Document and Entity Information Document

3 Months Ended

Mar. 31, 2017

May 3, 2017

Entity Information [Line Items]

Entity Registrant Name

LEVEL 3 COMMUNICATIONS INC

Entity Central Index Key

0000794323

Document Type

10-Q

Document Period End Date

Mar. 31, 2017

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

361,387,369

Document Fiscal Year Focus

2017

Document Fiscal Period Focus

Q1

Consolidated Statements of Income (USD $)

In Millions, except Share data in Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Income Statement [Abstract]

Revenue

$ 2,048

$ 2,051

Costs and Expenses:

Network access costs

691

694

Network related expenses

336

338

Depreciation and amortization

320

301

Selling, general and administrative Expenses

364

356

Total Costs and Expenses

1,711

1,689

Operating Income

337

362

Other Income (Expense):

Interest income

2

1

Interest expense

(134)

(135)

Loss on modification and extinguishment of Debt

(44)

0

Other, net

4

(10)

Total Other Expense

(172)

(144)

Income Before Income Taxes

165

218

Income Tax Expense

(70)

(90)

Net Income

$ 95

$ 128

Basic Earnings per Common Share

Net Income Per Share

$ 0.26

$ 0.36

Weighted-Average Shares Outstanding (in thousands)

361,461

356,785

Diluted Earnings per Common Share

Net Income Per Share

$ 0.26

$ 0.36

Weighted-Average Shares Outstanding (in thousands)

364,121

360,745

Consolidated Statements of Comprehensive Income (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Net Income

$ 95

$ 128

Other Comprehensive Income, net of Tax:

Foreign currency translation adjustments, net of tax effect of ($8) and $8

20

48

Defined benefit pension plan adjustments, net of tax effect of $0 and ($2)

1

(3)

Other Comprehensive Income, net of Tax

21

45

Comprehensive Income

$ 116

$ 173

Comprehensive Income Parenthetical (Parentheticals) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Comprehensive Income Parenthetical [Abstract]

Foreign currency translation adjustments, tax effect

$ (8)

$ 8

Defined benefit pension plan adjustments, tax effect

$ 0

$ (2)

Consolidated Balance Sheets (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Dec. 31, 2016

Assets:

Cash and cash equivalents

$ 1,947

$ 1,819

Restricted cash and securities

7

Receivables, less allowances for doubtful accounts of $30 and $29, respectively

712

Other

141

115

Total Current Assets

2,807

2,653

Property, Plant and Equipment, net of accumulated depreciation of $11,534 and $11,249, respectively

10,285

10,139

Restricted Cash and Securities

31

Goodwill

7,731

7,729

Other Intangibles, net

861

915

Deferred Tax Assets

3,305

3,370

Other Assets, net

51

Total Assets

25,071

24,888

Liabilities and Stockholders' Equity:

Accounts payable

750

706

Current portion of long-term debt

307

7

Accrued payroll and employee benefits

148

195

Accrued interest

101

129

Current portion of deferred revenue

275

266

Other

153

168

Total Current Liabilities

1,734

1,471

Long-Term Debt, less current portion

10,581

10,877

Deferred Revenue, less current portion

1,044

1,001

Other Liabilities

631

622

Total Liabilities

13,990

13,971

Commitments and Contingencies

Stockholders’ Equity:

Preferred stock, $.01 par value, authorized 10,000,000 shares: no shares issued or outstanding

0

Common stock, $.01 par value, authorized 433,333,333 shares in both periods; 360,856,279 issued and outstanding at March 31, 2017 and 360,021,098 issued and outstanding at December 31, 2016

4

Additional paid-in capital

19,848

19,800

Accumulated other comprehensive loss

(366)

(387)

Accumulated deficit

(8,405)

(8,500)

Total Stockholders’ Equity

11,081

10,917

Total Liabilities and Stockholders’ Equity

$ 25,071

$ 24,888

Consolidated Balance Sheets Parentheticals (Parentheticals) (USD $)

In Millions, except Share data, unless otherwise specified

Mar. 31, 2017

Dec. 31, 2016

Allowance for doubtful accounts

$ 30

$ 29

Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment

$ 11,534

$ 11,249

Preferred stock, par value

$ 0.01

Preferred stock, shares authorized

10,000,000

Preferred stock, shares issued

0

Preferred stock, shares outstanding

0

Common stock, par value (in dollars per share)

$ 0.01

Common stock, shares authorized

433,333,333

Common stock, shares issued

360,856,279

360,021,098

Common stock, shares outstanding

360,856,279

360,021,098

Consolidated Statements of Cash Flows (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Cash Flows from Operating Activities:

Net Income

$ 95

$ 128

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

320

301

Non-cash compensation expense attributable to stock awards

48

47

Loss on modification and extinguishment of debt

44

0

Accretion of debt discount and amortization of debt issuance costs

5

Accrued interest on long-term debt, net

(28)

23

Deferred income taxes

62

81

Other, net

(5)

(9)

Changes in working capital items:

Receivables

6

(44)

Other current assets

(32)

(35)

Accounts payable

42

48

Deferred revenue

50

46

Other current liabilities

(68)

(81)

Net Cash Provided by Operating Activities

539

510

Cash Flows from Investing Activities:

Capital expenditures

(368)

(297)

Change in restricted cash and securities, net

0

(828)

Net Cash Used in Investing Activities

(368)

(1,125)

Cash Flows from Financing Activities:

Long-term debt borrowings, net of issuance costs

4,569

765

Payments on and repurchases of long-term debt and capital leases

(4,613)

(1)

Net Cash (Used in) Provided by Financing Activities

(44)

764

Effect of Exchange Rates on Cash and Cash Equivalents

1

Net Change in Cash and Cash Equivalents

128

150

Cash and Cash Equivalents at Beginning of Period

1,819

854

Cash and Cash Equivalents at End of Period

1,947

1,004

Supplemental Disclosure of Cash Flow Information:

Cash interest paid

153

112

Income taxes paid, net of refunds

$ 10

$ 7

Organization and Summary of Significant Accounting Policies (Notes)

Organization and Summary of Significant Accounting Policies

(1) Organization and Summary of Significant Accounting Policies

Description of Business

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

On October 31, 2016, we entered into an agreement and plan of merger (the "Merger Agreement") with CenturyLink, Inc., a Louisiana corporation ("CenturyLink"), Wildcat Merger Sub 1 LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink ("Merger Sub 1"), and WWG Merger Sub LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink ("Merger Sub 2"), pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, we will be acquired by CenturyLink in a cash and stock transaction, including the assumption of our debt (the "CenturyLink Merger"). See Note 2 - CenturyLink Merger.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include our and our subsidiaries' accounts in which we have 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 our consolidation policy, we consider our controlled subsidiaries, investments in businesses in which we are not the primary beneficiary or do not have effective control but have the ability to significantly influence operating and financial policies, and variable interests resulting from economic arrangements that give us rights to economic risks or rewards of a legal entity. We do not have variable interests in a variable interest entity where we are required to consolidate the entity as the primary beneficiary. Due to exchange restrictions and other conditions, effective at the end of the third quarter of 2015 we deconsolidated our Venezuelan subsidiary and began accounting for our investment in our Venezuelan subsidiary using the cost method of accounting. The factors that led to our conclusions at the end of the third quarter of 2015 continued to exist through the end of the first quarter of 2017.

The accompanying Consolidated Balance Sheet as of December 31, 2016, which was derived from audited Consolidated Financial Statements, and the unaudited interim Consolidated Financial Statements as of March 31, 2017 and for the three months ended March 31, 2017 and 2016 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 our audited Consolidated Financial Statements and notes thereto included in our Form 10-K for the year ended December 31, 2016. In the opinion of our 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.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases ("ASC 842"), which requires entities that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. This ASU will replace most existing leasing guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those years. Early application is permitted. The standard requires the use of a modified retrospective transition method. We are evaluating the effect that ASU 2016-02 will have on our Consolidated Financial Statements and related disclosures, and expect the new guidance to significantly increase the reported assets and liabilities on our Consolidated Balance Sheets.

In May 2014, the Financial Accounting Standards Board issued ASU 2014-09, Revenue from Contracts with Customers, which amended the existing accounting standards for revenue recognition and requires an entity to recognize the amount of revenue it expects to be entitled to for the transfer of promised goods or services to customers. The ASU and subsequent amendments have been codified as ASC 606, Revenue from Contracts with Customers (“ASC 606”). In July 2015, the FASB deferred the effective date to annual reporting periods beginning after December 15, 2017, and interim reporting periods within those periods. Early adoption is permitted using the original effective date of annual reporting periods beginning after December 15, 2016, and interim reporting periods within those periods. The new guidance may be applied retrospectively to each prior period presented or prospectively with the cumulative effect recognized as of the date of initial adoption. We will not adopt ASC 606 early.

We are performing a comprehensive analysis of our revenue streams and contractual arrangements to identify the effects of ASC 606 on our consolidated financial statements and are developing new accounting and reporting policies, business and internal control processes and procedures to facilitate adoption of the standard. Because we currently have service contracts that contain a significant financing component that are not currently separately accounted for, we will be required to estimate and record incremental revenue and interest cost associated with these contractual terms. In addition, we will be required to capitalize, and subsequently amortize, commission costs associated with obtaining or fulfilling our customer contracts, which we do not currently defer and amortize. We will also have to comply with new revenue disclosure requirements. We are continuing to review and evaluate underlying contract information that will be used to support new accounting and disclosure requirements under ASC 606 and evaluate other matters that may result from adoption of the standard. We have not yet selected a transition method, as our method of transition may be affected by the CenturyLink Merger, which we expect will be completed in the third quarter of 2017, and subsequent integration activities completed prior to the January 1, 2018 ASC 606 adoption date.

CenturyLink Merger (Notes)

CenturyLink Merger

(2) CenturyLink Merger

On October 31, 2016, we entered into an agreement and plan of merger with CenturyLink, Inc., a Louisiana corporation, Wildcat Merger Sub 1 LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink, and WWG Merger Sub LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink, pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, we will be acquired by CenturyLink in a cash and stock transaction, including the assumption of our debt.

Under the Merger Agreement, at the effective time of the merger of Merger Sub 1 with and into us (the "Initial Merger"), (i) each issued and outstanding share of our common stock, will be converted into 1.4286 shares (the "Stock Consideration") of CenturyLink's common stock par value $1.00 per share and (ii) the right to receive $26.50 in cash (the "Cash Consideration" and, together with the Stock Consideration, the "Merger Consideration"). In addition, the Merger Agreement provides that at the effective time of the CenturyLink Merger, each issued and outstanding restricted stock unit award granted prior to April 1, 2014 and each restricted stock unit award granted to a non-employee member of our Board of Directors will be exchanged for the Merger Consideration. Further, at the effective time of the CenturyLink Merger, each issued and outstanding restricted stock unit award granted on or after April 1, 2014, other than those granted to non-employee members of our Board of Directors, will be assumed and converted automatically into a restricted stock unit award of CenturyLink common stock that will be subject to the same service-based vesting conditions as applicable to such awards prior to the transaction (but not any performance-based vesting conditions, which will be deemed satisfied based on forecasted and adjusted results through the closing of the transaction (as determined by Compensation Committee of our Board of Directors)). The CenturyLink Merger is subject to the receipt of certain regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, review by the U.S. Federal Communications Commission, certain state regulatory approvals and other customary closing conditions.

The transaction has received approval of CenturyLink's shareholders and our stockholders.

Earnings Per Share (Notes)

Earnings Per Share

(3) Earnings Per Share

We compute basic earnings per share by dividing net income 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 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 exercise of stock-based compensation awards.

The effects of approximately 3 million total restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs") outstanding at March 31, 2017 have been included in the computation of diluted earnings per share for the three months ended March 31, 2017. Less than 1 million of PRSUs granted in 2016 were excluded from the computation of diluted earnings per share for the three months ended March 31, 2017, as they were contingently issuable and no shares would have been issued if these periods were the end of the contingency period. The effect of approximately 4 million total outperform stock appreciation rights ("OSOs"), RSUs and PRSUs outstanding at March 31, 2016 was included in the computation of diluted earnings per share for the three months ended March 31, 2016.

Other Intangible Assets (Notes)

Acquired Intangible Assets

(4) Other Intangible Assets

Other intangible assets as of March 31, 2017 and December 31, 2016 were as follows (dollars in millions):



	Gross Carrying Amount		Accumulated Amortization			Net
March 31, 2017
Finite-Lived Intangible Assets:
Customer Contracts and Relationships	$	1,972	$	(1,159	)	$	813
Trademarks	55		(55		)	—
Patents and Developed Technology	227		(194		)	33
	2,254		(1,408		)	846
Indefinite-Lived Intangible Assets:
Trade Name	15		—			15
	$	2,269	$	(1,408	)	$	861
December 31, 2016
Finite-Lived Intangible Assets:
Customer Contracts and Relationships	$	1,973	$	(1,113	)	$	860
Trademarks	55		(55		)	—
Patents and Developed Technology	229		(189		)	40
	2,257		(1,357		)	900
Indefinite-Lived Intangible Assets:
Trade Name	15		—			15
	$	2,272	$	(1,357	)	$	915

Finite-lived intangible asset amortization expense was $52 million for the three months ended March 31, 2017 and $53 million for three months ended March 31, 2016.

At March 31, 2017, the weighted average remaining useful lives of our finite-lived intangible assets was 4.6 in total; 4.7 for customer contracts and relationships, and 2.3 for patents and developed technology.

As of March 31, 2017, estimated amortization expense for our finite-lived intangible assets over the next five years is as follows (dollars in millions):



2017 (remaining nine months)	$	147
2018	190
2019	179
2020	166
2021	143
2022	21
Thereafter	—
	$	846

Fair Value of Financial Instruments (Notes)

Fair Value of Financial Instruments

(5) Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, restricted cash and securities, receivables, accounts payable, capital leases, other liabilities and long-term debt (including the current portion). The carrying values of cash and cash equivalents, restricted cash and securities, receivables, accounts payable, capital leases and other liabilities approximated their fair values at March 31, 2017 and December 31, 2016.

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, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as interest and foreign exchange rates, transfer restrictions, and risk of nonperformance.

Fair Value Hierarchy

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

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

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

Level 3— Unobservable inputs for the asset or liability.

We recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the fair value hierarchy during each of the three months ended March 31, 2017 and March 31, 2016.

The table below presents the fair values for our long-term debt as well as the input levels used to determine these fair values as of March 31, 2017 and December 31, 2016:



					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)	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Liabilities Not Recorded at Fair Value in the Financial Statements:
Long-term Debt, including the current portion:
Term Loans	$	4,567	$	4,566	$	4,616	$	4,671	$	—	$	—
Senior Notes	6,138		6,135		6,367		6,283		—		—
Capital Leases and Other	183		183		—		—		183		183
Total Long-term Debt, including the current portion	$	10,888	$	10,884	$	10,983	$	10,954	$	183	$	183

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

Term Loans

The fair value of the Term Loans referenced above was approximately $4.6 billion and $4.7 billion at March 31, 2017 and December 31, 2016, respectively. The fair value of each loan is based on quoted prices. Each loan tranche is actively traded. For additional information on the refinancing of the Term Loans, see Note 6 - Long-Term Debt.

Senior Notes

The fair value of the Senior Notes referenced above was approximately $6.4 billion at March 31, 2017 and $6.3 billion at December 31, 2016, respectively, based on quoted prices for identical terms and maturities. Each series of notes is actively traded.

Capital Leases

The fair value of our capital leases is 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

(6) Long-Term Debt

The following table summarizes our long-term debt (amounts in millions):



	Date of				March 31, 2017			December 31, 2016
	Issuance/Amendment	Maturity	Interest Payments	Interest Rate	Amount			Amount
Senior Secured Term Loans:
Borrowed by Level 3 Financing, Inc.
Tranche B-III 2019 Term Loan ⁽¹⁾⁽⁴⁾	Aug 2013	—	Quarterly	LIBOR +3.00%	$	—		$	815
Tranche B 2020 Term Loan ⁽¹⁾⁽⁴⁾	Oct 2013	—	Quarterly	LIBOR +3.00%	—			1,796
Tranche B-II 2022 Term Loan⁽¹⁾⁽⁴⁾	May 2015	—	Quarterly	LIBOR +2.75%	—			2,000
Tranche B 2024 Term Loan ⁽¹⁾⁽⁴⁾	Feb 2017	Feb 2024	Quarterly	LIBOR +2.25%	4,611			—
Senior Notes:
Issued by Level 3 Financing, Inc.
Floating Rate Senior Notes due 2018 ⁽²⁾⁽⁴⁾	Nov 2013	Jan 2018	May/Nov	6-Month LIBOR +3.50%	300			300
6.125% Senior Notes due 2021 ⁽²⁾	Nov 2013	Jan 2021	Apr/Oct	6.125%	640			640
5.375% Senior Notes due 2022⁽²⁾	Aug 2014	Aug 2022	May/Nov	5.375%	1,000			1,000
5.625% Senior Notes due 2023 ⁽²⁾	Jan 2015	Feb 2023	Jun/Dec	5.625%	500			500
5.125% Senior Notes due 2023⁽²⁾	Apr 2015	May 2023	Mar/Sept	5.125%	700			700
5.375% Senior Notes due 2025 ⁽²⁾	Apr 2015	May 2025	Mar/Sept	5.375%	800			800
5.375% Senior Notes due 2024 ⁽²⁾	Nov 2015	Jan 2024	Jan/Jul	5.375%	900			900
5.25% Senior Notes due 2026 ⁽²⁾	Mar 2016	Mar 2026	Apr/Oct	5.250%	775			775
Issued by Level 3 Communications, Inc.
5.75% Senior Notes due 2022⁽³⁾	Dec 2014	Dec 2022	Mar/Sept	5.750%	600			600
Capital Leases and Other Debt					183			183
Total Debt Obligations					11,009			11,009
Unamortized discounts					—			(13		)
Unamortized debt issuance costs					(121		)	(112		)
Current Portion					(307		)	(7		)
Total Long-Term Debt					$	10,581		$	10,877

⁽¹⁾ The term loans are secured obligations and guaranteed by Level 3 Communications, Inc. and Level 3 Communications, LLC and certain other subsidiaries.

⁽²⁾ The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by Level 3 Communications, Inc. and Level 3 Communications, LLC.

⁽³⁾The notes were not guaranteed by any of Level 3 Communications, Inc.'s subsidiaries.

⁽⁴⁾ The Tranche B 2024 Term Loan had an interest rate of 3.227% as of March 31, 2017. The term loans may select from several LIBO rates, including 1 month and 2 month rates. As such, payments may be monthly but no less than quarterly. All other term loans were refinanced on February 22, 2017 as described below.The Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of December 31, 2016. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of December 31, 2016. The Floating Rate Senior Notes due 2018 had an interest rate of 4.762% as of March 31, 2017 and 4.762% as of December 31, 2016. The interest rate on the Tranche B-III 2019 Term Loan, and the Tranche B 2020 Term Loan were set with a minimum LIBOR of 1.00%, the Tranche B-II 2022 Term Loan was set with a minimum LIBOR of 0.75% and the Tranche B 2024 Term Loan is set with a minimum LIBOR of zero percent.

Senior Secured Term Loans

As of March 31, 2017, Level 3 Financing, Inc., Level 3 Communications, Inc.'s direct wholly owned subsidiary ("Level 3 Financing") had a senior secured credit facility consisting of a $4.611 billion Tranche B Term Loan due 2024.

On February 22, 2017, we completed the refinancing of all of our then outstanding $4.611 billion senior secured term loans through the issuance of a new Tranche B 2024 Term Loan in the principal amount of $4.611 billion. The term loans refinanced were our Tranche B-III 2019 Term Loan, Tranche B 2020 Term Loan, and the Tranche B-II 2022 Term Loan. The new Tranche B 2024 Term Loan bears interest at LIBOR plus 2.25 percent, with a zero percent minimum LIBOR, and will mature on February 22, 2024. The Tranche B 2024 Term Loan was priced to lenders at par, with the payment to the lenders at closing of an upfront 25 basis point fee. We recognized a charge of approximately $44 million for modification and extinguishment in the first quarter of 2017 related to this refinancing.

As the new Tranche B 2024 Term Loan represents a new tranche to our existing credit facility, new regulatory approvals are required for Level 3 Communications, LLC and certain other regulated subsidiaries of Level 3 Financing to guarantee and to provide security for the Tranche B 2024 Term Loan. As a result, the guarantees and a portion of the collateral provided by those entities to support the term loans that were refinanced are not available to support the Tranche B 2024 Term Loan unless and until those regulatory approvals are obtained.

Senior Notes

All of the notes pay interest semiannually, and allow for the redemption of the notes at the option of the issuer upon not less than 30 or more than 60 days’ prior notice by paying the greater of 101% of the principal amount or a “make-whole” amount, plus accrued interest. In addition, the notes also have a provision that allows for an additional right of optional redemption using cash proceeds received from the sale of equity securities. For specific details of these features and requirements, including the applicable premiums and timing, refer to the indentures for the respective senior notes in connection with the original issuances.

7% Senior Notes due 2020 and 5.25% Senior Notes due 2026

On March 22, 2016, Level 3 Financing issued $775 million in aggregate principal amount of our 5.25% Senior Notes due 2026 (the “5.25% Senior Notes due 2026”). The 5.25% Senior Notes due 2026 are fully and unconditionally guaranteed on an unsubordinated unsecured basis by Level 3 Communications, Inc. and Level 3 Communications, LLC as of September 30, 2016.

On April 21, 2016, all of the outstanding principal amount of the 7% Senior Notes Due 2020 was redeemed at a redemption price equal to 104.138% of the principal amount, along with accrued and unpaid interest to but excluding the redemption date. To fund the redemption of these notes, Level 3 Financing used the net proceeds, along with cash on hand, from the March 22, 2016 issuance of our 5.25% Senior Notes due 2026.

Capital Leases

As of March 31, 2017, we had $183 million of capital leases. We lease property, equipment, certain dark fiber facilities and metro fiber under non-cancelable IRU agreements that are accounted for as capital leases. The weighted average interest rate on these capital leases approximated 5.8% as of March 31, 2017.

Covenant Compliance

At March 31, 2017 and December 31, 2016, we were in compliance with the financial covenants on all outstanding debt issuances.

Long-Term Debt Maturities

Aggregate future contractual maturities of long-term debt and capital leases (excluding discounts and debt issuance costs) were as follows as of March 31, 2017 (dollars in millions):



2017 (remaining nine months)	$	5
2018	307
2019	7
2020	8
2021	650
2022	1,610
Thereafter	8,422
	$	11,009

Accumulated Other Comprehensive Loss (Notes)

Accumulated Other Comprehensive Loss

(7) Accumulated Other Comprehensive 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, 2015	$	(273	)	$	(28	)	$	(301	)
Other comprehensive income (loss) before reclassifications, net of tax	48			(2		)	46
Amounts reclassified from accumulated other comprehensive loss	—			(1		)	(1		)
Balance at March 31, 2016	$	(225	)	$	(31	)	$	(256	)



Balance at December 31, 2016	$	(353	)	$	(34	)	$	(387	)
Other comprehensive income before reclassifications, net of tax	20			—			20
Amounts reclassified from accumulated other comprehensive loss	—			1			1
Balance at March 31, 2017	$	(333	)	$	(33	)	$	(366	)

Stock-Based Compensation (Notes)

Stock-Based Compensation

(8) Stock-Based Compensation

The following table summarizes non-cash compensation expense for each of the three months ended March 31, 2017 and 2016 (dollars in millions):



	Three Months Ended March 31,
	2017		2016
Outperform Stock Appreciation Rights	$	—	$	1
Restricted Stock Units	28		21
Performance Restricted Stock Units	9		14
401(k) Match Expense	11		11
	48		47

As of March 31, 2017, there were approximately 6 million total restricted stock and performance restricted stock units outstanding.

Segment Information (Notes)

Segment Information

(9) Segment Information

Operating segments are defined under GAAP as components of an enterprise for which separate financial information is available and evaluated regularly by our chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. Our reportable segments consist of: 1) North America; 2) Europe, the Middle East and Africa (EMEA); and 3) 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 us, is equal to net income from the Consolidated Statements of Income before (1) income tax benefit (expense), (2) total other income (expense), (3) non-cash impairment charges included within selling, general and administrative expenses and network related expenses, (4) depreciation and amortization expense, and (5) non-cash stock-based compensation expense included within selling, general and administrative expenses and network related 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 our internal reporting and is a key measure used by management to evaluate our profitability and operating performance 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 our performance to that of our competitors and to eliminate certain non-cash and non-operating items in order to consistently measure from period to period our ability to fund capital expenditures, fund growth, service debt and determine bonuses.

Adjusted EBITDA excludes non-cash impairment charges and non-cash stock-based 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 our 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 our primary operations.

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 our 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-based 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.

The following table presents revenue by segment:



	Three Months Ended
(dollars in millions)	March 31, 2017		March 31, 2016⁽¹⁾
Core Network Services Revenue:
North America	$	1,594	$	1,601
EMEA	175		190
Latin America	177		155
Total Core Network Services Revenue	1,946		1,946

Wholesale Voice Services Revenue:
North America	98		99
EMEA	2		4
Latin America	2		2
Total Wholesale Voice Services Revenue	102		105

Total Revenue	$	2,048	$	2,051

⁽¹⁾ The 2016 results have been adjusted to reflect changes made to customer assignments between the wholesale and enterprise channels as of the beginning of 2017.

The following table presents Adjusted EBITDA by segment and reconciles Adjusted EBITDA to net income:



	Three Months Ended
(dollars in millions)	March 31, 2017			March 31, 2016
Adjusted EBITDA:
North America	$	809		$	812
EMEA	56			54
Latin America	80			74
Unallocated Corporate Expenses	(240		)	(230		)
Adjusted EBITDA	705			710
Income Tax Expense	(70		)	(90		)
Total Other Expense	(172		)	(144		)
Depreciation and Amortization	(320		)	(301		)
Non-Cash Stock Compensation Attributable to Stock Awards	(48		)	(47		)
Net Income	$	95		$	128

The following table presents capital expenditures by segment and reconciles capital expenditures by segment to total capital expenditures:



	Three Months Ended
(dollars in millions)	March 31, 2017		March 31, 2016
Capital Expenditures:
North America	$	254	$	195
EMEA	31		39
Latin America	35		23
Unallocated Corporate Capital Expenditures	48		40
Total Capital Expenditures	$	368	$	297

The following table presents total assets by segment:



(dollars in millions)	March 31, 2017		December 31, 2016
Assets:
North America	$	20,942	$	20,818
EMEA	1,662		1,639
Latin America	2,340		2,304
Other	127		127
Total Assets	$	25,071	$	24,888

The changes in the carrying amount of goodwill by segment during the three months ended March 31, 2017 were as follows (in millions):



	North America		EMEA		Latin America		Total
Balance at December 31, 2016	$	7,024	$	109	$	596	$	7,729
Effect of foreign currency rate change	—		2		—		2
Balance at March 31, 2017	$	7,024	$	111	$	596	$	7,731

There were no events or changes in circumstances during the first three months of 2017 that indicated the carrying value of goodwill may not be recoverable.

Commitments, Contingencies and Other Items (Notes)

Commitments, Contingencies and Other Items

(10) Commitments, Contingencies and Other Items

We are subject to various legal proceedings and other contingent liabilities that individually or in the aggregate could materially affect our financial condition, future results of operations or cash flows. Amounts accrued for such contingencies aggregate to $98 million and are included in “Other” current liabilities and “Other Liabilities” in our Consolidated Balance Sheet at March 31, 2017. 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 would have no effect on our results of operations but could materially adversely affect our cash flows for the affected period.

We review our accruals at least quarterly and adjust 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 March 31, 2017. Although we believe we have 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 we believe it is reasonably possible that a loss may result that is materially in excess of the accrual (if any) established for the matter, we have 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, we are party to many other legal proceedings and contingencies, the resolution of which is not expected to materially affect our financial condition or future results of operations beyond the amounts accrued.

Rights-of-Way Litigation

We are party to a number of purported class action lawsuits involving our right to install fiber optic cable network in railroad right-of-ways adjacent to plaintiffs' land. In general, we obtained the rights to construct our networks from railroads, utilities, and others, and have installed our 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 us the right to construct and maintain our 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. We have 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. We have defeated motions for class certification in a number of these actions but expect 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 us, 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.

We negotiated a series of class settlements affecting all persons who own or owned land next to or near railroad rights of way in which we have installed our 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, we 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 we have installed our fiber optic cable networks. We are currently pursuing presentment of the settlement in applicable jurisdictions. The settlements, affecting current and former landowners, have received final federal court approval in all but one of the applicable states and the parties are actively engaged in, or have completed, the claims process for the vast majority of the applicable states, including payment of claims. We continue to seek approval in the remaining state.

Management believes that we have 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 our 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. After taking into account the developments described below, as well as the accrued interest and foreign exchange effects, the total amount of exposure is $18 million at March 31, 2017.

We challenged the tax assessments during 2005 by filing administrative claims before SUNAT. During August 2006 and June 2007, SUNAT rejected our 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 our favor 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. We 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 our favor on the central issue underlying the assessments. SUNAT appealed the court’s decision to the next judicial level. The court of appeal remanded the case to the first judicial court for further development of the facts and legal analysis supporting its decision. In April 2016, the first judicial level rendered a decision in our favor on the central issue underlying the assessments. SUNAT has appealed the substantive issue to the next judicial level. We also appealed certain procedural points. A hearing on these issues is scheduled to be held in May 2017.

In October 2013, the Tribunal notified us 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. We appealed the Tribunal's July 2013 administrative resolutions to the judicial court in Peru. In April 2015, the first judicial court rendered a decision largely in SUNAT’s favor on the central issue underlying the assessments. We appealed the court’s decision to the next judicial level. In April 2016, the court of appeal rendered a decision that declared null the April 2015 decision and remanded the case to the first judicial court for further development of the facts and legal analysis supporting its decision.

In December 2013, SUNAT initiated an audit of calendar year 2001. In June 2014, we were served with SUNAT’s assessments of the 2001 VAT credits declared null by the Tribunal and the corresponding fine. In July 2014, we challenged these assessments by filing administrative claims before SUNAT. In January 2015, SUNAT rejected the administrative claims, thereby confirming the assessments. We filed an appeal with the Tribunal in February 2015. In May 2015, the Tribunal notified us of its administrative resolution declaring the assessments and corresponding fines null. The time for SUNAT to appeal this resolution has closed. Under local practice, notification of an appeal can take several months. Counsel confirmed in the first quarter of 2016 that SUNAT has not filed an appeal to the resolution. Nevertheless, SUNAT retains the right to reissue the assessments declared null or start a new audit. However, we are under no obligation to provide additional information and any fine issued by SUNAT based on the same information that it has already used in the past would be declared null. Accordingly, in March 2016, we released an accrual of approximately $15 million for an assessment and associated interest.

In addition, based on a change in legal interpretation by the Peruvian judicial courts, the statute of limitations with respect to the 2001 fines has expired. Accordingly, in the fourth quarter of 2016, we released an accrual of approximately $11 million of fines and associated interest.

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 of our Latin American subsidiaries 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 us or termination of service relationships. We are vigorously defending ourselves against the asserted claims, which aggregate to approximately $32 million at March 31, 2017.

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 our 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, we released an accrual 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. We have 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 we have appealed those decisions to the judicial courts. In October 2012 and June 2014, we 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 July 2014 assessment was confirmed during the fourth quarter of 2014 at the first administrative level and we appealed this decision to the second administrative level. During the fourth quarter of 2014, we entered into an amnesty with the Rio de Janeiro state tax authorities with respect to potential ICMS liability for the 2008 tax period. As a result, we paid $5 million and released an accrual of $3 million of tax corresponding to the ICMS applicable on the provision of Internet access services in the fourth quarter of 2014.

We are vigorously contesting all such assessments in both states and, in particular, view the assessment of ICMS on revenue from leasing movable properties to be without merit. Nevertheless, we believe it is reasonably possible that these assessments could result in a loss of up to $51 million at March 31, 2017 in excess of the accruals established for these matters.

Letters of Credit

It is customary for us 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 our behalf in accordance with specified terms and conditions. As of March 31, 2017 and December 31, 2016, we had outstanding letters of credit or other similar obligations of approximately $39 million and $39 million, respectively, of which $34 million and $33 million are collateralized by cash that is reflected on the Consolidated Balance Sheets as restricted cash and securities. We do not believe exposure to loss related to our letters of credit is material.

Condensed Consolidating Financial Information (Notes)

Condensed Consolidating Financial Information

(11) Condensed Consolidating Financial Information

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

In conjunction with the registration of the Level 3 Financing, Inc. Senior Notes, 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 our Consolidated Financial Statements are interdependent. The accompanying condensed consolidating financial information presents the statements of comprehensive income, balance sheets and statements of cash flows of each legal entity and, on an aggregate basis, the other non-guarantor subsidiaries based on amounts incurred by such entities, and is not intended to present the operating results of those legal entities on a stand-alone basis. Level 3 Communications, LLC leases equipment and certain facilities from other wholly owned subsidiaries of Level 3 Communications, Inc. These transactions are eliminated in our consolidated results.

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2017



	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
	(dollars in millions)
Revenue	$	—		$	—		$	920		$	1,157		$	(29	)	$	2,048
Costs and Expense:
Network Access Costs	—			—			323			397			(29		)	691
Network Related Expenses	—			—			243			93			—			336
Depreciation and Amortization	—			—			104			216			—			320
Selling, General and Administrative Expenses	1			1			277			85			—			364
Total Costs and Expenses	1			1			947			791			(29		)	1,711
Operating Income (Loss)	(1		)	(1		)	(27		)	366			—			337
Other Income (Expense):
Interest income	—			—			2			—			—			2
Interest expense	(9		)	(120		)	(1		)	(4		)	—			(134		)
Interest income (expense) affiliates, net	377			574			(869		)	(82		)	—			—
Equity in net earnings (losses) of subsidiaries	(275		)	(646		)	203			—			718			—
Other, net	—			(44		)	5			(1		)	—			(40		)
Total Other Income (Expense)	93			(236		)	(660		)	(87		)	718			(172		)
Income (Loss) before Income Taxes	92			(237		)	(687		)	279			718			165
Income Tax Benefit (Expense)	3			(38		)	(1		)	(34		)	—			(70		)
Net Income (Loss)	95			(275		)	(688		)	245			718			95
Other Comprehensive Income (Loss), Net of Income Taxes	21			—			—			21			(21		)	21
Comprehensive Income (Loss)	$	116		$	(275	)	$	(688	)	$	266		$	697		$	116

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2016



	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
	(dollars in millions)
Revenue	$	—		$	—		$	866		$	1,219		$	(34	)	$	2,051
Costs and Expense:
Network access costs	—			—			320			408			(34		)	694
Network related expenses	—			—			237			101			—			338
Depreciation and amortization	—			—			88			213			—			301
Selling, general and administrative expenses	1			1			250			104			—			356
Total Costs and Expenses	1			1			895			826			(34		)	1,689
Operating (Loss) Income	(1		)	(1		)	(29		)	393			—			362
Other Income (Expense):
Interest income	—			—			—			1			—			1
Interest expense	(9		)	(128		)	(1		)	3			—			(135		)
Interest income (expense) affiliates, net	342			531			(801		)	(72		)	—			—
Equity in net earnings (losses) of subsidiaries	(212		)	(541		)	199			—			554			—
Other, net	—			—			2			(12		)	—			(10		)
Total Other Income (Expense)	121			(138		)	(601		)	(80		)	554			(144		)
Income (Loss) before Income Taxes	120			(139		)	(630		)	313			554			218
Income Tax Expense	4			(69		)	(1		)	(24		)	—			(90		)
Net Income (Loss)	124			(208		)	(631		)	289			554			128
Other Comprehensive Income (Loss), Net of Income Taxes	45			—			—			45			(45		)	45
Comprehensive Income (Loss)	$	169		$	(208	)	$	(631	)	$	334		$	509		$	173

Condensed Consolidating Balance Sheets

March 31, 2017



	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	$	15	$	—	$	1,838		$	94	$	—		$	1,947
Restricted cash and securities	—		—		1			6		—			7
Receivables, less allowances for doubtful accounts	—		—		18			694		—			712
Due from affiliates	17,415		22,142		—			2,531		(42,088		)	—
Other	—		—		111			30		—			141
Total Current Assets	17,430		22,142		1,968			3,355		(42,088		)	2,807
Property, Plant, and Equipment, net	—		—		4,012			6,273		—			10,285
Restricted Cash and Securities	22		—		9			—		—			31
Goodwill and Other Intangibles, net	—		—		352			8,240		—			8,592
Investment in Subsidiaries	16,899		17,610		3,655			—		(38,164		)	—
Deferred Tax Assets	53		2,650		(1		)	603		—			3,305
Other Assets, net	—		—		15			36		—			51
Total Assets	$	34,404	$	42,402	$	10,010		$	18,507	$	(80,252	)	$	25,071

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	—	$	3	$	346		$	401	$	—		$	750
Current portion of long-term debt	—		299		2			6		—			307
Accrued payroll and employee benefits	—		—		112			36		—			148
Accrued interest	3		91		—			7		—			101
Current portion of deferred revenue	—		—		114			161		—			275
Due to affiliates	—		—		42,088			—		(42,088		)	—
Other	—		1		125			27		—			153
Total Current Liabilities	3		394		42,787			638		(42,088		)	1,734
Long-Term Debt, less current portion	592		9,813		12			164		—			10,581
Deferred Revenue, less current portion	—		—		760			284		—			1,044
Other Liabilities	16		—		160			455		—			631
Commitments and Contingencies
Stockholders' Equity (Deficit)	33,793		32,195		(33,709		)	16,966		(38,164		)	11,081
Total Liabilities and Stockholders' Equity (Deficit)	$	34,404	$	42,402	$	10,010		$	18,507	$	(80,252	)	$	25,071

Condensed Consolidating Balance Sheets

December 31, 2016



	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	$	15	$	—	$	1,700		$	104	$	—		$	1,819
Restricted cash and securities	—		—		1			6		—			7
Receivables, less allowances for doubtful accounts	—		—		26			686		—			712
Due from affiliates	17,032		21,715		—			2,180		(40,927		)	—
Other	—		—		87			28		—			115
Total Current Assets	17,047		21,715		1,814			3,004		(40,927		)	2,653
Property, Plant, and Equipment, net	—		—		3,869			6,270		—			10,139
Restricted Cash and Securities	22		—		9			—		—			31
Goodwill and Other Intangibles, net	—		—		353			8,291		—			8,644
Investment in Subsidiaries	16,869		17,599		3,674			—		(38,142		)	—
Deferred Tax Assets	51		2,687		—			632		—			3,370
Other Assets, net	—		—		16			35		—			51
Total Assets	$	33,989	$	42,001	$	9,735		$	18,232	$	(79,069	)	$	24,888

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	—	$	—	$	307		$	399	$	—		$	706
Current portion of long-term debt	—		—		2			5		—			7
Accrued payroll and employee benefits	—		—		160			35		—			195
Accrued interest	11		110		—			8		—			129
Current portion of deferred revenue	—		—		116			150		—			266
Due to affiliates	—		—		40,927			—		(40,927		)	—
Other	—		—		127			41		—			168
Total Current Liabilities	11		110		41,639			638		(40,927		)	1,471
Long-Term Debt, less current portion	592		10,108		13			164		—			10,877
Deferred Revenue, less current portion	—		—		719			282		—			1,001
Other Liabilities	16		—		155			451		—			622
Commitments and Contingencies
Stockholders' Equity (Deficit)	33,370		31,783		(32,791		)	16,697		(38,142		)	10,917
Total Liabilities and Stockholders' Equity (Deficit)	$	33,989	$	42,001	$	9,735		$	18,232	$	(79,069	)	$	24,888

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2017



	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	$	(16	)	$	(135	)	$	109		$	581		$	—	$	539
Cash Flows from Investing Activities:
Capital expenditures	—			—			(233		)	(135		)	—		(368		)
Decrease in restricted cash and securities, net	—			—			—			—			—		—
Proceeds from the sale of property, plant and equipment and other assets	—			—			—			—			—		—
Net Cash Provided by (Used in) Investing Activities	—			—			(233		)	(135		)	—		(368		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	—			4,569			—			—			—		4,569
Payments on and repurchases of long-term debt and capital leases	—			(4,611		)	—			(2		)	—		(4,613		)
Increase (decrease) due from/to affiliates, net	16			177			262			(455		)	—		—
Net Cash Provided by (Used in) Financing Activities	16			135			262			(457		)	—		(44		)
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			1			—		1
Net Change in Cash and Cash Equivalents	—			—			138			(10		)	—		128
Cash and Cash Equivalents at Beginning of Period	15			—			1,700			104			—		1,819
Cash and Cash Equivalents at End of Period	$	15		$	—		$	1,838		$	94		$	—	$	1,947

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2016



	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	$	(17	)	$	(92	)	$	130		$	489		$	—	$	510
Cash Flows from Investing Activities:
Capital expenditures	—			—			(159		)	(138		)	—		(297		)
(Increase) decrease in restricted cash and securities, net	—			(829		)	1			—			—		(828		)
Net Cash Used in Investing Activities	—			(829		)	(158		)	(138		)	—		(1,125		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	—			765			—			—			—		765
Payments on and repurchases of long-term debt and capital leases	—			—			—			(1		)	—		(1		)
Increase (decrease) due from/to affiliates, net	17			156			187			(360		)	—		—
Net Cash Provided by (Used in) Financing Activities	17			921			187			(361		)	—		764
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			1			—		1
Net Change in Cash and Cash Equivalents	—			—			159			(9		)	—		150
Cash and Cash Equivalents at Beginning of Period	12			6			727			109			—		854
Cash and Cash Equivalents at End of Period	$	12		$	6		$	886		$	100		$	—	$	1,004

Organization and Summary of Significant Accounting Policies (Policies)

Description of Business

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

On October 31, 2016, we entered into an agreement and plan of merger (the "Merger Agreement") with CenturyLink, Inc., a Louisiana corporation ("CenturyLink"), Wildcat Merger Sub 1 LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink ("Merger Sub 1"), and WWG Merger Sub LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink ("Merger Sub 2"), pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, we will be acquired by CenturyLink in a cash and stock transaction, including the assumption of our debt (the "CenturyLink Merger"). See Note 2 - CenturyLink Merger.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include our and our subsidiaries' accounts in which we have 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 our consolidation policy, we consider our controlled subsidiaries, investments in businesses in which we are not the primary beneficiary or do not have effective control but have the ability to significantly influence operating and financial policies, and variable interests resulting from economic arrangements that give us rights to economic risks or rewards of a legal entity. We do not have variable interests in a variable interest entity where we are required to consolidate the entity as the primary beneficiary. Due to exchange restrictions and other conditions, effective at the end of the third quarter of 2015 we deconsolidated our Venezuelan subsidiary and began accounting for our investment in our Venezuelan subsidiary using the cost method of accounting. The factors that led to our conclusions at the end of the third quarter of 2015 continued to exist through the end of the first quarter of 2017.

The accompanying Consolidated Balance Sheet as of December 31, 2016, which was derived from audited Consolidated Financial Statements, and the unaudited interim Consolidated Financial Statements as of March 31, 2017 and for the three months ended March 31, 2017 and 2016 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 our audited Consolidated Financial Statements and notes thereto included in our Form 10-K for the year ended December 31, 2016. In the opinion of our 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.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases ("ASC 842"), which requires entities that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. This ASU will replace most existing leasing guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those years. Early application is permitted. The standard requires the use of a modified retrospective transition method. We are evaluating the effect that ASU 2016-02 will have on our Consolidated Financial Statements and related disclosures, and expect the new guidance to significantly increase the reported assets and liabilities on our Consolidated Balance Sheets.

In May 2014, the Financial Accounting Standards Board issued ASU 2014-09, Revenue from Contracts with Customers, which amended the existing accounting standards for revenue recognition and requires an entity to recognize the amount of revenue it expects to be entitled to for the transfer of promised goods or services to customers. The ASU and subsequent amendments have been codified as ASC 606, Revenue from Contracts with Customers (“ASC 606”). In July 2015, the FASB deferred the effective date to annual reporting periods beginning after December 15, 2017, and interim reporting periods within those periods. Early adoption is permitted using the original effective date of annual reporting periods beginning after December 15, 2016, and interim reporting periods within those periods. The new guidance may be applied retrospectively to each prior period presented or prospectively with the cumulative effect recognized as of the date of initial adoption. We will not adopt ASC 606 early.

We are performing a comprehensive analysis of our revenue streams and contractual arrangements to identify the effects of ASC 606 on our consolidated financial statements and are developing new accounting and reporting policies, business and internal control processes and procedures to facilitate adoption of the standard. Because we currently have service contracts that contain a significant financing component that are not currently separately accounted for, we will be required to estimate and record incremental revenue and interest cost associated with these contractual terms. In addition, we will be required to capitalize, and subsequently amortize, commission costs associated with obtaining or fulfilling our customer contracts, which we do not currently defer and amortize. We will also have to comply with new revenue disclosure requirements. We are continuing to review and evaluate underlying contract information that will be used to support new accounting and disclosure requirements under ASC 606 and evaluate other matters that may result from adoption of the standard. We have not yet selected a transition method, as our method of transition may be affected by the CenturyLink Merger, which we expect will be completed in the third quarter of 2017, and subsequent integration activities completed prior to the January 1, 2018 ASC 606 adoption date.

Other Intangible Assets (Tables)

Schedule of acquisition-related intangible assets

Other intangible assets as of March 31, 2017 and December 31, 2016 were as follows (dollars in millions):



	Gross Carrying Amount		Accumulated Amortization			Net
March 31, 2017
Finite-Lived Intangible Assets:
Customer Contracts and Relationships	$	1,972	$	(1,159	)	$	813
Trademarks	55		(55		)	—
Patents and Developed Technology	227		(194		)	33
	2,254		(1,408		)	846
Indefinite-Lived Intangible Assets:
Trade Name	15		—			15
	$	2,269	$	(1,408	)	$	861
December 31, 2016
Finite-Lived Intangible Assets:
Customer Contracts and Relationships	$	1,973	$	(1,113	)	$	860
Trademarks	55		(55		)	—
Patents and Developed Technology	229		(189		)	40
	2,257		(1,357		)	900
Indefinite-Lived Intangible Assets:
Trade Name	15		—			15
	$	2,272	$	(1,357	)	$	915

Schedule of estimated amortization expense of finite-lived acquisition-related intangible assets

As of March 31, 2017, estimated amortization expense for our finite-lived intangible assets over the next five years is as follows (dollars in millions):



2017 (remaining nine months)	$	147
2018	190
2019	179
2020	166
2021	143
2022	21
Thereafter	—
	$	846

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 our long-term debt as well as the input levels used to determine these fair values as of March 31, 2017 and December 31, 2016:



					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)	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Liabilities Not Recorded at Fair Value in the Financial Statements:
Long-term Debt, including the current portion:
Term Loans	$	4,567	$	4,566	$	4,616	$	4,671	$	—	$	—
Senior Notes	6,138		6,135		6,367		6,283		—		—
Capital Leases and Other	183		183		—		—		183		183
Total Long-term Debt, including the current portion	$	10,888	$	10,884	$	10,983	$	10,954	$	183	$	183

We do 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

The following table summarizes our long-term debt (amounts in millions):



	Date of				March 31, 2017			December 31, 2016
	Issuance/Amendment	Maturity	Interest Payments	Interest Rate	Amount			Amount
Senior Secured Term Loans:
Borrowed by Level 3 Financing, Inc.
Tranche B-III 2019 Term Loan ⁽¹⁾⁽⁴⁾	Aug 2013	—	Quarterly	LIBOR +3.00%	$	—		$	815
Tranche B 2020 Term Loan ⁽¹⁾⁽⁴⁾	Oct 2013	—	Quarterly	LIBOR +3.00%	—			1,796
Tranche B-II 2022 Term Loan⁽¹⁾⁽⁴⁾	May 2015	—	Quarterly	LIBOR +2.75%	—			2,000
Tranche B 2024 Term Loan ⁽¹⁾⁽⁴⁾	Feb 2017	Feb 2024	Quarterly	LIBOR +2.25%	4,611			—
Senior Notes:
Issued by Level 3 Financing, Inc.
Floating Rate Senior Notes due 2018 ⁽²⁾⁽⁴⁾	Nov 2013	Jan 2018	May/Nov	6-Month LIBOR +3.50%	300			300
6.125% Senior Notes due 2021 ⁽²⁾	Nov 2013	Jan 2021	Apr/Oct	6.125%	640			640
5.375% Senior Notes due 2022⁽²⁾	Aug 2014	Aug 2022	May/Nov	5.375%	1,000			1,000
5.625% Senior Notes due 2023 ⁽²⁾	Jan 2015	Feb 2023	Jun/Dec	5.625%	500			500
5.125% Senior Notes due 2023⁽²⁾	Apr 2015	May 2023	Mar/Sept	5.125%	700			700
5.375% Senior Notes due 2025 ⁽²⁾	Apr 2015	May 2025	Mar/Sept	5.375%	800			800
5.375% Senior Notes due 2024 ⁽²⁾	Nov 2015	Jan 2024	Jan/Jul	5.375%	900			900
5.25% Senior Notes due 2026 ⁽²⁾	Mar 2016	Mar 2026	Apr/Oct	5.250%	775			775
Issued by Level 3 Communications, Inc.
5.75% Senior Notes due 2022⁽³⁾	Dec 2014	Dec 2022	Mar/Sept	5.750%	600			600
Capital Leases and Other Debt					183			183
Total Debt Obligations					11,009			11,009
Unamortized discounts					—			(13		)
Unamortized debt issuance costs					(121		)	(112		)
Current Portion					(307		)	(7		)
Total Long-Term Debt					$	10,581		$	10,877

⁽¹⁾ The term loans are secured obligations and guaranteed by Level 3 Communications, Inc. and Level 3 Communications, LLC and certain other subsidiaries.

⁽²⁾ The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by Level 3 Communications, Inc. and Level 3 Communications, LLC.

⁽³⁾The notes were not guaranteed by any of Level 3 Communications, Inc.'s subsidiaries.

⁽⁴⁾ The Tranche B 2024 Term Loan had an interest rate of 3.227% as of March 31, 2017. The term loans may select from several LIBO rates, including 1 month and 2 month rates. As such, payments may be monthly but no less than quarterly. All other term loans were refinanced on February 22, 2017 as described below.The Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of December 31, 2016. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of December 31, 2016. The Floating Rate Senior Notes due 2018 had an interest rate of 4.762% as of March 31, 2017 and 4.762% as of December 31, 2016. The interest rate on the Tranche B-III 2019 Term Loan, and the Tranche B 2020 Term Loan were set with a minimum LIBOR of 1.00%, the Tranche B-II 2022 Term Loan was set with a minimum LIBOR of 0.75% and the Tranche B 2024 Term Loan is set with a minimum LIBOR of zero percent.

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 and debt issuance costs) were as follows as of March 31, 2017 (dollars in millions):



2017 (remaining nine months)	$	5
2018	307
2019	7
2020	8
2021	650
2022	1,610
Thereafter	8,422
	$	11,009

Accumulated Other Comprehensive Loss (Tables)

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, 2015	$	(273	)	$	(28	)	$	(301	)
Other comprehensive income (loss) before reclassifications, net of tax	48			(2		)	46
Amounts reclassified from accumulated other comprehensive loss	—			(1		)	(1		)
Balance at March 31, 2016	$	(225	)	$	(31	)	$	(256	)



Balance at December 31, 2016	$	(353	)	$	(34	)	$	(387	)
Other comprehensive income before reclassifications, net of tax	20			—			20
Amounts reclassified from accumulated other comprehensive loss	—			1			1
Balance at March 31, 2017	$	(333	)	$	(33	)	$	(366	)

Stock-Based Compensation (Tables)

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table summarizes non-cash compensation expense for each of the three months ended March 31, 2017 and 2016 (dollars in millions):



	Three Months Ended March 31,
	2017		2016
Outperform Stock Appreciation Rights	$	—	$	1
Restricted Stock Units	28		21
Performance Restricted Stock Units	9		14
401(k) Match Expense	11		11
	48		47

Segment Information (Tables)

Reconciliation of Revenue from Segments to Consolidated

The following table presents revenue by segment:



	Three Months Ended
(dollars in millions)	March 31, 2017		March 31, 2016⁽¹⁾
Core Network Services Revenue:
North America	$	1,594	$	1,601
EMEA	175		190
Latin America	177		155
Total Core Network Services Revenue	1,946		1,946

Wholesale Voice Services Revenue:
North America	98		99
EMEA	2		4
Latin America	2		2
Total Wholesale Voice Services Revenue	102		105

Total Revenue	$	2,048	$	2,051

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following table presents Adjusted EBITDA by segment and reconciles Adjusted EBITDA to net income:



	Three Months Ended
(dollars in millions)	March 31, 2017			March 31, 2016
Adjusted EBITDA:
North America	$	809		$	812
EMEA	56			54
Latin America	80			74
Unallocated Corporate Expenses	(240		)	(230		)
Adjusted EBITDA	705			710
Income Tax Expense	(70		)	(90		)
Total Other Expense	(172		)	(144		)
Depreciation and Amortization	(320		)	(301		)
Non-Cash Stock Compensation Attributable to Stock Awards	(48		)	(47		)
Net Income	$	95		$	128

Schedule of Segment Reporting Information, by Segment

The following table presents capital expenditures by segment and reconciles capital expenditures by segment to total capital expenditures:



	Three Months Ended
(dollars in millions)	March 31, 2017		March 31, 2016
Capital Expenditures:
North America	$	254	$	195
EMEA	31		39
Latin America	35		23
Unallocated Corporate Capital Expenditures	48		40
Total Capital Expenditures	$	368	$	297

Reconciliation of Assets from Segment to Consolidated

The following table presents total assets by segment:



(dollars in millions)	March 31, 2017		December 31, 2016
Assets:
North America	$	20,942	$	20,818
EMEA	1,662		1,639
Latin America	2,340		2,304
Other	127		127
Total Assets	$	25,071	$	24,888

Reconciliation of Goodwill from Segment to Consolidated

The changes in the carrying amount of goodwill by segment during the three months ended March 31, 2017 were as follows (in millions):



	North America		EMEA		Latin America		Total
Balance at December 31, 2016	$	7,024	$	109	$	596	$	7,729
Effect of foreign currency rate change	—		2		—		2
Balance at March 31, 2017	$	7,024	$	111	$	596	$	7,731

There were no events or changes in circumstances during the first three months of 2017 that indicated the carrying value of goodwill may not be recoverable.

Condensed Consolidating Financial Information (Tables)

Condensed Consolidating Financial Information

(11) Condensed Consolidating Financial Information

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

In conjunction with the registration of the Level 3 Financing, Inc. Senior Notes, 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 our Consolidated Financial Statements are interdependent. The accompanying condensed consolidating financial information presents the statements of comprehensive income, balance sheets and statements of cash flows of each legal entity and, on an aggregate basis, the other non-guarantor subsidiaries based on amounts incurred by such entities, and is not intended to present the operating results of those legal entities on a stand-alone basis. Level 3 Communications, LLC leases equipment and certain facilities from other wholly owned subsidiaries of Level 3 Communications, Inc. These transactions are eliminated in our consolidated results.

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2017



	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
	(dollars in millions)
Revenue	$	—		$	—		$	920		$	1,157		$	(29	)	$	2,048
Costs and Expense:
Network Access Costs	—			—			323			397			(29		)	691
Network Related Expenses	—			—			243			93			—			336
Depreciation and Amortization	—			—			104			216			—			320
Selling, General and Administrative Expenses	1			1			277			85			—			364
Total Costs and Expenses	1			1			947			791			(29		)	1,711
Operating Income (Loss)	(1		)	(1		)	(27		)	366			—			337
Other Income (Expense):
Interest income	—			—			2			—			—			2
Interest expense	(9		)	(120		)	(1		)	(4		)	—			(134		)
Interest income (expense) affiliates, net	377			574			(869		)	(82		)	—			—
Equity in net earnings (losses) of subsidiaries	(275		)	(646		)	203			—			718			—
Other, net	—			(44		)	5			(1		)	—			(40		)
Total Other Income (Expense)	93			(236		)	(660		)	(87		)	718			(172		)
Income (Loss) before Income Taxes	92			(237		)	(687		)	279			718			165
Income Tax Benefit (Expense)	3			(38		)	(1		)	(34		)	—			(70		)
Net Income (Loss)	95			(275		)	(688		)	245			718			95
Other Comprehensive Income (Loss), Net of Income Taxes	21			—			—			21			(21		)	21
Comprehensive Income (Loss)	$	116		$	(275	)	$	(688	)	$	266		$	697		$	116

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2016



	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
	(dollars in millions)
Revenue	$	—		$	—		$	866		$	1,219		$	(34	)	$	2,051
Costs and Expense:
Network access costs	—			—			320			408			(34		)	694
Network related expenses	—			—			237			101			—			338
Depreciation and amortization	—			—			88			213			—			301
Selling, general and administrative expenses	1			1			250			104			—			356
Total Costs and Expenses	1			1			895			826			(34		)	1,689
Operating (Loss) Income	(1		)	(1		)	(29		)	393			—			362
Other Income (Expense):
Interest income	—			—			—			1			—			1
Interest expense	(9		)	(128		)	(1		)	3			—			(135		)
Interest income (expense) affiliates, net	342			531			(801		)	(72		)	—			—
Equity in net earnings (losses) of subsidiaries	(212		)	(541		)	199			—			554			—
Other, net	—			—			2			(12		)	—			(10		)
Total Other Income (Expense)	121			(138		)	(601		)	(80		)	554			(144		)
Income (Loss) before Income Taxes	120			(139		)	(630		)	313			554			218
Income Tax Expense	4			(69		)	(1		)	(24		)	—			(90		)
Net Income (Loss)	124			(208		)	(631		)	289			554			128
Other Comprehensive Income (Loss), Net of Income Taxes	45			—			—			45			(45		)	45
Comprehensive Income (Loss)	$	169		$	(208	)	$	(631	)	$	334		$	509		$	173

Condensed Consolidating Balance Sheets

March 31, 2017



	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	$	15	$	—	$	1,838		$	94	$	—		$	1,947
Restricted cash and securities	—		—		1			6		—			7
Receivables, less allowances for doubtful accounts	—		—		18			694		—			712
Due from affiliates	17,415		22,142		—			2,531		(42,088		)	—
Other	—		—		111			30		—			141
Total Current Assets	17,430		22,142		1,968			3,355		(42,088		)	2,807
Property, Plant, and Equipment, net	—		—		4,012			6,273		—			10,285
Restricted Cash and Securities	22		—		9			—		—			31
Goodwill and Other Intangibles, net	—		—		352			8,240		—			8,592
Investment in Subsidiaries	16,899		17,610		3,655			—		(38,164		)	—
Deferred Tax Assets	53		2,650		(1		)	603		—			3,305
Other Assets, net	—		—		15			36		—			51
Total Assets	$	34,404	$	42,402	$	10,010		$	18,507	$	(80,252	)	$	25,071

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	—	$	3	$	346		$	401	$	—		$	750
Current portion of long-term debt	—		299		2			6		—			307
Accrued payroll and employee benefits	—		—		112			36		—			148
Accrued interest	3		91		—			7		—			101
Current portion of deferred revenue	—		—		114			161		—			275
Due to affiliates	—		—		42,088			—		(42,088		)	—
Other	—		1		125			27		—			153
Total Current Liabilities	3		394		42,787			638		(42,088		)	1,734
Long-Term Debt, less current portion	592		9,813		12			164		—			10,581
Deferred Revenue, less current portion	—		—		760			284		—			1,044
Other Liabilities	16		—		160			455		—			631
Commitments and Contingencies
Stockholders' Equity (Deficit)	33,793		32,195		(33,709		)	16,966		(38,164		)	11,081
Total Liabilities and Stockholders' Equity (Deficit)	$	34,404	$	42,402	$	10,010		$	18,507	$	(80,252	)	$	25,071

Condensed Consolidating Balance Sheets

December 31, 2016



	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	$	15	$	—	$	1,700		$	104	$	—		$	1,819
Restricted cash and securities	—		—		1			6		—			7
Receivables, less allowances for doubtful accounts	—		—		26			686		—			712
Due from affiliates	17,032		21,715		—			2,180		(40,927		)	—
Other	—		—		87			28		—			115
Total Current Assets	17,047		21,715		1,814			3,004		(40,927		)	2,653
Property, Plant, and Equipment, net	—		—		3,869			6,270		—			10,139
Restricted Cash and Securities	22		—		9			—		—			31
Goodwill and Other Intangibles, net	—		—		353			8,291		—			8,644
Investment in Subsidiaries	16,869		17,599		3,674			—		(38,142		)	—
Deferred Tax Assets	51		2,687		—			632		—			3,370
Other Assets, net	—		—		16			35		—			51
Total Assets	$	33,989	$	42,001	$	9,735		$	18,232	$	(79,069	)	$	24,888

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	—	$	—	$	307		$	399	$	—		$	706
Current portion of long-term debt	—		—		2			5		—			7
Accrued payroll and employee benefits	—		—		160			35		—			195
Accrued interest	11		110		—			8		—			129
Current portion of deferred revenue	—		—		116			150		—			266
Due to affiliates	—		—		40,927			—		(40,927		)	—
Other	—		—		127			41		—			168
Total Current Liabilities	11		110		41,639			638		(40,927		)	1,471
Long-Term Debt, less current portion	592		10,108		13			164		—			10,877
Deferred Revenue, less current portion	—		—		719			282		—			1,001
Other Liabilities	16		—		155			451		—			622
Commitments and Contingencies
Stockholders' Equity (Deficit)	33,370		31,783		(32,791		)	16,697		(38,142		)	10,917
Total Liabilities and Stockholders' Equity (Deficit)	$	33,989	$	42,001	$	9,735		$	18,232	$	(79,069	)	$	24,888

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2017



	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	$	(16	)	$	(135	)	$	109		$	581		$	—	$	539
Cash Flows from Investing Activities:
Capital expenditures	—			—			(233		)	(135		)	—		(368		)
Decrease in restricted cash and securities, net	—			—			—			—			—		—
Proceeds from the sale of property, plant and equipment and other assets	—			—			—			—			—		—
Net Cash Provided by (Used in) Investing Activities	—			—			(233		)	(135		)	—		(368		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	—			4,569			—			—			—		4,569
Payments on and repurchases of long-term debt and capital leases	—			(4,611		)	—			(2		)	—		(4,613		)
Increase (decrease) due from/to affiliates, net	16			177			262			(455		)	—		—
Net Cash Provided by (Used in) Financing Activities	16			135			262			(457		)	—		(44		)
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			1			—		1
Net Change in Cash and Cash Equivalents	—			—			138			(10		)	—		128
Cash and Cash Equivalents at Beginning of Period	15			—			1,700			104			—		1,819
Cash and Cash Equivalents at End of Period	$	15		$	—		$	1,838		$	94		$	—	$	1,947

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2016



	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	$	(17	)	$	(92	)	$	130		$	489		$	—	$	510
Cash Flows from Investing Activities:
Capital expenditures	—			—			(159		)	(138		)	—		(297		)
(Increase) decrease in restricted cash and securities, net	—			(829		)	1			—			—		(828		)
Net Cash Used in Investing Activities	—			(829		)	(158		)	(138		)	—		(1,125		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	—			765			—			—			—		765
Payments on and repurchases of long-term debt and capital leases	—			—			—			(1		)	—		(1		)
Increase (decrease) due from/to affiliates, net	17			156			187			(360		)	—		—
Net Cash Provided by (Used in) Financing Activities	17			921			187			(361		)	—		764
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			1			—		1
Net Change in Cash and Cash Equivalents	—			—			159			(9		)	—		150
Cash and Cash Equivalents at Beginning of Period	12			6			727			109			—		854
Cash and Cash Equivalents at End of Period	$	12		$	6		$	886		$	100		$	—	$	1,004

Schedule of Condensed Consolidating Statements of Comprehensive Income (Loss)

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2017



	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
	(dollars in millions)
Revenue	$	—		$	—		$	920		$	1,157		$	(29	)	$	2,048
Costs and Expense:
Network Access Costs	—			—			323			397			(29		)	691
Network Related Expenses	—			—			243			93			—			336
Depreciation and Amortization	—			—			104			216			—			320
Selling, General and Administrative Expenses	1			1			277			85			—			364
Total Costs and Expenses	1			1			947			791			(29		)	1,711
Operating Income (Loss)	(1		)	(1		)	(27		)	366			—			337
Other Income (Expense):
Interest income	—			—			2			—			—			2
Interest expense	(9		)	(120		)	(1		)	(4		)	—			(134		)
Interest income (expense) affiliates, net	377			574			(869		)	(82		)	—			—
Equity in net earnings (losses) of subsidiaries	(275		)	(646		)	203			—			718			—
Other, net	—			(44		)	5			(1		)	—			(40		)
Total Other Income (Expense)	93			(236		)	(660		)	(87		)	718			(172		)
Income (Loss) before Income Taxes	92			(237		)	(687		)	279			718			165
Income Tax Benefit (Expense)	3			(38		)	(1		)	(34		)	—			(70		)
Net Income (Loss)	95			(275		)	(688		)	245			718			95
Other Comprehensive Income (Loss), Net of Income Taxes	21			—			—			21			(21		)	21
Comprehensive Income (Loss)	$	116		$	(275	)	$	(688	)	$	266		$	697		$	116

Condensed Consolidating Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2016



	Level 3 Communications, Inc.			Level 3 Financing, Inc.			Level 3 Communications, LLC			Other Non-Guarantor Subsidiaries			Eliminations			Total
	(dollars in millions)
Revenue	$	—		$	—		$	866		$	1,219		$	(34	)	$	2,051
Costs and Expense:
Network access costs	—			—			320			408			(34		)	694
Network related expenses	—			—			237			101			—			338
Depreciation and amortization	—			—			88			213			—			301
Selling, general and administrative expenses	1			1			250			104			—			356
Total Costs and Expenses	1			1			895			826			(34		)	1,689
Operating (Loss) Income	(1		)	(1		)	(29		)	393			—			362
Other Income (Expense):
Interest income	—			—			—			1			—			1
Interest expense	(9		)	(128		)	(1		)	3			—			(135		)
Interest income (expense) affiliates, net	342			531			(801		)	(72		)	—			—
Equity in net earnings (losses) of subsidiaries	(212		)	(541		)	199			—			554			—
Other, net	—			—			2			(12		)	—			(10		)
Total Other Income (Expense)	121			(138		)	(601		)	(80		)	554			(144		)
Income (Loss) before Income Taxes	120			(139		)	(630		)	313			554			218
Income Tax Expense	4			(69		)	(1		)	(24		)	—			(90		)
Net Income (Loss)	124			(208		)	(631		)	289			554			128
Other Comprehensive Income (Loss), Net of Income Taxes	45			—			—			45			(45		)	45
Comprehensive Income (Loss)	$	169		$	(208	)	$	(631	)	$	334		$	509		$	173

Schedule of Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheets

March 31, 2017



	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	$	15	$	—	$	1,838		$	94	$	—		$	1,947
Restricted cash and securities	—		—		1			6		—			7
Receivables, less allowances for doubtful accounts	—		—		18			694		—			712
Due from affiliates	17,415		22,142		—			2,531		(42,088		)	—
Other	—		—		111			30		—			141
Total Current Assets	17,430		22,142		1,968			3,355		(42,088		)	2,807
Property, Plant, and Equipment, net	—		—		4,012			6,273		—			10,285
Restricted Cash and Securities	22		—		9			—		—			31
Goodwill and Other Intangibles, net	—		—		352			8,240		—			8,592
Investment in Subsidiaries	16,899		17,610		3,655			—		(38,164		)	—
Deferred Tax Assets	53		2,650		(1		)	603		—			3,305
Other Assets, net	—		—		15			36		—			51
Total Assets	$	34,404	$	42,402	$	10,010		$	18,507	$	(80,252	)	$	25,071

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	—	$	3	$	346		$	401	$	—		$	750
Current portion of long-term debt	—		299		2			6		—			307
Accrued payroll and employee benefits	—		—		112			36		—			148
Accrued interest	3		91		—			7		—			101
Current portion of deferred revenue	—		—		114			161		—			275
Due to affiliates	—		—		42,088			—		(42,088		)	—
Other	—		1		125			27		—			153
Total Current Liabilities	3		394		42,787			638		(42,088		)	1,734
Long-Term Debt, less current portion	592		9,813		12			164		—			10,581
Deferred Revenue, less current portion	—		—		760			284		—			1,044
Other Liabilities	16		—		160			455		—			631
Commitments and Contingencies
Stockholders' Equity (Deficit)	33,793		32,195		(33,709		)	16,966		(38,164		)	11,081
Total Liabilities and Stockholders' Equity (Deficit)	$	34,404	$	42,402	$	10,010		$	18,507	$	(80,252	)	$	25,071

Condensed Consolidating Balance Sheets

December 31, 2016



	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	$	15	$	—	$	1,700		$	104	$	—		$	1,819
Restricted cash and securities	—		—		1			6		—			7
Receivables, less allowances for doubtful accounts	—		—		26			686		—			712
Due from affiliates	17,032		21,715		—			2,180		(40,927		)	—
Other	—		—		87			28		—			115
Total Current Assets	17,047		21,715		1,814			3,004		(40,927		)	2,653
Property, Plant, and Equipment, net	—		—		3,869			6,270		—			10,139
Restricted Cash and Securities	22		—		9			—		—			31
Goodwill and Other Intangibles, net	—		—		353			8,291		—			8,644
Investment in Subsidiaries	16,869		17,599		3,674			—		(38,142		)	—
Deferred Tax Assets	51		2,687		—			632		—			3,370
Other Assets, net	—		—		16			35		—			51
Total Assets	$	33,989	$	42,001	$	9,735		$	18,232	$	(79,069	)	$	24,888

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	—	$	—	$	307		$	399	$	—		$	706
Current portion of long-term debt	—		—		2			5		—			7
Accrued payroll and employee benefits	—		—		160			35		—			195
Accrued interest	11		110		—			8		—			129
Current portion of deferred revenue	—		—		116			150		—			266
Due to affiliates	—		—		40,927			—		(40,927		)	—
Other	—		—		127			41		—			168
Total Current Liabilities	11		110		41,639			638		(40,927		)	1,471
Long-Term Debt, less current portion	592		10,108		13			164		—			10,877
Deferred Revenue, less current portion	—		—		719			282		—			1,001
Other Liabilities	16		—		155			451		—			622
Commitments and Contingencies
Stockholders' Equity (Deficit)	33,370		31,783		(32,791		)	16,697		(38,142		)	10,917
Total Liabilities and Stockholders' Equity (Deficit)	$	33,989	$	42,001	$	9,735		$	18,232	$	(79,069	)	$	24,888

Schedule of Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2017



	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	$	(16	)	$	(135	)	$	109		$	581		$	—	$	539
Cash Flows from Investing Activities:
Capital expenditures	—			—			(233		)	(135		)	—		(368		)
Decrease in restricted cash and securities, net	—			—			—			—			—		—
Proceeds from the sale of property, plant and equipment and other assets	—			—			—			—			—		—
Net Cash Provided by (Used in) Investing Activities	—			—			(233		)	(135		)	—		(368		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	—			4,569			—			—			—		4,569
Payments on and repurchases of long-term debt and capital leases	—			(4,611		)	—			(2		)	—		(4,613		)
Increase (decrease) due from/to affiliates, net	16			177			262			(455		)	—		—
Net Cash Provided by (Used in) Financing Activities	16			135			262			(457		)	—		(44		)
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			1			—		1
Net Change in Cash and Cash Equivalents	—			—			138			(10		)	—		128
Cash and Cash Equivalents at Beginning of Period	15			—			1,700			104			—		1,819
Cash and Cash Equivalents at End of Period	$	15		$	—		$	1,838		$	94		$	—	$	1,947

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2016



	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	$	(17	)	$	(92	)	$	130		$	489		$	—	$	510
Cash Flows from Investing Activities:
Capital expenditures	—			—			(159		)	(138		)	—		(297		)
(Increase) decrease in restricted cash and securities, net	—			(829		)	1			—			—		(828		)
Net Cash Used in Investing Activities	—			(829		)	(158		)	(138		)	—		(1,125		)
Cash Flows from Financing Activities:
Long-term debt borrowings, net of issuance costs	—			765			—			—			—		765
Payments on and repurchases of long-term debt and capital leases	—			—			—			(1		)	—		(1		)
Increase (decrease) due from/to affiliates, net	17			156			187			(360		)	—		—
Net Cash Provided by (Used in) Financing Activities	17			921			187			(361		)	—		764
Effect of Exchange Rates on Cash and Cash Equivalents	—			—			—			1			—		1
Net Change in Cash and Cash Equivalents	—			—			159			(9		)	—		150
Cash and Cash Equivalents at Beginning of Period	12			6			727			109			—		854
Cash and Cash Equivalents at End of Period	$	12		$	6		$	886		$	100		$	—	$	1,004

Organization and Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

schedule of consolidation [Line Items]

Revenue

$ 2,048

$ 2,051

Adjusted EBITDA by Segment

705

710

Latin America [Member]

schedule of consolidation [Line Items]

Adjusted EBITDA by Segment

$ 80

$ 74

Organization and Summary of Significant Accounting Policies New Accounting Pronouncements (Details) (USD $)

In Millions, except Share data in Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

New Accounting Pronouncement, Early Adoption [Line Items]

Net Income

$ 95

$ 128

Earnings Per Share, Basic

$ 0.26

$ 0.36

Earnings Per Share, Diluted

$ 0.26

$ 0.36

Weighted Average Number of Shares Outstanding, Diluted

364,121

360,745

Accumulated deficit

$ (8,405)

$ (8,500)

CenturyLink Merger (Details)

3 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Oct. 31, 2016

Business Combinations [Abstract]

Business acquisition, date of acquisition agreement

Oct. 31, 2016

stock conversion ratio

1.4286

Common stock, par value (in dollars per share)

$ 0.01

$ 1.00

Cash consideration per share (in dollars per share)

$ 26.50

Earnings Per Share (Details)

In Millions, unless otherwise specified

3 Months Ended

12 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount

1

Stock Awards Included in Computation of Earnings Per Share, Amount

3

4

Performance Shares

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount

1

0

Performance Restricted Stock Units

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount

4

Other Intangible Assets (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

Finite-Lived Intangible Assets:

Finite-Lived Intangible Assets, Gross Carrying Amount

$ 2,254

$ 2,257

Finite-Lived Intangible Assets, Accumulated Amortization

(1,408)

(1,357)

Finite-Lived Intangible Assets, Net

846

900

Acquired finite-lived intangible asset amortization expense

52

53

Acquired finite-lived intangible assets weighted average remaining useful lives (in years)

4 years 7 months 6 days

Indefinite-Lived Intangible Assets:

Total identifiable acquisition-related intangible assets, Gross Carrying Amount

2,269

2,272

Total identifiable acquisition-related intangible assets, Net

861

915

Estimated amortization expense of finite-lived acquisition-related intangible assets

2017 (remaining nine months)

147

2018

190

2019

179

2020

166

2021

143

2022

21

Thereafter

0

Finite-Lived Intangible Assets, Net

846

900

Vyvx Trade Name

Indefinite-Lived Intangible Assets:

Indefinite-Lived Intangible Assets

15

Customer Contracts And Relationships

Finite-Lived Intangible Assets:

Finite-Lived Intangible Assets, Gross Carrying Amount

1,972

1,973

Finite-Lived Intangible Assets, Accumulated Amortization

(1,159)

(1,113)

Finite-Lived Intangible Assets, Net

813

860

Acquired finite-lived intangible assets weighted average remaining useful lives (in years)

4 years 8 months 12 days

Estimated amortization expense of finite-lived acquisition-related intangible assets

Finite-Lived Intangible Assets, Net

813

860

Trademarks

Finite-Lived Intangible Assets:

Finite-Lived Intangible Assets, Gross Carrying Amount

55

Finite-Lived Intangible Assets, Accumulated Amortization

(55)

Finite-Lived Intangible Assets, Net

0

Estimated amortization expense of finite-lived acquisition-related intangible assets

Finite-Lived Intangible Assets, Net

0

Patents and Developed Technology

Finite-Lived Intangible Assets:

Finite-Lived Intangible Assets, Gross Carrying Amount

227

229

Finite-Lived Intangible Assets, Accumulated Amortization

(194)

(189)

Finite-Lived Intangible Assets, Net

33

40

Acquired finite-lived intangible assets weighted average remaining useful lives (in years)

2 years 3 months 18 days

Estimated amortization expense of finite-lived acquisition-related intangible assets

Finite-Lived Intangible Assets, Net

$ 33

$ 40

Fair Value of Financial Instruments - Liabilities, Recurring (Details) (Fair Value, Measurements, Recurring, USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Dec. 31, 2016

Total Carrying Value in Consolidated Balance Sheet

Long-term Debt, including the current portion:

Term Loans

$ 4,567

$ 4,566

Senior Notes

6,138

6,135

Capital Leases and Other

183

Total Long-term Debt, including the current portion:

10,888

10,884

Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)

Long-term Debt, including the current portion:

Term Loans

4,616

4,671

Senior Notes

6,367

6,283

Capital Leases and Other

0

Total Long-term Debt, including the current portion:

10,983

10,954

Significant Other Observable Inputs (Level 2)

Long-term Debt, including the current portion:

Term Loans

0

Senior Notes

0

Capital Leases and Other

183

Total Long-term Debt, including the current portion:

$ 183

Long-Term Debt - Schedule of Long Term Debt (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Mar. 31, 2017

Tranche B-III 2019 Term Loan

Dec. 31, 2016

Tranche B-III 2019 Term Loan

Mar. 31, 2017

TrancheB2020TermLoanTotal [Member]

Dec. 31, 2016

TrancheB2020TermLoanTotal [Member]

Mar. 31, 2017

Floating Rate Senior Notes due 2018 [Member]

Dec. 31, 2016

Floating Rate Senior Notes due 2018 [Member]

Dec. 31, 2015

Floating Rate Senior Notes due 2018 [Member]

Mar. 31, 2017

2.0 Billion Tranche B-II 2022 Term Loan [Member]

Dec. 31, 2016

2.0 Billion Tranche B-II 2022 Term Loan [Member]

Mar. 31, 2017

Tranche B Two Thousand Twenty Four Term Loan [Member]

Feb. 22, 2017

Tranche B Two Thousand Twenty Four Term Loan [Member]

Mar. 31, 2017

SeniorNotes6Point125PercentDue2021 [Member]

Dec. 31, 2016

SeniorNotes6Point125PercentDue2021 [Member]

Mar. 31, 2017

5point375SeniorNotesdue2022 [Member]

Dec. 31, 2016

5point375SeniorNotesdue2022 [Member]

Mar. 31, 2017

Senior Notes 5point75Percent Due 2022 [Member]

Dec. 31, 2016

Senior Notes 5point75Percent Due 2022 [Member]

Mar. 31, 2017

Senior Notes 5point 625Percent Due 2023 [Member]

Dec. 31, 2016

Senior Notes 5point 625Percent Due 2023 [Member]

Mar. 31, 2017

Senior Notes 5.375 Percent Due 2024 [Member]

Dec. 31, 2016

Senior Notes 5.375 Percent Due 2024 [Member]

Mar. 31, 2017

Senior Notes 5point 125Percent Due 2023 [Member]

Dec. 31, 2016

Senior Notes 5point 125Percent Due 2023 [Member]

Mar. 31, 2017

Senior Notes 5point 375Percent Due 2025 [Member]

Dec. 31, 2016

Senior Notes 5point 375Percent Due 2025 [Member]

Mar. 31, 2017

Capital Leases

Dec. 31, 2016

Capital Leases

Mar. 31, 2017

Level 3 Communications, LLC

Dec. 31, 2016

Level 3 Communications, LLC

Mar. 31, 2017

Level 3 Communications, LLC

Tranche B-III 2019 Term Loan

Mar. 31, 2017

Level 3 Communications, LLC

TrancheB2020TermLoanTotal [Member]

Mar. 31, 2017

Level 3 Financing [Member]

7.0% Senior Notes due 2020

Apr. 21, 2016

Level 3 Financing [Member]

7.0% Senior Notes due 2020

Mar. 31, 2017

Level 3 Financing [Member]

SeniorNotes6Point125PercentDue2021 [Member]

Mar. 31, 2017

Level 3 Financing [Member]

5.37percent Senior Notes Due 2022 [Member]

Mar. 31, 2017

Level 3 Financing [Member]

Senior Notes 5point 625Percent Due 2023 [Member]

Mar. 31, 2017

Level 3 Financing [Member]

Senior Notes 5point 125Percent Due 2023 [Member]

Mar. 31, 2017

Level 3 Financing [Member]

Senior Notes 5point 375Percent Due 2024 [Member]

Mar. 31, 2017

Level 3 Financing [Member]

Senior Notes 5point 375Percent Due 2025 [Member]

Mar. 31, 2017

Level 3 Financing [Member]

Senior Notes 5point 250Percent Due 2026 [Member]

Dec. 31, 2016

Level 3 Financing [Member]

Senior Notes 5point 250Percent Due 2026 [Member]

Sep. 30, 2016

Level 3 Financing [Member]

Senior Notes 5point 250Percent Due 2026 [Member]

Apr. 21, 2016

Level 3 Financing [Member]

Senior Notes 5point 250Percent Due 2026 [Member]

Mar. 22, 2016

Level 3 Financing [Member]

Senior Notes 5point 250Percent Due 2026 [Member]

Mar. 31, 2017

Parent Company [Member]

Dec. 31, 2016

Parent Company [Member]

Mar. 31, 2017

Parent Company [Member]

Senior Notes 5point75Percent Due 2022 [Member]

Long-term debt

Debt Instrument, Interest Rate Terms

6-Month LIBOR +3.50%

LIBOR +2.75%

LIBOR +2.25%

LIBOR +3.00%

Stated interest rate (as a percent)

4.762%

3.50%

7.00%

6.125%

5.375%

5.625%

5.125%

5.375%

5.25%

5.75%

Total Debt Obligations

$ 11,009

$ 0

$ 815

$ 0

$ 1,796

$ 300

$ 0

$ 2,000

$ 4,611

$ 640

$ 1,000

$ 600

$ 500

$ 900

$ 700

$ 800

$ 183

$ 775

Total Unamortized Discount

0

13

Unamortized Debt Issuance Expense

(121)

(112)

Current portion of long-term debt

(307)

(7)

(2)

0

Long-Term Debt, less current portion

$ 10,581

$ 10,877

$ 12

$ 13

$ 592

Long-Term Debt - Textuals (Details) (USD $)

0 Months Ended

3 Months Ended

0 Months Ended

3 Months Ended

0 Months Ended

3 Months Ended

0 Months Ended

3 Months Ended

Feb. 22, 2017

Mar. 31, 2017

days

Dec. 31, 2016

Mar. 31, 2017

Tranche B Two Thousand Twenty Four Term Loan [Member]

Feb. 22, 2017

Tranche B Two Thousand Twenty Four Term Loan [Member]

Feb. 22, 2017

Tranche B Two Thousand Twenty Four Term Loan [Member]

Level 3 Financing [Member]

London Interbank Offered Rate (LIBOR) [Member]

Mar. 31, 2017

Tranche B Two Thousand Twenty Four Term Loan [Member]

Level 3 Financing [Member]

London Interbank Offered Rate (LIBOR) [Member]

Minimum [Member]

Dec. 31, 2016

Tranche B III 2019 and Tranche B 2020 Term Loans [Member]

Mar. 31, 2017

Senior Notes 5point 125Percent Due 2023 [Member]

Dec. 31, 2016

Senior Notes 5point 125Percent Due 2023 [Member]

Mar. 31, 2017

Senior Notes 5point 125Percent Due 2023 [Member]

Level 3 Financing [Member]

Mar. 31, 2017

Senior Notes 5point 625Percent Due 2023 [Member]

Dec. 31, 2016

Senior Notes 5point 625Percent Due 2023 [Member]

Mar. 31, 2017

Senior Notes 5point 625Percent Due 2023 [Member]

Level 3 Financing [Member]

Mar. 31, 2017

Tranche B-III 2019 Term Loan

Dec. 31, 2016

Tranche B-III 2019 Term Loan

Mar. 31, 2017

TrancheB2020TermLoanTotal [Member]

Dec. 31, 2016

TrancheB2020TermLoanTotal [Member]

Apr. 21, 2016

7.0% Senior Notes due 2020

Level 3 Financing [Member]

Mar. 31, 2017

7.0% Senior Notes due 2020

Level 3 Financing [Member]

Apr. 21, 2016

7.0% Senior Notes due 2020

Level 3 Financing [Member]

Mar. 31, 2017

Capital Lease Obligations [Member]

Dec. 31, 2016

Capital Lease Obligations [Member]

Mar. 31, 2017

Senior Notes 5point 375Percent Due 2025 [Member]

Dec. 31, 2016

Senior Notes 5point 375Percent Due 2025 [Member]

Mar. 31, 2017

Senior Notes 5point 375Percent Due 2025 [Member]

Level 3 Financing [Member]

Mar. 31, 2017

2.0 Billion Tranche B-II 2022 Term Loan [Member]

Dec. 31, 2016

2.0 Billion Tranche B-II 2022 Term Loan [Member]

Mar. 31, 2017

2.0 Billion Tranche B-II 2022 Term Loan [Member]

Level 3 Financing [Member]

London Interbank Offered Rate (LIBOR) [Member]

Feb. 22, 2017

2.0 Billion Tranche B-II 2022 Term Loan [Member]

Level 3 Financing [Member]

London Interbank Offered Rate (LIBOR) [Member]

Minimum [Member]

Mar. 31, 2017

2.0 Billion Tranche B-II 2022 Term Loan [Member]

Level 3 Financing [Member]

London Interbank Offered Rate (LIBOR) [Member]

Minimum [Member]

Mar. 31, 2017

Senior Notes 5point 250Percent Due 2026 [Member]

Level 3 Financing [Member]

Dec. 31, 2016

Senior Notes 5point 250Percent Due 2026 [Member]

Level 3 Financing [Member]

Sep. 30, 2016

Senior Notes 5point 250Percent Due 2026 [Member]

Level 3 Financing [Member]

Apr. 21, 2016

Senior Notes 5point 250Percent Due 2026 [Member]

Level 3 Financing [Member]

Mar. 22, 2016

Senior Notes 5point 250Percent Due 2026 [Member]

Level 3 Financing [Member]

Mar. 31, 2017

Floating Rate Senior Notes due 2018 [Member]

Dec. 31, 2016

Floating Rate Senior Notes due 2018 [Member]

Dec. 31, 2015

Floating Rate Senior Notes due 2018 [Member]

Mar. 31, 2017

Tranche B-III 2019, Tranche B 2020 and Tranche B 2022 Term Loans [Member]

Level 3 Financing, Inc.

London Interbank Offered Rate (LIBOR) [Member]

Mar. 31, 2017

Tranche B-III 2019, Tranche B 2020 and Tranche B 2022 Term Loans [Member]

Level 3 Financing [Member]

London Interbank Offered Rate (LIBOR) [Member]

Minimum [Member]

Long-term debt

Debt Instrument, Collateral Fee

$ 0.0025

Debt Instrument, Interest Rate, Effective Percentage

3.227%

Debt, Weighted Average Interest Rate

5.80%

Stated interest rate (as a percent)

4.00%

5.125%

5.625%

7.00%

5.375%

3.50%

5.25%

4.762%

Debt Instrument, Redemption Period Notice Minimum Number of Days

30

Debt Instrument Redemption Period Notice Maximum Number of Days

60

Debt Instrument, Redemption Price, Percentage

101.00%

104.138%

Total Debt Obligations

11,009,000,000

4,611,000,000

700,000,000

500,000,000

0

815,000,000

0

1,796,000,000

183,000,000

800,000,000

0

2,000,000,000

775,000,000

300,000,000

2017 (remaining nine months)

5,000,000

2017

307,000,000

2018

7,000,000

2019

8,000,000

2020

650,000,000

2021

1,610,000,000

Thereafter

8,422,000,000

Debt Instrument, Description of Variable Rate Basis

LIBOR

Debt Instrument, Basis Spread on Variable Rate

0.00%

225.00%

0.75%

1.00%

Upfront basis point

0.0025

Payments of Debt Extinguishment Costs

$ 44,000,000

Accumulated Other Comprehensive Loss (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Accumulated Other Comprehensive Loss [Line Items]

Accumulated Other Comprehensive Income (Loss), Net of Tax

$ (387)

$ (301)

Other comprehensive income before reclassifications, net of tax

20

46

Amounts reclassified from accumulated other comprehensive loss

1

(1)

Accumulated Other Comprehensive Income (Loss), Net of Tax

(366)

(256)

Net Foreign Currency Translation Adjustment

Accumulated Other Comprehensive Loss [Line Items]

Accumulated Other Comprehensive Income (Loss), Net of Tax

(353)

(273)

Other comprehensive income before reclassifications, net of tax

20

48

Amounts reclassified from accumulated other comprehensive loss

0

Accumulated Other Comprehensive Income (Loss), Net of Tax

(333)

(225)

Defined Benefit Pension Plans

Accumulated Other Comprehensive Loss [Line Items]

Accumulated Other Comprehensive Income (Loss), Net of Tax

(34)

(28)

Other comprehensive income before reclassifications, net of tax

0

(2)

Amounts reclassified from accumulated other comprehensive loss

1

(1)

Accumulated Other Comprehensive Income (Loss), Net of Tax

$ (33)

$ (31)

Stock-Based Compensation - Non-cash compensation expense and capitalized non-cash compensation (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Non-cash compensation expense and capitalized non-cash compensation

Nonvested restricted stock and restricted stock units (RSUs)

6

Stock-based compensation expense

$ 48

$ 47

Outperform Stock Appreciation Rights

Non-cash compensation expense and capitalized non-cash compensation

Stock-based compensation expense

0

1

Restricted Stock Units

Non-cash compensation expense and capitalized non-cash compensation

Stock-based compensation expense

28

21

Performance Restricted Stock Units

Non-cash compensation expense and capitalized non-cash compensation

Stock-based compensation expense

9

14

401 (K) Match Expense

Non-cash compensation expense and capitalized non-cash compensation

Stock-based compensation expense

$ 11

Segment Information (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

Segment Reporting, Revenue Reconciling Item [Line Items]

Goodwill

$ 7,731

$ 7,729

Assets

25,071

24,888

Payments to Acquire Productive Assets

368

297

Adjusted EBITDA by Segment

(705)

(710)

Revenue

2,048

2,051

Income Tax Expense

(70)

(90)

Other Expenses

(172)

(144)

Depreciation, Depletion and Amortization

(320)

(301)

Share-based Compensation

(48)

(47)

Net Income (Loss) Available to Common Stockholders, Basic

95

128

Goodwill, Translation Adjustments

2

Corporate and Other [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Assets

127

Payments to Acquire Productive Assets

48

40

Adjusted EBITDA by Segment

(240)

(230)

North America [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Goodwill

7,024

Assets

20,942

20,818

Payments to Acquire Productive Assets

254

195

Adjusted EBITDA by Segment

(809)

(812)

Goodwill, Translation Adjustments

0

EMEA [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Goodwill

111

109

Assets

1,662

1,639

Payments to Acquire Productive Assets

31

39

Adjusted EBITDA by Segment

(56)

(54)

Goodwill, Translation Adjustments

2

Latin America [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Goodwill

596

Assets

2,340

2,304

Payments to Acquire Productive Assets

35

23

Adjusted EBITDA by Segment

(80)

(74)

Goodwill, Translation Adjustments

0

Core Network Service [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

1,946

Core Network Service [Member] |
North America [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

1,594

1,601

Core Network Service [Member] |
EMEA [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

175

190

Core Network Service [Member] |
Latin America [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

177

155

Wholesale Voice Services [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

102

105

Wholesale Voice Services [Member] |
North America [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

98

99

Wholesale Voice Services [Member] |
EMEA [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

2

4

Wholesale Voice Services [Member] |
Latin America [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Revenue

$ 2

Commitments, Contingencies and Other Items - Lawsuits (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Peruvian Tax Litigation

Pending Litigation

Mar. 31, 2016

Peruvian Tax Litigation

Pending Litigation

Mar. 31, 2017

Peruvian Tax Litigation

Pending Litigation

Mar. 31, 2017

Peruvian Tax Litigation, Before Interest

Pending Litigation

Mar. 31, 2017

Peruvian Tax Litigation, Income Tax witholding 2001 and 2002

Pending Litigation

Mar. 31, 2017

Peruvian Tax Litigation, VAT for 2001 and 2002

Pending Litigation

Mar. 31, 2017

Peruvian Tax Litigation, Disallowance of VAT in 2005

Pending Litigation

Mar. 31, 2017

Employee Severance and Contractor Termination Disputes

Pending Litigation

Mar. 31, 2017

up to

Brazilian Tax Claims

Pending Litigation

Dec. 31, 2014

Brazilian Tax Reserve Release [Member]

Brazilian Tax Claims

Pending Litigation

Sep. 30, 2014

Brazilian Tax Reserve Release [Member]

Brazilian Tax Claims

Pending Litigation

Loss Contingencies

Estimated Litigation Liability

$ 98

Loss Contingency, Asserted Claim

18

26

3

7

16

32

Release of Loss Contingency Accrual

11

15

Loss Contingency Accrual, Period Increase (Decrease)

3

6

Loss Contingency Accrual, Payments

5

Loss Contingency, Range of Possible Loss, Portion Not Accrued

$ 51

Commitments, Contingencies and Other Items - Other Commitments (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Amount outstanding under letters of credit or other similar obligations

$ 39

Collateralized by cash, that is reflected on the consolidated balance sheets as restricted cash

$ 34

$ 33

Condensed Consolidating Financial Information - Statements of Comprehensive Income (Loss) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Condensed Consolidating Financial Information

Revenue

$ 2,048

$ 2,051

Costs and Expenses:

Network access costs

691

694

Network related expenses

336

338

Depreciation and amortization

320

301

Selling, general and administrative Expenses

364

356

Total Costs and Expenses

1,711

1,689

Operating Income (Loss)

337

362

Other Income (Expense):

Interest income

2

1

Interest expense

(134)

(135)

Interest income (expense) affiliates, net

0

Equity in net earnings (losses) of subsidiaries

0

Other, net

(40)

(10)

Total Other Expense

(172)

(144)

Income (Loss) before Income Taxes

165

218

Income Tax Expense

(70)

(90)

Net Income (Loss)

95

128

Other Comprehensive Income (Loss), Net of Income Taxes

21

45

Comprehensive Income (Loss)

116

173

Level 3 Communications, Inc.

Condensed Consolidating Financial Information

Revenue

0

Costs and Expenses:

Network access costs

0

Network related expenses

0

Depreciation and amortization

0

Selling, general and administrative Expenses

1

Total Costs and Expenses

1

Operating Income (Loss)

(1)

Other Income (Expense):

Interest income

0

Interest expense

(9)

Interest income (expense) affiliates, net

377

342

Equity in net earnings (losses) of subsidiaries

(275)

(212)

Other, net

0

Total Other Expense

93

121

Income (Loss) before Income Taxes

92

120

Income Tax Expense

3

4

Net Income (Loss)

95

124

Other Comprehensive Income (Loss), Net of Income Taxes

21

45

Comprehensive Income (Loss)

116

169

Level 3 Financing, Inc.

Condensed Consolidating Financial Information

Revenue

0

Costs and Expenses:

Network access costs

0

Network related expenses

0

Depreciation and amortization

0

Selling, general and administrative Expenses

1

Total Costs and Expenses

1

Operating Income (Loss)

(1)

Other Income (Expense):

Interest income

0

Interest expense

(120)

(128)

Interest income (expense) affiliates, net

574

531

Equity in net earnings (losses) of subsidiaries

(646)

(541)

Other, net

(44)

0

Total Other Expense

(236)

(138)

Income (Loss) before Income Taxes

(237)

(139)

Income Tax Expense

(38)

(69)

Net Income (Loss)

(275)

(208)

Other Comprehensive Income (Loss), Net of Income Taxes

0

Comprehensive Income (Loss)

(275)

(208)

Level 3 Communications, LLC

Condensed Consolidating Financial Information

Revenue

920

866

Costs and Expenses:

Network access costs

323

320

Network related expenses

243

237

Depreciation and amortization

104

88

Selling, general and administrative Expenses

277

250

Total Costs and Expenses

947

895

Operating Income (Loss)

(27)

(29)

Other Income (Expense):

Interest income

2

0

Interest expense

(1)

Interest income (expense) affiliates, net

(869)

(801)

Equity in net earnings (losses) of subsidiaries

203

199

Other, net

5

2

Total Other Expense

(660)

(601)

Income (Loss) before Income Taxes

(687)

(630)

Income Tax Expense

(1)

Net Income (Loss)

(688)

(631)

Other Comprehensive Income (Loss), Net of Income Taxes

0

Comprehensive Income (Loss)

(688)

(631)

Other Non-Guarantor Subsidiaries

Condensed Consolidating Financial Information

Revenue

1,157

1,219

Costs and Expenses:

Network access costs

397

408

Network related expenses

93

101

Depreciation and amortization

216

213

Selling, general and administrative Expenses

85

104

Total Costs and Expenses

791

826

Operating Income (Loss)

366

393

Other Income (Expense):

Interest income

0

1

Interest expense

(4)

3

Interest income (expense) affiliates, net

(82)

(72)

Equity in net earnings (losses) of subsidiaries

0

Other, net

(1)

(12)

Total Other Expense

(87)

(80)

Income (Loss) before Income Taxes

279

313

Income Tax Expense

(34)

(24)

Net Income (Loss)

245

289

Other Comprehensive Income (Loss), Net of Income Taxes

21

45

Comprehensive Income (Loss)

266

334

Eliminations

Condensed Consolidating Financial Information

Revenue

(29)

(34)

Costs and Expenses:

Network access costs

(29)

(34)

Network related expenses

0

Depreciation and amortization

0

Selling, general and administrative Expenses

0

Total Costs and Expenses

(29)

(34)

Operating Income (Loss)

0

Other Income (Expense):

Interest income

0

Interest expense

0

Interest income (expense) affiliates, net

0

Equity in net earnings (losses) of subsidiaries

718

554

Other, net

0

Total Other Expense

718

554

Income (Loss) before Income Taxes

718

554

Income Tax Expense

0

Net Income (Loss)

718

554

Other Comprehensive Income (Loss), Net of Income Taxes

(21)

(45)

Comprehensive Income (Loss)

$ 697

$ 509

Condensed Consolidating Financial Information - Balance Sheets (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Dec. 31, 2016

Mar. 31, 2016

Dec. 31, 2015

Current Assets:

Cash and cash equivalents

$ 1,947

$ 1,819

$ 1,004

$ 854

Restricted cash and securities

7

Receivables, less allowances for doubtful accounts

712

Due from affiliates

0

Other

141

115

Total Current Assets

2,807

2,653

Property, Plant and Equipment, net

10,285

10,139

Restricted Cash and Securities

31

Goodwill and Other Intangibles Assets, net

8,592

8,644

Investment in Subsidiaries

0

Deferred Tax Assets

3,305

3,370

Other Assets, net

51

Total Assets

25,071

24,888

Liabilities and Stockholders' Equity:

Accounts payable

750

706

Current portion of long-term debt

307

7

Accrued payroll and employee benefits

148

195

Accrued interest

101

129

Current portion of deferred revenue

275

266

Due to affiliates

0

Other

153

168

Total Current Liabilities

1,734

1,471

Long-Term Debt, less current portion

10,581

10,877

Deferred Revenue, less current portion

1,044

1,001

Other Liabilities

631

622

Commitments and Contingencies

Stockholders' Equity (Deficit)

11,081

10,917

Total Liabilities and Stockholders’ Equity

25,071

24,888

Level 3 Communications, Inc.

Current Assets:

Cash and cash equivalents

15

12

Restricted cash and securities

0

Receivables, less allowances for doubtful accounts

0

Due from affiliates

17,415

17,032

Other

0

Total Current Assets

17,430

17,047

Property, Plant and Equipment, net

0

Restricted Cash and Securities

22

Goodwill and Other Intangibles Assets, net

0

Investment in Subsidiaries

16,899

16,869

Deferred Tax Assets

53

51

Other Assets, net

0

Total Assets

34,404

33,989

Liabilities and Stockholders' Equity:

Accounts payable

0

Current portion of long-term debt

0

Accrued payroll and employee benefits

0

Accrued interest

3

11

Current portion of deferred revenue

0

Due to affiliates

0

Other

0

Total Current Liabilities

3

11

Long-Term Debt, less current portion

592

Deferred Revenue, less current portion

0

Other Liabilities

16

Commitments and Contingencies

Stockholders' Equity (Deficit)

33,793

33,370

Total Liabilities and Stockholders’ Equity

34,404

33,989

Level 3 Financing, Inc.

Current Assets:

Cash and cash equivalents

0

6

Restricted cash and securities

0

Receivables, less allowances for doubtful accounts

0

Due from affiliates

22,142

21,715

Other

0

Total Current Assets

22,142

21,715

Property, Plant and Equipment, net

0

Restricted Cash and Securities

0

Goodwill and Other Intangibles Assets, net

0

Investment in Subsidiaries

17,610

17,599

Deferred Tax Assets

2,650

2,687

Other Assets, net

0

Total Assets

42,402

42,001

Liabilities and Stockholders' Equity:

Accounts payable

3

0

Current portion of long-term debt

299

0

Accrued payroll and employee benefits

0

Accrued interest

91

110

Current portion of deferred revenue

0

Due to affiliates

0

Other

1

0

Total Current Liabilities

394

110

Long-Term Debt, less current portion

9,813

10,108

Deferred Revenue, less current portion

0

Other Liabilities

0

Commitments and Contingencies

Stockholders' Equity (Deficit)

32,195

31,783

Total Liabilities and Stockholders’ Equity

42,402

42,001

Level 3 Communications, LLC

Current Assets:

Cash and cash equivalents

1,838

1,700

886

727

Restricted cash and securities

1

Receivables, less allowances for doubtful accounts

18

26

Due from affiliates

0

Other

111

87

Total Current Assets

1,968

1,814

Property, Plant and Equipment, net

4,012

3,869

Restricted Cash and Securities

9

Goodwill and Other Intangibles Assets, net

352

353

Investment in Subsidiaries

3,655

3,674

Deferred Tax Assets

(1)

0

Other Assets, net

15

16

Total Assets

10,010

9,735

Liabilities and Stockholders' Equity:

Accounts payable

346

307

Current portion of long-term debt

2

Accrued payroll and employee benefits

112

160

Accrued interest

0

Current portion of deferred revenue

114

116

Due to affiliates

42,088

40,927

Other

125

127

Total Current Liabilities

42,787

41,639

Long-Term Debt, less current portion

12

13

Deferred Revenue, less current portion

760

719

Other Liabilities

160

155

Commitments and Contingencies

Stockholders' Equity (Deficit)

(33,709)

(32,791)

Total Liabilities and Stockholders’ Equity

10,010

9,735

Other Non-Guarantor Subsidiaries

Current Assets:

Cash and cash equivalents

94

104

100

109

Restricted cash and securities

6

Receivables, less allowances for doubtful accounts

694

686

Due from affiliates

2,531

2,180

Other

30

28

Total Current Assets

3,355

3,004

Property, Plant and Equipment, net

6,273

6,270

Restricted Cash and Securities

0

Goodwill and Other Intangibles Assets, net

8,240

8,291

Investment in Subsidiaries

0

Deferred Tax Assets

603

632

Other Assets, net

36

35

Total Assets

18,507

18,232

Liabilities and Stockholders' Equity:

Accounts payable

401

399

Current portion of long-term debt

6

5

Accrued payroll and employee benefits

36

35

Accrued interest

7

8

Current portion of deferred revenue

161

150

Due to affiliates

0

Other

27

41

Total Current Liabilities

638

Long-Term Debt, less current portion

164

Deferred Revenue, less current portion

284

282

Other Liabilities

455

451

Commitments and Contingencies

Stockholders' Equity (Deficit)

16,966

16,697

Total Liabilities and Stockholders’ Equity

18,507

18,232

Eliminations

Current Assets:

Cash and cash equivalents

0

Restricted cash and securities

0

Receivables, less allowances for doubtful accounts

0

Due from affiliates

(42,088)

(40,927)

Other

0

Total Current Assets

(42,088)

(40,927)

Property, Plant and Equipment, net

0

Restricted Cash and Securities

0

Goodwill and Other Intangibles Assets, net

0

Investment in Subsidiaries

(38,164)

(38,142)

Deferred Tax Assets

0

Other Assets, net

0

Total Assets

(80,252)

(79,069)

Liabilities and Stockholders' Equity:

Accounts payable

0

Current portion of long-term debt

0

Accrued payroll and employee benefits

0

Accrued interest

0

Current portion of deferred revenue

0

Due to affiliates

(42,088)

(40,927)

Other

0

Total Current Liabilities

(42,088)

(40,927)

Long-Term Debt, less current portion

0

Deferred Revenue, less current portion

0

Other Liabilities

0

Commitments and Contingencies

Stockholders' Equity (Deficit)

(38,164)

(38,142)

Total Liabilities and Stockholders’ Equity

$ (80,252)

$ (79,069)

Condensed Consolidating Financial Information - Statements of Cash Flows (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Condensed Consolidating Financial Information

Net Cash Provided by (Used in) Operating Activities

$ 539

$ 510

Cash Flows from Investing Activities:

Capital expenditures

(368)

(297)

(Increase) decrease in restricted cash and securities, net

0

(828)

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

0

Net Cash Used in Investing Activities

(368)

(1,125)

Cash Flows from Financing Activities:

Long-term debt borrowings, net of issuance costs

4,569

765

Payments on and repurchases of long-term debt and capital leases

(4,613)

(1)

Increase (decrease) due from-to affiliates, net

0

Net Cash (Used in) Provided by Financing Activities

(44)

764

Effect of Exchange Rates on Cash and Cash Equivalents

1

Net Change in Cash and Cash Equivalents

128

150

Cash and Cash Equivalents at Beginning of Period

1,819

854

Cash and Cash Equivalents at End of Period

1,947

1,004

Level 3 Communications, Inc.

Condensed Consolidating Financial Information

Net Cash Provided by (Used in) Operating Activities

(16)

(17)

Cash Flows from Investing Activities:

Capital expenditures

0

(Increase) decrease in restricted cash and securities, net

0

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

0

Net Cash Used in Investing Activities

0

Cash Flows from Financing Activities:

Long-term debt borrowings, net of issuance costs

0

Payments on and repurchases of long-term debt and capital leases

0

Increase (decrease) due from-to affiliates, net

16

17

Net Cash (Used in) Provided by Financing Activities

16

17

Effect of Exchange Rates on Cash and Cash Equivalents

0

Net Change in Cash and Cash Equivalents

0

Cash and Cash Equivalents at Beginning of Period

15

12

Cash and Cash Equivalents at End of Period

15

12

Level 3 Financing, Inc.

Condensed Consolidating Financial Information

Net Cash Provided by (Used in) Operating Activities

(135)

(92)

Cash Flows from Investing Activities:

Capital expenditures

0

(Increase) decrease in restricted cash and securities, net

0

(829)

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

0

Net Cash Used in Investing Activities

0

(829)

Cash Flows from Financing Activities:

Long-term debt borrowings, net of issuance costs

4,569

765

Payments on and repurchases of long-term debt and capital leases

(4,611)

0

Increase (decrease) due from-to affiliates, net

177

156

Net Cash (Used in) Provided by Financing Activities

135

921

Effect of Exchange Rates on Cash and Cash Equivalents

0

Net Change in Cash and Cash Equivalents

0

Cash and Cash Equivalents at Beginning of Period

0

6

Cash and Cash Equivalents at End of Period

0

6

Level 3 Communications, LLC

Condensed Consolidating Financial Information

Net Cash Provided by (Used in) Operating Activities

109

130

Cash Flows from Investing Activities:

Capital expenditures

(233)

(159)

(Increase) decrease in restricted cash and securities, net

0

1

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

0

Net Cash Used in Investing Activities

(233)

(158)

Cash Flows from Financing Activities:

Long-term debt borrowings, net of issuance costs

0

Payments on and repurchases of long-term debt and capital leases

0

Increase (decrease) due from-to affiliates, net

262

187

Net Cash (Used in) Provided by Financing Activities

262

187

Effect of Exchange Rates on Cash and Cash Equivalents

0

Net Change in Cash and Cash Equivalents

138

159

Cash and Cash Equivalents at Beginning of Period

1,700

727

Cash and Cash Equivalents at End of Period

1,838

886

Other Non-Guarantor Subsidiaries

Condensed Consolidating Financial Information

Net Cash Provided by (Used in) Operating Activities

581

489

Cash Flows from Investing Activities:

Capital expenditures

(135)

(138)

(Increase) decrease in restricted cash and securities, net

0

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

0

Net Cash Used in Investing Activities

(135)

(138)

Cash Flows from Financing Activities:

Long-term debt borrowings, net of issuance costs

0

Payments on and repurchases of long-term debt and capital leases

(2)

(1)

Increase (decrease) due from-to affiliates, net

(455)

(360)

Net Cash (Used in) Provided by Financing Activities

(457)

(361)

Effect of Exchange Rates on Cash and Cash Equivalents

1

Net Change in Cash and Cash Equivalents

(10)

(9)

Cash and Cash Equivalents at Beginning of Period

104

109

Cash and Cash Equivalents at End of Period

94

100

Eliminations

Condensed Consolidating Financial Information

Net Cash Provided by (Used in) Operating Activities

0

Cash Flows from Investing Activities:

Capital expenditures

0

(Increase) decrease in restricted cash and securities, net

0

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

0

Net Cash Used in Investing Activities

0

Cash Flows from Financing Activities:

Long-term debt borrowings, net of issuance costs

0

Payments on and repurchases of long-term debt and capital leases

0

Increase (decrease) due from-to affiliates, net

0

Net Cash (Used in) Provided by Financing Activities

0

Effect of Exchange Rates on Cash and Cash Equivalents

0

Net Change in Cash and Cash Equivalents

0

Cash and Cash Equivalents at Beginning of Period

0

Cash and Cash Equivalents at End of Period

$ 0