised
 
(107,228
)
 
$
14.10

-
$
14.10

 
$
14.10

 
 
 
 
Balance December 31, 2013
 
2,148,865

 
$
14.10

-
$
36.60

 
$
23.99

 
$
31.6

 
1.46
Information regarding NQ Options outstanding is summarized below:
 
Number Outstanding
 
Weighted Average Exercise Price
Balance at October 4, 2011
765,585

 
$
10.82

Exercised
(167,395
)
 
$
10.93

Balance at December 31, 2011
598,190

 
$
10.79

Exercised
(533,717
)
 
$
10.61

Forfeited
(2,149
)
 
$
14.39

Balance at December 31, 2012
62,324

 
$
12.18

Exercised
(35,659
)
 
$
10.50

Balance at December 31, 2013
26,665

 
$
14.43

Schedule of OSO by exercise price range 
 
 
 
 
OSO Units Outstanding
at December 31, 2013
 
OSO units Exercisable
at December 31, 2013
Range of Exercise Prices
 
Number
Outstanding
 
Weighted
Average
Remaining
Life (years)
 
Weighted
Average
Initial
Strike Price
 
Number
Exercisable
 
Weighted
Average
Initial
Strike Price
$
14.10

-
$
16.99

 
227,733

 
0.53
 
$
15.90

 
—

 
$
—

$
20.29

-
$
24.30

 
1,030,279

 
1.69
 
$
21.92

 
—

 
$
—

$
26.69

-
$
36.60

 
890,853

 
1.43
 
$
28.46

 
—

 
$
—

 
 
 
 
2,148,865

 
1.46
 
$
23.99

 
—

 
$
—

The following table summarizes information concerning outstanding and exercisable NQ Options at December 31, 2013:
 
 
 
 
Options Outstanding and Exercisable
Exercise Price
 
Number Outstanding
 
Weighted Average Remaining Contractual Life (in years)
 
Weighted Average Exercise Price per Share
$
14.43

 
26,665

 
0.96 years
 
$
14.43

Total
 
26,665

 
0.96 years
 
$
14.43

Schedule of restricted stock and restricted stock units 
A summary of the retention restricted stock units granted under the MIRP is shown in the following table:
 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2012
 
—

 
$
—

Stock and units granted
 
465,000

 
$
25.92

Lapse of restrictions
 
—

 
$
—

Stock and units forfeited
 
—

 
$
—

Nonvested at December 31, 2012
 
465,000

 
$
25.92

Stock and units granted
 
—

 
$
—

Lapse of restrictions
 
(270,000
)
 
$
25.92

Stock and units forfeited
 
—

 
$
—

Nonvested at December 31, 2013
 
195,000

 
$
25.92

Income Taxes (Tables)
Components of income tax expense (benefit) 
The following table summarizes the income tax provision attributable to loss from continuing operations before income taxes for each of the three years ended December 31, 2013, 2012 and 2011:

 
 
2013
 
2012
 
2011
(dollars in millions)
Current:
 
 
 
 
 
 
United States federal
 
$
9

 
$
—

 
$
—

State
 
(1
)
 
(2
)
 
—

Foreign
 
(37
)
 
(36
)
 
(8
)
 
 
(29
)
 
(38
)
 
(8
)
Deferred, net of changes in valuation allowances:
 
 
 
 
 
 
United States federal
 
(3
)
 
(3
)
 
(30
)
State
 
—

 
—

 
(1
)
Foreign
 
(6
)
 
(7
)
 
(2
)
Income tax provision
 
$
(38
)
 
$
(48
)
 
$
(41
)
Schedule of income before income tax, domestic and foreign 
The United States and Foreign components of loss from continuing operations before income taxes for each of the three years ended December 31, 2013, 2012 and 2011 are as follows:

 
 
2013
 
2012
 
2011
(dollars in millions)
United States
 
$
(122
)
 
$
(434
)
 
$
(692
)
Foreign
 
51

 
60

 
(94
)
 
 
$
(71
)
 
$
(374
)
 
$
(786
)
Schedule of effective income tax rate reconciliation 
A reconciliation of the actual income tax provision and the tax computed by applying the U.S. federal rate (35%) to the loss before income taxes for each of the three years ended December 31, 2013, 2012 and 2011 is shown in the following table:

 
 
2013
 
2012
 
2011
 
 
(dollars in millions)
Computed tax benefit at statutory rate
 
$
25

 
$
131

 
$
275

Effect of earnings in jurisdictions outside of US
 
12

 
25

 
(13
)
Change in valuation allowance
 
(27
)
 
(145
)
 
(213
)
Permanent items
 
(44
)
 
(48
)
 
(44
)
Indefinite-lived assets
 
(3
)
 
(3
)
 
(26
)
Uncertain tax positions
 
9

 
(3
)
 
(1
)
Changes in tax rates
 
(7
)
 
(4
)
 
(3
)
Other, net
 
(3
)
 
(1
)
 
(16
)
Income tax provision
 
$
(38
)
 
$
(48
)
 
$
(41
)
Deferred tax assets and liabilities 
The components of the net deferred tax assets (liabilities) as of December 31, 2013 and 2012 are as follows:

 
 
2013
 
2012
 
 
(dollars in millions)
Deferred Tax Assets:
 
 
 
 
Accrued payroll and related benefits
 
$
132

 
$
119

Deferred revenue
 
336

 
271

Unutilized tax net operating loss carry forwards
 
4,791

 
4,611

Fixed assets and intangible assets
 
102

 
134

Intercompany loss
 
139

 
148

Other
 
144

 
162

Total Deferred Tax Assets
 
5,644

 
5,445

Deferred Tax Liabilities:
 
 
 
 
Fixed assets and intangible assets
 
(790
)
 
(702
)
Deferred revenue
 
(76
)
 
(87
)
Other
 
(33
)
 
(45
)
Foreign branch income
 
(163
)
 
(37
)
Total Deferred Tax Liabilities
 
(1,062
)
 
(871
)
Net Deferred Tax Assets before valuation allowance
 
4,582

 
4,574

Valuation Allowance
 
(4,698
)
 
(4,697
)
Net Deferred Tax Liability after Valuation Allowance
 
$
(116
)
 
$
(123
)
Balance sheet classification of deferred taxes:
 
 
 
 
Net current deferred income tax asset
 
$
9

 
$
9

Net current deferred income tax liability
 
(2
)
 
(3
)
Net non-current deferred income tax asset
 
211

 
219

Net non-current deferred income tax liability
 
(334
)
 
(348
)
Net Deferred Tax Liability after Valuation Allowance
 
$
(116
)
 
$
(123
)
Operating loss carryforwards 
As of December 31, 2013, the Company had net operating loss carry forwards of approximately $9.1 billion (net of IRC Section 382 limitation) for U.S. federal income tax purposes. These loss carry forwards expire in future years through 2033 and are subject to examination by the tax authorities until three years after the carry forwards are utilized. The U.S. federal tax loss carry forwards expire as follows (dollars in millions):

Expiring December 31,
Amount
2023
$
220

2024
1,302

2025
1,186

2026
1,064

2027
1,644

2028
482

2029
694

2030
687

2031
832

2032
726

2033
221

 
$
9,058

Uncertain tax benefits 
A reconciliation of the beginning and ending balance of unrecognized tax benefits follows (dollars in millions):

 
Amount
Balance as of January 1, 2011
$
6

Gross increases - Global Crossing tax positions of prior years
11

Gross decreases - tax positions of prior years
(1
)
Gross decreases - settlement with taxing authorities
(1
)
Balance as of December 31, 2011
15

Gross increases - tax positions of prior years
4

Gross increases - tax positions during 2012
1

Gross decreases - lapse of statute of limitations
(1
)
Gross decreases - settlement with taxing authorities
(1
)
Balance as of December 31, 2012
18

Gross increases - tax positions of prior years
—

Gross increases - tax positions during 2013
1

Gross decreases - lapse of statute of limitations
(6
)
Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2013
$
13

Segment Information (Tables)
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] 
The following table presents revenues by segment for each of the years ended December 31,

(dollars in millions)
 
2013
 
2012
 
2011
Core Network Services Revenue:
 
 
 
 
 
 
North America
 
$
3,949

 
$
3,840

 
$
2,915

EMEA
 
888

 
911

 
475

Latin America
 
754

 
712

 
176

Total Core Network Services Revenue
 
$
5,591

 
$
5,463

 
$
3,566

 
 
 
 
 
 
 
Wholesale Voice Services and Other Revenue:
 
 
 
 
 
 
North America
 
$
681

 
$
863

 
$
731

EMEA
 
31

 
40

 
34

Latin America
 
10

 
10

 
2

Total Wholesale Voice Services and Other Revenue
 
$
722

 
$
913

 
$
767

 
 
 
 
 
 
 
Total Consolidated Revenue
 
$
6,313

 
$
6,376

 
$
4,333

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] 
The following table presents Adjusted EBITDA by segment and reconciles Adjusted EBITDA to net loss for each of the years ended December 31,

(dollars in millions)
 
2013
 
2012
 
2011
Adjusted EBITDA:
 
 
 
 
 
 
North America
 
$
1,799

 
$
1,708

 
$
1,325

EMEA
 
226

 
195

 
104

Latin America
 
313

 
278

 
70

Unallocated Corporate Expenses
 
(714
)
 
(722
)
 
(541
)
Consolidated Adjusted EBITDA
 
$
1,624

 
$
1,459

 
$
958

Income Tax Expense
 
(38
)
 
(48
)
 
(41
)
Total Other Expense
 
(737
)
 
(949
)
 
(838
)
Depreciation and Amortization
 
(800
)
 
(749
)
 
(805
)
Non-Cash Stock Compensation
 
(151
)
 
(135
)
 
(101
)
Non-Cash Impairment
 
(7
)
 
—

 
—

Income from Discontinued Operations
 
—

 
—

 
71

Total Consolidated Net Loss
 
$
(109
)

$
(422
)

$
(756
)
Summary of segment information 
The following table presents capital expenditures by segment and reconciles capital expenditures to consolidated capital expenditures for each of the years ended December 31,

(dollars in millions)
 
2013
 
2012
 
2011
Capital Expenditures:
 
 
 
 
 
 
North America
 
$
398

 
$
407

 
$
353

EMEA
 
128

 
115

 
66

Latin America
 
134

 
122

 
27

Unallocated Corporate Capital Expenditures
 
100

 
99

 
48

Consolidated Capital Expenditures
 
$
760

 
$
743

 
$
494

Reconciliation of Assets from Segment to Consolidated [Table Text Block] 
The following table presents total assets by segment:

 
 
As of December 31,
(dollars in millions)
 
2013
 
2012
Assets:
 
 
 
 
North America
 
$
8,133

 
$
8,495

EMEA
 
2,030

 
2,015

Latin America
 
2,445

 
2,513

Other
 
266

 
284

Total Consolidated Assets
 
$
12,874

 
$
13,307

Commitments, Contingencies and Other Items (Tables)
Schedule of Operating Leases, Future Minimum Payments Due and Unrecorded Unconditional Purchase Obligation 
Future minimum payments for the next five years and thereafter under network and related right-of-way agreements and non-cancelable operating leases for facilities and other assets consist of the following as of December 31, 2013 (dollars in millions):

 
 
Right-of-Way
Agreements
 
Facilities and Other Assets
 
Total
 
Future Minimum Sublease Receipts
2014
 
$
119

 
$
268

 
$
387

 
$
13

2015
 
61

 
238

 
299

 
9

2016
 
56

 
183

 
239

 
8

2017
 
50

 
162

 
212

 
6

2018
 
49

 
163

 
212

 
5

Thereafter
 
365

 
553

 
918

 
6

 
 
$
700

 
$
1,567

 
$
2,267

 
$
47

Schedule of long-term purchase commitments 
The following table summarizes the Company's purchase commitments at December 31, 2013 (dollars in millions):

 
 
Total
 
Less than
1 Year
 
2 - 3
Years
 
4 - 5
Years
 
After 5
Years
Cost of Access Services
 
$
744

 
$
338

 
$
388

 
$
15

 
$
3

Third-Party Maintenance Services
 
232

 
60

 
46

 
33

 
93

 
 
$
976

 
$
398

 
$
434

 
$
48

 
$
96

Condensed Consolidating Financial Information (Tables)
Schedule of Condensed Consolidating Statements of Operations 
Condensed Consolidating Statements of Operations
For the year ended December 31, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Revenue
$
—

 
$
—

 
$
2,825

 
$
3,734

 
$
(246
)
 
$
6,313

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
1,068

 
1,649

 
(246
)
 
2,471

Depreciation and Amortization
—

 
—

 
289

 
511

 
—

 
800

Selling, General and Administrative
3

 
1

 
1,544

 
828

 
—

 
2,376

Total Costs and Expenses
3

 
1

 
2,901

 
2,988

 
(246
)
 
5,647

Operating Income (Loss)
(3
)
 
(1
)
 
(76
)
 
746

 
—

 
666

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
—

 
—

 
—

Interest expense
(151
)
 
(497
)
 
(3
)
 
2

 
—

 
(649
)
Interest income (expense) affiliates, net
1,091

 
1,706

 
(2,679
)
 
(118
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(1,039
)
 
(2,164
)
 
550

 
—

 
2,653

 
—

Other, net
—

 
(85
)
 
4

 
(7
)
 
—

 
(88
)
Total Other Expense
(99
)
 
(1,040
)
 
(2,128
)
 
(123
)
 
2,653

 
(737
)
Income (Loss) before Income Taxes
(102
)
 
(1,041
)
 
(2,204
)
 
623

 
2,653

 
(71
)
Income Tax Expense
(7
)
 
2

 
—

 
(33
)
 
—

 
(38
)
Net Income (Loss)
(109
)
 
(1,039
)
 
(2,204
)
 
590

 
2,653

 
(109
)
Other Comprehensive Loss, Net of Income Taxes
10

 
10

 
—

 
10

 
(20
)
 
10

Comprehensive Income (Loss)
$
(99
)
 
$
(1,029
)
 
$
(2,204
)
 
$
600

 
$
2,633

 
$
(99
)
Condensed Consolidating Statements of Operations
For the year ended December 31, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Revenue
$
—

 
$
—

 
$
2,657

 
$
3,975

 
$
(256
)
 
$
6,376

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
996

 
1,854

 
(248
)
 
2,602

Depreciation and Amortization
—

 
—

 
260

 
489

 
—

 
749

Selling, General and Administrative
2

 
1

 
1,559

 
896

 
(8
)
 
2,450

Total Costs and Expenses
2

 
1

 
2,815

 
3,239

 
(256
)
 
5,801

Operating Income (Loss)
(2
)
 
(1
)
 
(158
)
 
736

 
—

 
575

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
1

 
1

 
—

 
2

Interest expense
(168
)
 
(535
)
 
(3
)
 
(27
)
 
—

 
(733
)
Interest income (expense) affiliates, net
976

 
1,598

 
(2,233
)
 
(341
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(1,188
)
 
(2,066
)
 
92

 
—

 
3,162

 
—

Other, net
(39
)
 
(184
)
 
6

 
(1
)
 
—

 
(218
)
Total Other Expense
(419
)
 
(1,187
)
 
(2,137
)
 
(368
)
 
3,162

 
(949
)
Income (Loss) before Income Taxes
(421
)
 
(1,188
)
 
(2,295
)
 
368

 
3,162

 
(374
)
Income Tax Expense
(1
)
 
—

 
(4
)
 
(43
)
 
—

 
(48
)
Net Income (Loss)
(422
)
 
(1,188
)
 
(2,299
)
 
325

 
3,162

 
(422
)
Other Comprehensive Income, Net of Income Taxes
106

 
106

 
—

 
16

 
(122
)
 
106

Comprehensive Income (Loss)
$
(316
)
 
$
(1,082
)
 
$
(2,299
)
 
$
341

 
$
3,040

 
$
(316
)
Condensed Consolidating Statements of Operations
For the year ended December 31, 2011

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Revenue
$
—

 
$
—

 
$
2,367

 
$
2,196

 
$
(230
)
 
$
4,333

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
—

 
—

 
888

 
1,036

 
(218
)
 
1,706

Depreciation and Amortization
—

 
—

 
376

 
429

 
—

 
805

Selling, General and Administrative
2

 
19

 
1,270

 
491

 
(12
)
 
1,770

Total Costs and Expenses
2

 
19

 
2,534

 
1,956

 
(230
)
 
4,281

Operating Income (Loss)
(2
)
 
(19
)
 
(167
)
 
240

 
—

 
52

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(211
)
 
(471
)
 
(3
)
 
(31
)
 
—

 
(716
)
Interest income (expense) affiliates, net
865

 
1,423

 
(2,065
)
 
(223
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(1,346
)
 
(2,241
)
 
122

 
—

 
3,465

 
—

Other, net
(62
)
 
(38
)
 
9

 
(32
)
 
—

 
(123
)
Total Other Expense
(754
)
 
(1,327
)
 
(1,937
)
 
(285
)
 
3,465

 
(838
)
Loss before Income Taxes
(756
)
 
(1,346
)
 
(2,104
)
 
(45
)
 
3,465

 
(786
)
Income Tax Expense
—

 
—

 
(15
)
 
(26
)
 
—

 
(41
)
Loss from Continuing Operations
(756
)
 
(1,346
)
 
(2,119
)
 
(71
)
 
3,465

 
(827
)
Income From Discontinued Operations, Net
—

 
—

 
—

 
71

 
—

 
71

Net Loss
(756
)
 
(1,346
)
 
(2,119
)
 
—

 
3,465

 
(756
)
Other Comprehensive Income (Loss), Net of Income Taxes
18

 
18

 
—

 
—

 
(18
)
 
18

Comprehensive Loss
$
(738
)
 
$
(1,328
)
 
$
(2,119
)
 
$
—

 
$
3,447

 
$
(738
)


Schedule of Condensed Consolidating Balance Sheets 
Condensed Consolidating Balance Sheets
December 31, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
8

 
$
6

 
$
347

 
$
270

 
$
—

 
$
631

Restricted cash and securities
—

 
—

 
1

 
6

 
—

 
7

Receivables, less allowances for doubtful accounts
—

 
—

 
79

 
594

 
—

 
673

Due from affiliates
15,507

 
16,886

 
—

 
—

 
(32,393
)
 
—

Other
2

 
15

 
47

 
79

 
—

 
143

Total Current Assets
15,517

 
16,907

 
474

 
949

 
(32,393
)
 
1,454

Property, plant, and equipment, net
—

 
—

 
3,028

 
5,212

 
—

 
8,240

Restricted cash and securities
3

 
—

 
18

 
2

 
—

 
23

Goodwill and other intangibles, net
—

 
—

 
395

 
2,387

 
—

 
2,782

Investment in subsidiaries
10,039

 
27,014

 
3,735

 
—

 
(40,788
)
 
—

Other assets, net
10

 
113

 
11

 
241

 
—

 
375

Total Assets
$
25,569

 
$
44,034

 
$
7,661

 
$
8,791

 
$
(73,181
)
 
$
12,874

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
2

 
$
42

 
$
581

 
$
—

 
$
625

Current portion of long-term debt
—

 
—

 
3

 
28

 
—

 
31

Accrued payroll and employee benefits
—

 
—

 
171

 
38

 
—

 
209

Accrued interest
30

 
129

 
—

 
1

 
—

 
160

Current portion of deferred revenue
—

 
—

 
131

 
122

 
—

 
253

Due to affiliates
—

 
—

 
32,165

 
228

 
(32,393
)
 
—

Other
—

 
13

 
74

 
81

 
—

 
168

Total Current Liabilities
30

 
144

 
32,586

 
1,079

 
(32,393
)
 
1,446

Long-term debt, less current portion
1,370

 
6,905

 
17

 
39

 
—

 
8,331

Deferred revenue, less current portion
—

 
—

 
603

 
303

 
—

 
906

Other liabilities
15

 
27

 
135

 
603

 
—

 
780

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit)
24,154

 
36,958

 
(25,680
)
 
6,767

 
(40,788
)
 
1,411

Total Liabilities and Stockholders' Equity (Deficit)
$
25,569

 
$
44,034

 
$
7,661

 
$
8,791

 
$
(73,181
)
 
$
12,874

Condensed Consolidating Balance Sheets
December 31, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
253

 
$
5

 
$
386

 
$
335

 
$
—

 
$
979

Restricted cash and securities
—

 
—

 
1

 
7

 
—

 
8

Receivables, less allowances for doubtful accounts
—

 
—

 
93

 
621

 
—

 
714

Due from affiliates
14,446

 
15,709

 
—

 
7

 
(30,162
)
 
—

Other
3

 
16

 
49

 
73

 
—

 
141

Total Current Assets
14,702

 
15,730

 
529

 
1,043

 
(30,162
)
 
1,842

Property, plant, and equipment, net
—

 
—

 
2,926

 
5,273

 
—

 
8,199

Restricted cash and securities
12

 
—

 
17

 
6

 
—

 
35

Goodwill and other intangibles, net
—

 
—

 
429

 
2,404

 
—

 
2,833

Investment in subsidiaries
(11,756
)
 
(20,470
)
 
3,242

 
—

 
28,984

 
—

Other assets, net
16

 
119

 
11

 
252

 
—

 
398

Total Assets
$
2,974

 
$
(4,621
)
 
$
7,154

 
$
8,978

 
$
(1,178
)
 
$
13,307

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
1

 
$
2

 
$
53

 
$
723

 
$
—

 
$
779

Current portion of long-term debt
172

 
6

 
6

 
32

 
—

 
216

Accrued payroll and employee benefits
—

 
—

 
161

 
50

 
—

 
211

Accrued interest
45

 
163

 
—

 
1

 
—

 
209

Current portion of deferred revenue
—

 
—

 
109

 
142

 
—

 
251

Due to affiliates
—

 
—

 
30,162

 
—

 
(30,162
)
 
—

Other
1

 
1

 
29

 
105

 
—

 
136

Total Current Liabilities
219

 
172

 
30,520

 
1,053

 
(30,162
)
 
1,802

Long-term debt, less current portion
1,570

 
6,886

 
20

 
40

 
—

 
8,516

Deferred revenue, less current portion
—

 
—

 
602

 
285

 
—

 
887

Other liabilities
14

 
81

 
75

 
761

 
—

 
931

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit)
1,171

 
(11,760
)
 
(24,063
)
 
6,839

 
28,984

 
1,171

Total Liabilities and Stockholders' Equity (Deficit)
$
2,974

 
$
(4,621
)
 
$
7,154

 
$
8,978

 
$
(1,178
)
 
$
13,307

Schedule of Condensed Consolidating Statements of Cash Flows 
Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2013

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(169
)
 
$
(557
)
 
$
710

 
$
729

 
$
—

 
$
713

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(312
)
 
(448
)
 
—

 
(760
)
Change in restricted cash and securities, net
9

 
—

 
(1
)
 
5

 
—

 
13

Other
—

 
—

 
1

 
1

 
—

 
2

Net Cash Provided by (Used in) Investing Activities
9

 
—

 
(312
)
 
(442
)
 
—

 
(745
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
1,502

 
—

 
—

 
—

 
1,502

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(173
)
 
(1,586
)
 
(4
)
 
(33
)
 
—

 
(1,796
)
Increase (decrease) due from/to affiliates, net
88

 
642

 
(433
)
 
(297
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
(85
)
 
558

 
(437
)
 
(330
)
 
—

 
(294
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(22
)
 
—

 
(22
)
Net Change in Cash and Cash Equivalents
(245
)
 
1

 
(39
)
 
(65
)
 
—

 
(348
)
Cash and Cash Equivalents at Beginning of Year
253

 
5

 
386

 
335

 
—

 
979

Cash and Cash Equivalents at End of Year
$
8

 
$
6

 
$
347

 
$
270

 
$
—

 
$
631


Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2012

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(165
)
 
$
(520
)
 
$
140

 
$
1,123

 
$
—

 
$
578

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(276
)
 
(467
)
 
—

 
(743
)
Change in restricted cash and securities, net
6

 
—

 
2

 
12

 
—

 
20

Other
—

 
—

 
—

 
(2
)
 
—

 
(2
)
Net Cash Provided by (Used in) Investing Activities
6

 
—

 
(274
)
 
(457
)
 
—

 
(725
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
293

 
4,211

 
—

 
—

 
—

 
4,504

Payments on and repurchases of long-term debt, including current portion and refinancing costs
—

 
(4,161
)
 
—

 
(141
)
 
—

 
(4,302
)
Proceeds from stock options exercised
5

 
—

 
—

 
—

 
—

 
5

Increase (decrease) due from affiliates, net
112

 
469

 
(98
)
 
(483
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
410

 
519

 
(98
)
 
(624
)
 
—

 
207

Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
1

 
—

 
1

Net Change in Cash and Cash Equivalents
251

 
(1
)
 
(232
)
 
43

 
—

 
61

Cash and Cash Equivalents at Beginning of Year
2

 
6

 
618

 
292

 
—

 
918

Cash and Cash Equivalents at End of Year
$
253

 
$
5

 
$
386

 
$
335

 
$
—

 
$
979

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2011

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
$
(176
)
 
$
(428
)
 
$
293

 
$
699

 
$
—

 
$
388

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(197
)
 
(297
)
 
—

 
(494
)
Change in restricted cash and securities, net
—

 
—

 
3

 
(57
)
 
—

 
(54
)
Other
—

 
—

 
1

 
3

 
—

 
4

Investments in Global Crossing, net of cash acquired
—

 
—

 
—

 
146

 
—

 
146

Net Cash Used in Investing Activities of Continuing Operations
—

 
—

 
(193
)
 
(205
)
 
—

 
(398
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
292

 
1,586

 
—

 
—

 
—

 
1,878

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(521
)
 
(755
)
 
—

 
(341
)
 
—

 
(1,617
)
Increase (decrease) due from affiliates, net
234

 
(404
)
 
168

 
2

 
—

 
—

Net Cash Provided by (Used in) Financing Activities of Continuing Operations
5

 
427

 
168

 
(339
)
 
—

 
261

Net Cash Provided by Discontinued Operations
—

 
—

 
—

 
51

 
—

 
51

Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
—

 
—

 
—

Net Change in Cash and Cash Equivalents
(171
)
 
(1
)
 
268

 
206

 
—

 
302

Cash and Cash Equivalents at Beginning of Year
173

 
7

 
350

 
86

 
—

 
616

Cash and Cash Equivalents at End of Year
$
2

 
$
6

 
$
618

 
$
292

 
$
—

 
$
918

Unaudited Quarterly Financial Data (Tables)
Unaudited Quarterly Financial Data
 
 
Three Months Ended
 
 
March 31,
 
June 30,
 
September 30,
 
December 31,
 
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
(dollars in millions except per share data)
Revenue
 
$
1,577

 
$
1,586

 
$
1,565

 
$
1,586

 
$
1,569

 
$
1,590

 
$
1,602

 
$
1,614

Gross Margin
 
948

 
929

 
949

 
938

 
961

 
948

 
984

 
959

Operating Income
 
155

 
116

 
140

 
133

 
152

 
138

 
219

 
188

Net Income (Loss)
 
(78
)
 
(138
)
 
(24
)
 
(62
)
 
(21
)
 
(166
)
 
14

 
(56
)
Income (Loss) per share (Basic and Diluted)
 
$
(0.36
)
 
$
(0.66
)
 
$
(0.11
)
 
$
(0.29
)
 
$
(0.09
)
 
$
(0.76
)
 
$
0.06

 
$
(0.26
)
Organization and Summary of Significant Accounting Policies (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
0 Months Ended 3 Months Ended 12 Months Ended
Nov. 14, 2011
jointventures
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income
 
 
 
 
 
 
 
 
 
 
 
$ 74 
Number of joint-venture surface mines
2 
 
 
 
 
 
 
 
 
 
 
 
Period company may receive up front payments for services to be provided in the future (in years)
 
 
 
 
 
 
 
 
 
25 
 
 
USF contributions
 
 
 
 
 
 
 
 
 
194 
191 
107 
Advertising expense
 
 
 
 
 
 
 
 
 
16 
20 
15 
Bad debt expense
 
 
 
 
 
 
 
 
 
17 
15 
6 
Net Loss
 
14 
(21)
(24)
(78)
(56)
(166)
(62)
(138)
(109)
(422)
(756)
Net Loss per Share, Basic and Diluted
 
$ 0.06 
$ (0.09)
$ (0.11)
$ (0.36)
$ (0.26)
$ (0.76)
$ (0.29)
$ (0.66)
$ (0.49)
$ (1.96)
$ (5.51)
Capitalized labor and related costs associated with employee and contract labor working on capital projects
 
 
 
 
 
 
 
 
 
164 
146 
87 
Impairment of Intangible Assets (Excluding Goodwill)
 
 
 
 
 
 
 
 
 
 
 
20 
Deferred taxes on certain indefinite-lived intangible assets
 
 
 
 
 
 
 
 
 
$ 38 
$ 48 
$ 41 
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Basic Earnings Per Share
 
 
 
 
 
 
 
 
 
 
 
$ 0.54 
Sales Revenue |
Customer Concentration Risk
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of communications revenue from top ten customers
 
 
 
 
 
 
 
 
 
17.00% 
17.00% 
24.00% 
Montana
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Number of joint-venture surface mines
1 
 
 
 
 
 
 
 
 
 
 
 
Investments in Joint Venture, Percentage
50.00% 
 
 
 
 
 
 
 
 
 
 
 
Wyoming
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Number of joint-venture surface mines
1 
 
 
 
 
 
 
 
 
 
 
 
Investments in Joint Venture, Percentage
50.00% 
 
 
 
 
 
 
 
 
 
 
 
Minimum [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Finite-lived intangible assets, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
4 years 
 
 
Minimum [Member] |
Facility and Leasehold Improvements
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
10 years 
 
 
Minimum [Member] |
Network infrastructure (including fiber and conduit)
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
25 years 
 
 
Minimum [Member] |
Operating Equipment
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
4 years 
 
 
Minimum [Member] |
Office Equipment [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
2 years 
 
 
Minimum [Member] |
Expansion and improvements of communications network and customer installations
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
3 years 
 
 
Maximum
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Finite-lived intangible assets, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
12 years 
 
 
Maximum |
Facility and Leasehold Improvements
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
40 years 
 
 
Maximum |
Network infrastructure (including fiber and conduit)
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
50 years 
 
 
Maximum |
Operating Equipment
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
15 years 
 
 
Maximum |
Office Equipment [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
7 years 
 
 
Maximum |
Expansion and improvements of communications network and customer installations
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
7 years 
 
 
Maximum |
Software development
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
3 years 
 
 
Events Associated with the Amalgamation of Global Crossing (Details) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended
Oct. 4, 2011
Oct. 19, 2011
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Oct. 3, 2011
Oct. 31, 2011
Senior Secured Term Loan
Tranche B II Term Loan
Dec. 31, 2011
Senior Notes due 2019 (8.125%)
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Oct. 4, 2011
Common stock
Oct. 31, 2011
Common stock
Nov. 30, 2011
Global Crossing
Oct. 4, 2011
Global Crossing
Oct. 4, 2011
Global Crossing
2% Cumulative convertible preferred stock
Acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets
$ 651,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amalgamation stock exchange ratio (in shares)
 
 
 
 
 
 
 
 
 
16 
 
 
 
 
Preferred stock dividend rate (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
Additional principal amount of debt issued
 
 
 
 
 
 
650,000,000 
 
 
 
 
 
 
 
Proceeds from issuance of 8.125% Senior Notes due 2019 in June and July 2011
 
 
 
 
 
 
 
1,200,000,000 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
 
 
 
 
 
 
 
8.125% 
8.125% 
 
 
 
 
 
Shares issued in Amalgamation transaction (in shares)
 
 
 
 
 
 
 
 
 
 
88,530,000 
 
 
 
Reverse stock split ratio (in shares)
 
15 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of outstanding debt redeemed and refinanced
 
 
 
 
 
 
 
 
 
 
 
1,360,000,000 
 
 
Closing stock price
 
 
 
 
 
$ 21.15 
 
 
 
 
 
 
 
 
Estimated total Amalgamation transaction consideration
1,962,000,000 
 
 
 
3,400,000,000 
 
 
 
 
 
 
 
 
 
Cash Paid for Employee Income and Payroll Tax Witholdings
 
81,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Final Purchase Price Allocation [Abstract]
Text Block 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents
226,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Property and Equipment
3,098,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Goodwill
1,123,000,000 
 
2,577,000,000 
2,565,000,000 
2,541,000,000 
 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Intangible Assets not Goodwill
106,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Other Assets Acquired
5,204,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Financial Liabilities
1,554,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Other Liabilities Assumed
1,688,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Total Liabilities Assumed
3,242,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Reduction Due to Un Amortizable Deferred Revenue
 
 
 
 
 
 
 
 
 
 
 
 
77,000,000 
 
Pro Forma Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
6,335,000,000 
 
 
 
 
 
 
 
 
 
Net Loss
 
 
 
 
(727,000,000)
 
 
 
 
 
 
 
 
 
Net Loss per share (in dollars per share)
 
 
 
 
$ (3.56)
 
 
 
 
 
 
 
 
 
Acquisition related costs incurred
 
 
49,000,000 
 
 
 
 
 
 
 
 
 
 
 
Acquisition related integration costs
 
 
 
$ 81,000,000 
$ 32,000,000 
 
 
 
 
 
 
 
 
 
Final Purchase Price Allocation [Abstract] 
The following is the final allocation of the purchase price.

 
Purchase Price Allocation
 
(dollars in millions)
Assets:
 
Cash, Cash Equivalents, and Restricted Cash
$
226

Property, Plant, and Equipment
3,098

Goodwill
1,123

Identifiable Intangibles
106

Other Assets
651

Total Assets
5,204

 
 
Liabilities:
 
Long-term Debt
(1,554
)
Other Liabilities
(1,688
)
Total Liabilities
(3,242
)
Total Estimated Consideration
$
1,962

Loss Per Share (Details)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Convertible Senior Notes
 
 
 
Loss per share
 
 
 
Securities not included in computation of diluted loss per share (in millions of shares)
18 
35 
39 
Stock options, restricted stock units and warrants
 
 
 
Loss per share
 
 
 
Securities not included in computation of diluted loss per share (in millions of shares)
6 
7 
4 
Dispositions (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended
Nov. 14, 2011
jointventures
Nov. 14, 2011
Wyoming
jointventures
Nov. 14, 2011
Montana
jointventures
Dec. 31, 2011
Ownership Interest in Joint Venture Surface Mines
Consolidated Statement of Operations, Including Discontinued Operations
 
 
 
 
Number of joint-venture surface mines
2 
1 
1 
 
Investments in Joint Venture, Percentage
 
50.00% 
50.00% 
 
Discontinued Operation, Gain on Disposal of Discontinued Operation, Net of Tax
 
 
 
$ 72 
Property, Plant and Equipment (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
$ 17,329 
$ 16,558 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(9,089)
(8,359)
 
Net
8,240 
8,199 
 
Depreciation expense
727 
659 
706 
Land
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
193 
195 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
0 
0 
 
Net
193 
195 
 
Land Improvements
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
72 
73 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(47)
(43)
 
Net
25 
30 
 
Facility and Leasehold Improvements
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
2,207 
2,093 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(1,193)
(1,085)
 
Net
1,014 
1,008 
 
Network infrastructure
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
8,505 
8,342 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(3,279)
(3,058)
 
Net
5,226 
5,284 
 
Operating Equipment
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
6,057 
5,506 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(4,381)
(3,997)
 
Net
1,676 
1,509 
 
Furniture, Fixtures and Office Equipment
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
196 
206 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(168)
(155)
 
Net
28 
51 
 
Other
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
22 
21 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(21)
(21)
 
Net
1 
0 
 
Construction-in-Progress
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
77 
122 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
0 
0 
 
Net
$ 77 
$ 122 
 
Asset Retirement Obligations (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Asset Retirement Obligation, Change in Accounting Estimate
 
 
 
 
Property, Plant and Equipment, Gross
$ 16,558 
$ 17,329 
$ 16,558 
 
Selling, General and Administrative and Depreciation Expense
 
5,647 
5,801 
4,281 
Selling, General and Administrative
 
2,376 
2,450 
1,770 
Depreciation and Amortization
 
800 
749 
805 
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
 
 
Asset retirement obligation, beginning balance
 
55 
121 
 
Accretion expense
 
7 
11 
 
Liabilities settled
 
(6)
 
(4)
Asset Retirement Obligation, Revision of Estimate
(73)
0 
 
 
Effect of foreign currency rate change
 
0 
0 
 
Asset retirement obligation, ending balance
55 
56 
55 
121 
Asset Retirement Obligation Change in Estimate
 
 
 
 
Asset Retirement Obligation, Change in Accounting Estimate
 
 
 
 
Property, Plant and Equipment, Gross
(24)
 
(24)
 
Selling, General and Administrative and Depreciation Expense
 
 
(49)
 
Selling, General and Administrative
(47)
 
(47)
 
Depreciation and Amortization
(2)
 
(2)
 
Earnings Per Share, Basic and Diluted Changes in Accounting Estimates
 
 
$ 0.23 
 
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
 
 
Asset Retirement Obligation, Revision of Estimate
 
 
(73)
 
Asset Retirement Obligation, Change in Estimate Right-of-way
 
 
 
 
Asset Retirement Obligation, Change in Accounting Estimate
 
 
 
 
Selling, General and Administrative
 
 
$ (21)
 
Earnings Per Share, Basic and Diluted Changes in Accounting Estimates
 
 
$ 0.10 
 
Goodwill (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Oct. 4, 2011
Changes in carrying amount of goodwill
 
 
 
Balance at the beginning of the period
$ 2,565 
$ 2,541 
$ 1,123 
Effect of foreign currency rate change
 
24 
 
Goodwill adjustments
12 
 
 
Balance at the end of the period
$ 2,577 
$ 2,565 
$ 1,123 
Acquired Intangible Assets (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
$ 999 
$ 989 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(826)
(753)
 
Finite-Lived Intangible Assets, Net
173 
236 
 
Impairment of Intangible Assets (Excluding Goodwill)
 
 
20 
Acquired finite-lived intangible asset amortization expense
73 
90 
99 
Total Acquired Intangible Assets
 
 
 
Total Intangible assets, Gross Carrying Amount
1,031 
1,021 
 
Total intangible assets, Net
205 
268 
 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
2013
64 
 
 
2014
48 
 
 
2015
30 
 
 
2016
15 
 
 
2017
13 
 
 
Thereafter
3 
 
 
Finite-Lived Intangible Assets, Net
173 
236 
 
Vyvx Trade Name
 
 
 
Indefinite-Lived Intangible Assets:
 
 
 
Indefinite-Lived Intangible Assets, Net
32 
32 
 
Customer Contracts and Relationships
 
 
 
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
786 
776 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(678)
(633)
 
Finite-Lived Intangible Assets, Net
108 
143 
 
Acquired finite-lived intangible assets, amortization period (in years)
2 years 3 months 18 days 
 
 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
Finite-Lived Intangible Assets, Net
108 
143 
 
Trademarks
 
 
 
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
55 
55 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(31)
(17)
 
Finite-Lived Intangible Assets, Net
24 
38 
 
Acquired finite-lived intangible assets, amortization period (in years)
1 year 8 months 12 days 
 
 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
Finite-Lived Intangible Assets, Net
24 
38 
 
Patents and Developed Technology
 
 
 
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
158 
158 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(117)
(103)
 
Finite-Lived Intangible Assets, Net
41 
55 
 
Acquired finite-lived intangible assets, amortization period (in years)
3 years 
 
 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
Finite-Lived Intangible Assets, Net
$ 41 
$ 55 
 
Restructuring Charges (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 144 Months Ended 12 Months Ended
Dec. 31, 2012
Dec. 31, 2025
Dec. 31, 2013
Employee Separations
Dec. 31, 2012
Employee Separations
Dec. 31, 2011
Employee Separations
Dec. 31, 2013
Facility Closings
Dec. 31, 2012
Facility Closings
Dec. 31, 2011
Facility Closings
Restructuring charge and reserve
 
 
 
 
 
 
 
 
Restructuring reserve
 
 
$ 8 
$ 16 
 
$ 31 
$ 35 
 
Restructuring and Related Activities, Description
 
2025 
 
 
 
 
 
 
Restructuring charges
20 
 
47 
34 
11 
 
 
 
Benefit (loss) recognized as a result of lease modification
 
 
 
 
 
$ 7 
$ (2)
$ 3 
Fair Value of Financial Instruments - Liabilities, Recurring (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 65 Months Ended 12 Months Ended 24 Months Ended 11 Months Ended 12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2013
Fair Value, Measurements, Recurring
Total Carrying Value in Consolidated Balance Sheet
Dec. 31, 2012
Fair Value, Measurements, Recurring
Total Carrying Value in Consolidated Balance Sheet
Dec. 31, 2013
Fair Value, Measurements, Recurring
Unadjusted quoted prices in active markets for identical assets or liabilities (Level 1)
Dec. 31, 2012
Fair Value, Measurements, Recurring
Unadjusted quoted prices in active markets for identical assets or liabilities (Level 1)
Dec. 31, 2013
Fair Value, Measurements, Recurring
Significant Other Observable Inputs (Level 2)
Dec. 31, 2012
Fair Value, Measurements, Recurring
Significant Other Observable Inputs (Level 2)
Dec. 31, 2011
Tranche A Term Loan [Member]
Jul. 31, 2012
Tranche A Term Loan [Member]
Dec. 31, 2011
Tranche B II Term Loan Six Hundred Fifty Million Dollars [Member]
Oct. 4, 2013
Tranche B II Term Loan Six Hundred Fifty Million Dollars [Member]
Sep. 30, 2012
Tranche B III Term Loan Five Hundred Fifty Million Dollars [Member]
Dec. 31, 2011
Tranche B III Term Loan Five Hundred Fifty Million Dollars [Member]
Dec. 31, 2013
Tranche B 2016 Term Loan [Member]
Aug. 1, 2013
Tranche B 2016 Term Loan [Member]
Dec. 31, 2013
Tranche B 2019 Term Loan [Member]
Aug. 1, 2013
Tranche B 2019 Term Loan [Member]
Dec. 31, 2013
TrancheBII2019TermLoan [Member]
Oct. 4, 2013
TrancheBII2019TermLoan [Member]
Fair Value Disclosures [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value of long-term debt, including current portion
$ 8,362 
$ 8,732 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities measured on a recurring basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Description of Variable Rate Basis
 
 
 
 
 
 
 
 
LIBOR 
 
LIBOR 
 
 
LIBOR 
LIBOR 
 
LIBOR 
 
LIBOR 
 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
 
 
 
 
2.25% 
 
4.25% 
4.25% 
 
 
3.25% 
 
3.75% 
 
3.25% 
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Swap Liabilities (included in other non-current liabilities)
 
 
12 
56 
0 
0 
12 
56 
 
 
 
 
 
 
 
 
 
 
 
 
Total Derivative Liabilities Recorded at Fair Value in the Financial Statements
 
 
12 
56 
0 
0 
12 
56 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, including the current portion:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
 
2,604 
2,603 
2,633 
2,631 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Notes
 
 
5,198 
5,185 
5,673 
5,712 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible Notes
 
 
474 
846 
0 
286 
647 
748 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Leases and Other
 
 
86 
98 
0 
0 
86 
98 
 
 
 
 
 
 
 
 
 
 
 
 
Total Long-term Debt, including the current portion:
 
 
$ 8,362 
$ 8,732 
$ 8,306 
$ 8,629 
$ 733 
$ 846 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Basis Floor
 
 
 
 
 
 
 
 
 
 
1.50% 
 
 
1.50% 
1.50% 
 
1.50% 
 
1.50% 
 
Fair Value of Financial Instruments - Liabilities, Non Recurring (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended 11 Months Ended 24 Months Ended 65 Months Ended 12 Months Ended
Oct. 4, 2013
Tranche B-II 2019 Term Loan
Dec. 31, 2013
Tranche B-II 2019 Term Loan
Dec. 31, 2012
Tranche B-II 2019 Term Loan
Aug. 1, 2013
Tranche B 2019 Term Loan
Dec. 31, 2013
Tranche B 2019 Term Loan
Dec. 31, 2012
Tranche B 2019 Term Loan
Aug. 1, 2013
Tranche B 2016 Term Loan
Dec. 31, 2013
Tranche B 2016 Term Loan
Dec. 31, 2012
Tranche B 2016 Term Loan
Sep. 30, 2012
Tranche B III Term Loan
Dec. 31, 2011
Tranche B III Term Loan
Oct. 4, 2013
Tranche B II Term Loan
Dec. 31, 2011
Tranche B II Term Loan
Jul. 31, 2012
Tranche A Term Loan
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Dec. 31, 2011
Senior Notes due 2019 (11.875%)
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Dec. 31, 2013
Convertible Senior Notes due 2016 (6.5%)
Dec. 31, 2011
Convertible Senior Notes due 2016 (6.5%)
Dec. 31, 2013
Not actively traded convertible notes
Dec. 31, 2013
Convertible Senior Notes due 2015 (7.0%)
Dec. 31, 2011
Convertible Senior Notes due 2015 (7.0%)
Dec. 31, 2013
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2011
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2013
Convertible Senior Notes due 2013 (15.0%)
Mar. 31, 2012
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2011
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2013
Estimate of Fair Value, Fair Value Disclosure
Term Loans
Dec. 31, 2012
Estimate of Fair Value, Fair Value Disclosure
Actively traded convertible notes
Dec. 31, 2013
Estimate of Fair Value, Fair Value Disclosure
Not actively traded convertible notes
Dec. 31, 2012
Estimate of Fair Value, Fair Value Disclosure
Not actively traded convertible notes
Dec. 31, 2013
Fair Value, Measurements, Recurring
Estimate of Fair Value, Fair Value Disclosure
Senior Notes
Liabilities measured on a recurring basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,600 
 
 
 
 
Debt instrument, Interest spread on debt (as percent)
3.25% 
 
 
3.75% 
 
 
3.25% 
 
 
4.25% 
 
4.25% 
 
2.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, basis floor (as percent)
 
1.50% 
 
 
1.50% 
 
 
1.50% 
 
 
1.50% 
 
1.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,700 
Convertible Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
286 
647 
748 
 
Debt instrument, stated interest rate (as a percent)
 
 
4.75% 
 
 
5.25% 
 
 
4.75% 
 
 
 
 
 
11.875% 
11.875% 
8.875% 
6.50% 
6.50% 
 
7.00% 
7.00% 
7.00% 
7.00% 
15.00% 
15.00% 
15.00% 
 
 
 
 
 
Security coupon rates used for valuation, lowest interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Security coupon rates used for valuation, highest interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value of long term debt
 
 
$ 1,200 
 
 
 
 
 
$ 599 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2013
Interest Rate Swap
Dec. 31, 2012
Interest Rate Swap
Mar. 31, 2007
Parent Company [Member]
Dec. 31, 2013
Parent Company [Member]
Mar. 31, 2007
Parent Company [Member]
Interest Rate Swap, Agreement One
Mar. 31, 2007
Parent Company [Member]
Interest Rate Swap, Agreement Two
Dec. 31, 2013
Interest Expense
Dec. 31, 2012
Interest Expense
Dec. 31, 2013
Other Current Liabilities [Member]
Dec. 31, 2012
Other Noncurrent Liabilities
Derivative
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps, number of instruments
 
 
 
 
 
2 
2 
 
 
 
 
 
 
Interest rate swaps, notional amount
 
 
 
 
 
$ 1,000 
$ 1,000 
$ 500 
$ 500 
 
 
 
 
Basis of interest payment
 
 
 
 
 
three month LIBOR 
three month LIBOR 
three month LIBOR 
three month LIBOR 
 
 
 
 
Fixed interest rate paid under agreement (as a percent)
 
 
 
 
 
 
 
4.93% 
4.92% 
 
 
 
 
Loss on Cash Flow Hedge Ineffectiveness
 
 
 
 
(60)
 
 
 
 
 
 
 
 
Interest rate swap agreements - Other noncurrent liabilities
 
 
 
 
 
 
 
 
 
 
 
12 
56 
Cash flow hedging contracts, gains (losses) recognized in Other Comprehensive Income (Loss)
0 
90 
18 
 
 
 
 
 
 
 
 
 
 
Cash flow hedging contracts, amount of gains (losses) reclassified from AOCI to Interest Expense
 
 
 
 
 
 
 
 
 
0 
26 
 
 
Gain (Loss) on interest rate swap agreements not designated as hedging instruments
$ (2)
$ (64)
$ 0 
$ (2)
$ (4)
 
 
 
 
 
 
 
 
Long-Term Debt - Schedule of Long Term Debt (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2013
Tranche B III 2019 and Tranche B 2020 Term Loans [Member]
Dec. 31, 2013
Term Loans
Dec. 31, 2012
Term Loans
Dec. 31, 2013
Floating Rate Senior Notes due 2015
Dec. 31, 2012
Floating Rate Senior Notes due 2015
Dec. 31, 2011
Floating Rate Senior Notes due 2015
Dec. 31, 2013
Senior Notes due 2018 (10.0%)
Dec. 31, 2012
Senior Notes due 2018 (10.0%)
Dec. 31, 2011
Senior Notes due 2018 (10.0%)
Dec. 31, 2013
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2012
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Dec. 31, 2012
Senior Notes due 2019 (11.875%)
Dec. 31, 2011
Senior Notes due 2019 (11.875%)
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Dec. 31, 2012
Senior Notes due 2019 (9.375%)
Dec. 31, 2011
Senior Notes due 2019 (9.375%)
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Dec. 31, 2012
Senior Notes due 2019 (8.125%)
Dec. 31, 2011
Senior Notes due 2019 (8.125%)
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Dec. 31, 2012
Senior Notes due 2019 (8.875%)
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Dec. 31, 2012
Senior Notes due 2020 (8.625%)
Dec. 31, 2013
Senior Notes due 2020 (7.0%)
Dec. 31, 2012
Senior Notes due 2020 (7.0%)
Dec. 31, 2013
Senior Notes due 2021 (6.125%)
Dec. 31, 2012
Senior Notes due 2021 (6.125%)
Dec. 31, 2013
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2012
Convertible Senior Notes due 2013 (15.0%)
Mar. 31, 2012
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2011
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2013
Convertible Senior Notes due 2015 (7.0%)
Dec. 31, 2012
Convertible Senior Notes due 2015 (7.0%)
Dec. 31, 2011
Convertible Senior Notes due 2015 (7.0%)
Dec. 31, 2013
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2012
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2011
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2013
Convertible Senior Notes due 2016 (6.5%)
Dec. 31, 2012
Convertible Senior Notes due 2016 (6.5%)
Dec. 31, 2011
Convertible Senior Notes due 2016 (6.5%)
Dec. 31, 2013
Capital Leases
Dec. 31, 2012
Capital Leases
Dec. 31, 2013
Other
Dec. 31, 2012
Other
Dec. 31, 2012
Tranche B 2016 Term Loan [Member]
Dec. 31, 2012
Tranche B 2019 Term Loan [Member]
Dec. 31, 2012
TrancheBII2019TermLoan [Member]
Dec. 31, 2013
Guarantor Subsidiaries [Member]
Dec. 31, 2012
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Guarantor Subsidiaries [Member]
TrancheB2020TermLoanTotal [Member]
Aug. 16, 2013
Guarantor Subsidiaries [Member]
Tranche B 2016 Term Loan [Member]
Aug. 12, 2013
Guarantor Subsidiaries [Member]
Tranche B 2019 Term Loan [Member]
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt Obligations
$ 8,392 
$ 8,780 
 
$ 2,611 1
$ 2,614 1
$ 0 
$ 300 
 
$ 0 
$ 640 
 
$ 300 
$ 0 
$ 605 
$ 605 
 
$ 500 
$ 500 
 
$ 1,200 
$ 1,200 
 
$ 300 
$ 300 
$ 900 
$ 900 
$ 775 
$ 775 
$ 640 
$ 0 
$ 0 
$ 172 
 
 
$ 200 
$ 200 
 
$ 275 
$ 275 
 
$ 0 
$ 201 
 
$ 73 
$ 86 
$ 13 
$ 12 
 
 
 
 
 
$ 1,796 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
4.00% 
 
 
4.469% 
 
4.202% 
10.00% 
 
10.00% 
 
 
11.875% 
 
11.875% 
9.375% 
 
9.375% 
8.125% 
 
8.125% 
8.875% 
 
8.625% 
 
7.00% 
 
 
 
15.00% 
 
15.00% 
15.00% 
7.00% 
 
7.00% 
7.00% 
 
7.00% 
6.50% 
 
6.50% 
 
 
 
 
4.75% 
5.25% 
4.75% 
 
 
 
 
 
Total Unamortized (Discount) Premium
(30)
(48)
 
(7)
(11)
 
 
 
0 
(10)
 
 
 
(8)
(9)
 
(7)
(8)
 
(7)
(8)
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying Value of Debt
8,362 
8,732 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less current portion
(31)
(216)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
(6)
 
 
 
Long-Term Debt, less current portion
8,331 
8,516 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,905 
6,886 
 
 
 
Long-term Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
599 
 
1,200 
 
 
 
 
 
Repayments of Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 595.5 
$ 815.0 
Long-Term Debt - Textuals (Details) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 3 Months Ended 65 Months Ended 3 Months Ended 28 Months Ended 24 Months Ended 3 Months Ended 24 Months Ended 11 Months Ended 3 Months Ended 11 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 3 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 1 Months Ended 0 Months Ended 0 Months Ended
Dec. 31, 2013
Sep. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Jun. 26, 2009
Level 3 Communications, Inc.
Dec. 31, 2013
Level 3 Communications, Inc.
Dec. 31, 2012
Level 3 Communications, Inc.
Dec. 31, 2011
Level 3 Communications, Inc.
Sep. 30, 2013
Level 3 Financing Inc.
Dec. 31, 2013
Level 3 Financing Inc.
Mar. 31, 2007
Level 3 Financing Inc.
Dec. 31, 2013
Guarantor Subsidiaries [Member]
Dec. 31, 2012
Guarantor Subsidiaries [Member]
Dec. 31, 2011
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Senior Notes 7 Percent Due 2020 [Member]
Dec. 31, 2012
Senior Notes 7 Percent Due 2020 [Member]
Aug. 31, 2012
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Dec. 31, 2013
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Aug. 6, 2012
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Dec. 31, 2013
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Twelve Months Beginning June 1, 2016 [Member]
Dec. 31, 2013
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Twelve Months Beginning June 1, 2017
Dec. 31, 2013
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Twelve Months Beginning June 1, 2018
Dec. 31, 2013
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Prior to June 2015
days
Dec. 31, 2013
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing Inc.
Prior to June 2016
days
Dec. 31, 2013
TrancheB2020TermLoanTotal [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Term Loans
Dec. 31, 2012
Term Loans
Jun. 30, 2009
Senior Secured Term Loan 2011
Level 3 Financing Inc.
Sep. 30, 2013
Tranche A Term Loan
Sep. 30, 2012
Tranche A Term Loan
Jul. 31, 2012
Tranche A Term Loan
Jul. 31, 2012
Tranche A Term Loan
Level 3 Financing Inc.
Dec. 31, 2011
Tranche A Term Loan
Level 3 Financing Inc.
Nov. 10, 2011
Tranche A Term Loan
Level 3 Financing Inc.
Mar. 13, 2007
Tranche A Term Loan
Level 3 Financing Inc.
Dec. 31, 2011
Tranche B Term Loan
Level 3 Financing Inc.
Oct. 31, 2011
Tranche B Term Loan
Level 3 Financing Inc.
Jun. 30, 2009
Tranche B Term Loan
Level 3 Financing Inc.
Oct. 4, 2013
Tranche B II Term Loan
Dec. 31, 2013
Tranche B II Term Loan
Dec. 31, 2011
Tranche B II Term Loan
Dec. 31, 2011
Tranche B II Term Loan
Level 3 Financing Inc.
Oct. 4, 2013
Tranche B II Term Loan
Level 3 Financing Inc.
Dec. 31, 2013
Tranche B II Term Loan
Level 3 Financing Inc.
Oct. 4, 2011
Tranche B II Term Loan
Level 3 Financing Inc.
Sep. 30, 2012
Tranche B III Term Loan
Dec. 31, 2012
Tranche B III Term Loan
Dec. 31, 2011
Tranche B III Term Loan
Dec. 31, 2011
Tranche B III Term Loan
Level 3 Financing Inc.
Sep. 30, 2012
Tranche B III Term Loan
Level 3 Financing Inc.
Dec. 31, 2013
Tranche B III Term Loan
Level 3 Financing Inc.
Nov. 10, 2011
Tranche B III Term Loan
Level 3 Financing Inc.
Dec. 31, 2013
Tranche B II and Tranche B III Term Loans
Dec. 31, 2012
Tranche B II and Tranche B III Term Loans
Aug. 1, 2013
Tranche B 2016 Term Loan
Dec. 31, 2013
Tranche B 2016 Term Loan
Dec. 31, 2012
Tranche B 2016 Term Loan
Aug. 31, 2012
Tranche B 2016 Term Loan
Level 3 Financing Inc.
Aug. 1, 2013
Tranche B 2016 Term Loan
Level 3 Financing Inc.
Aug. 6, 2012
Tranche B 2016 Term Loan
Level 3 Financing Inc.
Aug. 16, 2013
Tranche B 2016 Term Loan
Guarantor Subsidiaries [Member]
Aug. 16, 2013
TrancheB2020TermLoan [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2013
TrancheB2020TermLoan [Member]
Guarantor Subsidiaries [Member]
Aug. 1, 2013
Tranche B 2019 Term Loan
Dec. 31, 2013
Tranche B 2019 Term Loan
Dec. 31, 2012
Tranche B 2019 Term Loan
Aug. 31, 2012
Tranche B 2019 Term Loan
Level 3 Financing Inc.
Aug. 1, 2013
Tranche B 2019 Term Loan
Level 3 Financing Inc.
Aug. 6, 2012
Tranche B 2019 Term Loan
Level 3 Financing Inc.
Aug. 12, 2013
Tranche B 2019 Term Loan
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Tranche B 2019 Term Loan
Guarantor Subsidiaries [Member]
Aug. 12, 2013
TrancheBIII2019TermLoan [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Tranche B 2016 Term Loan and Tranche B 2019 Term Loan
Level 3 Financing Inc.
Aug. 6, 2012
Tranche B 2016 Term Loan and Tranche B 2019 Term Loan
Level 3 Financing Inc.
Dec. 31, 2013
Tranche B-II 2019 Term Loan
Oct. 4, 2013
Tranche B-II 2019 Term Loan
Dec. 31, 2012
Tranche B-II 2019 Term Loan
Oct. 4, 2013
Tranche B-II 2019 Term Loan
Level 3 Financing Inc.
Oct. 4, 2013
Tranche B-II 2019 Term Loan
Level 3 Financing Inc.
Oct. 4, 2012
Tranche B-II 2019 Term Loan
Level 3 Financing Inc.
Aug. 6, 2012
Tranche B-II 2019 Term Loan
Level 3 Financing Inc.
Oct. 4, 2013
Tranche B-II 2019 Term Loan
Guarantor Subsidiaries [Member]
Oct. 4, 2013
TrancheB2020TermLoanAdd-on [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2012
Floating Rate Senior Notes due 2018 [Member]
Nov. 26, 2013
Floating Rate Senior Notes due 2018 [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Floating Rate Senior Notes due 2018 [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2013
Floating Rate Senior Notes due 2018 [Member]
Guarantor Subsidiaries [Member]
May 2016 through November 2016 [Member]
Dec. 31, 2013
Floating Rate Senior Notes due 2018 [Member]
Guarantor Subsidiaries [Member]
May 2015 through May 2016 [Member]
Dec. 31, 2013
Floating Rate Senior Notes due 2018 [Member]
Guarantor Subsidiaries [Member]
Prior to May 2015 [Member] [Member]
days
Dec. 31, 2013
Floating Rate Senior Notes due 2018 [Member]
Guarantor Subsidiaries [Member]
November 2016 and Thereafter [Member]
Mar. 31, 2012
Senior Notes due 2014 (9.25%)
Dec. 31, 2011
Senior Notes due 2014 (9.25%)
Feb. 28, 2012
Senior Notes due 2014 (9.25%)
Level 3 Financing Inc.
Mar. 31, 2012
Senior Notes due 2014 (9.25%)
Level 3 Financing Inc.
Dec. 31, 2011
Senior Notes due 2014 (9.25%)
Level 3 Financing Inc.
Dec. 31, 2013
Floating Rate Senior Notes due 2015
Dec. 31, 2012
Floating Rate Senior Notes due 2015
Dec. 31, 2011
Floating Rate Senior Notes due 2015
Sep. 30, 2013
Senior Notes due 2017 (8.75%)
Sep. 30, 2012
Senior Notes due 2017 (8.75%)
Dec. 31, 2011
Senior Notes due 2017 (8.75%)
Sep. 30, 2013
Senior Notes due 2017 (8.75%)
Level 3 Financing Inc.
Dec. 31, 2013
Senior Notes due 2018 (10.0%)
Dec. 31, 2012
Senior Notes due 2018 (10.0%)
Dec. 31, 2011
Senior Notes due 2018 (10.0%)
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Dec. 31, 2012
Senior Notes due 2019 (11.875%)
Dec. 31, 2011
Senior Notes due 2019 (11.875%)
Jan. 31, 2011
Senior Notes due 2019 (11.875%)
Level 3 Communications, Inc.
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Level 3 Communications, Inc.
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Level 3 Communications, Inc.
Twelve Months Beginning February 1, 2015
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Level 3 Communications, Inc.
Twelve Months Beginning February 1, 2016
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Level 3 Communications, Inc.
Twelve Months Beginning February 1, 2017
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Level 3 Communications, Inc.
Prior to February 2014
days
Dec. 31, 2013
Senior Notes due 2019 (11.875%)
Level 3 Communications, Inc.
Prior to February 2015
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Dec. 31, 2012
Senior Notes due 2019 (9.375%)
Dec. 31, 2011
Senior Notes due 2019 (9.375%)
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Level 3 Financing Inc.
Mar. 4, 2011
Senior Notes due 2019 (9.375%)
Level 3 Financing Inc.
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Level 3 Financing Inc.
Twelve Months Beginning April 1, 2015
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Level 3 Financing Inc.
Twelve Months Beginning April 1, 2016
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Level 3 Financing Inc.
Twelve Months Beginning April 1, 2017
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Level 3 Financing Inc.
Prior to April 2014
Dec. 31, 2013
Senior Notes due 2019 (9.375%)
Level 3 Financing Inc.
Prior to April 2015
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Dec. 31, 2012
Senior Notes due 2019 (8.125%)
Dec. 31, 2011
Senior Notes due 2019 (8.125%)
Jul. 31, 2011
Senior Notes due 2019 (8.125%)
Level 3 Escrow Inc [Member]
Jun. 30, 2011
Senior Notes due 2019 (8.125%)
Level 3 Escrow Inc [Member]
Apr. 10, 2012
Senior Notes due 2019 (8.125%)
Level 3 Escrow Inc [Member]
Jun. 9, 2011
Senior Notes due 2019 (8.125%)
Level 3 Escrow Inc [Member]
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Apr. 10, 2012
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Oct. 4, 2011
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Twelve Months Beginning July 1, 2015
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Twelve Months Beginning July 1, 2016
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Twelve Months Beginning July 1, 2017
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Prior to July 2014
days
Dec. 31, 2013
Senior Notes due 2019 (8.125%)
Level 3 Financing Inc.
Prior to July 2015
days
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Dec. 31, 2012
Senior Notes due 2019 (8.875%)
Aug. 31, 2012
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Jul. 31, 2012
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Twelve Months Beginning June 1, 2016 [Member]
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Twelve Months Beginning June 1, 2015
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Twelve Months Beginning June 1, 2017
Dec. 31, 2013
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Prior to June 2015
days
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Dec. 31, 2012
Senior Notes due 2020 (8.625%)
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Level 3 Financing Inc.
Jan. 13, 2012
Senior Notes due 2020 (8.625%)
Level 3 Financing Inc.
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Level 3 Financing Inc.
Twelve Months Beginning January 15, 2016
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Level 3 Financing Inc.
Twelve Months Beginning January 15, 2017
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Level 3 Financing Inc.
Twelve Months Beginning January 15, 2018
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Level 3 Financing Inc.
Prior to January 2015
days
Dec. 31, 2013
Senior Notes due 2020 (8.625%)
Level 3 Financing Inc.
Prior to January 2016
days
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Dec. 31, 2012
SeniorNotes6Point125PercentDue2021 [Member]
Nov. 14, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Twelve Months Beginning June 1, 2016
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Twelve Months Beginning November 15, 2017 [Member]
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Prior to June 2015
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Prior to June 2016
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Prior to November 2015 [Member]
days
Dec. 31, 2013
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing Inc.
Twelve Months Beginning November 15, 2018 [Member]
Mar. 31, 2012
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2013
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2012
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2011
Convertible Senior Notes due 2013 (15.0%)
Jan. 15, 2013
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
Dec. 31, 2008
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
Dec. 24, 2008
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
Dec. 31, 2008
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
Jul. 31, 2011
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
Mar. 31, 2012
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
days
Dec. 31, 2010
Convertible Senior Notes due 2013 (15.0%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Notes due 2015 (7.0%)
Dec. 31, 2012
Convertible Senior Notes due 2015 (7.0%)
Dec. 31, 2011
Convertible Senior Notes due 2015 (7.0%)
Oct. 15, 2009
Convertible Senior Notes due 2015 (7.0%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Notes due 2015 (7.0%)
Level 3 Communications, Inc.
Jun. 26, 2009
Convertible Senior Notes due 2015 (7.0%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2012
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2011
Convertible Senior Notes due 2015 Series B (7.0%)
Dec. 31, 2013
Convertible Senior Notes due 2015 Series B (7.0%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Notes due 2016 (6.5%)
Dec. 31, 2012
Convertible Senior Notes due 2016 (6.5%)
Dec. 31, 2011
Convertible Senior Notes due 2016 (6.5%)
Dec. 26, 2013
Convertible Senior Notes due 2016 (6.5%)
Level 3 Communications, Inc.
Sep. 20, 2010
Convertible Senior Notes due 2016 (6.5%)
Level 3 Communications, Inc.
Dec. 31, 2010
Convertible Senior Notes due 2016 (6.5%)
Level 3 Communications, Inc.
Sep. 30, 2010
Convertible Senior Notes due 2016 (6.5%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Notes due 2016 (6.5%)
Level 3 Communications, Inc.
Dec. 31, 2011
Convertible Senior Notes due 2016 (6.5%)
Level 3 Communications, Inc.
Dec. 31, 2011
Convertible Senior Notes due 2016 (6.5%)
Level 3 Communications, Inc.
Maximum
Dec. 24, 2008
Convertible Subordinated Notes due 2009 (6.0%)
Level 3 Communications, Inc.
Jun. 26, 2009
Convertible Subordinated Notes due 2010 (6.0%)
Level 3 Communications, Inc.
Dec. 24, 2008
Convertible Subordinated Notes due 2010 (6.0%)
Level 3 Communications, Inc.
Jun. 26, 2009
Convertible Senior Notes due 2010 (2.875%)
Level 3 Communications, Inc.
Dec. 24, 2008
Convertible Senior Notes due 2010 (2.875%)
Level 3 Communications, Inc.
Mar. 31, 2011
Convertible Senior Notes due 2011 (5.25%)
Level 3 Communications, Inc.
Dec. 31, 2011
Convertible Senior Notes due 2012 (3.5%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Notes due 2012 (3.5%)
Level 3 Communications, Inc.
Dec. 31, 2013
Convertible Senior Discount Notes due 2013 (9.0%)
Level 3 Communications, Inc.
Dec. 31, 2011
Commercial Mortgage due 2015 (9.86%)
Dec. 31, 2013
Capital Leases
Dec. 31, 2012
Capital Leases
Dec. 31, 2013
Other
Dec. 31, 2012
Other
Aug. 31, 2012
Other
Level 3 Financing Inc.
Oct. 4, 2013
London Interbank Offered Rate (LIBOR) [Member]
TrancheB2020TermLoan [Member]
Guarantor Subsidiaries [Member]
Oct. 4, 2013
London Interbank Offered Rate (LIBOR) [Member]
TrancheB2020TermLoan [Member]
Guarantor Subsidiaries [Member]
Minimum [Member]
Aug. 12, 2013
London Interbank Offered Rate (LIBOR) [Member]
TrancheBIII2019TermLoan [Member]
Guarantor Subsidiaries [Member]
Aug. 12, 2013
London Interbank Offered Rate (LIBOR) [Member]
TrancheBIII2019TermLoan [Member]
Guarantor Subsidiaries [Member]
Minimum [Member]
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Face Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 775,000,000 
 
 
 
 
 
 
 
 
 
 
$ 1,400,000,000 
 
 
 
$ 1,400,000,000 
$ 1,400,000,000 
 
 
$ 280,000,000 
 
$ 650,000,000 
 
 
 
$ 650,000,000 
 
 
$ 550,000,000 
 
 
 
$ 550,000,000 
 
 
 
 
 
 
 
 
$ 600,000,000 
 
$ 595,500,000 
 
 
 
 
 
 
$ 815,000,000 
 
 
$ 815,000,000 
 
$ 1,415,000,000 
 
 
 
 
 
 
 
 
$ 1,200,000,000 
 
 
$ 300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 605,000,000 
 
 
 
 
 
 
 
 
 
 
$ 500,000,000 
 
 
 
 
 
 
 
 
 
 
$ 1,200,000,000 
$ 600,000,000 
 
$ 1,200,000,000 
 
 
 
 
 
 
 
 
 
 
$ 300,000,000 
 
 
 
 
 
 
 
$ 900,000,000 
 
 
 
 
 
 
 
$ 640,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
$ 175,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Additional Borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
650,000,000 
 
 
 
 
 
 
550,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
600,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000,000 
 
 
 
 
 
 
 
275,000,000 
 
 
 
 
 
 
 
 
 
 
 
26,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.00% 
 
 
7.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.75% 
 
 
 
 
 
 
 
 
5.25% 
 
 
 
 
 
 
 
 
 
 
4.75% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.25% 
9.25% 
 
9.25% 
9.25% 
4.469% 
 
4.202% 
 
8.75% 
8.75% 
8.75% 
10.00% 
 
10.00% 
11.875% 
 
11.875% 
 
11.875% 
 
 
 
 
 
9.375% 
 
9.375% 
9.375% 
 
 
 
 
 
 
8.125% 
 
8.125% 
 
 
8.125% 
8.125% 
8.125% 
 
 
 
 
 
 
 
8.875% 
 
 
8.875% 
 
 
 
 
 
8.625% 
 
8.625% 
 
 
 
 
 
 
 
 
 
6.125% 
 
 
 
 
 
 
15.00% 
15.00% 
 
15.00% 
 
 
 
 
 
 
15.00% 
 
7.00% 
 
7.00% 
 
7.00% 
 
7.00% 
 
7.00% 
7.00% 
6.50% 
 
6.50% 
 
 
 
 
6.50% 
 
 
6.00% 
6.00% 
6.00% 
2.875% 
2.875% 
5.25% 
 
3.50% 
9.00% 
9.86% 
 
 
 
 
 
 
1.00% 
 
1.00% 
Debt Instrument, Redemption Price, Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Conversion, Converted Instrument, Amount
 
 
 
200,000,000 
100,000,000 
128,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
128,000,000 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Issuance Cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,000,000 
 
 
 
 
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
11,000,000 
3,000,000 
 
 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, basis floor (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.00% 
 
 
1.50% 
 
 
1.50% 
 
 
 
1.50% 
 
 
1.50% 
 
 
 
 
1.50% 
 
 
 
 
 
 
 
 
1.50% 
 
 
 
 
 
 
 
1.50% 
 
1.50% 
 
 
 
 
1.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, Interest spread on debt (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.25% 
2.25% 
 
 
 
 
8.50% 
 
4.25% 
 
 
 
4.25% 
 
 
4.25% 
 
 
 
4.25% 
 
 
 
 
3.25% 
 
 
 
3.25% 
 
 
 
 
3.75% 
 
 
 
3.75% 
 
 
 
 
 
 
 
3.25% 
 
 
3.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.00% 
 
3.00% 
 
Debt instrument, weighted average interest rate (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.40% 
9.20% 
0.40% 
4.00% 
 
 
 
 
 
Debt Instrument, Unamortized Discount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,000,000 
 
 
 
 
 
 
28,000,000 
 
 
 
 
 
 
 
3,000,000 
 
 
 
 
 
 
 
 
8,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.0025 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11,000,000 
8,000,000 
 
 
 
 
 
 
 
 
7,000,000 
10,000,000 
 
 
 
 
 
 
 
 
9,000,000 
 
 
4,000,000 
7,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Unamortized Debt Issuance Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,000,000 
15,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,000,000 
 
 
20,000,000 
 
 
 
 
 
12,000,000 
 
9,000,000 
 
 
 
 
 
 
 
 
 
13,000,000 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,000,000 
6,000,000 
 
 
 
 
 
 
 
 
8,000,000 
11,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
25,000,000 
 
32,000,000 
 
 
 
 
 
 
 
 
6,000,000 
7,000,000 
 
 
 
 
 
 
16,000,000 
20,000,000 
 
 
 
 
 
 
 
12,000,000 
12,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,000,000 
4,000,000 
 
 
 
 
 
 
 
 
6,000,000 
 
 
 
 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Net Proceeds
 
 
 
1,502,000,000 
4,504,000,000 
1,878,000,000 
 
0 
293,000,000 
292,000,000 
 
 
 
1,502,000,000 
4,211,000,000 
1,586,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26,000,000 
374,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25,500,000 
170,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of Long-term Debt
 
 
 
 
 
 
78,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
730,000,000 
 
 
 
 
 
 
 
280,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
807,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
172,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
274,000,000 
 
 
 
 
 
 
 
15,000,000 
 
 
 
 
Debt Instrument, Principal amount exchanged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
142,000,000 
 
140,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Principal amount used for conversion
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,000 
 
1,000 
1,000 
 
 
 
 
 
 
 
1,000 
 
 
 
 
 
 
 
 
 
1,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non cash accrued interest payment
 
 
 
3,000,000 
2,000,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
67,000,000 
(49,000,000)
(61,000,000)
(84,000,000)
(160,000,000)
(100,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(9,000,000)
(9,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(50,000,000)
(50,000,000)
 
 
 
 
 
 
8,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,000,000 
 
 
 
 
 
 
10,000,000 
 
 
 
1,000,000 
 
 
 
 
 
(22,000,000)
 
 
 
 
1,000,000 
 
 
(40,000,000)
(40,000,000)
 
 
56,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
56,000,000 
 
 
 
 
 
 
 
(39,000,000)
 
 
 
 
 
 
 
 
39,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
595,500,000 
 
 
 
 
 
 
 
 
815,000,000 
 
 
 
 
 
 
 
1,200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on Cash Flow Hedge Ineffectiveness
 
 
 
 
 
 
 
 
 
 
60,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption price of principal amount (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
103.50% 
101.75% 
100.00% 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
99.00% 
 
 
 
 
 
 
95.00% 
 
 
 
 
 
 
 
 
99.50% 
 
 
 
 
 
 
 
 
99.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
101.00% 
102.00% 
 
100.00% 
 
 
 
102.313% 
 
 
 
 
 
 
 
104.375% 
 
 
 
 
 
 
98.173% 
 
105.938% 
102.969% 
100.00% 
 
100.00% 
 
 
 
 
 
104.688% 
102.344% 
100.00% 
 
100.00% 
 
 
 
98.545% 
99.264% 
 
 
 
 
 
104.063% 
102.031% 
100.00% 
 
100.00% 
 
 
100.00% 
 
 
102.219% 
104.438% 
100.00% 
100.00% 
 
 
 
 
104.313% 
102.156% 
100.00% 
 
100.00% 
 
 
 
 
103.063% 
101.531% 
 
100.00% 
 
100.00% 
 
 
 
 
 
 
 
100.00% 
 
 
100.00% 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption minimum gross proceeds from equity offering ($100 million)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument issuance price as a percentage of the principal amount (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
98.001% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, Trance B 2016 Term Loan annual repayment (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, effective interest rate at end of period (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.65% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Notional Amount
 
 
 
 
 
 
 
 
 
 
 
1,000,000,000 
1,000,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption with net proceeds from equity offerings of original principal (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption price with net proceeds from equity offerings of original principal (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
107.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
111.875% 
 
 
 
 
 
 
 
 
 
109.375% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
108.125% 
 
 
 
 
 
 
 
 
 
108.875% 
 
 
 
 
 
 
 
108.625% 
 
 
 
 
 
 
 
106.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, minimum percentage of original principal amount outstanding after redemption from equity offerings (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
65.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, convertible, conversion (price per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 27 
 
 
 
 
$ 27 
 
 
 
 
 
 
 
 
 
 
 
 
$ 18.525 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt conversion, shares issued upon conversion (in shares)
 
 
5,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,000,000 
3,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,814,264 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Conversion, Inducement Shares Issued [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Paid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
29,000,000 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Conversion, Converted Instrument, Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
225 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, number of shares converted for each $1000 principal amount (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37 
 
 
37 
 
 
 
 
37 
 
 
 
 
 
 
 
 
 
54 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, issuance transactions (number)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption period maximum following receipt of proceeds from equity offerings (number of days)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
 
 
90 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption period notice minimum (number of days)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 
30 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 
30 
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
 
 
30 
30 
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption period notice maximum (number of days)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60 
60 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60 
 
 
 
 
 
 
 
 
 
60 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60 
60 
 
 
 
 
 
 
 
 
60 
 
 
 
 
 
 
 
60 
60 
 
 
 
 
 
 
 
 
60 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption from proceeds from equity offering minimum (number) of private placements equity offerings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, minimum (number of days) stock exceeds ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, (period) used to determine if conversion is to occur
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, convertible, common stock (ratio) triggering debt conversion
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.222 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future contractual maturities of long-term debt and capital leases (excluding issue discounts, premiums and fair value adjustments)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013
31,000,000 
 
 
31,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
483,000,000 
 
 
483,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
7,000,000 
 
 
7,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
6,000,000 
 
 
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
6,000,000 
 
 
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thereafter
7,859,000,000 
 
 
7,859,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt Obligations
8,392,000,000 
 
 
8,392,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
73,000,000 
 
13,000,000 
 
 
 
 
 
 
Long-term Debt, Gross
8,392,000,000 
 
 
8,392,000,000 
8,780,000,000 
 
 
 
 
 
 
 
 
 
 
 
775,000,000 
775,000,000 
 
 
 
 
 
 
 
 
1,796,000,000 
2,611,000,000 1
2,614,000,000 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
300,000,000 
0 
 
 
 
 
 
 
 
 
 
 
 
0 
300,000,000 
 
 
 
 
 
0 
640,000,000 
 
605,000,000 
605,000,000 
 
 
 
 
 
 
 
 
500,000,000 
500,000,000 
 
 
 
 
 
 
 
 
1,200,000,000 
1,200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
300,000,000 
300,000,000 
 
 
 
 
 
 
 
900,000,000 
900,000,000 
 
 
 
 
 
 
 
640,000,000 
0 
 
 
 
 
 
 
 
 
 
0 
172,000,000 
 
 
 
 
 
 
 
 
 
200,000,000 
200,000,000 
 
 
 
 
275,000,000 
275,000,000 
 
 
0 
201,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
73,000,000 
86,000,000 
13,000,000 
12,000,000 
 
 
 
 
 
Long-term Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 599,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
$ 36 
$ 26 
$ (80)
$ (98)
Other comprehensive income before reclassifications
8 
132 
64 
 
Amounts reclassified from accumulated other comprehensive income
2 
(26)
(46)
 
Accumulated Translation Adjustment [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
67 
56 
39 
55 
Other comprehensive income before reclassifications
11 
17 
(16)
 
Amounts reclassified from accumulated other comprehensive income
0 
0 
0 
 
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
0 
0 
(90)
(108)
Other comprehensive income before reclassifications
0 
25 
(28)
 
Amounts reclassified from accumulated other comprehensive income
0 
65 
46 
 
Accumulated Defined Benefit Plans Adjustment [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
(31)
(30)
(29)
(45)
Other comprehensive income before reclassifications
(3)
(4)
14 
 
Amounts reclassified from accumulated other comprehensive income
$ 2 
$ 3 
$ 2 
 
Employee Benefit Benefits and Stock-Based Compensation - Non-cash compensation expensed and capitalized (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Stock-based compensation expense
 
 
 
Stock- based compensation expense
$ 152 
$ 136 
$ 102 
Capitalized Noncash Compensation
(1)
(1)
(1)
Non-cash compensation expense
151 
135 
101 
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost
5 
9 
12 
Outperform Stock Options
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
21 
14 
10 
Restricted Stock Units and Shares
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
38 
40 
22 
401(k) Match Expense
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
24 
23 
13 
Restricted Stock Unit Bonus Grant
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
59 
46 
57 
Management Incentive and Retention Plan
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
$ 10 
$ 13 
$ 0 
Employee Benefit Benefits and Stock-Based Compensation - Outperform Stock Options (Details) (Outperform Stock Options, USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Unamortized compensation expense
$ 15 
 
 
 
 
Weighted average period over which unamortized compensation cost will be recognized (in years)
1 year 11 months 25 days 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
 
 
 
 
 
Expected Dividend Yield Rate
2.24% 
2.05% 
1.83% 
 
 
Expected Life (in years)
3 years 
3 years 
3 years 
 
 
Expected Correlation Factor
0.44 
0.32 
0.39 
 
 
Theoretical Value
101.00% 
110.00% 
120.00% 
 
 
Estimated Forfeiture Rate
15.00% 
20.00% 
20.00% 
 
 
Fair value of OSO units awarded
17 
29 
12 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding
 
 
 
 
 
Options outstanding, beginning (in shares)
2,066,419 
1,288,712 
1,056,392 
 
 
Options granted (in shares)
748,481 
1,195,452 
498,618 
 
 
Options forfeited (in shares)
(271,883)
(72,335)
(96,174)
 
 
Options expired (in shares)
(286,924)
(278,111)
(140,655)
 
 
Options exercised (in shares)
(107,228)
(67,299)
(29,469)
 
 
Options outstanding, ending (in shares)
2,148,865 
2,066,419 
1,288,712 
1,056,392 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures
 
 
 
 
 
Options, Beginning, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 14.10 
$ 10.50 
$ 10.50 
 
 
Options, Beginning, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 36.60 
$ 36.60 
$ 51.60 
 
 
Options, Beginning, Weighted Average Initial Strike Price (in dollars per share)
$ 23.40 
$ 20.51 
$ 22.05 
 
 
Options, Beginning, Aggregate Intrinsic Value
$ 6.6 
$ 1.8 
$ 0 
 
$ 31.6 
Options, Beginning, Average Remaining Contractual Term (in years)
1 year 5 months 15 days 
1 year 8 months 23 days 
1 year 6 months 11 days 
1 year 8 months 23 days 
 
Options granted, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 20.29 
$ 16.99 
$ 14.70 
 
 
Options granted, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 26.69 
$ 27.53 
$ 36.60 
 
 
Options granted, Weighted Average Initial Strike Price (in dollars per share)
$ 22.64 
$ 24.65 
 
$ 23.96 
 
Options forfeited, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 14.10 
$ 12 
$ 10.50 
 
 
Options forfeited, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 36.60 
$ 36.60 
$ 51.60 
 
 
Options forfeited, Weighted Average Initial Strike Price (in dollars per share)
$ 22.33 
$ 21.80 
$ 22.36 
 
 
Options expired, Initial Strke Price Per Unit, Minimum (in dollars per share)
$ 16.35 
$ 15 
$ 31.80 
 
 
Options expired, Initial Strke Price Per Unit, Maximum (in dollars per share)
$ 24.30 
$ 22.65 
$ 51.60 
 
 
Options expired, Weighted Average Initial Strike Price (in dollars per share)
$ 21.48 
$ 18.45 
$ 44.64 
 
 
Options exercised, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 14.10 
$ 10.50 
$ 14.10 
 
 
Options exercised, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 14.10 
$ 13.80 
$ 15.75 
 
 
Options exercised, Weighted Average Initial Strike Price (in dollars per share)
$ 14.10 
$ 12.48 
$ 14.93 
 
 
Options, Ending, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 14.1 
$ 14.10 
$ 10.50 
$ 10.50 
 
Options, Ending, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 36.60 
$ 36.60 
$ 36.60 
$ 51.60 
 
Options, Ending, Weighted Average Initial Strike Price (in dollars per share)
$ 23.99 
$ 23.40 
$ 20.51 
$ 22.05 
 
Options, Ending, Average Remaining Contractual Term (in years)
1 year 5 months 15 days 
1 year 8 months 23 days 
1 year 6 months 11 days 
1 year 8 months 23 days 
 
Prior to March 31, 2007
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Life of Award
   
 
 
 
 
On or After April 1, 2007
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Life of Award
   
 
 
 
 
Percent vested after three years
100.00% 
 
 
 
 
S and P 500 Index
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
 
 
 
 
 
Expected volatility rate
19.00% 
23.00% 
30.00% 
 
 
Level 3 Communications, Inc.
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
 
 
 
 
 
Expected volatility rate
39.00% 
39.00% 
44.00% 
 
 
Performance Range 1
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Maximum
0.00% 
 
 
 
0.00% 
Share-based Compensation Arrangement by Share-based Payment Award, Success Multiplier of Pre Multiplier Gain
0.00 
 
 
 
0.00 
Performance Range 2
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Minimum
0.00% 
 
 
 
0.00% 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Maximum
11.00% 
 
 
 
11.00% 
Share-based Compensation Arrangement by Share-based Payment Award, Success Multiplier of Pre Multiplier Gain
0.36 
 
 
 
0.36 
Performance Range 3
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Minimum
11.00% 
 
 
 
11.00% 
Share-based Compensation Arrangement by Share-based Payment Award, Success Multiplier of Pre Multiplier Gain
4.00 
 
 
 
4.00 
Employee Benefit Benefits and Stock-Based Compensation - Range of OSO Exercise Prices (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2013
Outperform Stock Options
Dec. 31, 2012
Outperform Stock Options
Dec. 31, 2011
Outperform Stock Options
Dec. 31, 2010
Outperform Stock Options
Dec. 31, 2013
Outperform Stock Options
Range, 14.10 to $20.85
Dec. 31, 2013
Outperform Stock Options
Range, $22.05 to $24.30
Dec. 31, 2013
Outperform Stock Options
Range, $27.53 to $36.60
Dec. 31, 2011
Non Qualified Stock Options
Dec. 31, 2013
Non Qualified Stock Options
Dec. 31, 2012
Non Qualified Stock Options
Oct. 4, 2011
Non Qualified Stock Options
Dec. 31, 2013
Non Qualified Stock Options
Range, $14.43
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
 
 
 
 
 
 
 
 
 
 
 
 
Options exercised, Weighted Average Initial Strike Price (in dollars per share)
$ 14.10 
$ 12.48 
$ 14.93 
 
 
 
 
$ 10.93 
$ 10.50 
$ 10.61 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number
2,148,865 
2,066,419 
1,288,712 
1,056,392 
 
 
 
598,190 
26,665 
62,324 
765,585 
 
Total realized value of OSO units
$ 1.5 
$ 0.8 
$ 0.4 
 
 
 
 
$ 1.0 
$ 1.0 
$ 6.0 
 
 
Employee Service Share-based Compensation, Cash Received from Exercise of Stock Options
 
 
 
 
 
 
 
2 
 
5 
 
 
OSO units Outstanding, Range of Exercise Prices, Minimum (in dollars per share)
 
 
 
 
$ 14.10 
$ 20.29 
$ 26.69 
 
 
 
 
 
OSO units Outstanding, Range of Exercise Prices, Maximum (in dollars per share)
 
 
 
 
$ 16.99 
$ 24.30 
$ 36.60 
 
 
 
 
 
OSO units Outstanding, Number Outstanding (in shares)
2,148,865 
 
 
 
227,733 
1,030,279 
890,853 
 
26,665 
 
 
26,665 
OSO units Outstanding, Average Remaining Contractual Term
1 year 5 months 15 days 
1 year 8 months 23 days 
1 year 6 months 11 days 
1 year 8 months 23 days 
 
 
 
 
 
 
 
 
OSO units Outstanding, Weighted Average Initial Strike Price (in dollars per share)
$ 23.99 
$ 23.40 
$ 20.51 
$ 22.05 
 
 
 
$ 10.79 
$ 14.43 
$ 12.18 
$ 10.82 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
(107,228)
(67,299)
(29,469)
 
 
 
 
(167,395)
(35,659)
(533,717)
 
 
OSO units Outstanding, Weighted Average Remaining Life (in years)
 
 
 
 
0 years 6 months 11 days 
1 year 8 months 7 days 
1 year 5 months 5 days 
 
0 years 11 months 16 days 
 
 
0 years 11 months 16 days 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value
$ 32 
$ 7 
$ 2 
 
 
 
 
 
$ 0 
 
 
 
OSO units Outstanding, Weighted Average Initial Strike Price (in dollars per share)
 
 
 
 
$ 15.90 
$ 21.92 
$ 28.46 
 
$ 14.43 
 
 
$ 14.43 
OSO units Exercisable, Number Exercisable (in shares)
0 
 
 
 
0 
0 
0 
 
 
 
 
 
OSO units Exercisable, Weighted Average Initial Strike Price (in dollars per share)
$ 0.00 
 
 
 
$ 0.00 
$ 0.00 
$ 0.00 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period
271,883 
72,335 
96,174 
 
 
 
 
 
 
2,149 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price
 
 
 
 
 
 
 
 
 
$ 14.39 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period
90,879 
0 
0 
 
 
 
 
 
 
 
 
 
Employee Benefit Benefits and Stock-Based Compensation - Restricted Stock and Units (Details) (Restricted Stock Units and Shares, USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2013
year
Dec. 31, 2012
Dec. 31, 2011
Restricted Stock Units and Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Restrictions on transfer lapse, minimum (in years)
1 
 
 
Restrictions on transfer lapse, maximum (in years)
4 
 
 
Fair value of units and shares awarded
$ 34 
$ 69 
$ 35 
Unamortized compensation expense
30 
 
 
Weighted average period over which unamortized compensation cost will be recognized (in years)
2 years 10 months 24 days 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares
 
 
 
Nonvested, Beginning balance (in shares)
3,636,976 
2,030,783 
2,021,707 
Stock and units granted (in shares)
1,617,592 
2,869,584 
1,030,676 
Lapse of restrictions (in shares)
(1,841,757)
(1,048,757)
(845,717)
Stock and units forfeited (in shares)
(488,461)
(214,634)
(175,883)
Nonvested, Ending balance (in shares)
2,924,350 
3,636,976 
2,030,783 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
 
 
 
Nonvested, Beginning balance, Weighted Average Grant Date Fair Value (in dollars per share)
$ 24.71 
$ 26.25 
$ 22.95 
Stock and units granted, Weighted Average Grant Date Fair Value (in dollars per share)
$ 21.26 
$ 24.13 
$ 33.99 
Lapse of restrictions, Weighted Average Grant Date Fair Value (in dollars per share)
$ 25.19 
$ 26.06 
$ 27.79 
Stock and units forfeited, Weighted Average Grant Date Fair Value (in dollars per share)
$ 23.10 
$ 24.92 
$ 27.06 
Nonvested, Ending balance, Weighted Average Grant Date Fair Value (in dollars per share)
$ 22.77 
$ 24.71 
$ 26.25 
Total fair value of restricted stock and restricted stock units whose restriction lapsed
$ 46 
$ 27 
$ 24 
Employee Benefit Benefits and Stock-Based Compensation - MIRP Stock and Units (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2013
Dec. 31, 2012
Non Qualified Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value
$ 1.0 
$ 1.0 
$ 6.0 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
 
 
 
Employee Service Share-based Compensation, Cash Received from Exercise of Stock Options
2 
 
5 
Management Incentive and Retention Plan
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares
 
 
 
Nonvested, Beginning balance (in shares)
 
465,000 
0 
Stock and units granted (in shares)
 
0 
465,000 
Lapse of restrictions (in shares)
 
(270,000)
0 
Stock and units forfeited (in shares)
 
0 
0 
Nonvested, Ending balance (in shares)
 
195,000 
465,000 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
 
 
 
Nonvested, Beginning balance, Weighted Average Grant Date Fair Value (in dollars per share)
 
$ 25.92 
$ 0.00 
Stock and units granted, Weighted Average Grant Date Fair Value (in dollars per share)
 
$ 0.00 
$ 25.92 
Lapse of restrictions, Weighted Average Grant Date Fair Value (in dollars per share)
 
$ 25.92 
$ 0.00 
Stock and units forfeited, Weighted Average Grant Date Fair Value (in dollars per share)
 
$ 0.00 
$ 0.00 
Nonvested, Ending balance, Weighted Average Grant Date Fair Value (in dollars per share)
 
$ 25.92 
$ 25.92 
Total fair value of restricted stock and restricted stock units whose restriction lapsed
 
12 
 
Unamortized compensation expense
 
0 
 
Cash Component of MIRP in Other Current Liabilities
 
$ 15 
 
Management Incentive and Retention Plan - Incentive Portion
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares
 
 
 
Stock and units granted (in shares)
 
429,000 
 
Employee Benefit Benefits and Stock-Based Compensation - Warrants (Details) (Warrant [Member])
Dec. 31, 2012
Warrant [Member]
 
Class of Warrant or Right
 
Warrants outstanding (in shares)
45,593 
Warrants outstanding, exercise price (in dollars per share)
73.50 
Employee Benefit Benefits and Stock-Based Compensation - Defined Contribution (Details) (401(k) Match Expense, USD $)
12 Months Ended
Dec. 31, 2013
year
Dec. 31, 2012
Dec. 31, 2011
Schedule of Defined Contribution Plans Disclosures
 
 
 
Defined Contribution Plan, Maximum Annual Contribution Per Employee
$ 17,500 
 
 
Defined Contribution Plan, Vesting Period (in years)
3 
 
 
Defined Contribution Plan, Vesting Percentage After Vesting Period
100.00% 
 
 
Defined Contribution Plan, Cost Recognized
24,000,000 
23,000,000 
13,000,000 
After March 6, 2009
 
 
 
Schedule of Defined Contribution Plans Disclosures
 
 
 
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percentage
100.00% 
 
 
Defined Contribution Plan, Employer Matching Contribution, Percentage
3.00% 
 
 
After January 1, 2012
 
 
 
Schedule of Defined Contribution Plans Disclosures
 
 
 
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percentage
100.00% 
 
 
Defined Contribution Plan, Employer Matching Contribution, Percentage
4.00% 
 
 
All Other Defined Contribution
 
 
 
Schedule of Defined Contribution Plans Disclosures
 
 
 
Defined Contribution Plan, Cost Recognized
$ 5,000,000 
$ 7,000,000 
$ 2,000,000 
Employee Benefit Benefits and Stock-Based Compensation - Defined Benefits (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Defined Benefit Plan Disclosure
 
 
Defined Benefit Plan, Fair Value of Plan Assets
$ 148 
$ 146 
Defined Benefit Plan, Benefit Obligation
165 
166 
Defined Benefit Plan, Funded Status of Plan
$ 17 
$ 20 
Employee Benefit Benefits and Stock-Based Compensation - Annual Discretionary Bonus Grant (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2013
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits
 
 
 
Accrued Bonuses, Current
$ 103 
$ 136 
$ 124 
Cash Payments for Employee Bonus
$ 50 
$ 72 
 
Expected Percent Of Bonus Paid In Stock
 
 
60.00% 
Expected Percent of Bonus Paid in Cash
 
 
40.00% 
Restricted Stock Unit Bonus Grant |
Restricted Stock Units and Shares
 
 
 
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Granted or Expected to Be Granted in Next Fiscal Period
2.1 
2.4 
 
Income Taxes - Income Tax Expense (Benefit) by Current and Deferred (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Current:
 
 
 
United States federal
$ (9)
$ 0 
$ 0 
State
1 
2 
0 
Foreign
37 
36 
8 
Current income tax provision (benefit)
29 
38 
8 
Deferred, net of changes in valuation allowances:
 
 
 
United States federal
3 
3 
30 
State
0 
0 
1 
Deferred foreign income tax expense (benefit)
6 
7 
2 
Income tax provision (benefit)
$ 38 
$ 48 
$ 41 
Income Taxes - Income (Loss) by Geographic Region (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Income Tax Disclosure [Abstract]
 
 
 
United States
$ (122)
$ (434)
$ (692)
Foreign
51 
60 
(94)
Loss Before Income Taxes
$ (71)
$ (374)
$ (786)
Income Taxes - Reconciliation of Income Tax Expense (Benefit) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Tax Reconciliation [Line Items]
 
 
 
 
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent
35.00% 
 
35.00% 
35.00% 
Effective Income Tax Rate Reconciliation, Amount [Abstract]
 
 
 
 
Computed tax benefit at statutory rate
$ (25)
$ (131)
$ (275)
 
Effects of earnings in jurisdictions outside of U.S.
(12)
(25)
13 
 
Change in valuation allowance
27 
145 
213 
 
Permanent Items
44 
48 
44 
 
Indefinite-lived assets
3 
3 
26 
 
Effective Income Tax Rate Reconciliation, Tax Contingency, Amount
9 
(3)
(1)
 
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount
(7)
(4)
(3)
 
Other, net
3 
1 
16 
 
Income tax provision (benefit)
$ 38 
$ 48 
$ 41 
 
Income Taxes - Deferred Tax Assets (Liabilities) (Details) (USD $)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Deferred Tax Assets:
 
 
Accrued payroll and related benefits
$ 132,000,000 
$ 119,000,000 
Deferred revenue
336,000,000 
271,000,000 
Unutilized tax net operating loss carry forwards
4,791,000,000 
4,611,000,000 
Fixed assets and intangible assets
102,000,000 
134,000,000 
Intercompany loss
139,000,000 
148,000,000 
Other
144,000,000 
162,000,000 
Total Deferred Tax Assets
5,644,000,000 
5,445,000,000 
Deferred Tax Liabilities:
 
 
Fixed assets and intangible assets
(790,000,000)
(702,000,000)
Deferred revenue
(76,000,000)
(87,000,000)
Other
(33,000,000)
(45,000,000)
Foreign branch income
(163,000,000)
(37,000,000)
Total Deferred Tax Liabilities
(1,062,000,000)
(871,000,000)
Net Deferred Tax Assets before valuation allowance
4,582,000,000 
4,574,000,000 
Valuation Allowance
(4,698,000,000)
(4,697,000,000)
Net Deferred Tax (Liability) Asset after Valuation Allowance
116,000,000 
123,000,000 
Net current deferred income tax asset
9,000,000 
9,000,000 
Net current deferred income tax liability
(2,000,000)
(3,000,000)
Net non-current deferred income tax asset
211,000,000 
219,000,000 
Net non-current deferred income tax liability
(334,000,000)
(348,000,000)
Operating Loss Carryforwards, increase
300,000,000 
 
U.S. Internal Revenue Service (IRS)
 
 
Deferred Tax Liabilities:
 
 
Valuation Allowance
(4,700,000,000)
 
Operating Loss Carryforwards, increase
1,000,000,000 
 
Internal Revenue Code 382, Cumulative Ownership Shift Benchmark
50.00% 
 
Internal Revenue Code 382, Cumulative Ownership Shift Period Change
5.00% 
 
Operating Loss Carryforwards
$ 9,058,000,000 
 
Income Taxes - Operating Loss Carryforward (Details) (USD $)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards, increase
$ 300,000,000 
 
Deferred Tax Assets, Valuation Allowance
4,698,000,000 
4,697,000,000 
U.S. Internal Revenue Service (IRS)
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards, increase
1,000,000,000 
 
Operating Loss Carryforwards
9,058,000,000 
 
Deferred Tax Assets, Valuation Allowance
4,700,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2023
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
220,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2024
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
1,302,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2025
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
1,186,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2026
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
1,064,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2027
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
1,644,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2028
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
482,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2029
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
694,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2030
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
687,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2031
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
832,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2032
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
726,000,000 
 
U.S. Internal Revenue Service (IRS) |
Expiring, 2033
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
221,000,000 
 
Foreign jurisdiction
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforward, Disregarded for Domestic Country Tax Purposes
6,500,000,000 
 
State jurisdiction
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating Loss Carryforwards
$ 7,200,000,000 
 
Income Taxes - Unrecognized Tax Benefits (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2014
Operating Loss Carryforwards [Line Items]
 
 
 
 
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions
$ 0 
$ 4 
$ 11 
 
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions
 
 
1 
 
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
 
Unrecognized tax benefits, Beginning balance
18 
15 
6 
 
Gross increases - prior period tax positions
(2)
 
 
 
Gross increases - tax positions during 2012
1 
1 
 
 
Gross decreases - lapse of statue of limitations
(6)
(1)
 
 
Gross decreases - settlements with taxing authorities
0 
(1)
(1)
 
Unrecognized tax benefits, Ending Balance
13 
18 
15 
 
Accrued interest and penalties in the Company's liability for uncertain tax positions
(18)
(22)
(20)
4 
Unrecognized Tax Benefits, Interest on Income Taxes Expense
(4)
 
 
 
Accrued interest and penalties related to uncertain tax positions in income tax expense in its consolidated statements of operation
 
$ 3 
$ 0 
 
Segment Information Summarized Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Available to Common Stockholders, Basic
 
 
 
 
 
 
 
 
$ (109)
$ (422)
$ (756)
Other Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
(737)
(949)
(838)
Adjusted EBITDA by Segment [Line Items]
 
 
 
 
 
 
 
 
1,624 
1,459 
958 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
38 
48 
41 
Revenue
1,602 
1,569 
1,565 
1,577 
1,614 
1,590 
1,586 
1,586 
6,313 
6,376 
4,333 
Capital expenditures
 
 
 
 
 
 
 
 
760 
743 
494 
Depreciation and amortization
 
 
 
 
 
 
 
 
(800)
(749)
(805)
Total Assets
12,874 
 
 
 
13,307 
 
 
 
12,874 
13,307 
 
Share-based Compensation
 
 
 
 
 
 
 
 
(151)
(135)
(101)
Asset Impairment Charges
 
 
 
 
 
 
 
 
(7)
0 
0 
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
0 
0 
71 
Corporate and Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment [Line Items]
 
 
 
 
 
 
 
 
(714)
(722)
(541)
Capital expenditures
 
 
 
 
 
 
 
 
100 
99 
48 
Total Assets
266 
 
 
 
284 
 
 
 
266 
284 
 
North America [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment [Line Items]
 
 
 
 
 
 
 
 
1,799 
1,708 
1,325 
Capital expenditures
 
 
 
 
 
 
 
 
398 
407 
353 
Total Assets
8,133 
 
 
 
8,495 
 
 
 
8,133 
8,495 
 
Europe [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment [Line Items]
 
 
 
 
 
 
 
 
226 
195 
104 
Capital expenditures
 
 
 
 
 
 
 
 
128 
115 
66 
Total Assets
2,030 
 
 
 
2,015 
 
 
 
2,030 
2,015 
 
Latin America [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment [Line Items]
 
 
 
 
 
 
 
 
313 
278 
70 
Capital expenditures
 
 
 
 
 
 
 
 
134 
122 
27 
Total Assets
$ 2,445 
 
 
 
$ 2,513 
 
 
 
$ 2,445 
$ 2,513 
 
Segment Information Revenue From External Customers (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
$ 1,602 
$ 1,569 
$ 1,565 
$ 1,577 
$ 1,614 
$ 1,590 
$ 1,586 
$ 1,586 
$ 6,313 
$ 6,376 
$ 4,333 
Core Network Service [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
5,591 
5,463 
3,566 
Core Network Service [Member] |
North America
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
3,949 
3,840 
2,915 
Core Network Service [Member] |
Europe
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
888 
911 
475 
Core Network Service [Member] |
Latin America
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
754 
712 
176 
Wholesale Voice Services and Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
722 
913 
767 
Wholesale Voice Services and Other [Member] |
North America
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
681 
863 
731 
Wholesale Voice Services and Other [Member] |
Europe
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
31 
40 
34 
Wholesale Voice Services and Other [Member] |
Latin America
 
 
 
 
 
 
 
 
 
 
 
Segment information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
$ 10 
$ 10 
$ 2 
Segment Information Revenue By Service Offering (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Revenue from External Customer
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 1,602 
$ 1,569 
$ 1,565 
$ 1,577 
$ 1,614 
$ 1,590 
$ 1,586 
$ 1,586 
$ 6,313 
$ 6,376 
$ 4,333 
Core Network Service
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
5,591 
5,463 
3,566 
Wholesale Voice Services and Other
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 722 
$ 913 
$ 767 
Commitments, Contingencies and Other Items - Lawsuits (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Loss Contingencies
 
Estimated Litigation Liability
$ 216 
Peruvian Tax Litigation |
Pending Litigation
 
Loss Contingencies
 
Loss Contingency, Asserted Claim
60 
Loss Contingency Accrual, Period Increase (Decrease)
28 
Peruvian Tax Litigation, Before Interest |
Pending Litigation
 
Loss Contingencies
 
Loss Contingency, Asserted Claim
26 
Peruvian Tax Litigation, Income Taxwitholding 2001 and 2002 |
Pending Litigation
 
Loss Contingencies
 
Loss Contingency, Asserted Claim
3 
Peruvian Tax Litigation, Disallowance of VAT in 2005 |
Pending Litigation
 
Loss Contingencies
 
Loss Contingency, Asserted Claim
16 
Peruvian Tax Litigation, Vat for 2001 and 2002 |
Pending Litigation
 
Loss Contingencies
 
Loss Contingency, Asserted Claim
7 
Employee Severance and Contractor Termination Disputes |
Pending Litigation
 
Loss Contingencies
 
Loss Contingency, Asserted Claim
40 
Maximum |
Brazilian Tax Claims |
Pending Litigation
 
Loss Contingencies
 
Loss Contingency, Range of Possible Loss, Portion Not Accrued
$ 60 
Commitments, Contingencies and Other Items - Other Commitments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
year
Dec. 31, 2012
Dec. 31, 2011
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Amount outstanding under letters of credit
$ 29 
$ 31 
 
Collateralized Financings
25 
29 
 
Payments under these right-of-way agreements
161 
172 
135 
Rent expense, including common area maintenance, under non-cancelable lease agreements
311 
308 
232 
Right-of-Way Agreements
 
 
 
Right-of-Way Agreements, 2013
119 
 
 
Right-of-Way Agreements, 2014
61 
 
 
Right-of-Way Agreements, 2015
56 
 
 
Right-of-Way Agreements, 2016
50 
 
 
Right-of-Way Agreements, 2017
49 
 
 
Right-of-Way Agreements, Thereafter
365 
 
 
Right-of-Way Agreements, Total
700 
 
 
Facilities
 
 
 
Facilities, 2013
268 
 
 
Facilities, 2014
238 
 
 
Facilities, 2015
183 
 
 
Facilities, 2016
162 
 
 
Facilities, 2017
163 
 
 
Facilities, Thereafter
553 
 
 
Facilities, Total
1,567 
 
 
Total
 
 
 
Right-of-Way Agreements and Facilities, 2013
387 
 
 
Right-of-Way Agreements and Facilities, 2014
299 
 
 
Right-of-Way Agreements and Facilities, 2015
239 
 
 
Right-of-Way Agreements and Facilities, 2016
212 
 
 
Right-of-Way Agreements and Facilities, 2017
212 
 
 
Right-of-Way Agreements and Facilities, Thereafter
918 
 
 
Right-of-Way Agreements and Facilities, Total
2,267 
 
 
Future Minimum Sublease Receipts
 
 
 
2013
13 
 
 
2014
9 
 
 
2015
8 
 
 
2016
6 
 
 
2017
5 
 
 
Thereafter
6 
 
 
Total
$ 47 
 
 
Period of Right-of-Way Agreements with cancelable agreements (in years)
1 
 
 
Commitments, Contingencies and Other Items - Purchase Commitments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Long-term Purchase Commitment
 
Total
$ 976 
Less than 1 Year
398 
2 - 3 Years
434 
4 - 5 Years
48 
After 5 Years
96 
Cost of Access Services
 
Long-term Purchase Commitment
 
Total
744 
Less than 1 Year
338 
2 - 3 Years
388 
4 - 5 Years
15 
After 5 Years
3 
Third Party Maintenance Services
 
Long-term Purchase Commitment
 
Total
232 
Less than 1 Year
60 
2 - 3 Years
46 
4 - 5 Years
33 
After 5 Years
$ 93 
Condensed Consolidating Financial Information - Narrative (Details) (Senior Notes due 2020 (7.0%))
Dec. 31, 2013
Long-term debt
 
Debt instrument, stated interest rate (as a percent)
7.00% 
Level 3 Financing [Member]
 
Long-term debt
 
Debt instrument, stated interest rate (as a percent)
7.00% 
Condensed Consolidating Financial Information - Statements of Operations (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 1,602 
$ 1,569 
$ 1,565 
$ 1,577 
$ 1,614 
$ 1,590 
$ 1,586 
$ 1,586 
$ 6,313 
$ 6,376 
$ 4,333 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
 
 
 
 
 
 
 
 
2,471 
2,602 
1,706 
Depreciation and Amortization
 
 
 
 
 
 
 
 
800 
749 
805 
Selling, General and Administrative
 
 
 
 
 
 
 
 
2,376 
2,450 
1,770 
Restructuring Charges
 
 
 
 
20 
 
 
 
 
 
 
Total Costs and Expenses
 
 
 
 
 
 
 
 
5,647 
5,801 
4,281 
Operating Income (Loss)
219 
152 
140 
155 
188 
138 
133 
116 
666 
575 
52 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
2 
1 
Interest expense
 
 
 
 
 
 
 
 
(649)
(733)
(716)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
0 
0 
0 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
0 
0 
0 
Other income (expense), net
 
 
 
 
 
 
 
 
(88)
(218)
(123)
Total Other Expense
 
 
 
 
 
 
 
 
(737)
(949)
(838)
Loss Before Income Taxes
 
 
 
 
 
 
 
 
(71)
(374)
(786)
Income Tax Expense
 
 
 
 
 
 
 
 
(38)
(48)
(41)
Loss from Continuing Operations
 
 
 
 
 
 
 
 
(109)
(422)
(827)
Income (Loss) from Discontinued Operations, Net
 
 
 
 
 
 
 
 
0 
0 
71 
Net Loss
14 
(21)
(24)
(78)
(56)
(166)
(62)
(138)
(109)
(422)
(756)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
10 
106 
18 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
(99)
(316)
(738)
Level 3 Communications, Inc.
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Depreciation and Amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Selling, General and Administrative
 
 
 
 
 
 
 
 
3 
2 
2 
Total Costs and Expenses
 
 
 
 
 
 
 
 
3 
2 
2 
Operating Income (Loss)
 
 
 
 
 
 
 
 
(3)
(2)
(2)
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
(151)
(168)
(211)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
1,091 
976 
865 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
(1,039)
(1,188)
(1,346)
Other income (expense), net
 
 
 
 
 
 
 
 
0 
(39)
(62)
Total Other Expense
 
 
 
 
 
 
 
 
(99)
(419)
(754)
Loss Before Income Taxes
 
 
 
 
 
 
 
 
(102)
(421)
(756)
Income Tax Expense
 
 
 
 
 
 
 
 
(7)
(1)
0 
Loss from Continuing Operations
 
 
 
 
 
 
 
 
 
 
(756)
Income (Loss) from Discontinued Operations, Net
 
 
 
 
 
 
 
 
 
 
0 
Net Loss
 
 
 
 
 
 
 
 
(109)
(422)
(756)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
10 
106 
18 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
(99)
(316)
(738)
Level 3 Financing, Inc.
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Depreciation and Amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Selling, General and Administrative
 
 
 
 
 
 
 
 
1 
1 
19 
Total Costs and Expenses
 
 
 
 
 
 
 
 
1 
1 
19 
Operating Income (Loss)
 
 
 
 
 
 
 
 
(1)
(1)
(19)
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
(497)
(535)
(471)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
1,706 
1,598 
1,423 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
(2,164)
(2,066)
(2,241)
Other income (expense), net
 
 
 
 
 
 
 
 
(85)
(184)
(38)
Total Other Expense
 
 
 
 
 
 
 
 
(1,040)
(1,187)
(1,327)
Loss Before Income Taxes
 
 
 
 
 
 
 
 
(1,041)
(1,188)
(1,346)
Income Tax Expense
 
 
 
 
 
 
 
 
2 
0 
0 
Loss from Continuing Operations
 
 
 
 
 
 
 
 
 
 
(1,346)
Income (Loss) from Discontinued Operations, Net
 
 
 
 
 
 
 
 
 
 
0 
Net Loss
 
 
 
 
 
 
 
 
(1,039)
(1,188)
(1,346)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
10 
106 
18 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
(1,029)
(1,082)
(1,328)
Level 3 Communications, LLC
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
2,825 
2,657 
2,367 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
 
 
 
 
 
 
 
 
1,068 
996 
888 
Depreciation and Amortization
 
 
 
 
 
 
 
 
289 
260 
376 
Selling, General and Administrative
 
 
 
 
 
 
 
 
1,544 
1,559 
1,270 
Total Costs and Expenses
 
 
 
 
 
 
 
 
2,901 
2,815 
2,534 
Operating Income (Loss)
 
 
 
 
 
 
 
 
(76)
(158)
(167)
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
1 
0 
Interest expense
 
 
 
 
 
 
 
 
(3)
(3)
(3)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
(2,679)
(2,233)
(2,065)
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
550 
92 
122 
Other income (expense), net
 
 
 
 
 
 
 
 
4 
6 
9 
Total Other Expense
 
 
 
 
 
 
 
 
(2,128)
(2,137)
(1,937)
Loss Before Income Taxes
 
 
 
 
 
 
 
 
(2,204)
(2,295)
(2,104)
Income Tax Expense
 
 
 
 
 
 
 
 
0 
(4)
(15)
Loss from Continuing Operations
 
 
 
 
 
 
 
 
 
 
(2,119)
Income (Loss) from Discontinued Operations, Net
 
 
 
 
 
 
 
 
 
 
0 
Net Loss
 
 
 
 
 
 
 
 
(2,204)
(2,299)
(2,119)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
0 
0 
0 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
(2,204)
(2,299)
(2,119)
Other Non-Guarantor Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
3,734 
3,975 
2,196 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
 
 
 
 
 
 
 
 
1,649 
1,854 
1,036 
Depreciation and Amortization
 
 
 
 
 
 
 
 
511 
489 
429 
Selling, General and Administrative
 
 
 
 
 
 
 
 
828 
896 
491 
Total Costs and Expenses
 
 
 
 
 
 
 
 
2,988 
3,239 
1,956 
Operating Income (Loss)
 
 
 
 
 
 
 
 
746 
736 
240 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
1 
1 
Interest expense
 
 
 
 
 
 
 
 
2 
(27)
(31)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
(118)
(341)
(223)
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
0 
0 
0 
Other income (expense), net
 
 
 
 
 
 
 
 
(7)
(1)
(32)
Total Other Expense
 
 
 
 
 
 
 
 
(123)
(368)
(285)
Loss Before Income Taxes
 
 
 
 
 
 
 
 
623 
368 
(45)
Income Tax Expense
 
 
 
 
 
 
 
 
(33)
(43)
(26)
Loss from Continuing Operations
 
 
 
 
 
 
 
 
 
 
(71)
Income (Loss) from Discontinued Operations, Net
 
 
 
 
 
 
 
 
 
 
71 
Net Loss
 
 
 
 
 
 
 
 
590 
325 
0 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
10 
16 
0 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
600 
341 
0 
Eliminations
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
(246)
(256)
(230)
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of Revenue
 
 
 
 
 
 
 
 
(246)
(248)
(218)
Depreciation and Amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Selling, General and Administrative
 
 
 
 
 
 
 
 
0 
(8)
(12)
Total Costs and Expenses
 
 
 
 
 
 
 
 
(246)
(256)
(230)
Operating Income (Loss)
 
 
 
 
 
 
 
 
0 
0 
0 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
0 
0 
0 
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
0 
0 
0 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
2,653 
3,162 
3,465 
Other income (expense), net
 
 
 
 
 
 
 
 
0 
0 
0 
Total Other Expense
 
 
 
 
 
 
 
 
2,653 
3,162 
3,465 
Loss Before Income Taxes
 
 
 
 
 
 
 
 
2,653 
3,162 
3,465 
Income Tax Expense
 
 
 
 
 
 
 
 
0 
0 
0 
Loss from Continuing Operations
 
 
 
 
 
 
 
 
 
 
3,465 
Income (Loss) from Discontinued Operations, Net
 
 
 
 
 
 
 
 
 
 
0 
Net Loss
 
 
 
 
 
 
 
 
2,653 
3,162 
3,465 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
(20)
(122)
(18)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
$ 2,633 
$ 3,040 
$ 3,447 
Condensed Consolidating Financial Information - Balance Sheets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Current Assets:
 
 
 
 
Cash and cash equivalents
$ 631 
$ 979 
$ 918 
$ 616 
Restricted cash and securities
7 
8 
 
 
Receivables, less allowances for doubtful accounts
673 
714 
 
 
Due from affiliates
0 
0 
 
 
Other
143 
141 
 
 
Total Current Assets
1,454 
1,842 
 
 
Property, Plant and Equipment, net
8,240 
8,199 
 
 
Restricted Cash and Securities
23 
35 
 
 
Goodwill and Other Intangibles Assets, net
2,782 
2,833 
 
 
Investment in Subsidiaries
0 
0 
 
 
Other Assets, net
375 
398 
 
 
Total Assets
12,874 
13,307 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
625 
779 
 
 
Current portion of long-term debt
31 
216 
 
 
Accrued payroll and employee benefits
209 
211 
 
 
Accrued interest
160 
209 
 
 
Current portion of deferred revenue
253 
251 
 
 
Due to affiliates
0 
0 
 
 
Other
168 
136 
 
 
Total Current Liabilities
1,446 
1,802 
 
 
Long-Term Debt, less current portion
8,331 
8,516 
 
 
Deferred Revenue, less current portion
906 
887 
 
 
Other Liabilities
780 
931 
 
 
Commitments and Contingencies
0 
0 
 
 
Stockholders' Equity (Deficit)
1,411 
1,171 
1,193 
(157)
Total Liabilities and Stockholders’ Equity
12,874 
13,307 
 
 
Level 3 Communications, Inc.
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
8 
253 
2 
173 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
15,507 
14,446 
 
 
Other
2 
3 
 
 
Total Current Assets
15,517 
14,702 
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
3 
12 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
10,039 
(11,756)
 
 
Other Assets, net
10 
16 
 
 
Total Assets
25,569 
2,974 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
0 
1 
 
 
Current portion of long-term debt
0 
172 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
30 
45 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
0 
0 
 
 
Other
0 
1 
 
 
Total Current Liabilities
30 
219 
 
 
Long-Term Debt, less current portion
1,370 
1,570 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
15 
14 
 
 
Stockholders' Equity (Deficit)
24,154 
1,171 
 
 
Total Liabilities and Stockholders’ Equity
25,569 
2,974 
 
 
Level 3 Financing, Inc.
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
6 
5 
6 
7 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
16,886 
15,709 
 
 
Other
15 
16 
 
 
Total Current Assets
16,907 
15,730 
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
0 
0 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
27,014 
(20,470)
 
 
Other Assets, net
113 
119 
 
 
Total Assets
44,034 
(4,621)
 
 
Current Liabilities:
 
 
 
 
Accounts payable
2 
2 
 
 
Current portion of long-term debt
0 
6 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
129 
163 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
0 
0 
 
 
Other
13 
1 
 
 
Total Current Liabilities
144 
172 
 
 
Long-Term Debt, less current portion
6,905 
6,886 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
27 
81 
 
 
Stockholders' Equity (Deficit)
36,958 
(11,760)
 
 
Total Liabilities and Stockholders’ Equity
44,034 
(4,621)
 
 
Level 3 Communications, LLC
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
347 
386 
618 
350 
Restricted cash and securities
1 
1 
 
 
Receivables, less allowances for doubtful accounts
79 
93 
 
 
Due from affiliates
0 
0 
 
 
Other
47 
49 
 
 
Total Current Assets
474 
529 
 
 
Property, Plant and Equipment, net
3,028 
2,926 
 
 
Restricted Cash and Securities
18 
17 
 
 
Goodwill and Other Intangibles Assets, net
395 
429 
 
 
Investment in Subsidiaries
3,735 
3,242 
 
 
Other Assets, net
11 
11 
 
 
Total Assets
7,661 
7,154 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
42 
53 
 
 
Current portion of long-term debt
3 
6 
 
 
Accrued payroll and employee benefits
171 
161 
 
 
Accrued interest
0 
0 
 
 
Current portion of deferred revenue
131 
109 
 
 
Due to affiliates
32,165 
30,162 
 
 
Other
74 
29 
 
 
Total Current Liabilities
32,586 
30,520 
 
 
Long-Term Debt, less current portion
17 
20 
 
 
Deferred Revenue, less current portion
603 
602 
 
 
Other Liabilities
135 
75 
 
 
Stockholders' Equity (Deficit)
(25,680)
(24,063)
 
 
Total Liabilities and Stockholders’ Equity
7,661 
7,154 
 
 
Other Non-Guarantor Subsidiaries
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
270 
335 
292 
86 
Restricted cash and securities
6 
7 
 
 
Receivables, less allowances for doubtful accounts
594 
621 
 
 
Due from affiliates
0 
7 
 
 
Other
79 
73 
 
 
Total Current Assets
949 
1,043 
 
 
Property, Plant and Equipment, net
5,212 
5,273 
 
 
Restricted Cash and Securities
2 
6 
 
 
Goodwill and Other Intangibles Assets, net
2,387 
2,404 
 
 
Investment in Subsidiaries
0 
0 
 
 
Other Assets, net
241 
252 
 
 
Total Assets
8,791 
8,978 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
581 
723 
 
 
Current portion of long-term debt
28 
32 
 
 
Accrued payroll and employee benefits
38 
50 
 
 
Accrued interest
1 
1 
 
 
Current portion of deferred revenue
122 
142 
 
 
Due to affiliates
228 
0 
 
 
Other
81 
105 
 
 
Total Current Liabilities
1,079 
1,053 
 
 
Long-Term Debt, less current portion
39 
40 
 
 
Deferred Revenue, less current portion
303 
285 
 
 
Other Liabilities
603 
761 
 
 
Stockholders' Equity (Deficit)
6,767 
6,839 
 
 
Total Liabilities and Stockholders’ Equity
8,791 
8,978 
 
 
Eliminations
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
0 
0 
0 
0 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
(32,393)
(30,162)
 
 
Other
0 
0 
 
 
Total Current Assets
(32,393)
(30,162)
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
0 
0 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
(40,788)
28,984 
 
 
Other Assets, net
0 
0 
 
 
Total Assets
(73,181)
(1,178)
 
 
Current Liabilities:
 
 
 
 
Accounts payable
0 
0 
 
 
Current portion of long-term debt
0 
0 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
0 
0 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
(32,393)
(30,162)
 
 
Other
0 
0 
 
 
Total Current Liabilities
(32,393)
(30,162)
 
 
Long-Term Debt, less current portion
0 
0 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
0 
0 
 
 
Stockholders' Equity (Deficit)
(40,788)
28,984 
 
 
Total Liabilities and Stockholders’ Equity
$ (73,181)
$ (1,178)
 
 
Condensed Consolidating Financial Information - Statements of Cash Flows (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
$ 713 
$ 578 
$ 388 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(760)
(743)
(494)
(Increase) Decrease in restricted cash and securities, net
13 
20 
(54)
Proceeds from the sale of property, plant and equipment and other assets
 
 
4 
Investment in Global Crossing, net of cash acquired
0 
0 
146 
Payments for other investing activities
2 
(2)
4 
Net Cash Used in Investing Activities in Investing Activities of Continuing Operations
(745)
(725)
(398)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
1,502.0 
4,504.0 
1,878.0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(1,796)
(4,302)
(1,617)
Proceeds from Stock Options Exercised
0 
5 
0 
Increase (decrease) due from affiliates, net
0 
0 
0 
Net Cash Provided by (Used in) Financing Activities of Continuing Operations
(294)
207 
261 
Net Cash Provided by (Used in) Discontinued Operations
0 
0 
51 
Effect of Exchange Rates on Cash and Cash Equivalents
(22)
1 
0 
Net Change in Cash and Cash Equivalents
(348)
61 
302 
Cash and Cash Equivalents at Beginning of Year
979 
918 
616 
Cash and Cash Equivalents at End of Year
631 
979 
918 
Level 3 Communications, Inc.
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
(169)
(165)
(176)
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
0 
0 
0 
(Increase) Decrease in restricted cash and securities, net
9 
6 
0 
Proceeds from the sale of property, plant and equipment and other assets
 
 
0 
Investment in Global Crossing, net of cash acquired
 
 
0 
Payments for other investing activities
0 
0 
 
Net Cash Used in Investing Activities in Investing Activities of Continuing Operations
9 
6 
0 
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
293.0 
292.0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(173)
0 
(521)
Proceeds from Stock Options Exercised
 
5 
 
Increase (decrease) due from affiliates, net
88 
112 
234 
Net Cash Provided by (Used in) Financing Activities of Continuing Operations
(85)
410 
5 
Net Cash Provided by (Used in) Discontinued Operations
 
 
0 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
(245)
251 
(171)
Cash and Cash Equivalents at Beginning of Year
253 
2 
173 
Cash and Cash Equivalents at End of Year
8 
253 
2 
Level 3 Financing, Inc.
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
(557)
(520)
(428)
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
0 
0 
0 
(Increase) Decrease in restricted cash and securities, net
0 
0 
0 
Proceeds from the sale of property, plant and equipment and other assets
 
 
0 
Investment in Global Crossing, net of cash acquired
 
 
0 
Payments for other investing activities
0 
0 
 
Net Cash Used in Investing Activities in Investing Activities of Continuing Operations
0 
0 
0 
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
1,502.0 
4,211.0 
1,586.0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(1,586)
(4,161)
(755)
Proceeds from Stock Options Exercised
 
0 
 
Increase (decrease) due from affiliates, net
642 
469 
(404)
Net Cash Provided by (Used in) Financing Activities of Continuing Operations
558 
519 
427 
Net Cash Provided by (Used in) Discontinued Operations
 
 
0 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
1 
(1)
(1)
Cash and Cash Equivalents at Beginning of Year
5 
6 
7 
Cash and Cash Equivalents at End of Year
6 
5 
6 
Level 3 Communications, LLC
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
710 
140 
293 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(312)
(276)
(197)
(Increase) Decrease in restricted cash and securities, net
(1)
2 
3 
Proceeds from the sale of property, plant and equipment and other assets
 
 
1 
Investment in Global Crossing, net of cash acquired
 
 
0 
Payments for other investing activities
1 
0 
 
Net Cash Used in Investing Activities in Investing Activities of Continuing Operations
(312)
(274)
(193)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(4)
0 
0 
Proceeds from Stock Options Exercised
 
0 
 
Increase (decrease) due from affiliates, net
(433)
(98)
168 
Net Cash Provided by (Used in) Financing Activities of Continuing Operations
(437)
(98)
168 
Net Cash Provided by (Used in) Discontinued Operations
 
 
0 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
(39)
(232)
268 
Cash and Cash Equivalents at Beginning of Year
386 
618 
350 
Cash and Cash Equivalents at End of Year
347 
386 
618 
Other Non-Guarantor Subsidiaries
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
729 
1,123 
699 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(448)
(467)
(297)
(Increase) Decrease in restricted cash and securities, net
5 
12 
(57)
Proceeds from the sale of property, plant and equipment and other assets
 
 
3 
Investment in Global Crossing, net of cash acquired
 
 
(146)
Payments for other investing activities
1 
(2)
 
Net Cash Used in Investing Activities in Investing Activities of Continuing Operations
(442)
(457)
(205)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(33)
(141)
(341)
Proceeds from Stock Options Exercised
 
0 
 
Increase (decrease) due from affiliates, net
(297)
(483)
2 
Net Cash Provided by (Used in) Financing Activities of Continuing Operations
(330)
(624)
(339)
Net Cash Provided by (Used in) Discontinued Operations
 
 
51 
Effect of Exchange Rates on Cash and Cash Equivalents
(22)
1 
0 
Net Change in Cash and Cash Equivalents
(65)
43 
206 
Cash and Cash Equivalents at Beginning of Year
335 
292 
86 
Cash and Cash Equivalents at End of Year
270 
335 
292 
Eliminations
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by (Used in) Operating Activities of Continuing Operations
0 
0 
0 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
0 
0 
0 
(Increase) Decrease in restricted cash and securities, net
0 
0 
0 
Proceeds from the sale of property, plant and equipment and other assets
 
 
0 
Investment in Global Crossing, net of cash acquired
 
 
0 
Payments for other investing activities
0 
0 
 
Net Cash Used in Investing Activities in Investing Activities of Continuing Operations
0 
0 
0 
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
0 
0 
0 
Proceeds from Stock Options Exercised
 
0 
 
Increase (decrease) due from affiliates, net
0 
0 
0 
Net Cash Provided by (Used in) Financing Activities of Continuing Operations
0 
0 
0 
Net Cash Provided by (Used in) Discontinued Operations
 
 
0 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
0 
0 
0 
Cash and Cash Equivalents at Beginning of Year
0 
0 
0 
Cash and Cash Equivalents at End of Year
$ 0 
$ 0 
$ 0 
Subsequent Events (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2013
Convertible Senior Notes due 2013 (15.0%)
Mar. 31, 2012
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2011
Convertible Senior Notes due 2013 (15.0%)
Dec. 31, 2013
Level 3 Communications, Inc.
Dec. 31, 2012
Level 3 Communications, Inc.
Dec. 31, 2011
Level 3 Communications, Inc.
Dec. 31, 2010
Level 3 Communications, Inc.
Dec. 31, 2013
Level 3 Communications, Inc.
Convertible Senior Notes due 2013 (15.0%)
Subsequent Events
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
 
 
 
 
15.00% 
15.00% 
15.00% 
 
 
 
 
15.00% 
Cash and cash equivalents
$ 631 
$ 979 
$ 918 
$ 616 
 
 
 
$ 8 
$ 253 
$ 2 
$ 173 
 
Other, net
$ (4)
$ (58)
$ (23)
 
 
 
 
 
 
 
 
 
Unaudited Quarterly Financial Data (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 1,602 
$ 1,569 
$ 1,565 
$ 1,577 
$ 1,614 
$ 1,590 
$ 1,586 
$ 1,586 
$ 6,313 
$ 6,376 
$ 4,333 
Gross Margin
984 
961 
949 
948 
959 
948 
938 
929 
 
 
 
Operating Income (Loss)
219 
152 
140 
155 
188 
138 
133 
116 
666 
575 
52 
Net Loss
14 
(21)
(24)
(78)
(56)
(166)
(62)
(138)
(109)
(422)
(756)
Net Loss per Share, Basic and Diluted
$ 0.06 
$ (0.09)
$ (0.11)
$ (0.36)
$ (0.26)
$ (0.76)
$ (0.29)
$ (0.66)
$ (0.49)
$ (1.96)
$ (5.51)
Selling, General and Administrative
 
 
 
 
 
 
 
 
2,376 
2,450 
1,770 
Restructuring Charges
 
 
 
 
20 
 
 
 
 
 
 
Depreciation expense
 
 
 
 
 
 
 
 
727 
659 
706 
Depreciation and Amortization
 
 
 
 
 
 
 
 
800 
749 
805 
Impairment of Intangible Assets (Excluding Goodwill)
 
 
 
 
 
 
 
 
 
 
20 
Loss on extinguishment of debt
67 
 
 
 
 
(49)
 
(61)
(84)
(160)
(100)
Property, Plant and Equipment, Gross
17,329 
 
 
 
16,558 
 
 
 
17,329 
16,558 
 
Long-term Debt, Gross
8,392 
 
 
 
8,780 
 
 
 
8,392 
8,780 
 
Asset Retirement Obligation, Revision of Estimate
 
 
 
 
(73)
 
 
 
0 
 
 
Debt conversion, shares issued upon conversion (in shares)
 
 
 
 
 
 
 
5,400,000 
 
 
 
TrancheBII2019TermLoan [Member]
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
10 
 
 
 
 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
 
 
 
 
4.75% 
 
 
 
 
4.75% 
 
Senior Notes 10 Point 0 Percent Due 2018 [Member]
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
56 
 
 
 
 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
10.00% 
 
 
 
 
 
 
 
10.00% 
 
10.00% 
Long-term Debt, Gross
0 
 
 
 
640 
 
 
 
0 
640 
 
Floating Rate Senior Notes due 2015 [Member]
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
1 
 
 
 
 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
4.469% 
 
 
 
 
 
 
 
4.469% 
 
4.202% 
Long-term Debt, Gross
0 
 
 
 
300 
 
 
 
0 
300 
 
Tranche B 2016 and Tranche B 2019 Term Loans [Member]
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
17 
 
 
 
 
 
 
 
 
 
Tranche A Term Loan
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
(9)
 
 
 
(9)
 
 
 
 
 
Debt Instrument, Face Amount
 
 
 
 
 
1,400.0 
 
 
 
 
 
Loss on Cash Flow Hedge Ineffectiveness
 
 
 
 
 
60 
 
 
 
 
 
Tranche B II and Tranche B III Term Loans
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
(50)
 
 
 
(50)
 
 
 
 
 
 
Tranche B II Term Loan
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Face Amount
650.0 
 
 
 
 
 
 
 
650.0 
 
 
Tranche B III Term Loan
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Face Amount
 
 
 
 
550.0 
 
 
 
 
550.0 
 
Senior Notes due 2017 (8.75%)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
(40)
 
 
 
(40)
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
 
 
 
 
 
8.75% 
 
 
 
 
8.75% 
Convertible Senior Notes due 2013 (15.0%)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
 
 
 
 
 
 
(39)
 
 
 
Debt instrument, stated interest rate (as a percent)
15.00% 
 
 
 
 
 
 
15.00% 
15.00% 
 
15.00% 
Long-term Debt, Gross
0 
 
 
 
172 
 
 
 
0 
172 
 
Senior Notes due 2014 (9.25%)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
 
 
 
 
 
 
(22)
 
 
 
Debt instrument, stated interest rate (as a percent)
 
 
 
 
 
 
 
9.25% 
 
 
9.25% 
Asset Retirement Obligation Change in Estimate
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Selling, General and Administrative
 
 
 
 
(47)
 
 
 
 
(47)
 
Depreciation and Amortization
 
 
 
 
(2)
 
 
 
 
(2)
 
Property, Plant and Equipment, Gross
 
 
 
 
(24)
 
 
 
 
(24)
 
Asset Retirement Obligation, Revision of Estimate
 
 
 
 
 
 
 
 
 
$ (73)