LEVEL 3 COMMUNICATIONS INC, 10-Q filed on 11/7/2014
Quarterly Report
Document and Entity Information Document
9 Months Ended
Sep. 30, 2014
Nov. 5, 2014
Entity Information [Line Items]
 
 
Entity Registrant Name
LEVEL 3 COMMUNICATIONS INC 
 
Entity Central Index Key
0000794323 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2014 
 
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 Common Stock, Shares Outstanding
 
335,961,229 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q3 
 
Consolidated Statements of Operations (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Revenue
$ 1,629 
$ 1,569 
$ 4,863 
$ 4,711 
Costs and Expenses:
 
 
 
 
Network Access Costs
607 
608 
1,834 
1,853 
Network Related Expenses
307 
314 
901 
916 
Depreciation and Amortization
187 
203 
558 
596 
Selling, General and Administrative Expenses
266 
292 
788 
899 
Total Costs and Expenses
1,367 
1,417 
4,081 
4,264 
Operating Income
262 
152 
782 
447 
Other Income (Expense):
 
 
 
 
Interest Income, Other
1 
0 
1 
0 
Interest expense
(159)
(165)
(459)
(501)
Loss on modification and extinguishment of debt, net
0 
(17)
0 
(17)
Other, net
(11)
23 
(49)
(13)
Total Other Expense
(169)
(159)
(507)
(531)
Income (Loss) Before Income Taxes
93 
(7)
275 
(84)
Income Tax Expense
(8)
(14)
(27)
(39)
Net Income (Loss)
$ 85 
$ (21)
$ 248 
$ (123)
Earnings Per Share, Basic
$ 0.36 
$ (0.09)
$ 1.05 
$ (0.56)
Weighted Average Number of Shares Outstanding, Basic
238,265 
222,679 
237,102 
221,198 
Earnings Per Share, Diluted
$ 0.35 
$ (0.09)
$ 1.03 
$ (0.56)
Weighted Average Number of Shares Outstanding, Diluted
242,464 
222,679 
241,458 
221,198 
Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Net Income (Loss)
$ 85 
$ (21)
$ 248 
$ (123)
Other Comprehensive Income (Loss) Before Income Taxes:
 
 
 
 
Foreign Currency Translation Adjustment
(138)
41 
(120)
(15)
Other, net
1 
1 
2 
(6)
Other Comprehensive Income (Loss), Before Income Taxes
(137)
42 
(118)
(21)
Income Tax Related to Items of Other Comprehensive Income (Loss)
0 
0 
0 
0 
Other Comprehensive Income (Loss), Net of Income Taxes
(137)
42 
(118)
(21)
Comprehensive Income (Loss)
$ (52)
$ 21 
$ 130 
$ (144)
Supplementary Stockholders' Equity Information, Changes in Accumulated Other Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Change In Accumulated Other Comprehensive Income (Loss)
 
 
 
 
Balance
$ (82)
$ 36 
$ 5 
$ 26 
Balance
$ (82)
$ 36 
$ 5 
$ 26 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Assets:
 
 
Cash and cash equivalents
$ 729 
$ 631 
Restricted cash and securities
1,020 
7 
Receivables, less allowances for doubtful accounts of $34 and $32, respectively
678 
673 
Other
173 
143 
Total Current Assets
2,600 
1,454 
Property, Plant and Equipment, net of accumulated depreciation of $9,488 and $9,089, respectively
8,268 
8,240 
Restricted Cash and Securities
21 
23 
Goodwill
2,570 
2,577 
Other Intangibles, net
154 
205 
Other Assets, net
370 
375 
Total Assets
13,983 
12,874 
Liabilities and Stockholders' Equity:
 
 
Accounts payable
607 
625 
Current portion of long-term debt
502 
31 
Accrued payroll and employee benefits
165 
209 
Accrued interest
184 
160 
Current portion of deferred revenue
244 
253 
Other
151 
168 
Total Current Liabilities
1,853 
1,446 
Long-Term Debt, less current portion
8,856 
8,331 
Deferred Revenue, less current portion
877 
906 
Other Liabilities
749 
780 
Total Liabilities
12,335 
11,463 
Commitments and Contingencies
0 
0 
Stockholders’ Equity:
 
 
Preferred stock, $.01 par value, authorized 10,000,000 shares: no shares issued or outstanding
0 
0 
Common stock, $.01 par value, authorized 343,333,333 shares in both periods; 238,374,738 issued and outstanding at September 30, 2014 and 234,688,063 issued and outstanding at December 31, 2013
2 
2 
Additional paid-in capital
14,446 
14,339 
Accumulated other comprehensive income
(82)
36 
Accumulated deficit
(12,718)
(12,966)
Total Stockholders’ Equity
1,648 
1,411 
Total Liabilities and Stockholders’ Equity
$ 13,983 
$ 12,874 
Consolidated Balance Sheets Parentheticals (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Allowance for doubtful accounts
$ 34 
$ 32 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
$ 9,488 
$ 9,089 
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
238,374,738 
234,688,063 
Common stock, shares outstanding
238,374,738 
234,688,063 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash Flows from Operating Activities:
 
 
Net Income (Loss)
$ 248 
$ (123)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
Depreciation and amortization
558 
596 
Non-cash compensation expense attributable to stock awards
48 
115 
Loss on modification and extinguishment of debt, net
0 
17 
Accretion of debt discount and amortization of debt issuance costs
27 
27 
Accrued interest on long-term debt, net
24 
(39)
Non-cash tax adjustments
(9)
0 
Deferred income taxes
2 
0 
Gain on sale of property, plant and equipment and other assets
(3)
(1)
Other, net
(19)
(34)
Changes in working capital items:
 
 
Receivables
(25)
(34)
Other current assets
(31)
(34)
Payables
(35)
(152)
Deferred revenue
(29)
(18)
Other current liabilities
9 
7 
Net Cash Provided by Operating Activities
765 
327 
Cash Flows from Investing Activities:
 
 
Capital expenditures
(608)
(571)
(Increase) decrease in restricted cash and securities, net
(10)
13 
Proceeds from Sale of Property, Plant, and Equipment and other assets
(3)
(16)
Other
(2)
(14)
Net Cash Used in Investing Activities
(617)
(556)
Cash Flows from Financing Activities:
 
 
Long-term debt borrowings, net of issuance costs
(1)
590 
Payments on and repurchases of long-term debt, including current portion and refinancing costs
(8)
(810)
Net Cash Provided by (Used in) Financing Activities
(9)
(220)
Effect of Exchange Rates on Cash and Cash Equivalents
(41)
(23)
Net Change in Cash and Cash Equivalents
98 
(472)
Cash and Cash Equivalents at Beginning of Period
631 
979 
Cash and Cash Equivalents at End of Period
729 
507 
Supplemental Disclosure of Cash Flow Information:
 
 
Cash interest paid
408 
513 
Income taxes paid, net of refunds
34 
24 
Long-Term Debt Issued and Proceeds Placed into Escrow
1,000 
0 
Capital Lease Obligations Incurred
2 
13 
Notes issued for property
$ 0 
$ 12 
Organization and Summary of Significant Accounting Policies (Notes)
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 an international 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. 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.

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.

The accompanying Consolidated Balance Sheet as of December 31, 2013, which was derived from audited Consolidated Financial Statements, and the unaudited interim Consolidated Financial Statements as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2013. In the opinion of the Company’s management, these financial statements contain all adjustments necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the interim periods presented herein. The results of operations for an interim period are not necessarily indicative of the results of operations expected for a full fiscal year.

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, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported period. Actual results could differ from these estimates under different assumptions or conditions and such differences could be material.

Property, Plant and Equipment

In connection with its periodic review of the estimated useful lives of property, plant and equipment, the Company may determine that the period it expects to use certain assets is longer than the remaining originally estimated useful lives. The Company completed its most recent evaluation in the first quarter 2014 and revised its estimated useful lives for: IP equipment from its historical estimate of four years to a revised estimate of seven years; racks and cabinets from its historical estimate of seven years to a revised estimate of 15 years; and facility equipment from its historical estimate of 10 years to its revised estimate of 15 years. In determining the change in estimated useful lives, the Company, with input from its engineering team, considered its historical usage patterns and retirements, estimates of technological obsolescence and expected usage and maintenance. The change in the estimated useful lives of the Company’s property, plant and equipment was accounted for as a change in accounting estimate on a prospective basis effective January 1, 2014 under the accounting standard related to changes in accounting estimates.

The carrying values of assets subject to these revisions were (in millions):

 
January 1, 2014
IP Equipment
$
222

Racks and Cabinets
114

Facility Equipment
151

 
$
487


The change in estimated useful lives of the Company’s property, plant and equipment resulted in less depreciation expense than would have otherwise been recorded and in the following increase in net income and net income per share for the nine months ended September 30, 2014 (in millions, except per share amounts):

Net Income
$
75

Basic Net Income per Share
$
0.32

Diluted Net Income per Share
$
0.31

 
Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. Under the new guidance, a discontinued operation is defined as a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The revised guidance will affect the way entities identify and disclose information about disposal transactions and is effective prospectively for fiscal years beginning after December 15, 2014, 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.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those years. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its Consolidated Financial Statements and related disclosures and has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which explicitly requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated results of operations or financial condition.

Disaggregation of Network Related Expenses; Change in Description of Cost of Revenue to Network Access Costs

Historically, the Company has included "network related expenses" including facility rent, utilities, maintenance and other costs, each related to the operation of Level 3's communications network, as well as salaries, wages and related benefits (including non-cash stock-based compensation expenses) associated with personnel who are responsible for the delivery of services as well as operation and maintenance of its communications network, and accretion expense on asset retirement obligations, but excluding depreciation and amortization, within the line item "Selling, General and Administrative Expenses" in its Consolidated Statement of Operations. Beginning with the third quarter 2014, these network related expenses will be reported under a separate line item, “Network Related Expenses,” in the Company’s Consolidated Statement of Operations. Beginning with the third quarter 2014, “Selling General and Administrative Expenses” include the salaries, wages and related benefits (including non-cash, stock-based compensation expenses) and the related costs of corporate and sales personnel, travel, insurance, non-network related rent, advertising and other administrative expenses.

In addition, the Company has changed the description of “Cost of Revenue” in its Consolidated Statement of Operations to “Network Access Costs.” Network Access Costs include leased capacity costs, right-of-way costs, access charges, satellite transponder lease costs and other third party costs directly attributable to providing access to customer locations from the Level 3 network. Network Access Costs exclude Network Related Expenses, and depreciation and amortization. Network Access Costs do not include any employee expenses or impairment expenses; these expenses are allocated to Network Related Expenses or Selling, General and Administrative Expenses.

The changes outlined above do not affect the Company’s previously reported Consolidated Total Costs and Expenses, Operating Income, Net Loss or Loss per Share in the Consolidated Statement of Operations, or any items reported in the Consolidated Balance Sheets, Consolidated Statements of Comprehensive Loss, Cash Flows or Changes in Stockholders’ Equity (Deficit).

The following table reflects on an unaudited basis the change of the description of "Cost of Revenue" to "Network Access Costs" and the disaggregation of "Network Related Expenses" from "Selling, General and Administrative Expenses" for the three and nine months ended September 30, 2013 in the Consolidated Statements of Operations, assuming the changes discussed above were in effect for the entire period reported below.

(dollars in millions)
As Previously Reported

Adjustment

Revised Reporting (1)






Three Months Ended September 30, 2013





Cost of Revenue
$
608


$
(608
)

$
—

Network Access Costs
—


608


608

Network Related Expenses
—


314


314

Selling, General and Administrative Expenses
606


(314
)

292

Total Costs and Expenses
1,417


—


1,417







Nine Months Ended September 30, 2013





Cost of Revenue
$
1,853


$
(1,853
)

$
—

Network Access Costs
—


1,853


1,853

Network Related Expenses
—


916


916

Selling, General and Administrative Expenses
1,815


(916
)

899

Total Costs and Expenses
4,264


—


4,264


(1) The description of "Cost of Revenue" has been changed to "Network Access Costs" and the presentation of "Network Related Expenses" has been disaggregated from "Selling, General and Administrative Expenses" in the Consolidated Statements of Operations for the three and nine months ended September 30, 2013.

As a result of the above, the Company also revised the Condensed Consolidating Statements of Operations for the three and nine months ended September 30, 2013 in Note 11 — Condensed Consolidating Financial Information.
Events Associated with the Merger of tw telecom (Notes)
Business Combination Disclosure [Text Block]
Events Associated with the Merger of tw telecom inc.

On October 31, 2014, the Company and two of its subsidiaries completed the merger with tw telecom inc. (“tw telecom”) and tw telecom became a wholly owned subsidiary of the Company through a tax-free, stock and cash reorganization (the "Merger"). As a result of the Merger, (1) each issued and outstanding share of common stock of tw telecom was exchanged for 0.7 shares of Level 3 common stock and $10 in cash ( together the "merger consideration"); (2) the outstanding stock options were canceled and the holders received the merger consideration, net of aggregate per share exercise price; (3) each restricted stock unit award was canceled and the holders received the merger consideration; and (4) each restricted stock unit was immediately vested and canceled and holders received the merger consideration.

In connection with the closing of the Merger, Level 3 Financing amended its existing credit agreement to incur an additional $2 billion of borrowings through an additional Tranche (the "Tranche B 2022 Term Loan"). The aggregate net proceeds of Level 3 Financing's Tranche B 2022 Term Loan issued in October 2014 were used to finance the cash portion of the merger consideration payable to tw telecom's stockholders and to refinance certain existing indebtedness of tw telecom, including fees and premiums, in connection with the closing of the Merger (see Note 6 — Long-Term Debt for additional information). In addition, the $1.0 billion of proceeds from the issuance of 5.375% Senior Notes due 2022 raised in August 2014 (see Note 6 — Long-Term Debt) by an indirect, wholly owned subsidiary were deposited into an escrow account. On October 31, 2014, following the consummation of the Merger and the satisfaction of certain escrow release conditions, the 5.375% Senior Notes were assumed by Level 3 Financing and the funds were released from the escrow account. The net proceeds from the 5.375% Senior Notes were used to finance the cash portion of the merger consideration payable to tw telecom stockholders and to refinance certain existing indebtedness of tw telecom, including fees and premiums, in connection with the closing of the Merger.

On October 30, 2014, the Company increased the number of authorized shares of common stock by 100,000,000 shares to 433,333,333. As a result of the Merger, the Company issued approximately 96.9 million shares of Level 3 common stock to former holders of tw telecom common shares, stock options, restricted stock awards and restricted stock units. In addition, Level 3 called for redemption and discharged or repaid approximately $1.793 billion of tw telecom's outstanding consolidated debt. The shares of tw telecom common stock, which previously traded under the symbol "TWTC", ceased trading on the NASDAQ Global Select Market ("NASDAQ") at the close of trading on October 31, 2014 and were delisted from NASDAQ as of October 31, 2014.

Based on the number of Level 3 shares issued, Level 3's closing stock price of $46.91 on October 31, 2014, the cash paid to the former holders of tw telecom common stock and the $1.793 billion of debt of tw telecom called for redemption and discharged or repaid, the aggregate consideration for acquisition accounting, including assumed debt, approximated $8.1 billion.

The premium paid by Level 3 in this transaction is attributable to strategic benefits, as the transaction further solidifies Level 3's position as a premier global communications provider to the enterprise, government and carrier market, combining tw telecom's extensive local operations and assets in North America with Level 3's global assets and capabilities. tw telecom's business model is directly aligned with Level 3's initiatives for growth, which include building managed solutions to meet customer needs through an advanced IP/optical network.

The goodwill associated with this transaction is not expected to be deductible for income tax purposes.

The assets acquired and liabilities assumed of tw telecom will be recognized at their acquisition date fair value, however, based on the acquisition date of October 31, 2014, the summary of assets acquired and liabilities assumed are not available at the time of this filing. The purchase price allocation of acquired assets and assumed liabilities, including the assignment of goodwill to reporting units, will require extensive analysis and is expected to be completed no later than October 31, 2015. A preliminary allocation of the purchase price to intangible assets has been used to determine the adjustment to the pro forma operating results below. The final identification of all intangible assets acquired may be significantly different from the preliminary allocation.

The following unaudited pro forma financial information presents the combined results of Level 3 and tw telecom as if the completion of the merger had occurred as of January 1, 2013 (dollars in millions, except per share data).
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Total Revenue
 
$
2,047

 
$
1,955

 
$
6,096

 
$
5,854

Net Income (Loss)
 
$
72

 
$
(67
)
 
$
199

 
$
(212
)
Net Income (Loss) per Share - Basic
 
$
0.22

 
$
(0.21
)
 
$
0.60

 
$
(0.67
)
Net Income (Loss) per Share- Diluted
 
$
0.21

 
$
(0.21
)
 
$
0.59

 
$
(0.67
)

These pro forma results include certain adjustments, primarily due to increases in depreciation and amortization expense due to fair value adjustments of tangible and intangible assets, increases in interest expense due to Level 3's issuance of incremental debt to finance cash consideration partially offset by the refinancing of tw telecom debt that had higher interest rates than the incremental financing, and to eliminate historical transactions between Level 3 and tw telecom. The pro forma 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 Merger been completed on January 1, 2013, nor is it representative of future operating results of the Company. The 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 Network Related Expenses and Selling, General and Administrative Expenses in the Company's Consolidated Statements of Operations. Level 3 incurred total acquisition related transaction and integration costs of approximately $11 million through September 30, 2014. Level 3 estimates that total acquisition related transaction costs will be approximately $82 million. In addition, Level 3 expects to incur $170 million of integration related costs in 2014 and 2015.

Level 3 also adopted an amendment to its existing Stockholder Rights Plan to extend the term of that plan. The plan is designed to protect its U.S. federal net operating losses from certain Internal Revenue Code Section 382 limitations. The plan was designed to deter trading that would result in a change of control (as defined in that Code Section), and thereby protect the Company's ability to use its historical federal net operating loss carryforwards in the future.
Earnings Per Share (Notes)
Earnings Per Share
Per Share

The Company computes basic earnings per share by dividing net income or loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing the net income or 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.

The effect of approximately 18 million and 28 million shares issuable pursuant to the various series of convertible notes outstanding at September 30, 2014 and September 30, 2013, respectively, have not been included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive to the computation. The effect of approximately 5 million stock options, outperform stock appreciation rights ("OSOs"), and restricted stock units ("RSUs") outstanding at September 30, 2014 have been included in the computation of diluted earnings per share. The effect of approximately 6 million stock options, OSOs and RSUs outstanding at September 30, 2013 have not been included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive to the computation.
Acquired Intangible Assets (Notes)
Acquired Intangible Assets
Acquired Intangible Assets

Identifiable acquisition-related intangible assets as of September 30, 2014 and December 31, 2013 were as follows (dollars in millions):

 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
September 30, 2014
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
785

 
$
(708
)
 
$
77

Trademarks
55

 
(41
)
 
14

Patents and Developed Technology
158

 
(127
)
 
31

 
998

 
(876
)
 
122

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Vyvx Trade Name
32

 
—

 
32

 
$
1,030

 
$
(876
)
 
$
154

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



Acquired finite-lived intangible asset amortization expense was $14 million and $50 million for the three and nine months ended September 30, 2014 and $18 million and $54 million for the three and nine months ended September 30, 2013.

At September 30, 2014, the weighted average remaining useful lives of the Company's acquired finite-lived intangible assets was 3.3 years for customer contracts and relationships, 2.2 years for trademarks and 1.0 year for patents and developed technology.

As of September 30, 2014, estimated amortization expense for the Company’s finite-lived acquisition-related intangible assets over the next five years is as follows (dollars in millions):

2014 (remaining 3 months)
$
13

2015
48

2016
30

2017
15

2018
13

2019
3

 
$
122




Fair Value of Financial Instruments (Notes)
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 September 30, 2014 and December 31, 2013. The Company's interest rate swaps, which were extinguished in the first quarter of 2014, had been recorded in the Consolidated Balance Sheets at fair value.

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 non-performance.

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 at the end of the reporting period. There were no transfers within the fair value hierarchy during each of the nine months ended September 30, 2014 and September 30, 2013.

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 September 30, 2014 and December 31, 2013:

 
 
 
 
 
 
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)
 
September 30,
2014
 
December 31,
2013
 
September 30,
2014
 
December 31,
2013
 
September 30,
2014
 
December 31,
2013
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Swap Liabilities (included in other current liabilities)
 
$
—

 
$
12

 
$
—

 
$
—

 
$
—

 
$
12

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

 
$
12

 
$
—

 
$
—

 
$
—

 
$
12

Liabilities Not Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, including the current portion:
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
$
2,605

 
$
2,604

 
$
2,563

 
$
2,633

 
$
—

 
$
—

Senior Notes
 
6,200

 
5,198

 
5,531

 
5,673

 
—

 
—

Convertible Notes
 
475

 
474

 
—

 
—

 
818

 
647

Capital Leases and Other
 
78

 
86

 
—

 
—

 
78

 
86

Total Long-term Debt, including the current portion
 
$
9,358

 
$
8,362

 
$
8,094

 
$
8,306

 
$
896

 
$
733



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 was 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 September 30, 2014 and December 31, 2013, respectively. 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 $5.5 billion at September 30, 2014 and $5.7 billion at December 31, 2013, respectively, based on quoted prices for identical terms and maturities. Each series of notes is actively traded.

The 11.875% Senior Notes due 2019 and the 8.875% Senior Notes due 2019 were issued by Level 3 Communications, Inc. and are not guaranteed by any of the Company's subsidiaries. The remaining Senior Notes are obligations of Level 3 Financing, Inc. and are all fully and unconditionally guaranteed by Level 3 Communications, Inc. and by Level 3 Communications, LLC.

Convertible Notes

The fair value of the Company’s Convertible Notes was approximately $818 million and $647 million at September 30, 2014 and December 31, 2013, respectively. The estimated fair value of the Convertible Notes 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, convertible optionality, corporate and security credit ratings, maturity date, 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.
Long-Term Debt (Notes)
Long-term Debt
Long-Term Debt

As of September 30, 2014 and December 31, 2013, long-term debt was as follows:
(dollars in millions)
 
September 30,
2014
 
December 31,
2013
Senior Secured Term Loan*
 
$
2,611

 
$
2,611

Floating Rate Senior Notes due 2018 (3.823% as of September 30, 2014 and 3.846% as of December 31, 2013)
 
300

 
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

 
640

5.375% Senior Notes due 2022
 
1,000

 
—

7% Convertible Senior Notes due 2015
 
200

 
200

7% Convertible Senior Notes due 2015 Series B
 
275

 
275

Capital Leases
 
66

 
73

Other
 
12

 
13

Total Debt Obligations
 
9,384

 
8,392

Unamortized Discount:
 
 
 
 
Discount on Senior Secured Term Loan
 
(6
)
 
(7
)
Discount on 11.875% Senior Notes due 2019
 
(7
)
 
(8
)
Discount on 9.375% Senior Notes due 2019
 
(7
)
 
(7
)
Discount on 8.125% Senior Notes due 2019
 
(6
)
 
(7
)
Discount on 7% Convertible Senior Notes due 2015
 
—

 
(1
)
Total Unamortized Discount
 
(26
)
 
(30
)
Carrying Value of Debt
 
9,358

 
8,362

Less current portion
 
(502
)
 
(31
)
Long-term Debt, less current portion
 
$
8,856

 
$
8,331


* 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 September 30, 2014 and December 31, 2013.

2014 Debt Issuances and Registrations

5.375% Senior Notes due 2022

In August 2014, Level 3 Escrow II, Inc. (“Level 3 Escrow”), an indirect, wholly owned subsidiary of Level 3 Communications, Inc., issued $1.0 billion in aggregate principal amount of its 5.375% Senior Notes due 2022 (the “5.375% Senior Notes”). As a result of certain conditions that could have required Level 3 Escrow to redeem the notes on or before June 15, 2015, discussed further below, the initial term of the 5.375% Senior Notes was deemed to be through June 2015. When the contingency was resolved on October 31, 2014, the Company reclassified these notes into long-term debt in the accompanying Consolidated Balance Sheet as of September 30, 2014. The 5.375% Senior Notes will mature on August 15, 2022. Interest on the 5.375% Senior Notes is payable on May 15 and November 15 of each year, beginning on November 15, 2014. Debt issuance costs of approximately $17 million were capitalized and are amortized over the term of the loan.

The gross proceeds from the offering of the 5.375% 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 acquisition by Level 3 of tw telecom pursuant to the Merger and the assumption of the 5.375% Senior Notes by Level 3 Financing, Inc. (the “Notes Assumption”). In conjunction with the completion of the Merger on October 31, 2014 (see Note 2 — Events Associated with the Merger of tw telecom), the escrow conditions were satisfied. Following the Notes Assumption, Level 3 and Level 3 Communications, LLC guaranteed the 5.375% Senior Notes on an unsecured basis. Following the release of the escrowed funds in connection with the Notes Assumption, the escrowed funds were used to finance the cash portion of the merger consideration payable to tw telecom stockholders and to refinance certain existing indebtedness of tw telecom, including fees and premiums, in connection with the closing of the Merger.

The 5.375% Senior Notes are 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 August 15, 2017, at 100% of the principal amount of 5.375% 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 (ii) on and after August 15, 2017, 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 August 15, of the years indicated below:

Year
Redemption Price
2017
102.688
%
2018
101.344
%
2019
100.000
%

At any time or from time to time after the Notes Assumption and on or prior to August 15, 2017, Financing may redeem up to 40% of the original aggregate principal amount of the 5.375% Senior Notes at a redemption price equal to 105.375% of the principal amount of the 5.375% 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 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 the aggregate. However, at least 60% of the original aggregate principal amount of the 5.375% 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 5.375% Senior Notes were not originally registered under the Securities Act of 1933, as amended, and the 5.375% Senior Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The 5.375% Senior 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. The registration rights agreement became effective as of October 31, 2014.

In October 2014, Level 3 Financing, Inc. received commitments from lenders to increase the borrowings under its existing senior secured credit facility through the creation of a new $2 billion Tranche B 2022 Term Loan (the "Tranche B 2022 Term Loan"). The borrowing was completed with the close of the acquisition of tw telecom on October 31, 2014. The Tranche B 2022 Term Loan included an up front payment to the Tranche B 2022 Term Loan lenders of 0.75 percent of par, will pay interest equal to LIBOR plus 3.5 percent with LIBOR set at a minimum of 1.0 percent and mature on January 31, 2022.

Upon closing of the Tranche B 2022 Term Loan, Level 3 Financing, Inc. used the gross proceeds to finance the cash portion of the merger consideration payable to tw telecom's stockholders under the Merger Agreement and to refinance certain existing indebtedness of tw telecom, including fees and premiums, in connection with the closing of that acquisition. See Note 2 — Events Associated with the Merger of tw telecom for additional information.

During the fourth quarter of 2014, the Floating Rate Senior Notes due 2018 issued by Level 3 Financing, Inc. in November 2013 were exchanged for a new issue of Floating Rate Senior Notes due 2018 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable. The Floating Rate Senior Notes due 2018 are guaranteed by Level 3 Communications, Inc. and Level 3 Communications, LLC.

During the fourth quarter of 2014, the 6.125% Senior Notes due 2021 issued by Level 3 Financing, Inc. in November 2013 were exchanged for a new issue of 6.125% Senior Notes due 2021 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable. The 6.125% Senior Notes due 2021 are guaranteed by Level 3 Communications, Inc. and Level 3 Communications, LLC.

Long-Term Debt Maturities

Aggregate future contractual maturities of long-term debt and capital leases (excluding discounts) were as follows as of September 30, 2014 (dollars in millions):

2014 (remaining three months)
$
22

2015
483

2016
7

2017
6

2018
306

2019
3,426

Thereafter
5,134

 
$
9,384

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

The accumulated balances for each classification of other comprehensive income (loss) were as follows:

(dollars in millions)
 
Net Foreign Currency Translation Adjustment
 
Defined Benefit Pension Plans
 
Total
Balance at December 31, 2012
 
$
56

 
$
(30
)
 
$
26

Other comprehensive (loss) before reclassifications
 
(15
)
 
(9
)
 
(24
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
3

 
3

Balance at September 30, 2013
 
$
41

 
$
(36
)
 
$
5


Balance at December 31, 2013
 
$
67

 
$
(31
)
 
$
36

Other comprehensive (loss) before reclassifications
 
(120
)
 
(2
)
 
(122
)
Amounts reclassified from accumulated other comprehensive income
 
—

 
4

 
4

Balance at September 30, 2014
 
$
(53
)

$
(29
)

$
(82
)
Stock-Based Compensation (Notes)
Stock-Based Compensation
Stock-Based Compensation
The following table summarizes non-cash compensation expense and capitalized non-cash compensation for the three and nine months ended September 30, 2014 and 2013 (dollars in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Outperform Stock Options
$
2

 
$
2

 
$
6

 
$
18

Restricted Stock Units and Shares
10

 
10

 
22

 
31

Performance Restricted Stock Units
4

 
—

 
7

 
—

401(k) Match Expense
6

 
6

 
18

 
19

Restricted Stock Unit Bonus Grant
—

 
12

 
(5
)
 
41

Management Incentive and Retention Plan
—

 
1

 
—

 
7

 
22

 
31

 
48

 
116

Capitalized Non-Cash Compensation
—

 
(1
)
 
—

 
(1
)
 
$
22

 
$
30

 
$
48

 
$
115



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.

As of September 30, 2014, there were approximately 2 million outperform Stock Options ("OSOs") outstanding. As of September 30, 2014, there were approximately 4 million non-vested restricted stock, restricted stock units ("RSUs") and performance restricted stock units ("PRSUs") outstanding. The Company's Management Incentive and Retention Plan was completed in the first quarter 2014. In addition, as of September 30, 2014, there were approximately 9 thousand non-qualified stock options outstanding.

Effective April 2014, the Company's Board of Directors approved the Restricted Stock Unit and Performance Restricted Stock Unit Master Award Agreement ("the Agreement"), which provides for the ability to award participants PRSUs instead of the historical award of OSOs. While OSOs that were granted prior to 2014 will remain outstanding until their settlement, no additional OSOs will be granted. PRSUs are designed to provide participants with a long-term stake in the Company’s success with both retention and performance components. Under the Agreement, a participant becomes vested in a number of PRSUs based on the Company's achievement of specified levels of financial performance during the performance period set forth in the applicable award letter issued pursuant to the Agreement, so long as the participant remains continuously employed by the Company until the applicable scheduled vesting date, subject to certain change in control provisions as outlined in the Agreement. The performance objective is based on the Company’s financial performance measures. Participants will be entitled to an award within a range of 50% at a minimum achievement level and 200% at a maximum achievement level.
Segment Information (Notes)
Segment Reporting Disclosure [Text Block]
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. 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.

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 network related expenses and selling, general and administrative expenses, (4) depreciation and amortization expense, and (5) non-cash stock compensation expense included within network related expenses and 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 ratably between the regions, and the Company does not otherwise charge for services between reportable segments. Therefore, segment results do not include any intercompany revenue. 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.

Core Network Services revenue represents higher profit services and Wholesale Voice Services and Other revenue represents lower profit 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 the contribution from the Wholesale Voice Services and Other 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 revenue by segment:
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Core Network Services Revenue:
 
 
 
 
 
 
 
 
North America
 
$
1,063

 
$
987

 
$
3,157

 
$
2,924

EMEA
 
219

 
222

 
673

 
665

Latin America
 
200

 
188

 
588

 
559

Total Core Network Services Revenue
 
1,482

 
1,397

 
4,418

 
4,148

 
 
 
 
 
 
 
 
 
Wholesale Voice Services and Other Revenue:
 
 
 
 
 
 
 
 
North America
 
128

 
162

 
410

 
530

EMEA
 
4

 
8

 
14

 
25

Latin America
 
15

 
2

 
21

 
8

Total Wholesale Voice Services and Other Revenue
 
147

 
172

 
445

 
563

 
 
 
 
 
 
 
 
 
Total Consolidated Revenue
 
$
1,629

 
$
1,569

 
$
4,863

 
$
4,711



The following table presents Adjusted EBITDA by segment and reconciles Adjusted EBITDA to consolidated net income (loss):
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Adjusted EBITDA:
 
 
 
 
 
 
 
 
North America
 
$
492

 
$
447

 
$
1,460

 
$
1,309

EMEA
 
57

 
56

 
167

 
171

Latin America
 
92

 
77

 
264

 
226

Unallocated Corporate Expenses
 
(170
)
 
(195
)
 
(503
)
 
(548
)
Consolidated Adjusted EBITDA
 
471

 
385

 
1,388

 
1,158

Income Tax Expense
 
(8
)
 
(14
)
 
(27
)
 
(39
)
Total Other Expense
 
(169
)
 
(159
)
 
(507
)
 
(531
)
Depreciation and Amortization
 
(187
)
 
(203
)
 
(558
)
 
(596
)
Non-Cash Stock Compensation
 
(22
)
 
(30
)
 
(48
)
 
(115
)
Total Consolidated Net Income (Loss)
 
$
85

 
$
(21
)
 
$
248

 
$
(123
)


The following table presents capital expenditures by segment and reconciles capital expenditures to consolidated capital expenditures:
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Capital Expenditures:
 
 
 
 
 
 
 
 
North America
 
$
116

 
$
105

 
$
318

 
$
305

EMEA
 
34

 
33

 
82

 
102

Latin America
 
35

 
35

 
106

 
88

Unallocated Corporate Capital Expenditures
 
19

 
21

 
102

 
76

Consolidated Capital Expenditures
 
$
204

 
$
194

 
$
608

 
$
571



The following table presents total consolidated assets by segment:
(dollars in millions)
 
September 30, 2014
 
December 31, 2013
Assets:
 
 
 
 
North America
 
$
9,321

 
$
8,133

EMEA
 
1,963

 
2,030

Latin America
 
2,437

 
2,445

Other
 
262

 
266

Total Consolidated Assets
 
$
13,983

 
$
12,874

Commitments, Contingencies and Other Items (Notes)
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 the aggregate could materially affect its financial condition, future results of operations or cash flows. Amounts accrued for such contingencies aggregate to $191 million and are included in “Other” current liabilities and “Other Liabilities” in the Company's Consolidated Balance Sheet at September 30, 2014. 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 September 30, 2014. 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, including payments of claims. 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 $57 million at September 30, 2014.

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"). The 2001 and 2002 assessed withholding tax assessments were resolved in favor of the Company in separate administrative resolutions; however, the penalties with respect to withholding tax remain at issue in the administrative appeals.

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, deciding 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. The Company appealed the Tribunal's October 2011 administrative resolutions to the judicial court in Peru. In September 2014, the first judicial court rendered a decision largely in the Company’s favor on the central issue underlying the assessments. The Company expects SUNAT to appeal the court’s decision to the next judicial level.

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 regarding VAT, associated penalties and penalties associated with withholding taxes, 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. The Company has appealed the Tribunal's July 2013 administrative resolutions to the judicial court in Peru.

In December 2013, SUNAT initiated an audit of calendar year 2001. In June 2014, the Company was served with SUNAT’s assessments of the 2001 amounts declared null by the Tribunal. In July 2014, the Company appealed these assessments with SUNAT.


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 $43 million at September 30, 2014.

Brazilian Tax Claims

In December 2004, March 2009, April 2009 and July 2014, 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, March 2009 and July 2014 assessments) and revenue from the provision of Internet access services (in the case of the April 2009 and July 2014 assessments), by treating such activities as the provision of communications services, to which the ICMS tax applies. During the third quarter of 2014, the Company released a reserve of $6 million for tax, penalty and associated interest corresponding to the ICMS applicable on the provision of Internet access services due to the expiration of the statute of limitations for the January 2008 to June 2009 tax periods. 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 September 2002, December 2004 and March 2009 assessments were rejected by the respective state administrative courts, and the Company has appealed those decisions to the judicial courts. In October 2012 and June 2014, the Company received favorable rulings from the lower court on the December 2004 and March 2009 assessments regarding equipment leasing, but those rulings are subject to appeal by the state. No ruling has been obtained with respect to the September 2002 assessment. The objections to the April and July 2009 and May 2012 assessments are still pending final administrative decisions. The objection to the July 2014 assessment is pending first administrative decision.

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 $59 million in excess of the accruals established for these matters as of September 30, 2014.

Letters of Credit

It is customary for Level 3 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 Level 3 in accordance with specified terms and conditions. As of September 30, 2014 and December 31, 2013, Level 3 had outstanding letters of credit or other similar obligations of approximately $26 million and $29 million, respectively, of which $22 million and $25 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.
Condensed Consolidating Financial Information (Notes)
Condensed Consolidating Financial Information
Condensed Consolidating Financial Information (as revised)

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 senior notes, 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 results of operations, financial position and 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 Comprehensive Income (Loss)
Three Months Ended September 30, 2014

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

 
$
—

 
$
781

 
$
901

 
$
(53
)
 
$
1,629

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
291

 
369

 
(53
)
 
607

Network Related Expenses
—

 
—

 
195

 
112

 
—

 
307

Depreciation and Amortization
—

 
—

 
70

 
117

 
—

 
187

Selling, General and Administrative Expenses
6

 
—

 
181

 
79

 
—

 
266

Total Costs and Expenses
6

 
—

 
737

 
677

 
(53
)
 
1,367

Operating Income (Loss)
(6
)
 
—

 
44

 
224

 
—

 
262

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(34
)
 
(112
)
 
(1
)
 
(12
)
 
—

 
(159
)
Interest income (expense) affiliates, net
314

 
452

 
(730
)
 
(36
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(189
)
 
(528
)
 
162

 
—

 
555

 
—

Other, net
—

 
—

 
2

 
(13
)
 
—

 
(11
)
Total Other Income (Expense)
91

 
(188
)
 
(567
)
 
(60
)
 
555

 
(169
)
Income (Loss) before Income Taxes
85

 
(188
)
 
(523
)
 
164

 
555

 
93

Income Tax Expense
—

 
(1
)
 
—

 
(7
)
 
—

 
(8
)
Net Income (Loss)
85

 
(189
)
 
(523
)
 
157

 
555

 
85

Other Comprehensive Income, Net of Income Taxes
(137
)
 
—

 
—

 
(137
)
 
137

 
(137
)
Comprehensive Income (Loss)
$
(52
)
 
$
(189
)
 
$
(523
)
 
$
20

 
$
692

 
$
(52
)
Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2014

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

 
$
—

 
$
2,278

 
$
2,750

 
$
(165
)
 
$
4,863

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
869

 
1,130

 
(165
)
 
1,834

Network Related Expenses
—

 
—

 
567

 
334

 
—

 
901

Depreciation and Amortization
—

 
—

 
209

 
349

 
—

 
558

Selling, General and Administrative Expenses
7

 
1

 
505

 
275

 
—

 
788

Total Costs and Expenses
7

 
1

 
2,150

 
2,088

 
(165
)
 
4,081

Operating Income (Loss)
(7
)
 
(1
)
 
128

 
662

 
—

 
782

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(102
)
 
(337
)
 
(1
)
 
(19
)
 
—

 
(459
)
Interest income (expense) affiliates, net
905

 
1,370

 
(2,169
)
 
(106
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(548
)
 
(1,577
)
 
502

 
—

 
1,623

 
—

Other, net
—

 
—

 
6

 
(55
)
 
—

 
(49
)
Total Other Expense
255

 
(544
)
 
(1,662
)
 
(179
)
 
1,623

 
(507
)
Income (Loss) before Income Taxes
248

 
(545
)
 
(1,534
)
 
483

 
1,623

 
275

Income Tax Expense
—

 
(3
)
 
(1
)
 
(23
)
 
—

 
(27
)
Net Income (Loss)
248

 
(548
)
 
(1,535
)
 
460

 
1,623

 
248

Other Comprehensive Loss, Net of Income Taxes
(118
)
 
—

 
—

 
(118
)
 
118

 
(118
)
Comprehensive Income (Loss)
$
130

 
$
(548
)
 
$
(1,535
)
 
$
342

 
$
1,741

 
$
130

Condensed Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2013 (as revised)

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

 
$
—

 
$
711

 
$
919

 
$
(61
)
 
$
1,569

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs


 


 
264

 
405

 
(61
)
 
608

Network Related Expenses
—

 
—

 
194

 
120

 
—

 
314

Depreciation and Amortization
—

 
—

 
73

 
130

 
—

 
203

Selling, General and Administrative Expenses
1

 
1

 
191

 
99

 
—

 
292

Total Costs and Expenses
1

 
1

 
722

 
754

 
(61
)
 
1,417

Operating Income (Loss)
(1
)
 
(1
)
 
(11
)
 
165

 
—

 
152

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(38
)
 
(123
)
 
(1
)
 
(3
)
 
—

 
(165
)
Interest income (expense) affiliates, net
274

 
429

 
(670
)
 
(33
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(255
)
 
(542
)
 
122

 
—

 
675

 
—

Other, net
—

 
(18
)
 
1

 
23

 
—

 
6

Total Other Expense
(19
)
 
(254
)
 
(548
)
 
(13
)
 
675

 
(159
)
Income (Loss) before Income Taxes
(20
)
 
(255
)
 
(559
)
 
152

 
675

 
(7
)
Income Tax Expense
(1
)
 
—

 
(1
)
 
(12
)
 
—

 
(14
)
Net Income (Loss)
(21
)
 
(255
)
 
(560
)
 
140

 
675

 
(21
)
Other Comprehensive Income, Net of Income Taxes
42

 
42

 
—

 
42

 
(84
)
 
42

Comprehensive Income (Loss)
$
21

 
$
(213
)
 
$
(560
)
 
$
182

 
$
591

 
$
21

Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2013 (as revised)

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

 
$
—

 
$
2,090

 
$
2,803

 
$
(182
)
 
$
4,711

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
781

 
1,254

 
(182
)
 
1,853

Network Related Expenses
—

 
—

 
572

 
344

 
—

 
916

Depreciation and Amortization
—

 
—

 
215

 
381

 
—

 
596

Selling, General and Administrative Expenses
2

 
1

 
606

 
290

 
—

 
899

Total Costs and Expenses
2

 
1

 
2,174

 
2,269

 
(182
)
 
4,264

Operating Income (Loss)
(2
)
 
(1
)
 
(84
)
 
534

 
—

 
447

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(114
)
 
(374
)
 
(2
)
 
(11
)
 
—

 
(501
)
Interest income (expense) affiliates, net
819

 
1,284

 
(2,008
)
 
(95
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(825
)
 
(1,715
)
 
398

 
—

 
2,142

 
—

Other, net
—

 
(19
)
 
3

 
(14
)
 
—

 
(30
)
Total Other Expense
(120
)
 
(824
)
 
(1,609
)
 
(120
)
 
2,142

 
(531
)
Income (Loss) before Income Taxes
(122
)
 
(825
)
 
(1,693
)
 
414

 
2,142

 
(84
)
Income Tax Expense
(1
)
 
—

 
(2
)
 
(36
)
 
—

 
(39
)
Net Income (Loss)
(123
)
 
(825
)
 
(1,695
)
 
378

 
2,142

 
(123
)
Other Comprehensive Income, Net of Income Taxes
(21
)
 
(21
)
 
—

 
(21
)
 
42

 
(21
)
Comprehensive Income (Loss)
$
(144
)
 
$
(846
)
 
$
(1,695
)
 
$
357

 
$
2,184

 
$
(144
)
Condensed Consolidating Balance Sheets
September 30, 2014

 
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
$
7

 
$
5

 
$
524

 
$
193

 
$
—

 
$
729

Restricted cash and securities
—

 
—

 
1

 
1,019

 
—

 
1,020

Receivables, less allowances for doubtful accounts
—

 
—

 
48

 
630

 
—

 
678

Due from affiliates
16,348

 
17,921

 
—

 
—

 
(34,269
)
 
—

Other
3

 
16

 
63

 
91

 
—

 
173

Total Current Assets
16,358

 
17,942

 
636

 
1,933

 
(34,269
)
 
2,600

Property, Plant, and Equipment, net
—

 
—

 
3,112

 
5,156

 
—

 
8,268

Restricted Cash and Securities
3

 
—

 
16

 
2

 
—

 
21

Goodwill and Other Intangibles, net
—

 
—

 
376

 
2,348

 
—

 
2,724

Investment in Subsidiaries
10,127

 
8,794

 
3,731

 
—

 
(22,652
)
 
—

Other Assets, net
8

 
100

 
10

 
252

 
—

 
370

Total Assets
$
26,496

 
$
26,836

 
$
7,881

 
$
9,691

 
$
(56,921
)
 
$
13,983

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
2

 
$
—

 
$
236

 
$
369

 
$
—

 
$
607

Current portion of long-term debt
475

 
—

 
2

 
25

 
—

 
502

Accrued payroll and employee benefits
—

 
—

 
128

 
37

 
—

 
165

Accrued interest
46

 
131

 
—

 
7

 
—

 
184

Current portion of deferred revenue
—

 
—

 
124

 
120

 
—

 
244

Due to affiliates
—

 
—

 
33,869

 
400

 
(34,269
)
 
—

Other
—

 
1

 
67

 
83

 
—

 
151

Total Current Liabilities
523

 
132

 
34,426

 
1,041

 
(34,269
)
 
1,853

Long-Term Debt, less current portion
898

 
6,907

 
17

 
1,034

 
—

 
8,856

Deferred Revenue, less current portion
—

 
—

 
570

 
307

 
—

 
877

Other Liabilities
15

 
29

 
119

 
586

 
—

 
749

Commitments and Contingencies

 

 

 

 
—

 
—

Stockholders' Equity (Deficit)
25,060

 
19,768

 
(27,251
)
 
6,723

 
(22,652
)
 
1,648

Total Liabilities and Stockholders' Equity (Deficit)
$
26,496

 
$
26,836

 
$
7,881

 
$
9,691

 
$
(56,921
)
 
$
13,983

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 Statements of Cash Flows
Nine Months Ended September 30, 2014

 
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
$
(91
)
 
$
(336
)
 
$
443

 
$
749

 
$
—

 
$
765

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(261
)
 
(347
)
 
—

 
(608
)
Increase in restricted cash and securities, net
—

 
—

 
1

 
(11
)
 
—

 
(10
)
Proceeds from the sale of property, plant and equipment and other assets
—

 
—

 
—

 
3

 
—

 
3

Other
—

 
—

 
—

 
(2
)
 
—

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

 
—

 
(260
)
 
(357
)
 
—

 
(617
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
—

 
—

 
(1
)
 
—

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

 
—

 
—

 
(8
)
 
—

 
(8
)
Increase (decrease) due from/to affiliates, net
90

 
335

 
(6
)
 
(419
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
90

 
335

 
(6
)
 
(428
)
 
—

 
(9
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(41
)
 
—

 
(41
)
Net Change in Cash and Cash Equivalents
(1
)
 
(1
)
 
177

 
(77
)
 
—

 
98

Cash and Cash Equivalents at Beginning of Period
8

 
6

 
347

 
270

 
—

 
631

Cash and Cash Equivalents at End of Period
$
7

 
$
5

 
$
524

 
$
193

 
$
—

 
$
729

Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 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
$
(105
)
 
$
(441
)
 
$
298

 
$
575

 
$
—

 
$
327

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(235
)
 
(336
)
 
—

 
(571
)
Decrease in restricted cash and securities, net
9

 
—

 
—

 
4

 
—

 
13

Proceeds from sale of property, plant and equipment and other assets
—

 
—

 
—

 
16

 
—

 
16

Other
—

 
—

 
—

 
(14
)
 
—

 
(14
)
Net Cash Provided by (Used in) Investing Activities
9

 
—

 
(235
)
 
(330
)
 
—

 
(556
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
590

 
—

 
—

 
—

 
590

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(172
)
 
(607
)
 
(4
)
 
(27
)
 
—

 
(810
)
Increase (decrease) due from/to affiliates, net
24

 
459

 
(156
)
 
(327
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
(148
)
 
442

 
(160
)
 
(354
)
 
—

 
(220
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(23
)
 
—

 
(23
)
Net Change in Cash and Cash Equivalents
(244
)
 
1

 
(97
)
 
(132
)
 
—

 
(472
)
Cash and Cash Equivalents at Beginning of Period
253

 
5

 
386

 
335

 
—

 
979

Cash and Cash Equivalents at End of Period
$
9

 
$
6

 
$
289

 
$
203

 
$
—

 
$
507

Subsequent Events (Notes)
Subsequent Events [Text Block]
Subsequent Events

Merger of tw telecom

On October 31, 2014, the Company and two of its subsidiaries completed the merger with tw telecom and tw telecom became a wholly owned subsidiary of the Company through a tax-free, stock and cash reorganization. Based on the number of Level 3 shares issued, Level 3's closing stock price of $46.91 on October 31, 2014, the cash paid to the former holders of tw telecom common stock and the $1.793 billion of debt of tw telecom called for redemption and discharged or repaid, the aggregate consideration for acquisition accounting, including assumed debt, approximated $8.1 billion. See Note 2 — Events Associated with the Merger of tw telecom for additional information.

Tranche B 2022 Term Loan

On October 31, 2014, Level 3 Financing, Inc. increased the borrowings under its existing senior secured credit facility through the creation of a new $2 billion Tranche B 2022 Term Loan (the "Tranche B 2022 Term Loan"). The transaction was completed with the closing of the acquisition of tw telecom. The Tranche B 2022 Term Loan included an up front payment to the Tranche B 2022 Term Loan lenders of 0.75 percent of par, will pay interest equal to LIBOR plus 3.5 percent with LIBOR set at a minimum of 1.0 percent and mature on January 31, 2022. See Note 2 — Events Associated with the Merger of tw telecom for additional information.

Upon closing of the Tranche B 2022 Term Loan, Level 3 Financing, Inc. used the gross proceeds to finance the cash portion of the merger consideration payable to tw telecom's stockholders under the Merger Agreement and to refinance certain existing indebtedness of tw telecom, including fees and premiums, in connection with the closing of that acquisition. See Note 2 — Events Associated with the Merger of tw telecom for additional information.

Floating Rate Senior Notes due 2018

The Floating Rate Senior Notes due 2018 issued by Level 3 Financing, Inc. in November 2013 were not originally registered under the Securities Act of 1933, as amended. During the fourth quarter of 2014, all of the originally placed notes were exchanged for a new issue of Floating Rate Senior Notes due 2018 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable. The Floating Rate Senior Notes due 2018 are guaranteed by Level 3 Communications, Inc. and Level 3 Communications, LLC.

6.125% Senior Notes due 2021

The 6.125% Senior Notes due 2021 issued by Level 3 Financing, Inc. in November 2013 were not originally registered under the Securities Act of 1933, as amended. During the fourth quarter of 2014, all of the originally placed notes were exchanged for a new issue of 6.125% Senior Notes due 2021 with identical terms and conditions, other than those related to registration rights, in a registered exchange offer and are now freely tradeable. The 6.125% Senior Notes due 2021 are guaranteed by Level 3 Communications, Inc. and Level 3 Communications, LLC.
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.

Acquired Intangible Assets (Tables)
Schedule of acquisition-related intangible assets 
Identifiable acquisition-related intangible assets as of September 30, 2014 and December 31, 2013 were as follows (dollars in millions):

 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
September 30, 2014
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
785

 
$
(708
)
 
$
77

Trademarks
55

 
(41
)
 
14

Patents and Developed Technology
158

 
(127
)
 
31

 
998

 
(876
)
 
122

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Vyvx Trade Name
32

 
—

 
32

 
$
1,030

 
$
(876
)
 
$
154

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

Schedule of estimated amortization expense of finite-lived acquisition-related intangible assets 
As of September 30, 2014, estimated amortization expense for the Company’s finite-lived acquisition-related intangible assets over the next five years is as follows (dollars in millions):

2014 (remaining 3 months)
$
13

2015
48

2016
30

2017
15

2018
13

2019
3

 
$
122

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 September 30, 2014 and December 31, 2013:

 
 
 
 
 
 
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)
 
September 30,
2014
 
December 31,
2013
 
September 30,
2014
 
December 31,
2013
 
September 30,
2014
 
December 31,
2013
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Swap Liabilities (included in other current liabilities)
 
$
—

 
$
12

 
$
—

 
$
—

 
$
—

 
$
12

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

 
$
12

 
$
—

 
$
—

 
$
—

 
$
12

Liabilities Not Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, including the current portion:
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
$
2,605

 
$
2,604

 
$
2,563

 
$
2,633

 
$
—

 
$
—

Senior Notes
 
6,200

 
5,198

 
5,531

 
5,673

 
—

 
—

Convertible Notes
 
475

 
474

 
—

 
—

 
818

 
647

Capital Leases and Other
 
78

 
86

 
—

 
—

 
78

 
86

Total Long-term Debt, including the current portion
 
$
9,358

 
$
8,362

 
$
8,094

 
$
8,306

 
$
896

 
$
733



The Company does not have any assets or liabilities where the fair value is measured using significant unobservable inputs (Level 3).
Long-Term Debt (Tables)
Schedule of long-term debt 
As of September 30, 2014 and December 31, 2013, long-term debt was as follows:
(dollars in millions)
 
September 30,
2014
 
December 31,
2013
Senior Secured Term Loan*
 
$
2,611

 
$
2,611

Floating Rate Senior Notes due 2018 (3.823% as of September 30, 2014 and 3.846% as of December 31, 2013)
 
300

 
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

 
640

5.375% Senior Notes due 2022
 
1,000

 
—

7% Convertible Senior Notes due 2015
 
200

 
200

7% Convertible Senior Notes due 2015 Series B
 
275

 
275

Capital Leases
 
66

 
73

Other
 
12

 
13

Total Debt Obligations
 
9,384

 
8,392

Unamortized Discount:
 
 
 
 
Discount on Senior Secured Term Loan
 
(6
)
 
(7
)
Discount on 11.875% Senior Notes due 2019
 
(7
)
 
(8
)
Discount on 9.375% Senior Notes due 2019
 
(7
)
 
(7
)
Discount on 8.125% Senior Notes due 2019
 
(6
)
 
(7
)
Discount on 7% Convertible Senior Notes due 2015
 
—

 
(1
)
Total Unamortized Discount
 
(26
)
 
(30
)
Carrying Value of Debt
 
9,358

 
8,362

Less current portion
 
(502
)
 
(31
)
Long-term Debt, less current portion
 
$
8,856

 
$
8,331


* 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 September 30, 2014 and December 31, 2013.

Schedule of aggregate future contractual maturities of long-term debt and capital leases (excluding discounts) 
Long-Term Debt Maturities

Aggregate future contractual maturities of long-term debt and capital leases (excluding discounts) were as follows as of September 30, 2014 (dollars in millions):

2014 (remaining three months)
$
22

2015
483

2016
7

2017
6

2018
306

2019
3,426

Thereafter
5,134

 
$
9,384

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

The accumulated balances for each classification of other comprehensive income (loss) were as follows:

(dollars in millions)
 
Net Foreign Currency Translation Adjustment
 
Defined Benefit Pension Plans
 
Total
Balance at December 31, 2012
 
$
56

 
$
(30
)
 
$
26

Other comprehensive (loss) before reclassifications
 
(15
)
 
(9
)
 
(24
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
3

 
3

Balance at September 30, 2013
 
$
41

 
$
(36
)
 
$
5


Balance at December 31, 2013
 
$
67

 
$
(31
)
 
$
36

Other comprehensive (loss) before reclassifications
 
(120
)
 
(2
)
 
(122
)
Amounts reclassified from accumulated other comprehensive income
 
—

 
4

 
4

Balance at September 30, 2014
 
$
(53
)

$
(29
)

$
(82
)
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] 
The accumulated balances for each classification of other comprehensive income (loss) were as follows:

(dollars in millions)
 
Net Foreign Currency Translation Adjustment
 
Defined Benefit Pension Plans
 
Total
Balance at December 31, 2012
 
$
56

 
$
(30
)
 
$
26

Other comprehensive (loss) before reclassifications
 
(15
)
 
(9
)
 
(24
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
3

 
3

Balance at September 30, 2013
 
$
41

 
$
(36
)
 
$
5


Balance at December 31, 2013
 
$
67

 
$
(31
)
 
$
36

Other comprehensive (loss) before reclassifications
 
(120
)
 
(2
)
 
(122
)
Amounts reclassified from accumulated other comprehensive income
 
—

 
4

 
4

Balance at September 30, 2014
 
$
(53
)

$
(29
)

$
(82
)
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 the three and nine months ended September 30, 2014 and 2013 (dollars in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Outperform Stock Options
$
2

 
$
2

 
$
6

 
$
18

Restricted Stock Units and Shares
10

 
10

 
22

 
31

Performance Restricted Stock Units
4

 
—

 
7

 
—

401(k) Match Expense
6

 
6

 
18

 
19

Restricted Stock Unit Bonus Grant
—

 
12

 
(5
)
 
41

Management Incentive and Retention Plan
—

 
1

 
—

 
7

 
22

 
31

 
48

 
116

Capitalized Non-Cash Compensation
—

 
(1
)
 
—

 
(1
)
 
$
22

 
$
30

 
$
48

 
$
115

Segment Information (Tables)
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 consolidated net income (loss):
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Adjusted EBITDA:
 
 
 
 
 
 
 
 
North America
 
$
492

 
$
447

 
$
1,460

 
$
1,309

EMEA
 
57

 
56

 
167

 
171

Latin America
 
92

 
77

 
264

 
226

Unallocated Corporate Expenses
 
(170
)
 
(195
)
 
(503
)
 
(548
)
Consolidated Adjusted EBITDA
 
471

 
385

 
1,388

 
1,158

Income Tax Expense
 
(8
)
 
(14
)
 
(27
)
 
(39
)
Total Other Expense
 
(169
)
 
(159
)
 
(507
)
 
(531
)
Depreciation and Amortization
 
(187
)
 
(203
)
 
(558
)
 
(596
)
Non-Cash Stock Compensation
 
(22
)
 
(30
)
 
(48
)
 
(115
)
Total Consolidated Net Income (Loss)
 
$
85

 
$
(21
)
 
$
248

 
$
(123
)
Schedule of Segment Reporting Information, by Segment [Table Text Block] 
The following table presents capital expenditures by segment and reconciles capital expenditures to consolidated capital expenditures:
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Capital Expenditures:
 
 
 
 
 
 
 
 
North America
 
$
116

 
$
105

 
$
318

 
$
305

EMEA
 
34

 
33

 
82

 
102

Latin America
 
35

 
35

 
106

 
88

Unallocated Corporate Capital Expenditures
 
19

 
21

 
102

 
76

Consolidated Capital Expenditures
 
$
204

 
$
194

 
$
608

 
$
571

Segment Reporting Disclosure [Text Block] 
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. 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.

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 network related expenses and selling, general and administrative expenses, (4) depreciation and amortization expense, and (5) non-cash stock compensation expense included within network related expenses and 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 ratably between the regions, and the Company does not otherwise charge for services between reportable segments. Therefore, segment results do not include any intercompany revenue. 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.

Core Network Services revenue represents higher profit services and Wholesale Voice Services and Other revenue represents lower profit 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 the contribution from the Wholesale Voice Services and Other 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 revenue by segment:
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Core Network Services Revenue:
 
 
 
 
 
 
 
 
North America
 
$
1,063

 
$
987

 
$
3,157

 
$
2,924

EMEA
 
219

 
222

 
673

 
665

Latin America
 
200

 
188

 
588

 
559

Total Core Network Services Revenue
 
1,482

 
1,397

 
4,418

 
4,148

 
 
 
 
 
 
 
 
 
Wholesale Voice Services and Other Revenue:
 
 
 
 
 
 
 
 
North America
 
128

 
162

 
410

 
530

EMEA
 
4

 
8

 
14

 
25

Latin America
 
15

 
2

 
21

 
8

Total Wholesale Voice Services and Other Revenue
 
147

 
172

 
445

 
563

 
 
 
 
 
 
 
 
 
Total Consolidated Revenue
 
$
1,629

 
$
1,569

 
$
4,863

 
$
4,711



The following table presents Adjusted EBITDA by segment and reconciles Adjusted EBITDA to consolidated net income (loss):
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Adjusted EBITDA:
 
 
 
 
 
 
 
 
North America
 
$
492

 
$
447

 
$
1,460

 
$
1,309

EMEA
 
57

 
56

 
167

 
171

Latin America
 
92

 
77

 
264

 
226

Unallocated Corporate Expenses
 
(170
)
 
(195
)
 
(503
)
 
(548
)
Consolidated Adjusted EBITDA
 
471

 
385

 
1,388

 
1,158

Income Tax Expense
 
(8
)
 
(14
)
 
(27
)
 
(39
)
Total Other Expense
 
(169
)
 
(159
)
 
(507
)
 
(531
)
Depreciation and Amortization
 
(187
)
 
(203
)
 
(558
)
 
(596
)
Non-Cash Stock Compensation
 
(22
)
 
(30
)
 
(48
)
 
(115
)
Total Consolidated Net Income (Loss)
 
$
85

 
$
(21
)
 
$
248

 
$
(123
)


The following table presents capital expenditures by segment and reconciles capital expenditures to consolidated capital expenditures:
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Capital Expenditures:
 
 
 
 
 
 
 
 
North America
 
$
116

 
$
105

 
$
318

 
$
305

EMEA
 
34

 
33

 
82

 
102

Latin America
 
35

 
35

 
106

 
88

Unallocated Corporate Capital Expenditures
 
19

 
21

 
102

 
76

Consolidated Capital Expenditures
 
$
204

 
$
194

 
$
608

 
$
571



The following table presents total consolidated assets by segment:
(dollars in millions)
 
September 30, 2014
 
December 31, 2013
Assets:
 
 
 
 
North America
 
$
9,321

 
$
8,133

EMEA
 
1,963

 
2,030

Latin America
 
2,437

 
2,445

Other
 
262

 
266

Total Consolidated Assets
 
$
13,983

 
$
12,874

Reconciliation of Revenue from Segments to Consolidated [Table Text Block] 
The following table presents revenue by segment:
 
 
Three Months Ended
 
Nine Months Ended
(dollars in millions)
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
Core Network Services Revenue:
 
 
 
 
 
 
 
 
North America
 
$
1,063

 
$
987

 
$
3,157

 
$
2,924

EMEA
 
219

 
222

 
673

 
665

Latin America
 
200

 
188

 
588

 
559

Total Core Network Services Revenue
 
1,482

 
1,397

 
4,418

 
4,148

 
 
 
 
 
 
 
 
 
Wholesale Voice Services and Other Revenue:
 
 
 
 
 
 
 
 
North America
 
128

 
162

 
410

 
530

EMEA
 
4

 
8

 
14

 
25

Latin America
 
15

 
2

 
21

 
8

Total Wholesale Voice Services and Other Revenue
 
147

 
172

 
445

 
563

 
 
 
 
 
 
 
 
 
Total Consolidated Revenue
 
$
1,629

 
$
1,569

 
$
4,863

 
$
4,711

Condensed Consolidating Financial Information (Tables)
Condensed Consolidating Financial Information 
Condensed Consolidating Financial Information (as revised)

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 senior notes, 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 results of operations, financial position and 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 Comprehensive Income (Loss)
Three Months Ended September 30, 2014

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

 
$
—

 
$
781

 
$
901

 
$
(53
)
 
$
1,629

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
291

 
369

 
(53
)
 
607

Network Related Expenses
—

 
—

 
195

 
112

 
—

 
307

Depreciation and Amortization
—

 
—

 
70

 
117

 
—

 
187

Selling, General and Administrative Expenses
6

 
—

 
181

 
79

 
—

 
266

Total Costs and Expenses
6

 
—

 
737

 
677

 
(53
)
 
1,367

Operating Income (Loss)
(6
)
 
—

 
44

 
224

 
—

 
262

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(34
)
 
(112
)
 
(1
)
 
(12
)
 
—

 
(159
)
Interest income (expense) affiliates, net
314

 
452

 
(730
)
 
(36
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(189
)
 
(528
)
 
162

 
—

 
555

 
—

Other, net
—

 
—

 
2

 
(13
)
 
—

 
(11
)
Total Other Income (Expense)
91

 
(188
)
 
(567
)
 
(60
)
 
555

 
(169
)
Income (Loss) before Income Taxes
85

 
(188
)
 
(523
)
 
164

 
555

 
93

Income Tax Expense
—

 
(1
)
 
—

 
(7
)
 
—

 
(8
)
Net Income (Loss)
85

 
(189
)
 
(523
)
 
157

 
555

 
85

Other Comprehensive Income, Net of Income Taxes
(137
)
 
—

 
—

 
(137
)
 
137

 
(137
)
Comprehensive Income (Loss)
$
(52
)
 
$
(189
)
 
$
(523
)
 
$
20

 
$
692

 
$
(52
)
Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2014

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

 
$
—

 
$
2,278

 
$
2,750

 
$
(165
)
 
$
4,863

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
869

 
1,130

 
(165
)
 
1,834

Network Related Expenses
—

 
—

 
567

 
334

 
—

 
901

Depreciation and Amortization
—

 
—

 
209

 
349

 
—

 
558

Selling, General and Administrative Expenses
7

 
1

 
505

 
275

 
—

 
788

Total Costs and Expenses
7

 
1

 
2,150

 
2,088

 
(165
)
 
4,081

Operating Income (Loss)
(7
)
 
(1
)
 
128

 
662

 
—

 
782

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(102
)
 
(337
)
 
(1
)
 
(19
)
 
—

 
(459
)
Interest income (expense) affiliates, net
905

 
1,370

 
(2,169
)
 
(106
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(548
)
 
(1,577
)
 
502

 
—

 
1,623

 
—

Other, net
—

 
—

 
6

 
(55
)
 
—

 
(49
)
Total Other Expense
255

 
(544
)
 
(1,662
)
 
(179
)
 
1,623

 
(507
)
Income (Loss) before Income Taxes
248

 
(545
)
 
(1,534
)
 
483

 
1,623

 
275

Income Tax Expense
—

 
(3
)
 
(1
)
 
(23
)
 
—

 
(27
)
Net Income (Loss)
248

 
(548
)
 
(1,535
)
 
460

 
1,623

 
248

Other Comprehensive Loss, Net of Income Taxes
(118
)
 
—

 
—

 
(118
)
 
118

 
(118
)
Comprehensive Income (Loss)
$
130

 
$
(548
)
 
$
(1,535
)
 
$
342

 
$
1,741

 
$
130

Condensed Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2013 (as revised)

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

 
$
—

 
$
711

 
$
919

 
$
(61
)
 
$
1,569

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs


 


 
264

 
405

 
(61
)
 
608

Network Related Expenses
—

 
—

 
194

 
120

 
—

 
314

Depreciation and Amortization
—

 
—

 
73

 
130

 
—

 
203

Selling, General and Administrative Expenses
1

 
1

 
191

 
99

 
—

 
292

Total Costs and Expenses
1

 
1

 
722

 
754

 
(61
)
 
1,417

Operating Income (Loss)
(1
)
 
(1
)
 
(11
)
 
165

 
—

 
152

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(38
)
 
(123
)
 
(1
)
 
(3
)
 
—

 
(165
)
Interest income (expense) affiliates, net
274

 
429

 
(670
)
 
(33
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(255
)
 
(542
)
 
122

 
—

 
675

 
—

Other, net
—

 
(18
)
 
1

 
23

 
—

 
6

Total Other Expense
(19
)
 
(254
)
 
(548
)
 
(13
)
 
675

 
(159
)
Income (Loss) before Income Taxes
(20
)
 
(255
)
 
(559
)
 
152

 
675

 
(7
)
Income Tax Expense
(1
)
 
—

 
(1
)
 
(12
)
 
—

 
(14
)
Net Income (Loss)
(21
)
 
(255
)
 
(560
)
 
140

 
675

 
(21
)
Other Comprehensive Income, Net of Income Taxes
42

 
42

 
—

 
42

 
(84
)
 
42

Comprehensive Income (Loss)
$
21

 
$
(213
)
 
$
(560
)
 
$
182

 
$
591

 
$
21

Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2013 (as revised)

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

 
$
—

 
$
2,090

 
$
2,803

 
$
(182
)
 
$
4,711

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
781

 
1,254

 
(182
)
 
1,853

Network Related Expenses
—

 
—

 
572

 
344

 
—

 
916

Depreciation and Amortization
—

 
—

 
215

 
381

 
—

 
596

Selling, General and Administrative Expenses
2

 
1

 
606

 
290

 
—

 
899

Total Costs and Expenses
2

 
1

 
2,174

 
2,269

 
(182
)
 
4,264

Operating Income (Loss)
(2
)
 
(1
)
 
(84
)
 
534

 
—

 
447

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(114
)
 
(374
)
 
(2
)
 
(11
)
 
—

 
(501
)
Interest income (expense) affiliates, net
819

 
1,284

 
(2,008
)
 
(95
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(825
)
 
(1,715
)
 
398

 
—

 
2,142

 
—

Other, net
—

 
(19
)
 
3

 
(14
)
 
—

 
(30
)
Total Other Expense
(120
)
 
(824
)
 
(1,609
)
 
(120
)
 
2,142

 
(531
)
Income (Loss) before Income Taxes
(122
)
 
(825
)
 
(1,693
)
 
414

 
2,142

 
(84
)
Income Tax Expense
(1
)
 
—

 
(2
)
 
(36
)
 
—

 
(39
)
Net Income (Loss)
(123
)
 
(825
)
 
(1,695
)
 
378

 
2,142

 
(123
)
Other Comprehensive Income, Net of Income Taxes
(21
)
 
(21
)
 
—

 
(21
)
 
42

 
(21
)
Comprehensive Income (Loss)
$
(144
)
 
$
(846
)
 
$
(1,695
)
 
$
357

 
$
2,184

 
$
(144
)
Condensed Consolidating Balance Sheets
September 30, 2014

 
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
$
7

 
$
5

 
$
524

 
$
193

 
$
—

 
$
729

Restricted cash and securities
—

 
—

 
1

 
1,019

 
—

 
1,020

Receivables, less allowances for doubtful accounts
—

 
—

 
48

 
630

 
—

 
678

Due from affiliates
16,348

 
17,921

 
—

 
—

 
(34,269
)
 
—

Other
3

 
16

 
63

 
91

 
—

 
173

Total Current Assets
16,358

 
17,942

 
636

 
1,933

 
(34,269
)
 
2,600

Property, Plant, and Equipment, net
—

 
—

 
3,112

 
5,156

 
—

 
8,268

Restricted Cash and Securities
3

 
—

 
16

 
2

 
—

 
21

Goodwill and Other Intangibles, net
—

 
—

 
376

 
2,348

 
—

 
2,724

Investment in Subsidiaries
10,127

 
8,794

 
3,731

 
—

 
(22,652
)
 
—

Other Assets, net
8

 
100

 
10

 
252

 
—

 
370

Total Assets
$
26,496

 
$
26,836

 
$
7,881

 
$
9,691

 
$
(56,921
)
 
$
13,983

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
2

 
$
—

 
$
236

 
$
369

 
$
—

 
$
607

Current portion of long-term debt
475

 
—

 
2

 
25

 
—

 
502

Accrued payroll and employee benefits
—

 
—

 
128

 
37

 
—

 
165

Accrued interest
46

 
131

 
—

 
7

 
—

 
184

Current portion of deferred revenue
—

 
—

 
124

 
120

 
—

 
244

Due to affiliates
—

 
—

 
33,869

 
400

 
(34,269
)
 
—

Other
—

 
1

 
67

 
83

 
—

 
151

Total Current Liabilities
523

 
132

 
34,426

 
1,041

 
(34,269
)
 
1,853

Long-Term Debt, less current portion
898

 
6,907

 
17

 
1,034

 
—

 
8,856

Deferred Revenue, less current portion
—

 
—

 
570

 
307

 
—

 
877

Other Liabilities
15

 
29

 
119

 
586

 
—

 
749

Commitments and Contingencies

 

 

 

 
—

 
—

Stockholders' Equity (Deficit)
25,060

 
19,768

 
(27,251
)
 
6,723

 
(22,652
)
 
1,648

Total Liabilities and Stockholders' Equity (Deficit)
$
26,496

 
$
26,836

 
$
7,881

 
$
9,691

 
$
(56,921
)
 
$
13,983

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 Statements of Cash Flows
Nine Months Ended September 30, 2014

 
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
$
(91
)
 
$
(336
)
 
$
443

 
$
749

 
$
—

 
$
765

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(261
)
 
(347
)
 
—

 
(608
)
Increase in restricted cash and securities, net
—

 
—

 
1

 
(11
)
 
—

 
(10
)
Proceeds from the sale of property, plant and equipment and other assets
—

 
—

 
—

 
3

 
—

 
3

Other
—

 
—

 
—

 
(2
)
 
—

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

 
—

 
(260
)
 
(357
)
 
—

 
(617
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
—

 
—

 
(1
)
 
—

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

 
—

 
—

 
(8
)
 
—

 
(8
)
Increase (decrease) due from/to affiliates, net
90

 
335

 
(6
)
 
(419
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
90

 
335

 
(6
)
 
(428
)
 
—

 
(9
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(41
)
 
—

 
(41
)
Net Change in Cash and Cash Equivalents
(1
)
 
(1
)
 
177

 
(77
)
 
—

 
98

Cash and Cash Equivalents at Beginning of Period
8

 
6

 
347

 
270

 
—

 
631

Cash and Cash Equivalents at End of Period
$
7

 
$
5

 
$
524

 
$
193

 
$
—

 
$
729

Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 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
$
(105
)
 
$
(441
)
 
$
298

 
$
575

 
$
—

 
$
327

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(235
)
 
(336
)
 
—

 
(571
)
Decrease in restricted cash and securities, net
9

 
—

 
—

 
4

 
—

 
13

Proceeds from sale of property, plant and equipment and other assets
—

 
—

 
—

 
16

 
—

 
16

Other
—

 
—

 
—

 
(14
)
 
—

 
(14
)
Net Cash Provided by (Used in) Investing Activities
9

 
—

 
(235
)
 
(330
)
 
—

 
(556
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
590

 
—

 
—

 
—

 
590

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(172
)
 
(607
)
 
(4
)
 
(27
)
 
—

 
(810
)
Increase (decrease) due from/to affiliates, net
24

 
459

 
(156
)
 
(327
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
(148
)
 
442

 
(160
)
 
(354
)
 
—

 
(220
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(23
)
 
—

 
(23
)
Net Change in Cash and Cash Equivalents
(244
)
 
1

 
(97
)
 
(132
)
 
—

 
(472
)
Cash and Cash Equivalents at Beginning of Period
253

 
5

 
386

 
335

 
—

 
979

Cash and Cash Equivalents at End of Period
$
9

 
$
6

 
$
289

 
$
203

 
$
—

 
$
507

Schedule of Condensed Consolidating Statements of Operations 
Condensed Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2014

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

 
$
—

 
$
781

 
$
901

 
$
(53
)
 
$
1,629

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
291

 
369

 
(53
)
 
607

Network Related Expenses
—

 
—

 
195

 
112

 
—

 
307

Depreciation and Amortization
—

 
—

 
70

 
117

 
—

 
187

Selling, General and Administrative Expenses
6

 
—

 
181

 
79

 
—

 
266

Total Costs and Expenses
6

 
—

 
737

 
677

 
(53
)
 
1,367

Operating Income (Loss)
(6
)
 
—

 
44

 
224

 
—

 
262

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(34
)
 
(112
)
 
(1
)
 
(12
)
 
—

 
(159
)
Interest income (expense) affiliates, net
314

 
452

 
(730
)
 
(36
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(189
)
 
(528
)
 
162

 
—

 
555

 
—

Other, net
—

 
—

 
2

 
(13
)
 
—

 
(11
)
Total Other Income (Expense)
91

 
(188
)
 
(567
)
 
(60
)
 
555

 
(169
)
Income (Loss) before Income Taxes
85

 
(188
)
 
(523
)
 
164

 
555

 
93

Income Tax Expense
—

 
(1
)
 
—

 
(7
)
 
—

 
(8
)
Net Income (Loss)
85

 
(189
)
 
(523
)
 
157

 
555

 
85

Other Comprehensive Income, Net of Income Taxes
(137
)
 
—

 
—

 
(137
)
 
137

 
(137
)
Comprehensive Income (Loss)
$
(52
)
 
$
(189
)
 
$
(523
)
 
$
20

 
$
692

 
$
(52
)
Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2014

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

 
$
—

 
$
2,278

 
$
2,750

 
$
(165
)
 
$
4,863

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
869

 
1,130

 
(165
)
 
1,834

Network Related Expenses
—

 
—

 
567

 
334

 
—

 
901

Depreciation and Amortization
—

 
—

 
209

 
349

 
—

 
558

Selling, General and Administrative Expenses
7

 
1

 
505

 
275

 
—

 
788

Total Costs and Expenses
7

 
1

 
2,150

 
2,088

 
(165
)
 
4,081

Operating Income (Loss)
(7
)
 
(1
)
 
128

 
662

 
—

 
782

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(102
)
 
(337
)
 
(1
)
 
(19
)
 
—

 
(459
)
Interest income (expense) affiliates, net
905

 
1,370

 
(2,169
)
 
(106
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(548
)
 
(1,577
)
 
502

 
—

 
1,623

 
—

Other, net
—

 
—

 
6

 
(55
)
 
—

 
(49
)
Total Other Expense
255

 
(544
)
 
(1,662
)
 
(179
)
 
1,623

 
(507
)
Income (Loss) before Income Taxes
248

 
(545
)
 
(1,534
)
 
483

 
1,623

 
275

Income Tax Expense
—

 
(3
)
 
(1
)
 
(23
)
 
—

 
(27
)
Net Income (Loss)
248

 
(548
)
 
(1,535
)
 
460

 
1,623

 
248

Other Comprehensive Loss, Net of Income Taxes
(118
)
 
—

 
—

 
(118
)
 
118

 
(118
)
Comprehensive Income (Loss)
$
130

 
$
(548
)
 
$
(1,535
)
 
$
342

 
$
1,741

 
$
130

Condensed Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2013 (as revised)

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

 
$
—

 
$
711

 
$
919

 
$
(61
)
 
$
1,569

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs


 


 
264

 
405

 
(61
)
 
608

Network Related Expenses
—

 
—

 
194

 
120

 
—

 
314

Depreciation and Amortization
—

 
—

 
73

 
130

 
—

 
203

Selling, General and Administrative Expenses
1

 
1

 
191

 
99

 
—

 
292

Total Costs and Expenses
1

 
1

 
722

 
754

 
(61
)
 
1,417

Operating Income (Loss)
(1
)
 
(1
)
 
(11
)
 
165

 
—

 
152

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(38
)
 
(123
)
 
(1
)
 
(3
)
 
—

 
(165
)
Interest income (expense) affiliates, net
274

 
429

 
(670
)
 
(33
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(255
)
 
(542
)
 
122

 
—

 
675

 
—

Other, net
—

 
(18
)
 
1

 
23

 
—

 
6

Total Other Expense
(19
)
 
(254
)
 
(548
)
 
(13
)
 
675

 
(159
)
Income (Loss) before Income Taxes
(20
)
 
(255
)
 
(559
)
 
152

 
675

 
(7
)
Income Tax Expense
(1
)
 
—

 
(1
)
 
(12
)
 
—

 
(14
)
Net Income (Loss)
(21
)
 
(255
)
 
(560
)
 
140

 
675

 
(21
)
Other Comprehensive Income, Net of Income Taxes
42

 
42

 
—

 
42

 
(84
)
 
42

Comprehensive Income (Loss)
$
21

 
$
(213
)
 
$
(560
)
 
$
182

 
$
591

 
$
21

Condensed Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2013 (as revised)

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

 
$
—

 
$
2,090

 
$
2,803

 
$
(182
)
 
$
4,711

Costs and Expense:
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
—

 
—

 
781

 
1,254

 
(182
)
 
1,853

Network Related Expenses
—

 
—

 
572

 
344

 
—

 
916

Depreciation and Amortization
—

 
—

 
215

 
381

 
—

 
596

Selling, General and Administrative Expenses
2

 
1

 
606

 
290

 
—

 
899

Total Costs and Expenses
2

 
1

 
2,174

 
2,269

 
(182
)
 
4,264

Operating Income (Loss)
(2
)
 
(1
)
 
(84
)
 
534

 
—

 
447

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(114
)
 
(374
)
 
(2
)
 
(11
)
 
—

 
(501
)
Interest income (expense) affiliates, net
819

 
1,284

 
(2,008
)
 
(95
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(825
)
 
(1,715
)
 
398

 
—

 
2,142

 
—

Other, net
—

 
(19
)
 
3

 
(14
)
 
—

 
(30
)
Total Other Expense
(120
)
 
(824
)
 
(1,609
)
 
(120
)
 
2,142

 
(531
)
Income (Loss) before Income Taxes
(122
)
 
(825
)
 
(1,693
)
 
414

 
2,142

 
(84
)
Income Tax Expense
(1
)
 
—

 
(2
)
 
(36
)
 
—

 
(39
)
Net Income (Loss)
(123
)
 
(825
)
 
(1,695
)
 
378

 
2,142

 
(123
)
Other Comprehensive Income, Net of Income Taxes
(21
)
 
(21
)
 
—

 
(21
)
 
42

 
(21
)
Comprehensive Income (Loss)
$
(144
)
 
$
(846
)
 
$
(1,695
)
 
$
357

 
$
2,184

 
$
(144
)
Schedule of Condensed Consolidating Balance Sheets 
Condensed Consolidating Balance Sheets
September 30, 2014

 
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
$
7

 
$
5

 
$
524

 
$
193

 
$
—

 
$
729

Restricted cash and securities
—

 
—

 
1

 
1,019

 
—

 
1,020

Receivables, less allowances for doubtful accounts
—

 
—

 
48

 
630

 
—

 
678

Due from affiliates
16,348

 
17,921

 
—

 
—

 
(34,269
)
 
—

Other
3

 
16

 
63

 
91

 
—

 
173

Total Current Assets
16,358

 
17,942

 
636

 
1,933

 
(34,269
)
 
2,600

Property, Plant, and Equipment, net
—

 
—

 
3,112

 
5,156

 
—

 
8,268

Restricted Cash and Securities
3

 
—

 
16

 
2

 
—

 
21

Goodwill and Other Intangibles, net
—

 
—

 
376

 
2,348

 
—

 
2,724

Investment in Subsidiaries
10,127

 
8,794

 
3,731

 
—

 
(22,652
)
 
—

Other Assets, net
8

 
100

 
10

 
252

 
—

 
370

Total Assets
$
26,496

 
$
26,836

 
$
7,881

 
$
9,691

 
$
(56,921
)
 
$
13,983

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
2

 
$
—

 
$
236

 
$
369

 
$
—

 
$
607

Current portion of long-term debt
475

 
—

 
2

 
25

 
—

 
502

Accrued payroll and employee benefits
—

 
—

 
128

 
37

 
—

 
165

Accrued interest
46

 
131

 
—

 
7

 
—

 
184

Current portion of deferred revenue
—

 
—

 
124

 
120

 
—

 
244

Due to affiliates
—

 
—

 
33,869

 
400

 
(34,269
)
 
—

Other
—

 
1

 
67

 
83

 
—

 
151

Total Current Liabilities
523

 
132

 
34,426

 
1,041

 
(34,269
)
 
1,853

Long-Term Debt, less current portion
898

 
6,907

 
17

 
1,034

 
—

 
8,856

Deferred Revenue, less current portion
—

 
—

 
570

 
307

 
—

 
877

Other Liabilities
15

 
29

 
119

 
586

 
—

 
749

Commitments and Contingencies

 

 

 

 
—

 
—

Stockholders' Equity (Deficit)
25,060

 
19,768

 
(27,251
)
 
6,723

 
(22,652
)
 
1,648

Total Liabilities and Stockholders' Equity (Deficit)
$
26,496

 
$
26,836

 
$
7,881

 
$
9,691

 
$
(56,921
)
 
$
13,983

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

Schedule of Condensed Consolidating Statements of Cash Flows 
Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2014

 
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
$
(91
)
 
$
(336
)
 
$
443

 
$
749

 
$
—

 
$
765

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(261
)
 
(347
)
 
—

 
(608
)
Increase in restricted cash and securities, net
—

 
—

 
1

 
(11
)
 
—

 
(10
)
Proceeds from the sale of property, plant and equipment and other assets
—

 
—

 
—

 
3

 
—

 
3

Other
—

 
—

 
—

 
(2
)
 
—

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

 
—

 
(260
)
 
(357
)
 
—

 
(617
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
—

 
—

 
(1
)
 
—

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

 
—

 
—

 
(8
)
 
—

 
(8
)
Increase (decrease) due from/to affiliates, net
90

 
335

 
(6
)
 
(419
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
90

 
335

 
(6
)
 
(428
)
 
—

 
(9
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(41
)
 
—

 
(41
)
Net Change in Cash and Cash Equivalents
(1
)
 
(1
)
 
177

 
(77
)
 
—

 
98

Cash and Cash Equivalents at Beginning of Period
8

 
6

 
347

 
270

 
—

 
631

Cash and Cash Equivalents at End of Period
$
7

 
$
5

 
$
524

 
$
193

 
$
—

 
$
729



Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 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
$
(105
)
 
$
(441
)
 
$
298

 
$
575

 
$
—

 
$
327

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
—

 
—

 
(235
)
 
(336
)
 
—

 
(571
)
Decrease in restricted cash and securities, net
9

 
—

 
—

 
4

 
—

 
13

Proceeds from sale of property, plant and equipment and other assets
—

 
—

 
—

 
16

 
—

 
16

Other
—

 
—

 
—

 
(14
)
 
—

 
(14
)
Net Cash Provided by (Used in) Investing Activities
9

 
—

 
(235
)
 
(330
)
 
—

 
(556
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
590

 
—

 
—

 
—

 
590

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(172
)
 
(607
)
 
(4
)
 
(27
)
 
—

 
(810
)
Increase (decrease) due from/to affiliates, net
24

 
459

 
(156
)
 
(327
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
(148
)
 
442

 
(160
)
 
(354
)
 
—

 
(220
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(23
)
 
—

 
(23
)
Net Change in Cash and Cash Equivalents
(244
)
 
1

 
(97
)
 
(132
)
 
—

 
(472
)
Cash and Cash Equivalents at Beginning of Period
253

 
5

 
386

 
335

 
—

 
979

Cash and Cash Equivalents at End of Period
$
9

 
$
6

 
$
289

 
$
203

 
$
—

 
$
507

Organization and Summary of Significant Accounting Policies (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Jan. 1, 2014
Property, Plant and Equipment [Line Items]
 
 
IP Equipment
 
$ 222 
Net Income
75 
 
Change in Accounting Estimate, Effect of Change on Basic Earnings Per Share
$ 0.32 
 
Change in Accounting Estimate, Effect of Change on Diluted Earnings Per Share
$ 0.31 
 
Racks and Cabinets
 
114 
Facility Equipment
 
151 
Fixtures and Equipment, Gross
 
$ 487 
Organization and Summary of Significant Accounting Policies Schedule of Changes in Presentation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Schedule of Changes in Presentation [Line Items]
 
 
 
 
Cost of Revenue
$ 607 
$ 608 
$ 1,834 
$ 1,853 
Network Access Costs
607 
608 
1,834 
1,853 
Network Related Expenses
307 
314 
901 
916 
Selling, General and Administrative Expenses
266 
292 
788 
899 
Total Costs and Expenses
1,367 
1,417 
4,081 
4,264 
Scenario, Previously Reported [Member]
 
 
 
 
Schedule of Changes in Presentation [Line Items]
 
 
 
 
Cost of Revenue
 
608 
 
1,853 
Network Access Costs
 
0 
 
0 
Network Related Expenses
 
0 
 
0 
Selling, General and Administrative Expenses
 
606 
 
1,815 
Total Costs and Expenses
 
1,417 
 
4,264 
Restatement Adjustment [Member]
 
 
 
 
Schedule of Changes in Presentation [Line Items]
 
 
 
 
Cost of Revenue
 
(608)
 
(1,853)
Network Access Costs
 
608 
 
1,853 
Network Related Expenses
 
314 
 
916 
Selling, General and Administrative Expenses
 
(314)
 
(916)
Total Costs and Expenses
 
0 
 
0 
As Restated [Member]
 
 
 
 
Schedule of Changes in Presentation [Line Items]
 
 
 
 
Cost of Revenue
 
0 
 
0 
Network Access Costs
 
608 
 
1,853 
Network Related Expenses
 
314 
 
916 
Selling, General and Administrative Expenses
 
292 
 
899 
Total Costs and Expenses
 
$ 1,417 
 
$ 4,264 
Events Associated with the Merger of tw telecom (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 5 Months Ended 14 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Sep. 30, 2014
Level 3 Escrow II, Inc. [Member]
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2014
Subsequent Event [Member]
Oct. 31, 2014
Subsequent Event [Member]
Dec. 31, 2015
Subsequent Event [Member]
Oct. 30, 2014
Subsequent Event [Member]
Oct. 13, 2014
Subsequent Event [Member]
Level 3 Financing [Member]
2.0 Billion Senior Secured Debt [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Revenue
$ 2,047,000,000 
$ 1,955,000,000 
$ 6,096,000,000 
$ 5,854,000,000 
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Net Income (Loss)
72,000,000 
(67,000,000)
199,000,000 
(212,000,000)
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Earnings Per Share, Basic
$ 0.22 
$ (0.21)
$ 0.60 
$ (0.67)
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Earnings Per Share, Diluted
$ 0.21 
$ (0.21)
$ 0.59 
$ (0.67)
 
 
 
 
 
 
 
Business Acquisition, Effective Date of Acquisition
 
 
 
 
 
 
Oct. 31, 2014 
 
 
 
 
Business Combination, Consideration Transferred
 
 
 
 
 
 
8,100,000,000 
 
 
 
 
Business Acquisition, Share Price
 
 
 
 
 
 
 
$ 46.91 
 
 
 
business acquisition, cash consideration per share
 
 
10 
 
 
 
 
 
 
 
 
Debt Instrument, Face Amount
 
 
 
 
 
1,000,000,000 
 
 
 
 
2,000,000,000 
Proceeds from Issuance of Unsecured Debt
 
 
 
 
 
1,000,000,000 
 
 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
 
 
 
5.375% 
 
 
 
 
 
Authorized Common Shares
 
 
 
 
 
 
 
 
 
100,000,000 
 
Common Stock, Shares Authorized
343,333,333 
 
343,333,333 
 
343,333,333 
 
 
 
 
433,333,333 
 
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares
 
 
 
 
 
 
96,900,000 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt
 
 
 
 
 
 
 
1,793,000,000 
 
 
 
Stock consideration per share
 
 
0.7 
 
 
 
 
 
 
 
 
Business Combination, Integration Related Costs
 
 
$ 11,000,000 
 
 
 
 
$ 82,000,000 
$ 170,000,000 
 
 
Earnings Per Share (Details)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Convertible Senior Notes
 
 
Earnings per share
 
 
Securities not included in computation of diluted loss per share (in millions of shares)
18 
28 
Stock options, outperform stock appreciation rights (OSOs), restricted stock units and warrants
 
 
Earnings per share
 
 
Securities not included in computation of diluted loss per share (in millions of shares)
5 
6 
Acquired Intangible Assets (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Finite-Lived Intangible Assets:
 
 
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
$ 998 
 
$ 998 
 
$ 999 
Finite-Lived Intangible Assets, Accumulated Amortization
(876)
 
(876)
 
(826)
Finite-Lived Intangible Assets, Net
122 
 
122 
 
173 
Acquired finite-lived intangible asset amortization expense
14 
18 
50 
54 
 
Indefinite-Lived Intangible Assets:
 
 
 
 
 
Total identifiable acquisition-related intangible assets, Gross Carrying Amount
1,030 
 
1,030 
 
1,031 
Total identifiable acquisition-related intangible assets, Net
154 
 
154 
 
205 
Estimated amortization expense of finite-lived acquisition-related intangible assets
 
 
 
 
 
2013 (remaining three months)
13 
 
13 
 
 
2014
48 
 
48 
 
 
2015
30 
 
30 
 
 
2016
15 
 
15 
 
 
2017
13 
 
13 
 
 
2018
3 
 
3 
 
 
Finite-Lived Intangible Assets, Net
122 
 
122 
 
173 
Vyvx Trade Name
 
 
 
 
 
Indefinite-Lived Intangible Assets:
 
 
 
 
 
Indefinite-Lived Intangible Assets
32 
 
32 
 
32 
Customer Contracts And Relationships
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
785 
 
785 
 
786 
Finite-Lived Intangible Assets, Accumulated Amortization
(708)
 
(708)
 
(678)
Finite-Lived Intangible Assets, Net
77 
 
77 
 
108 
Acquired finite-lived intangible assets weighted average remaining useful lives (in years)
3 years 3 months 18 days 
 
 
 
 
Estimated amortization expense of finite-lived acquisition-related intangible assets
 
 
 
 
 
Finite-Lived Intangible Assets, Net
77 
 
77 
 
108 
Trademarks
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
55 
 
55 
 
55 
Finite-Lived Intangible Assets, Accumulated Amortization
(41)
 
(41)
 
(31)
Finite-Lived Intangible Assets, Net
14 
 
14 
 
24 
Acquired finite-lived intangible assets weighted average remaining useful lives (in years)
2 years 2 months 12 days 
 
 
 
 
Estimated amortization expense of finite-lived acquisition-related intangible assets
 
 
 
 
 
Finite-Lived Intangible Assets, Net
14 
 
14 
 
24 
Patents and Developed Technology
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
158 
 
158 
 
158 
Finite-Lived Intangible Assets, Accumulated Amortization
(127)
 
(127)
 
(117)
Finite-Lived Intangible Assets, Net
31 
 
31 
 
41 
Acquired finite-lived intangible assets weighted average remaining useful lives (in years)
1 year 
 
 
 
 
Estimated amortization expense of finite-lived acquisition-related intangible assets
 
 
 
 
 
Finite-Lived Intangible Assets, Net
$ 31 
 
$ 31 
 
$ 41 
Fair Value of Financial Instruments - Liabilities, Recurring (Details) (Fair Value, Measurements, Recurring, USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Total Carrying Value in Consolidated Balance Sheet
 
 
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
Interest Rate Swap Liabilities (included in other current and non-current liabilities)
$ 0 
$ 12 
Total Derivative Liabilities Recorded at Fair Value in the Financial Statements
0 
12 
Long-term Debt, including the current portion:
 
 
Term Loans
2,605 
2,604 
Senior Notes
6,200 
5,198 
Convertible Notes
475 
474 
Capital Leases and Other
78 
86 
Total Long-term Debt, including the current portion:
9,358 
8,362 
Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)
 
 
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
Interest Rate Swap Liabilities (included in other current and non-current liabilities)
0 
0 
Total Derivative Liabilities Recorded at Fair Value in the Financial Statements
0 
0 
Long-term Debt, including the current portion:
 
 
Term Loans
2,563 
2,633 
Senior Notes
5,531 
5,673 
Convertible Notes
0 
0 
Capital Leases and Other
0 
0 
Total Long-term Debt, including the current portion:
8,094 
8,306 
Significant Other Observable Inputs (Level 2)
 
 
Liabilities Recorded at Fair Value in the Financial Statements:
 
 
Interest Rate Swap Liabilities (included in other current and non-current liabilities)
0 
12 
Total Derivative Liabilities Recorded at Fair Value in the Financial Statements
0 
12 
Long-term Debt, including the current portion:
 
 
Term Loans
0 
0 
Senior Notes
0 
0 
Convertible Notes
818 
647 
Capital Leases and Other
78 
86 
Total Long-term Debt, including the current portion:
$ 896 
$ 733 
Long-Term Debt - Schedule of Long Term Debt (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Long-term debt
 
 
Total Debt Obligations
$ 9,384 
$ 8,392 
Total Unamortized Discount
(26)
(30)
Carrying Value of Debt
9,358 
8,362 
Current portion of long-term debt
(502)
(31)
Long-Term Debt, less current portion
8,856 
8,331 
Senior Secured Term Loan
 
 
Long-term debt
 
 
Total Debt Obligations
2,611 1
2,611 1
Total Unamortized Discount
(6)
(7)
Tranche B-III 2019 Term Loan
 
 
Long-term debt
 
 
Total Debt Obligations
815 
 
Tranche B 2020 Term Loan
 
 
Long-term debt
 
 
Stated interest rate (as a percent)
4.00% 
 
Total Debt Obligations
1,796 
 
Floating Rate Senior Notes due 2018 [Member]
 
 
Long-term debt
 
 
Total Debt Obligations
300 
300 
11.875% Senior Notes due 2019
 
 
Long-term debt
 
 
Total Debt Obligations
605 
605 
Total Unamortized Discount
(7)
(8)
9.375% Senior Notes due 2019
 
 
Long-term debt
 
 
Total Debt Obligations
500 
500 
Total Unamortized Discount
(7)
(7)
8.125% Senior Notes due 2019
 
 
Long-term debt
 
 
Total Debt Obligations
1,200 
1,200 
Total Unamortized Discount
(6)
(7)
8.875% Senior Notes due 2019
 
 
Long-term debt
 
 
Total Debt Obligations
300 
300 
8.625% Senior Notes due 2020
 
 
Long-term debt
 
 
Total Debt Obligations
900 
900 
7.0% Senior Notes due 2020
 
 
Long-term debt
 
 
Total Debt Obligations
775 
775 
SeniorNotes6Point125PercentDue2021 [Member]
 
 
Long-term debt
 
 
Total Debt Obligations
640 
640 
5.37percent Senior Notes Due 2022 [Member]
 
 
Long-term debt
 
 
Total Debt Obligations
1,000 
0 
7.0% Convertible Senior Notes due 2015
 
 
Long-term debt
 
 
Total Debt Obligations
200 
200 
Total Unamortized Discount
0 
(1)
7.0% Convertible Senior Notes due 2015 Series B
 
 
Long-term debt
 
 
Total Debt Obligations
275 
275 
Capital Leases
 
 
Long-term debt
 
 
Total Debt Obligations
66 
73 
Other
 
 
Long-term debt
 
 
Total Debt Obligations
$ 12 
$ 13 
Long-Term Debt - Textuals (Details) (USD $)
3 Months Ended 3 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2014
Tranche B 2020 Term Loan
Sep. 30, 2014
Tranche B-III 2019 Term Loan
Sep. 30, 2014
8.875% Senior Notes due 2019
Dec. 31, 2013
8.875% Senior Notes due 2019
Sep. 30, 2014
7.0% Senior Notes due 2020
Dec. 31, 2013
7.0% Senior Notes due 2020
Sep. 30, 2014
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2013
Senior Notes 5.375percent Due 2022 [Member]
Sep. 30, 2014
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Escrow II, Inc. [Member]
Sep. 30, 2014
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing, Inc.
Sep. 30, 2014
Before August 15, 2017 [Member]
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing [Member]
Sep. 30, 2014
Before August 15, 2017 [Member]
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing [Member]
Maximum [Member]
Sep. 30, 2014
Before August 15, 2017 [Member]
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing [Member]
Minimum [Member]
Sep. 30, 2014
Before August 15, 2017 [Member]
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing [Member]
Sep. 30, 2014
Twelve Months Beginning August 15, 2018 [Member]
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing [Member]
Sep. 30, 2014
Twelve Months Beginning August 15, 2019 [Member]
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing [Member]
Dec. 31, 2014
Subsequent Event [Member]
2.0 Billion Senior Secured Debt [Member]
Level 3 Financing [Member]
Oct. 13, 2014
Subsequent Event [Member]
2.0 Billion Senior Secured Debt [Member]
Level 3 Financing [Member]
Dec. 31, 2014
Subsequent Event [Member]
2.0 Billion Senior Secured Debt [Member]
Level 3 Financing [Member]
London Interbank Offered Rate (LIBOR) [Member]
Oct. 6, 2014
Subsequent Event [Member]
Senior Notes 6.125percent Due 2021 [Member] [Member]
Level 3 Financing [Member]
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate (as a percent)
 
 
4.00% 
 
 
 
 
 
 
 
5.375% 
 
 
 
 
 
 
 
 
 
 
6.125% 
Debt Instrument Redemption Minimum Gross Proceeds from Private or Public Offering
 
 
 
 
 
 
 
 
 
 
 
 
$ 100,000,000 
 
 
 
 
 
 
 
 
 
Debt Instrument, Redemption Price, Percentage
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
100.00% 
 
 
 
 
 
 
Debt Issuance Cost
 
 
 
 
 
 
 
 
 
 
 
17,000,000 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Redemption Price as Percentage of Principal Amount
 
 
 
 
 
 
 
 
 
 
 
 
105.375% 
40.00% 
60.00% 
102.688% 
101.344% 
100.00% 
 
 
 
 
Total Debt Obligations
9,384,000,000 
8,392,000,000 
1,796,000,000 
815,000,000 
300,000,000 
300,000,000 
775,000,000 
775,000,000 
1,000,000,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
2014 (remaining three months)
22,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
483,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
7,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
306,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
3,426,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thereafter
5,134,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Face Amount
 
 
 
 
 
 
 
 
 
 
$ 1,000,000,000 
 
 
 
 
 
 
 
 
$ 2,000,000,000 
 
 
Debt Instrument, Upfront Payment as Percentage of Principal Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.75% 
 
 
 
Debt Instrument, Description of Variable Rate Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.50% 
 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
Accumulated Other Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
$ (82)
$ 5 
$ 36 
$ 26 
Other comprehensive income before reclassifications
(122)
(24)
 
 
Amounts reclassified from accumulated other comprehensive income
4 
3 
 
 
Accumulated Translation Adjustment [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
(53)
41 
67 
56 
Other comprehensive income before reclassifications
(120)
(15)
 
 
Amounts reclassified from accumulated other comprehensive income
0 
0 
 
 
Accumulated Defined Benefit Plans Adjustment [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
(29)
(36)
(31)
(30)
Other comprehensive income before reclassifications
(2)
(9)
 
 
Amounts reclassified from accumulated other comprehensive income
$ 4 
$ 3 
 
 
Stock-Based Compensation - Non-cash compensation expense and capitalized non-cash compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
Nonvested restricted stock and restricted stock units (RSUs)
4,000,000 
 
4,000,000 
 
OSOs outstanding
2,000,000 
 
2,000,000 
 
Stock-based compensation expense
$ 22 
$ 31 
$ 48 
$ 116 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount
0 
(1)
0 
1 
Non-cash compensation expense and capitalized non-cash compensation
22 
30 
48 
115 
Outperform Stock Options
 
 
 
 
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
Stock-based compensation expense
2 
2 
6 
18 
Restricted Stock Units and Shares
 
 
 
 
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
Stock-based compensation expense
10 
10 
22 
31 
Performance Restricted Stock Units [Member]
 
 
 
 
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
Stock-based compensation expense
4 
0 
7 
0 
401(k) Match Expense
 
 
 
 
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
Stock-based compensation expense
6 
6 
18 
19 
Restricted Stock Unit Bonus Grant
 
 
 
 
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
Stock-based compensation expense
0 
12 
(5)
41 
Management Incentive and Retention Plan
 
 
 
 
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
Stock-based compensation expense
$ 0 
$ 1 
$ 0 
$ 7 
Non-qualified stock options
 
 
 
 
Non-cash compensation expense and capitalized non-cash compensation
 
 
 
 
OSOs outstanding
9,000 
 
9,000 
 
Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Assets
$ 13,983 
 
$ 13,983 
 
$ 12,874 
Payments to Acquire Productive Assets
204 
194 
608 
571 
 
Adjusted EBITDA by Segment
471 
385 
1,388 
1,158 
 
Revenue
1,629 
1,569 
4,863 
4,711 
 
Income Tax Expense (Benefit)
(8)
(14)
(27)
(39)
 
Other Income
(169)
(159)
(507)
(531)
 
Depreciation, Depletion and Amortization
(187)
(203)
(558)
(596)
 
Share-based Compensation
(22)
(30)
(48)
(115)
 
Net Income (Loss) Available to Common Stockholders, Basic
85 
(21)
248 
(123)
 
Corporate and Other [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Assets
262 
 
262 
 
266 
Payments to Acquire Productive Assets
19 
21 
102 
76 
 
Adjusted EBITDA by Segment
(170)
(195)
(503)
(548)
 
North America [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Assets
9,321 
 
9,321 
 
8,133 
Payments to Acquire Productive Assets
116 
105 
318 
305 
 
Adjusted EBITDA by Segment
492 
447 
1,460 
1,309 
 
Europe [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Assets
1,963 
 
1,963 
 
2,030 
Payments to Acquire Productive Assets
34 
33 
82 
102 
 
Adjusted EBITDA by Segment
57 
56 
167 
171 
 
Latin America [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Assets
2,437 
 
2,437 
 
2,445 
Payments to Acquire Productive Assets
35 
35 
106 
88 
 
Adjusted EBITDA by Segment
92 
77 
264 
226 
 
Core Network Service [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
1,482 
1,397 
4,418 
4,148 
 
Core Network Service [Member] |
North America [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
1,063 
987 
3,157 
2,924 
 
Core Network Service [Member] |
Europe [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
219 
222 
673 
665 
 
Core Network Service [Member] |
Latin America [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
200 
188 
588 
559 
 
Wholesale Voice Services and Other [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
147 
172 
445 
563 
 
Wholesale Voice Services and Other [Member] |
North America [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
128 
162 
410 
530 
 
Wholesale Voice Services and Other [Member] |
Europe [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
4 
8 
14 
25 
 
Wholesale Voice Services and Other [Member] |
Latin America [Member]
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
Revenue
$ 15 
$ 2 
$ 21 
$ 8 
 
Commitments, Contingencies and Other Items - Lawsuits (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 3 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Peruvian Tax Litigation
Pending Litigation
Sep. 30, 2014
Peruvian Tax Litigation
Pending Litigation
Sep. 30, 2014
Peruvian Tax Litigation, Before Interest
Pending Litigation
Sep. 30, 2014
Peruvian Tax Litigation, Income Tax witholding 2001 and 2002
Pending Litigation
Sep. 30, 2014
Peruvian Tax Litigation, VAT for 2001 and 2002
Pending Litigation
Sep. 30, 2014
Peruvian Tax Litigation, Disallowance of VAT in 2005
Pending Litigation
Sep. 30, 2014
Employee Severance and Contractor Termination Disputes
Pending Litigation
Sep. 30, 2014
up to
Brazilian Tax Claims
Pending Litigation
Sep. 30, 2014
Brazilian Tax Reserve Release [Member]
Brazilian Tax Claims
Pending Litigation
Loss Contingencies
 
 
 
 
 
 
 
 
 
 
Estimated Litigation Liability
$ 191 
 
 
 
 
 
 
 
 
 
Loss Contingency, Asserted Claim
 
 
57 
26 
3 
7 
16 
43 
 
 
Loss Contingency Accrual, Period Increase (Decrease)
 
28 
 
 
 
 
 
 
 
6 
Loss Contingency, Range of Possible Loss, Portion Not Accrued
 
 
 
 
 
 
 
 
$ 59 
 
Commitments, Contingencies and Other Items - Other Commitments (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
 
 
Amount outstanding under letters of credit or other similar obligations
$ 26 
$ 29 
Collateralized by cash, that is reflected on the consolidated balance sheets as restricted cash
$ 22 
$ 25 
Condensed Consolidating Financial Information - Statements of Operations (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Condensed Consolidating Financial Information
 
 
 
 
Revenue
$ 1,629 
$ 1,569 
$ 4,863 
$ 4,711 
Costs and Expenses:
 
 
 
 
Cost of Revenue
607 
608 
1,834 
1,853 
Network Related Expenses
307 
314 
901 
916 
Depreciation and Amortization
187 
203 
558 
596 
Selling, General and Administrative Expenses
266 
292 
788 
899 
Total Costs and Expenses
1,367 
1,417 
4,081 
4,264 
Operating Income (Loss)
262 
152 
782 
447 
Interest Income, Other
1 
0 
1 
0 
Other Income (Expense):
 
 
 
 
Interest expense
(159)
(165)
(459)
(501)
Interest income (expense) affiliates, net
0 
0 
0 
0 
Equity in net earnings (losses) of subsidiaries
0 
0 
0 
0 
Other, net
(11)
6 
(49)
(30)
Total Other Expense
(169)
(159)
(507)
(531)
Income (Loss) before Income Taxes
93 
(7)
275 
(84)
Income Tax Expense
(8)
(14)
(27)
(39)
Net Income (Loss)
85 
(21)
248 
(123)
Other Comprehensive Income (Loss), Net of Income Taxes
(137)
42 
(118)
(21)
Comprehensive Income (Loss)
(52)
21 
130 
(144)
Level 3 Communications, Inc.
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
Revenue
0 
0 
0 
0 
Costs and Expenses:
 
 
 
 
Cost of Revenue
0 
   
0 
0 
Network Related Expenses
0 
0 
0 
0 
Depreciation and Amortization
0 
0 
0 
0 
Selling, General and Administrative Expenses
6 
1 
7 
2 
Total Costs and Expenses
6 
1 
7 
2 
Operating Income (Loss)
(6)
(1)
(7)
(2)
Interest Income, Other
0 
 
0 
 
Other Income (Expense):
 
 
 
 
Interest expense
(34)
(38)
(102)
(114)
Interest income (expense) affiliates, net
314 
274 
905 
819 
Equity in net earnings (losses) of subsidiaries
(189)
(255)
(548)
(825)
Other, net
0 
0 
0 
0 
Total Other Expense
91 
(19)
255 
(120)
Income (Loss) before Income Taxes
85 
(20)
248 
(122)
Income Tax Expense
0 
(1)
0 
(1)
Net Income (Loss)
85 
(21)
248 
(123)
Other Comprehensive Income (Loss), Net of Income Taxes
(137)
42 
(118)
(21)
Comprehensive Income (Loss)
(52)
21 
130 
(144)
Level 3 Financing, Inc.
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
Revenue
0 
0 
0 
0 
Costs and Expenses:
 
 
 
 
Cost of Revenue
0 
   
0 
0 
Network Related Expenses
0 
0 
0 
0 
Depreciation and Amortization
0 
0 
0 
0 
Selling, General and Administrative Expenses
0 
1 
1 
1 
Total Costs and Expenses
0 
1 
1 
1 
Operating Income (Loss)
0 
(1)
(1)
(1)
Interest Income, Other
0 
 
0 
 
Other Income (Expense):
 
 
 
 
Interest expense
(112)
(123)
(337)
(374)
Interest income (expense) affiliates, net
452 
429 
1,370 
1,284 
Equity in net earnings (losses) of subsidiaries
(528)
(542)
(1,577)
(1,715)
Other, net
0 
(18)
0 
(19)
Total Other Expense
(188)
(254)
(544)
(824)
Income (Loss) before Income Taxes
(188)
(255)
(545)
(825)
Income Tax Expense
(1)
0 
(3)
0 
Net Income (Loss)
(189)
(255)
(548)
(825)
Other Comprehensive Income (Loss), Net of Income Taxes
0 
42 
0 
(21)
Comprehensive Income (Loss)
(189)
(213)
(548)
(846)
Level 3 Communications, LLC
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
Revenue
781 
711 
2,278 
2,090 
Costs and Expenses:
 
 
 
 
Cost of Revenue
291 
264 
869 
781 
Network Related Expenses
195 
194 
567 
572 
Depreciation and Amortization
70 
73 
209 
215 
Selling, General and Administrative Expenses
181 
191 
505 
606 
Total Costs and Expenses
737 
722 
2,150 
2,174 
Operating Income (Loss)
44 
(11)
128 
(84)
Interest Income, Other
0 
 
0 
 
Other Income (Expense):
 
 
 
 
Interest expense
(1)
(1)
(1)
(2)
Interest income (expense) affiliates, net
(730)
(670)
(2,169)
(2,008)
Equity in net earnings (losses) of subsidiaries
162 
122 
502 
398 
Other, net
2 
1 
6 
3 
Total Other Expense
(567)
(548)
(1,662)
(1,609)
Income (Loss) before Income Taxes
(523)
(559)
(1,534)
(1,693)
Income Tax Expense
0 
(1)
(1)
(2)
Net Income (Loss)
(523)
(560)
(1,535)
(1,695)
Other Comprehensive Income (Loss), Net of Income Taxes
0 
0 
0 
0 
Comprehensive Income (Loss)
(523)
(560)
(1,535)
(1,695)
Other Non-Guarantor Subsidiaries
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
Revenue
901 
919 
2,750 
2,803 
Costs and Expenses:
 
 
 
 
Cost of Revenue
369 
405 
1,130 
1,254 
Network Related Expenses
112 
120 
334 
344 
Depreciation and Amortization
117 
130 
349 
381 
Selling, General and Administrative Expenses
79 
99 
275 
290 
Total Costs and Expenses
677 
754 
2,088 
2,269 
Operating Income (Loss)
224 
165 
662 
534 
Interest Income, Other
1 
 
1 
 
Other Income (Expense):
 
 
 
 
Interest expense
(12)
(3)
(19)
(11)
Interest income (expense) affiliates, net
(36)
(33)
(106)
(95)
Equity in net earnings (losses) of subsidiaries
0 
0 
0 
0 
Other, net
(13)
23 
(55)
(14)
Total Other Expense
(60)
(13)
(179)
(120)
Income (Loss) before Income Taxes
164 
152 
483 
414 
Income Tax Expense
(7)
(12)
(23)
(36)
Net Income (Loss)
157 
140 
460 
378 
Other Comprehensive Income (Loss), Net of Income Taxes
(137)
42 
(118)
(21)
Comprehensive Income (Loss)
20 
182 
342 
357 
Eliminations
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
Revenue
(53)
(61)
(165)
(182)
Costs and Expenses:
 
 
 
 
Cost of Revenue
(53)
(61)
(165)
(182)
Network Related Expenses
0 
0 
0 
0 
Depreciation and Amortization
0 
0 
0 
0 
Selling, General and Administrative Expenses
0 
0 
0 
0 
Total Costs and Expenses
(53)
(61)
(165)
(182)
Operating Income (Loss)
0 
0 
0 
0 
Interest Income, Other
0 
 
0 
 
Other Income (Expense):
 
 
 
 
Interest expense
0 
0 
0 
0 
Interest income (expense) affiliates, net
0 
0 
0 
0 
Equity in net earnings (losses) of subsidiaries
555 
675 
1,623 
2,142 
Other, net
0 
0 
0 
0 
Total Other Expense
555 
675 
1,623 
2,142 
Income (Loss) before Income Taxes
555 
675 
1,623 
2,142 
Income Tax Expense
0 
0 
0 
0 
Net Income (Loss)
555 
675 
1,623 
2,142 
Other Comprehensive Income (Loss), Net of Income Taxes
137 
(84)
118 
42 
Comprehensive Income (Loss)
$ 692 
$ 591 
$ 1,741 
$ 2,184 
Condensed Consolidating Financial Information - Balance Sheets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Current Assets:
 
 
 
 
Cash and cash equivalents
$ 729 
$ 631 
$ 507 
$ 979 
Restricted cash and securities
1,020 
7 
 
 
Receivables, less allowances for doubtful accounts
678 
673 
 
 
Due from affiliates
0 
0 
 
 
Other
173 
143 
 
 
Total Current Assets
2,600 
1,454 
 
 
Property, Plant and Equipment, net
8,268 
8,240 
 
 
Restricted Cash and Securities
21 
23 
 
 
Goodwill and Other Intangibles Assets, net
2,724 
2,782 
 
 
Investment in Subsidiaries
0 
0 
 
 
Other Assets, net
370 
375 
 
 
Total Assets
13,983 
12,874 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
Accounts payable
607 
625 
 
 
Current portion of long-term debt
502 
31 
 
 
Accrued payroll and employee benefits
165 
209 
 
 
Accrued interest
184 
160 
 
 
Current portion of deferred revenue
244 
253 
 
 
Due to affiliates
0 
0 
 
 
Other
151 
168 
 
 
Total Current Liabilities
1,853 
1,446 
 
 
Long-Term Debt, less current portion
8,856 
8,331 
 
 
Deferred Revenue, less current portion
877 
906 
 
 
Other Liabilities
749 
780 
 
 
Commitments and Contingencies
0 
0 
 
 
Stockholders' Equity (Deficit)
1,648 
1,411 
 
 
Total Liabilities and Stockholders’ Equity (Deficit)
13,983 
12,874 
 
 
Level 3 Communications, Inc.
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
7 
8 
9 
253 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
16,348 
15,507 
 
 
Other
3 
2 
 
 
Total Current Assets
16,358 
15,517 
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
3 
3 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
10,127 
10,039 
 
 
Other Assets, net
8 
10 
 
 
Total Assets
26,496 
25,569 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
Accounts payable
2 
0 
 
 
Current portion of long-term debt
475 
0 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
46 
30 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
0 
0 
 
 
Other
0 
0 
 
 
Total Current Liabilities
523 
30 
 
 
Long-Term Debt, less current portion
898 
1,370 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
15 
15 
 
 
Commitments and Contingencies
   
 
 
 
Stockholders' Equity (Deficit)
25,060 
24,154 
 
 
Total Liabilities and Stockholders’ Equity (Deficit)
26,496 
25,569 
 
 
Level 3 Financing, Inc.
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
5 
6 
6 
5 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
17,921 
16,886 
 
 
Other
16 
15 
 
 
Total Current Assets
17,942 
16,907 
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
0 
0 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
8,794 
27,014 
 
 
Other Assets, net
100 
113 
 
 
Total Assets
26,836 
44,034 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
Accounts payable
0 
2 
 
 
Current portion of long-term debt
0 
0 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
131 
129 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
0 
0 
 
 
Other
1 
13 
 
 
Total Current Liabilities
132 
144 
 
 
Long-Term Debt, less current portion
6,907 
6,905 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
29 
27 
 
 
Commitments and Contingencies
   
 
 
 
Stockholders' Equity (Deficit)
19,768 
36,958 
 
 
Total Liabilities and Stockholders’ Equity (Deficit)
26,836 
44,034 
 
 
Level 3 Communications, LLC
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
524 
347 
289 
386 
Restricted cash and securities
1 
1 
 
 
Receivables, less allowances for doubtful accounts
48 
79 
 
 
Due from affiliates
0 
0 
 
 
Other
63 
47 
 
 
Total Current Assets
636 
474 
 
 
Property, Plant and Equipment, net
3,112 
3,028 
 
 
Restricted Cash and Securities
16 
18 
 
 
Goodwill and Other Intangibles Assets, net
376 
395 
 
 
Investment in Subsidiaries
3,731 
3,735 
 
 
Other Assets, net
10 
11 
 
 
Total Assets
7,881 
7,661 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
Accounts payable
236 
42 
 
 
Current portion of long-term debt
2 
3 
 
 
Accrued payroll and employee benefits
128 
171 
 
 
Accrued interest
0 
0 
 
 
Current portion of deferred revenue
124 
131 
 
 
Due to affiliates
33,869 
32,165 
 
 
Other
67 
74 
 
 
Total Current Liabilities
34,426 
32,586 
 
 
Long-Term Debt, less current portion
17 
17 
 
 
Deferred Revenue, less current portion
570 
603 
 
 
Other Liabilities
119 
135 
 
 
Commitments and Contingencies
   
 
 
 
Stockholders' Equity (Deficit)
(27,251)
(25,680)
 
 
Total Liabilities and Stockholders’ Equity (Deficit)
7,881 
7,661 
 
 
Other Non-Guarantor Subsidiaries
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
193 
270 
203 
335 
Restricted cash and securities
1,019 
6 
 
 
Receivables, less allowances for doubtful accounts
630 
594 
 
 
Due from affiliates
0 
0 
 
 
Other
91 
79 
 
 
Total Current Assets
1,933 
949 
 
 
Property, Plant and Equipment, net
5,156 
5,212 
 
 
Restricted Cash and Securities
2 
2 
 
 
Goodwill and Other Intangibles Assets, net
2,348 
2,387 
 
 
Investment in Subsidiaries
0 
0 
 
 
Other Assets, net
252 
241 
 
 
Total Assets
9,691 
8,791 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
Accounts payable
369 
581 
 
 
Current portion of long-term debt
25 
28 
 
 
Accrued payroll and employee benefits
37 
38 
 
 
Accrued interest
7 
1 
 
 
Current portion of deferred revenue
120 
122 
 
 
Due to affiliates
400 
228 
 
 
Other
83 
81 
 
 
Total Current Liabilities
1,041 
1,079 
 
 
Long-Term Debt, less current portion
1,034 
39 
 
 
Deferred Revenue, less current portion
307 
303 
 
 
Other Liabilities
586 
603 
 
 
Commitments and Contingencies
   
 
 
 
Stockholders' Equity (Deficit)
6,723 
6,767 
 
 
Total Liabilities and Stockholders’ Equity (Deficit)
9,691 
8,791 
 
 
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
(34,269)
(32,393)
 
 
Other
0 
0 
 
 
Total Current Assets
(34,269)
(32,393)
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
0 
0 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
(22,652)
(40,788)
 
 
Other Assets, net
0 
0 
 
 
Total Assets
(56,921)
(73,181)
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
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
(34,269)
(32,393)
 
 
Other
0 
0 
 
 
Total Current Liabilities
(34,269)
(32,393)
 
 
Long-Term Debt, less current portion
0 
0 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
0 
0 
 
 
Commitments and Contingencies
0 
 
 
 
Stockholders' Equity (Deficit)
(22,652)
(40,788)
 
 
Total Liabilities and Stockholders’ Equity (Deficit)
$ (56,921)
$ (73,181)
 
 
Condensed Consolidating Financial Information - Statements of Cash Flows (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Condensed Consolidating Financial Information
 
 
Net Cash Provided by (Used in) Operating Activities
$ 765 
$ 327 
Cash Flows from Investing Activities:
 
 
Capital expenditures
(608)
(571)
(Increase) decrease in restricted cash and securities, net
(10)
13 
Proceeds from Sale of Property, Plant, and Equipment and other assets
3 
16 
Other
2 
14 
Net Cash Provided by (Used in) Investing Activities
(617)
(556)
Cash Flows from Financing Activities:
 
 
Long-term debt borrowings, net of issuance costs
(1)
590 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(8)
(810)
Increase (decrease) due from-to affiliates, net
0 
0 
Net Cash Provided by (Used in) Financing Activities
(9)
(220)
Effect of Exchange Rates on Cash and Cash Equivalents
(41)
(23)
Net Change in Cash and Cash Equivalents
98 
(472)
Cash and Cash Equivalents at Beginning of Period
631 
979 
Cash and Cash Equivalents at End of Period
729 
507 
Level 3 Communications, Inc.
 
 
Condensed Consolidating Financial Information
 
 
Net Cash Provided by (Used in) Operating Activities
(91)
(105)
Cash Flows from Investing Activities:
 
 
Capital expenditures
0 
0 
(Increase) decrease in restricted cash and securities, net
0 
9 
Proceeds from Sale of Property, Plant, and Equipment and other assets
0 
0 
Other
0 
0 
Net Cash Provided by (Used in) Investing Activities
0 
9 
Cash Flows from Financing Activities:
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
0 
(172)
Increase (decrease) due from-to affiliates, net
90 
24 
Net Cash Provided by (Used in) Financing Activities
90 
(148)
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
Net Change in Cash and Cash Equivalents
(1)
(244)
Cash and Cash Equivalents at Beginning of Period
8 
253 
Cash and Cash Equivalents at End of Period
7 
9 
Level 3 Financing, Inc.
 
 
Condensed Consolidating Financial Information
 
 
Net Cash Provided by (Used in) Operating Activities
(336)
(441)
Cash Flows from Investing Activities:
 
 
Capital expenditures
0 
0 
(Increase) decrease in restricted cash and securities, net
0 
0 
Proceeds from Sale of Property, Plant, and Equipment and other assets
0 
0 
Other
0 
0 
Net Cash Provided by (Used in) Investing Activities
0 
0 
Cash Flows from Financing Activities:
 
 
Long-term debt borrowings, net of issuance costs
0 
590 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
0 
(607)
Increase (decrease) due from-to affiliates, net
335 
459 
Net Cash Provided by (Used in) Financing Activities
335 
442 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
Net Change in Cash and Cash Equivalents
(1)
1 
Cash and Cash Equivalents at Beginning of Period
6 
5 
Cash and Cash Equivalents at End of Period
5 
6 
Level 3 Communications, LLC
 
 
Condensed Consolidating Financial Information
 
 
Net Cash Provided by (Used in) Operating Activities
443 
298 
Cash Flows from Investing Activities:
 
 
Capital expenditures
(261)
(235)
(Increase) decrease in restricted cash and securities, net
1 
0 
Proceeds from Sale of Property, Plant, and Equipment and other assets
0 
0 
Other
0 
0 
Net Cash Provided by (Used in) Investing Activities
(260)
(235)
Cash Flows from Financing Activities:
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
0 
(4)
Increase (decrease) due from-to affiliates, net
(6)
(156)
Net Cash Provided by (Used in) Financing Activities
(6)
(160)
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
Net Change in Cash and Cash Equivalents
177 
(97)
Cash and Cash Equivalents at Beginning of Period
347 
386 
Cash and Cash Equivalents at End of Period
524 
289 
Other Non-Guarantor Subsidiaries
 
 
Condensed Consolidating Financial Information
 
 
Net Cash Provided by (Used in) Operating Activities
749 
575 
Cash Flows from Investing Activities:
 
 
Capital expenditures
(347)
(336)
(Increase) decrease in restricted cash and securities, net
(11)
4 
Proceeds from Sale of Property, Plant, and Equipment and other assets
3 
16 
Other
2 
14 
Net Cash Provided by (Used in) Investing Activities
(357)
(330)
Cash Flows from Financing Activities:
 
 
Long-term debt borrowings, net of issuance costs
(1)
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(8)
(27)
Increase (decrease) due from-to affiliates, net
(419)
(327)
Net Cash Provided by (Used in) Financing Activities
(428)
(354)
Effect of Exchange Rates on Cash and Cash Equivalents
(41)
(23)
Net Change in Cash and Cash Equivalents
(77)
(132)
Cash and Cash Equivalents at Beginning of Period
270 
335 
Cash and Cash Equivalents at End of Period
193 
203 
Eliminations
 
 
Condensed Consolidating Financial Information
 
 
Net Cash Provided by (Used in) Operating Activities
0 
0 
Cash Flows from Investing Activities:
 
 
Capital expenditures
0 
0 
(Increase) decrease in restricted cash and securities, net
0 
0 
Proceeds from Sale of Property, Plant, and Equipment and other assets
0 
0 
Other
0 
0 
Net Cash Provided by (Used in) Investing Activities
0 
0 
Cash Flows from Financing Activities:
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
0 
0 
Increase (decrease) due from-to affiliates, net
0 
0 
Net Cash Provided by (Used in) Financing Activities
0 
0 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
Net Change in Cash and Cash Equivalents
0 
0 
Cash and Cash Equivalents at Beginning of Period
0 
0 
Cash and Cash Equivalents at End of Period
$ 0 
$ 0 
Subsequent Events Subsequent Events (Details) (Subsequent Event [Member], USD $)
3 Months Ended 3 Months Ended 3 Months Ended
Dec. 31, 2014
Oct. 31, 2014
Dec. 31, 2014
Level 3 Financing [Member]
2.0 Billion Senior Secured Debt [Member]
Oct. 13, 2014
Level 3 Financing [Member]
2.0 Billion Senior Secured Debt [Member]
Oct. 6, 2014
Level 3 Financing [Member]
Senior Notes 6.125percent Due 2021 [Member] [Member]
Dec. 31, 2014
London Interbank Offered Rate (LIBOR) [Member]
Level 3 Financing [Member]
2.0 Billion Senior Secured Debt [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
Business Acquisition, Effective Date of Acquisition
Oct. 31, 2014 
 
 
 
 
 
Business Acquisition, Share Price
 
$ 46.91 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt
 
$ 1,793,000,000 
 
 
 
 
Business Combination, Consideration Transferred
8,100,000,000 
 
 
 
 
 
Debt Instrument, Face Amount
 
 
 
$ 2,000,000,000 
 
 
Debt Instrument, Upfront Payment as Percentage of Principal Amount
 
 
0.75% 
 
 
 
Debt Instrument, Description of Variable Rate Basis
 
 
 
 
 
LIBOR 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
3.50% 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
 
 
 
 
 
1.00% 
Debt Instrument, Interest Rate, Stated Percentage
 
 
 
 
6.125%