LEVEL 3 COMMUNICATIONS INC, 10-K filed on 2/24/2017
Annual Report
Document and Entity Information Document (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Feb. 22, 2017
Jun. 30, 2016
Entity Information [Line Items]
 
 
 
Entity Registrant Name
LEVEL 3 COMMUNICATIONS INC 
 
 
Entity Central Index Key
0000794323 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2016 
 
 
Amendment Flag
false 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 15,008 
Entity Common Stock, Shares Outstanding
 
360,678,324 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
FY 
 
 
Consolidated Statements of Operations (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenue
$ 8,172 
$ 8,229 
$ 6,777 
Costs and Expenses:
 
 
 
Network access costs
2,725 
2,833 
2,529 
Network related expenses
1,346 
1,432 
1,246 
Depreciation and amortization
1,250 
1,166 
808 
Selling, general and administrative expenses
1,407 
1,467 
1,181 
Total costs and expenses
6,728 
6,898 
5,764 
Operating Income
1,444 
1,331 
1,013 
Other Income (Expense):
 
 
 
Interest income
4 
1 
1 
Interest expense
(546)
(642)
(654)
Loss on modification and extinguishment of debt
(40)
(218)
(53)
Venezuela deconsolidation charge
0 
(171)
0 
Other, net
(20)
(18)
(69)
Total other expense
(602)
(1,048)
(775)
Income (Loss) Before Income Taxes
842 
283 
238 
Income Tax Benefit (Expense)
(165)
3,150 
76 
Net Income
$ 677 
$ 3,433 
$ 314 
Net Income (Loss) Per Share -Basic
$ 1.89 
$ 9.71 
$ 1.23 
Shares Used to Compute Basic Net Income (Loss)per Share (in thousands)
358,559 
353,385 
254,428 
Net Income (Loss) Per Share - Diluted
$ 1.87 
$ 9.58 
$ 1.21 
Shares Used to Compute Diluted Net Income (Loss)per Share (in thousands)
361,472 
358,593 
258,483 
Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Net Income
$ 677 
$ 3,433 
$ 314 
Foreign currency translation adjustments, net of tax effect of $39, $13, and $0
(80)
(162)
(178)
Defined benefit pension plan adjustments, net of tax effect of $4, ($2), and $0
6 
(8)
5 
Other Comprehensive Loss, net of Tax
(86)
(154)
(183)
Comprehensive Income
$ 591 
$ 3,279 
$ 131 
Comprehensive Income (Loss) Parenthetical (Parentheticals) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
 
 
 
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax
$ 39 
$ 13 
$ 0 
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Tax
$ 4 
$ (2)
$ 0 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Assets
 
 
Cash and cash equivalents
$ 1,819 
$ 854 
Restricted cash and securities
7 
8 
Receivables, less allowances for doubtful accounts of $29 and $32, respectively
712 
757 
Other
115 
111 
Total Current Assets
2,653 
1,730 
Property, Plant and Equipment, net of accumulated depreciation of $11,249 and $10,365, respectively
10,139 
9,878 
Restricted Cash and Securities
31 
42 
Goodwill
7,729 
7,749 
Other Intangibles, net
915 
1,127 
Deferred Tax Assets
3,370 
3,441 
Other Assets, net
51 
50 
Total Assets
24,888 
24,017 
Liabilities:
 
 
Accounts payable
706 
629 
Current portion of long-term debt
7 
15 
Accrued payroll and employee benefits
195 
218 
Accrued interest
129 
108 
Current portion of deferred revenue
266 
267 
Other
168 
179 
Total Current Liabilities
1,471 
1,416 
Long-Term Debt, less current portion
10,877 
10,866 
Deferred Revenue, less current portion
1,001 
977 
Other Liabilities
622 
632 
Total Liabilities
13,971 
13,891 
Commitments and Contingencies
0 
0 
Stockholders’ Equity:
 
 
Preferred stock, $.01 par value, authorized 10,000,000 shares: no shares issued or outstanding
0 
0 
Common stock, $.01 par value, authorized 433,333,333 shares in both periods; 360,021,098 shares issued and outstanding at December 31, 2016 and 356,374,473 shares issued and outstanding at December 31, 2015
4 
4 
Additional paid-in capital
19,800 
19,642 
Accumulated other comprehensive loss
(387)
(301)
Accumulated deficit
(8,500)
(9,219)
Total Stockholders’ Equity
10,917 
10,126 
Total Liabilities and Stockholders’ Equity
$ 24,888 
$ 24,017 
Consolidated Balance Sheets Parentheticals (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Allowance for doubtful accounts
$ 29 
$ 32 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
$ 11,249 
$ 10,365 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.01 
$ 0.01 
Common Stock, Shares Authorized
433,333,333 
433,333,333 
Common stock, shares issued
360,021,098 
356,374,473 
Common stock, shares outstanding
360,021,098 
356,374,473 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Cash Flows from Operating Activities:
 
 
 
Net income
$ 677 
$ 3,433 
$ 314 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
1,250 
1,166 
808 
Loss on impairment
0 
0 
18 
Non-cash compensation expense attributable to stock awards
156 
141 
73 
Loss on modification and extinguishment of debt
40 
218 
53 
Venezuela deconsolidation charge
0 
171 
0 
Accretion of debt discount and amortization of debt issuance costs
21 
24 
36 
Accrued interest on long-term debt, net
21 
(57)
12 
Non-cash tax adjustments
0 
0 
(7)
Deferred income taxes
123 
(3,202)
(116)
(Gain) loss on sale of property, plant, and equipment and other assets
(2)
1 
(3)
Other, net
(10)
35 
(8)
Changes in working capital items:
 
 
 
Receivables
31 
(87)
9 
Other current assets
(36)
(11)
2 
Payables
83 
4 
(77)
Deferred revenue
18 
88 
6 
Other current liabilities
(29)
(69)
41 
Net Cash Provided by Operating Activities
2,343 
1,855 
1,161 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(1,334)
(1,229)
(910)
Cash related to deconsolidated Venezuela operations
0 
(83)
0 
Change in restricted cash and securities, net
12 
(22)
(10)
Proceeds from sale of property, plant and equipment and other assets
3 
4 
3 
Investment in tw telecom, net of cash acquired
0 
0 
(167)
Other
0 
(14)
(2)
Net Cash Used in Investing Activities
(1,319)
(1,344)
(1,086)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
764 
4,832 
589 
Payments on and repurchases of long-term debt and capital leases
(820)
(5,051)
(671)
Net Cash Used in Financing Activities
(56)
(219)
(82)
Effect of Exchange Rates on Cash and Cash Equivalents
(3)
(18)
(44)
Net Change in Cash and Cash Equivalents
965 
274 
(51)
Cash and Cash Equivalents at Beginning of Year
854 
580 
631 
Cash and Cash Equivalents at End of Year
1,819 
854 
580 
Supplemental Disclosure of Cash Flow Information:
 
 
 
Cash interest paid
508 
668 
598 
Income taxes paid, net of refunds
35 
50 
44 
Non-cash Investing and Financing Activities:
 
 
 
Capital lease obligations incurred
1 
6 
2 
Long-term debt conversion into equity
0 
333 
142 
Accrued interest conversion into equity
0 
10 
2 
Long-term debt issued and proceeds placed in escrow
0 
0 
3,000 
Escrowed securities used in the acquisition of tw telecom
$ 0 
$ 0 
$ 3,014 
Consolidated Statements of Changes In Stockholders' Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Beginning balance at Dec. 31, 2013
$ 1,411 
$ 2 
$ 14,339 
$ 36 
$ (12,966)
Beginning balance (in shares) at Dec. 31, 2013
 
234,688,063 
 
 
 
Common Stock
 
 
 
 
 
Common stock issued under employee stock benefit plans and other
78 
0 
78 
0 
0 
Common stock issued under employee stock benefit plans and other (in shares)
 
4,528,559 
 
 
 
Stock-based compensation expense
55 
0 
55 
0 
0 
tw telecom acquisition equity consideration
4,544 
1 
4,543 
0 
0 
tw telecom acquisition equity consideration (in shares)
 
96,868,883 
 
 
 
Conversion of debt to equity
144 
0 
144 
0 
0 
Conversion of debt to equity (in shares)
 
5,275,915 
 
 
 
Net Income
314 
0 
0 
0 
314 
Other Comprehensive Income (Loss)
(183)
0 
0 
(183)
0 
Ending balance at Dec. 31, 2014
6,363 
3 
19,159 
(147)
(12,652)
Ending balance (in shares) at Dec. 31, 2014
 
341,361,420 
 
 
 
Common Stock
 
 
 
 
 
Common stock issued under employee stock benefit plans and other
35 
0 
35 
0 
0 
Common stock issued under employee stock benefit plans and other (in shares)
 
2,696,470 
 
 
 
Stock-based compensation expense
106 
0 
106 
0 
0 
Conversion of debt to equity
343 
1 
342 
0 
0 
Conversion of debt to equity (in shares)
 
12,316,583 
 
 
 
Net Income
3,433 
0 
0 
0 
3,433 
Other Comprehensive Income (Loss)
(154)
0 
0 
(154)
0 
Ending balance at Dec. 31, 2015
10,126 
4 
19,642 
(301)
(9,219)
Ending balance (in shares) at Dec. 31, 2015
356,374,473 
356,374,473 
 
 
 
Common Stock
 
 
 
 
 
Common stock issued under employee stock benefit plans and other
37 
0 
37 
0 
0 
Common stock issued under employee stock benefit plans and other (in shares)
 
3,646,625 
 
 
 
Stock-based compensation expense
121 
0 
121 
0 
0 
Net Income
677 
0 
0 
0 
677 
Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting
42 
 
 
 
42 
Other Comprehensive Income (Loss)
(86)
0 
0 
(86)
0 
Ending balance at Dec. 31, 2016
$ 10,917 
$ 4 
$ 19,800 
$ (387)
$ (8,500)
Ending balance (in shares) at Dec. 31, 2016
360,021,098 
360,021,098 
 
 
 
Summary of Significant Accounting Policies
Organization and Summary of Significant Accounting Policies
Organization and Summary of Significant Accounting Policies

Description of Business

Level 3 Communications, Inc. and subsidiaries 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, 2014, we completed the acquisition of tw telecom inc. (“tw telecom”) and tw telecom became our indirect, wholly owned subsidiary through a tax-free, stock and cash reorganization. See Note 3 - Events Associated with the Acquisition of tw telecom inc.

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.

Prior to October 1, 2015, we included the results of our wholly owned Venezuelan subsidiary in our Consolidated Financial Statements using the consolidation method of accounting. Our Venezuelan subsidiary was in the Latin America segment and had total revenue of $72 million for the nine months ended September 30, 2015. For more information on our segments and non-GAAP measures see Note 16 - Segment Information.
    
Venezuelan exchange control regulations have resulted in an other-than-temporary lack of exchangeability between the Venezuelan bolivar and U.S. dollar, and have restricted our Venezuelan operations’ ability to pay dividends and settle intercompany obligations in U.S. dollars. The severe currency controls imposed by the Venezuelan government have significantly limited the ability to realize the benefits from earnings of our Venezuelan operations and access the resulting liquidity provided by those earnings in U.S. dollars. We expect that this condition will continue for the foreseeable future.



Additionally, government regulations affecting our ability to manage our Venezuelan subsidiary’s capital structure, purchasing, product pricing, customer invoicing and collections, and labor relations; and the current political and economic situation within Venezuela have resulted in an acute degradation in our ability to make key operational decisions for our Venezuelan operations. The lack of exchangeability between the Venezuelan bolivar and the U.S. dollar and the degradation in our ability to control key operational decisions resulting in a lack of control over our Venezuelan subsidiary for U.S. accounting purposes, we concluded it no longer met the accounting criteria for consolidation and deconsolidated our Venezuelan subsidiary on September 30, 2015, and began accounting for our variable interest investment in our Venezuelan operations using the cost method of accounting. As a result of deconsolidating our Venezuelan subsidiary, we recorded a one-time charge of $171 million in the third quarter of 2015, which had no accompanying tax benefit. Our financial results no longer include the operating results of our Venezuelan operations. The factors that led to the deconsolidation of our Venezuelan subsidiary at the end of the third quarter of 2015 continued to exist through the end of 2016. Any dividends from our Venezuelan subsidiary are recorded as other income upon receipt of the cash in U.S. dollars. Prior period results have not been adjusted to reflect the deconsolidation of our Venezuelan subsidiary.

Foreign Currency Translation

Local currencies of foreign subsidiaries are the functional currencies for financial reporting purposes except for certain foreign subsidiaries in Latin America. For operations outside the United States that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using average exchange rates prevailing during the year. A significant portion of our non-United States subsidiaries have either the British pound, the euro or the Brazilian real as the functional currency, each of which experienced significant fluctuations against the U.S. dollar during 2016, 2015 and 2014. Foreign currency translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in stockholders' equity and in the Consolidated Statements of Comprehensive Income in accordance with accounting guidance for foreign currency translation. We consider the majority of our investments in our foreign subsidiaries to be long-term in nature. Our non-United States exchange transaction gains (losses), including where transactions with our non-United States subsidiaries are not considered to be long-term in nature, are included within other income (expense) in Other, net on the Consolidated Statements of Income.

Reclassifications

Certain amounts in the prior year Consolidated Financial Statements and accompanying footnotes have been reclassified to conform to the current year's presentation primarily pursuant to the adoption of Accounting Standards Update ("ASU") 2015-03, Simplifying the Presentation of Debt Issuance Costs. As of December 31, 2015, approximately $19 million of current debt issuance costs have been reclassified from other current assets to long-term debt, less current portion and approximately $109 million of non-current debt issuance costs have been reclassified from other non-current assets to long-term debt, less current portion.

Use of Estimates

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

Revenue

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

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

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

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

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

Our customer contracts require us to meet certain service level commitments. If we do not meet the required service levels, we may be obligated to provide credits, usually in the form of free service, for a short period of time. The credits are a reduction to revenue and, to date, have not been material.

Network Access Costs

Network Access Costs for the communications business include leased capacity, right-of-way costs, access charges, satellite transponder lease costs and other third party costs directly attributable to providing access to customer locations from our network, but excludes Network Related Expenses, and depreciation and amortization. Network Access Costs do not include any employee expenses or impairment expenses; these expenses are allocated to Network Related Expenses or Selling, General and Administrative Expenses.

We recognize the network access costs as they are incurred in accordance with contractual requirements. We dispute incorrect billings from our suppliers of network services. The most prevalent types of disputes include disputes for circuits that are not disconnected by the supplier on a timely basis, charges from suppliers for circuits that were not timely installed and incorrect rate or other inadequate information needed to determine the appropriate billing from the supplier. Depending on the type and complexity of the issues involved, it may and often does take several quarters to resolve the disputes. We establish appropriate network access costs reserves for disputed supplier billings based on an analysis of our historical experience in resolving disputes with our suppliers and regulatory analysis regarding certain supplier billing matters. Judgment is required in estimating the ultimate outcome of the dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiations or settle any litigation. Actual results may differ from these estimates under different assumptions or conditions and these differences could be material.

Network Related Expenses

Network Related Expenses includes certain expenses associated with the delivery of services to customers and the operation and maintenance of our network, such as facility rent, utilities, maintenance and other costs, each related to the operation of our communications network, as well as salaries, wages and related benefits (including non-cash stock-based compensation expenses) associated with personnel who are responsible for the delivery of services, operation and maintenance of our communications network, and accretion expense on asset retirement obligations, but excludes depreciation and amortization.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses includes the salaries, wages and related benefits (including non-cash, stock-based compensation expenses) and the related costs of corporate and sales personnel, travel, insurance, non-network related rent, advertising, and other administrative expenses.

USF and Gross Receipts Taxes

The revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, gross receipts taxes and certain state regulatory fees. We record Universal Service Fund ("USF") contributions where we are the primary obligor for the taxes assessed in each jurisdiction where we do business on a gross basis in our Consolidated Statements of Income, but generally record gross receipts taxes and certain state regulatory fees billed to our customers on a net basis in our Consolidated Statements of Income. Total revenue and network access costs on the Consolidated Statements of Income include USF contributions totaling $357 million, $323 million and $234 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Stock-Based Compensation

We recognize the estimated fair value of stock-based compensation costs, net of an estimated forfeiture rate, over the requisite service period of the award, which is generally the vesting term or term for restrictions on transfer that lapse, as the case may be. We estimate forfeiture rates based on our historical experience for the type of award, adjusted for expected activities as necessary.

Income Taxes

We recognize deferred tax assets and liabilities for our United States and non-U.S. operations, for operating loss and other credit carry forwards and the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income by tax jurisdiction.

Cash and Cash Equivalents

We classify investments as cash equivalents if they are readily convertible to cash and have original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist primarily of highly liquid investments in government and government agency securities and government money market funds issued or managed by financial institutions in the United States, Europe and Latin America and commercial paper depending on liquidity requirements. As of December 31, 2016 and 2015, the carrying value of cash equivalents approximates fair value due to the short period of time to maturity.

Restricted Cash and Securities

Restricted cash and securities consists primarily of cash and investments that serve to collateralize our outstanding letters of credit and certain performance and operating obligations. Restricted cash and securities are recorded as current or non-current assets in the Consolidated Balance Sheets depending on the duration of the restriction and the purpose for which the restriction exists. Restricted securities are stated at cost which approximates fair value as of December 31, 2016 and 2015.

Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and can bear interest. We establish an allowance for doubtful accounts for accounts receivable amounts that may not be collectible. We determine the allowance for doubtful accounts based on the aging of our accounts receivable balances, the credit quality of our customers and an analysis of our historical experience of bad debt write-offs. Accounts receivable balances are written off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. We recognized bad debt expense, net of recoveries, of approximately $18 million in 2016, $23 million in 2015 and $22 million in 2014.

Property, Plant and Equipment

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

Facility and Leasehold Improvements
15
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
5
-
15
years
Furniture, Fixtures, Office Equipment and Other
3
-
7
years


We perform internal reviews to evaluate the depreciable lives of our property, plant and equipment annually, or more frequently if new facts and circumstances arise, that may affect management's original estimates. Due to the rapid changes in technology and the competitive environment, selecting the estimated economic life of telecommunications property, plant, and equipment requires a significant amount of judgment. Our internal reviews take into account input from our global engineering and network services personnel, actual usage, the physical condition of our property, plant, and equipment, industry data, and other relevant factors. In connection with our periodic review of the estimated useful lives of property, plant and equipment, we may determine that the period we expect to use certain assets is different than the remaining previously estimated useful lives.

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

We capitalize costs directly associated with expansions and improvements of our communications network and customer installations, including employee-related costs, and generally capitalize costs associated with network construction and provisioning of services. We amortize such costs over an estimated useful life of 3 to 5 years.

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

Capitalized labor and related costs associated with employees and contract labor working on capital projects were approximately $271 million, $244 million and $187 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Asset Retirement Obligations

We recognize a liability for the estimated fair value of legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset in the period incurred. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Increases to the asset retirement obligation liability due to the passage of time are recognized as accretion expense and included within network related expenses. Changes in the liability due to revisions to the amount or timing of future cash flows are recognized by increasing or decreasing the liability with the offset adjusting the carrying amount of the related long-lived asset. To the extent that the downward revisions exceed the carrying amount of the related long-lived asset initially recorded when the asset retirement obligation liability was established, we record the remaining adjustment as a reduction to depreciation expense, to the extent of historical depreciation of the related long-lived asset, and then to network related expenses.

Goodwill and Indefinite-Lived Intangible Assets

Accounting guidance prohibits the amortization of goodwill and intangible assets with indefinite useful lives. We review goodwill and intangible assets with indefinite lives for impairment annually as of October 1st and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

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

At the time of each impairment assessment date in 2016, 2015, and 2014, our reporting units consisted of three regional operating units in: North America; Europe, the Middle East and Africa ("EMEA"); and Latin America. We conducted our annual goodwill impairment analysis as of October 1, and concluded that our goodwill was not impaired in 2016 and 2014. As a result of the deconsolidation of our Venezuelan subsidiary, we completed an assessment of the Latin American and our other reporting units' goodwill as of September 30, 2015 and concluded there was no impairment in 2015.

Our indefinite-lived intangible assets impairment review process compares the estimated fair value of the indefinite-lived intangible assets to their respective carrying values. If the fair value of the indefinite-lived intangible assets exceeds their carrying values, then the indefinite-lived intangible assets are not impaired. If the carrying value of the indefinite-lived intangible assets exceeds their fair value, then an impairment loss equal to the difference will be recorded. In accordance with applicable accounting guidance, an entity may assess qualitative factors to determine whether it is more likely than not that the fair value exceeds the carrying value prior to performing the two step evaluation. If it is determined that it is unlikely the carrying value exceeds the fair value, then the entity is not required to complete the indefinite-lived intangible assets impairment evaluation.

Long-Lived Assets Including Finite-Lived Intangible Assets

We amortize intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 4 to 12 years.

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

We conducted a long-lived asset impairment analysis in 2016, 2015 and 2014 and in each case concluded that our long-lived assets, including finite-lived intangible assets, were not impaired.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, accounts receivable, restricted cash and securities. We maintain our cash equivalents, restricted cash and securities with various financial institutions. These financial institutions are primarily located in the United States, Europe and Latin America and our policy is to limit exposure with any one institution. As part of our cash and risk management processes, we perform periodic evaluations of the relative credit standing of the financial institutions. We also have established guidelines relative to financial instrument credit ratings, diversification and maturities that seek to maintain safety and liquidity. Our investment strategy generally results in lower yields on investments but reduces the risk to principal in the short term prior to these funds being used in our business. Notwithstanding the devaluation of the Venezuelan bolivar, we have not experienced any material losses on financial instruments held at financial institutions.

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

A relatively small number of customers account for a significant percentage of our revenue. Our top ten customers accounted for approximately 16%, 16% and 17% of our revenue for the years ended December 31, 2016, 2015 and 2014, respectively.

Recently Adopted Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting, as part of its simplification initiative, which involves several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted, but all of the amendments must be adopted in the same period.

We elected to early adopt ASU 2016-09 in the third quarter of 2016, which required adjustments to be reflected as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. Upon adoption, we recognized previously unrecognized excess tax benefits using the modified retrospective transition method, which resulted in a cumulative-effect adjustment of $42 million recorded to accumulated deficit as of January 1, 2016.

This ASU amended the definition of assumed proceeds when applying the treasury stock method of computing earnings per share to exclude the amount of excess tax benefits that would be recognized in additional paid-in capital. This amendment increased the amount of Diluted Weighted-Average Shares Outstanding, as noted in the table below.

The new presentation requirements for excess tax benefits to be shown on the statement of cash flows as an operating activity and presenting employee taxes paid where the employer withholds shares for tax-withholding purposes as a financing activity had no effect to any of the periods presented in our Consolidated Statements of Cash Flows as there had been no such activities in the Consolidated Statements of Cash Flow. We have elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period.

Adoption of the new standard also resulted in the recognition of excess tax benefits as a reduction to income tax expense of $22 million, or $0.06 per basic share, for 2016.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which required debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. The new guidance is effective retrospectively for public companies for fiscal years beginning after December 15, 2015, and interim periods within those years. It was effective for us on January 1, 2016, and, upon adoption, debt issuance costs capitalized in other current assets and other assets in the consolidated balance sheet were reclassified and presented as a reduction to current and noncurrent long-term debt. As of December 31, 2015, debt issuance costs, net of accumulated amortization, recognized in the Consolidated Balance Sheets totaled $128 million, of which $19 million were recorded in other current assets.

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 (“FASB”) issued Accounting Standards Update 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.
Events Associated with the Acquisition of tw telecom inc.
Events Associated with the Acquisition of tw telecom inc.
Events Associated with the Acquisition of tw telecom inc.

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

In connection with the closing of the acquisition, Level 3 Financing, Inc., a wholly owned subsidiary, amended its existing credit agreement to incur an additional $2 billion of borrowings through an additional Tranche (the "Tranche B 2022 Term Loan"). The aggregate net proceeds of the Tranche B 2022 Term Loan were used to finance the cash portion of the acquisition consideration payable to tw telecom's stockholders and to refinance certain existing indebtedness of tw telecom, including fees and premiums, in connection with the closing of the acquisition (see Note 10 - Long-Term Debt for additional information). In addition, the net proceeds from the issuance of $1 billion of 5.375% Senior Notes due 2022 raised in August 2014 (see Note 10 - Long-Term Debt) were used to finance the cash portion of the acquisition consideration payable to tw telecom stockholders and to refinance certain existing indebtedness of tw telecom, including fees and premiums, in connection with the closing of the acquisition.

On October 30, 2014, we increased the number of authorized shares of common stock to 433,333,333. As a result of the acquisition, we issued approximately 96.9 million shares of our common stock to former holders of tw telecom common shares, stock options, restricted stock awards and restricted stock units. In addition, we called for redemption and discharged or repaid approximately $1.793 billion of tw telecom's outstanding consolidated debt including premiums of $154 million.

Based on the number of our shares issued, our closing stock price of $46.91 on October 31, 2014, the cash paid to the former holders of tw telecom common stock and the $2.1 billion of debt of tw telecom called for redemption and discharged or repaid, the aggregate consideration for acquisition accounting, including assumed capital leases of $152 million, approximated $8.1 billion.

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

The goodwill associated with this transaction is not deductible for income tax purposes except that certain deductible goodwill of tw telecom will continue to be deductible following the acquisition.

Our combined results of operations with tw telecom are included in our consolidated results of operations beginning in November 2014. The assets acquired and liabilities assumed of tw telecom were recognized at their acquisition date fair value. The purchase price allocation of acquired assets and assumed liabilities, including the assignment of goodwill to reporting units, was completed in the fourth quarter of 2015. The following is the final allocation of the purchase price.
 
Purchase Price Allocation
 
(dollars in millions)
Assets:
 
Cash, Cash Equivalents and Restricted Cash
$
309

Property, Plant and Equipment
1,553

Goodwill
5,181

Identifiable Intangible Assets
1,263

Other Assets
140

Total Assets
8,446

 
 
Liabilities:
 
Long-Term Debt
(2,099
)
Deferred Revenue
(57
)
Other Liabilities
(279
)
Total Liabilities
(2,435
)
Total Consideration to be Allocated
$
6,011



As a result of new information available since the acquisition date, we made certain immaterial adjustments to the preliminary purchase price allocation during the first quarter of 2015, which have been reflected in the above table. The primary adjustment was a result of a single change in the purchase price allocation of $60 million related to the estimated value associated with the identifiable intangible assets and goodwill.

The following unaudited pro forma financial information presents our combined results with tw telecom as if the completion of the acquisition had occurred as of January 1, 2014 (dollars in millions, except per share data).
 
Year Ended December 31,
 
2014
Total Revenue
$
8,123

Net Income
$
149

Net Income per Share - Basic
$
0.44

Net Income per Share - Diluted
$
0.44



These pro forma results include certain adjustments, primarily due to increases in depreciation and amortization expense due to fair value adjustments of tangible and intangible assets, increases in interest expense due to our issuance of incremental debt to finance cash consideration, partially offset by the refinancing of tw telecom debt that had higher interest rates than the incremental financing, and to eliminate historical transactions between us and tw telecom. The unaudited pro forma information is not intended to represent or be indicative of our actual results of operations that would have been reported had the acquisition been completed on January 1, 2014, nor is it representative of our future operating results. The pro forma information does not include any operating efficiencies or cost savings that we achieved with respect to combining the companies.

Acquisition related costs include transaction costs such as legal, accounting, valuation and other professional services as well as integration costs such as severance and retention. Acquisition related costs have been recorded in Network Related Expenses and Selling, General and Administrative Expenses in our Consolidated Statements of Income. We incurred total acquisition related transaction and integration costs of approximately $81 million in 2014 and $32 million in 2015.
Earnings Per Share
Earnings Per Share
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 conversion or exercise of outstanding convertible notes and stock-based compensation awards.

The effect of approximately 3 million total restricted stock units ("RSUs") and performance restricted stock units ("PRSUs") outstanding at December 31, 2016, has been included in the computation of diluted earnings per share for the year ended December 31, 2016. Less than 1 million of PRSUs granted in 2016 were excluded from the computation of diluted earnings per share for the year ended December 31, 2016, as they were contingently issuable and no shares would have been issued if this period was the end of the contingency period.

The effect of approximately 3 million and 4 million total outperform stock appreciation rights ("OSOs") and RSUs outstanding at December 31, 2015 and 2014, respectively have been included in the computation of diluted earnings per share for the year ended December 31, 2015 and 2014, respectively. PRSUs granted in 2015 were excluded from the computation of diluted earnings per share for the year ended December 31, 2015 and PRSUs granted in 2014 were excluded from the computation of diluted earnings per share for the year ended December 31, 2014, 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 17 million shares issuable pursuant to the various series of convertible notes outstanding at December 31, 2014, have not been included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive to the computation.
Property, Plant and Equipment
Property, Plant and Equipment
Property, Plant and Equipment

The components of our property, plant and equipment as of December 31, 2016 and 2015 are as follows (dollars in millions):

 
 
Cost
 
Accumulated
Depreciation
 
Net
December 31, 2016
 
 
 
 
 
 
Land
 
$
179

 
$
—

 
$
179

Land Improvements
 
77

 
(58
)
 
19

Facility and Leasehold Improvements
 
2,679

 
(1,447
)
 
1,232

Network Infrastructure
 
9,110

 
(3,899
)
 
5,211

Operating Equipment
 
8,846

 
(5,626
)
 
3,220

Furniture, Fixtures and Office Equipment
 
241

 
(196
)
 
45

Other
 
26

 
(23
)
 
3

Construction-in-Progress
 
230

 
—

 
230

 
 
$
21,388

 
$
(11,249
)
 
$
10,139

December 31, 2015
 
 
 
 
 
 
Land
 
$
180

 
$
—

 
$
180

Land Improvements
 
76

 
(53
)
 
23

Facility and Leasehold Improvements
 
2,582

 
(1,352
)
 
1,230

Network Infrastructure
 
8,979

 
(3,669
)
 
5,310

Operating Equipment
 
7,988

 
(5,079
)
 
2,909

Furniture, Fixtures and Office Equipment
 
242

 
(189
)
 
53

Other
 
28

 
(23
)
 
5

Construction-in-Progress
 
168

 
—

 
168

 
 
$
20,243

 
$
(10,365
)
 
$
9,878



Depreciation expense was $1.039 billion in 2016, $939 million in 2015 and $713 million in 2014.
Asset Retirement Obligations
Asset Retirement Obligations
Asset Retirement Obligations

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

The following table provides asset retirement obligation activity for the years ended December 31, 2016 and 2015 (dollars in millions):
 
 
2016
 
2015
Asset retirement obligation at January 1
 
$
90

 
$
85

Accretion expense
 
10

 
9

Liabilities settled
 
(9
)
 
(8
)
Revision in estimated cash flows
 
—

 
5

Effect of foreign currency rate change
 
(2
)
 
(1
)
Asset retirement obligation at December 31
 
$
89

 
$
90

Other Intangible Assets
Other Intangible Assets
Other Intangible Assets

Other intangible assets as of December 31, 2016 and 2015 were as follows (dollars in millions):

 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
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

December 31, 2015
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
1,975

 
$
(932
)
 
$
1,043

Trademarks
55

 
(55
)
 
—

Patents and Developed Technology
230

 
(161
)
 
69

 
2,260

 
(1,148
)
 
1,112

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Trade Name
15

 
—

 
15

 
$
2,275

 
$
(1,148
)
 
$
1,127



During the fourth quarter of 2016 and 2015, we conducted our long-lived assets and indefinite-lived intangible assets impairment analysis and concluded that there was no impairment in 2016 and 2015.

Finite-lived intangible assets amortization expense was $211 million in 2016, $227 million in 2015 and $95 million in 2014.

At December 31, 2016, the weighted average remaining useful lives of our finite-lived intangible assets was 4.8 years in total; 4.9 years for customer contracts and relationships and 2.8 years for patents and developed technology.

As of December 31, 2016, estimated amortization expense for our finite-lived intangible assets over the next five years and thereafter is as follows (dollars in millions):

2017
$
196

2018
193

2019
181

2020
166

2021
143

Thereafter
21

 
$
900

Restructuring Charges
Restructuring Charges
Restructuring Charges

Employee Separations

Changing economic and business conditions as well as organizational structure optimization efforts have caused us to initiate from time to time various workforce reductions resulting in involuntary employee terminations. We also have initiated workforce reductions resulting from the integration of previously acquired companies.

During 2015 and 2014, as part of the tw telecom acquisition and to improve organizational effectiveness, we initiated workforce reductions. Restructuring charges totaled $24 million and $45 million in 2015 and 2014, respectively, of which $8 million and $11 million in 2015 and 2014, respectively, were recorded in Network Related Expenses and $16 million and $34 million in 2015 and 2014, respectively, were recorded in Selling, General and Administrative Expenses. Workforce reductions were not material in 2016.

As of December 31, 2016 and 2015, we had $3 million and $4 million, respectively, of employee termination liabilities.

Facility Closings

We also have accrued contract termination costs of $5 million and $11 million as of December 31, 2016 and 2015, respectively, for facility lease costs that we continue to incur without economic benefit. Accrued contract termination costs are recorded in other liabilities (current and non-current) in the Consolidated Balance Sheets. We expect to pay the majority of these costs through 2020. We did not recognize any charge in 2016, and recognized a charge of approximately $3 million and a charge of less than $1 million in 2015 and 2014, respectively, as a result of facility lease costs associated with facility closing. We record charges for contract termination costs within Network Related Expenses and Selling, General and Administrative Expenses in the Consolidated Statements of Income.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
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 December 31, 2016 and 2015.

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 years ended December 31, 2016 and 2015.

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 December 31, 2016 and 2015:

 
 
 
 
 
 
Fair Value Measurement Using
 
 
Total Carrying Value in Consolidated Balance Sheets
 
Unadjusted Quoted Prices in Active
Markets for Identical Assets or Liabilities (Level 1)
 
Significant Other Observable Inputs (Level 2)
(dollars in millions)
 
December 31,
2016
 
December 31,
2015
 
December 31,
2016
 
December 31,
2015
 
December 31,
2016
 
December 31,
2015
Liabilities Not Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, including the current portion:
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
$
4,566

 
$
4,556

 
$
4,671

 
$
4,570

 
$
—

 
$
—

Senior Notes
 
6,135

 
6,126

 
6,283

 
6,298

 
—

 
—

Capital Leases and Other
 
183

 
199

 
—

 
—

 
183

 
199

Total Long-term Debt, including the current portion:
 
$
10,884

 
$
10,881

 
$
10,954

 
$
10,868

 
$
183

 
$
199



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 $4.7 billion and $4.6 billion at December 31, 2016 and 2015, respectively. The fair value of each loan is based on quoted prices. Each loan tranche is actively traded.

Senior Notes

The fair value of the Senior Notes referenced above was approximately $6.3 billion and $6.3 billion at December 31, 2016 and 2015, respectively, based on quoted prices. Each series of notes is actively traded.

Capital Leases

The fair value of our capital leases are determined by discounting anticipated future cash flows derived from the contractual terms of the obligations and observable market interest and foreign exchange rates.
Long-Term Debt
Long-Term Debt
Long-Term Debt

The following table summarizes our long-term debt (amounts in millions):
 
Date of
 
December 31, 2016
December 31, 2015
 
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
Aug 2019
Quarterly
LIBOR +3.00%
$
815

$
815

Tranche B 2020 Term Loan (1)(4)
Oct 2013
Jan 2020
Quarterly
LIBOR +3.00%
1,796

1,796

Tranche B-II 2022 Term Loan (1)(4)
May 2015
May 2022
Quarterly
LIBOR +2.75%
2,000

2,000

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

7% Senior Notes due 2020 (2)
Aug 2012
Jun 2020
Jun/Dec
7.000%
—

775

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

—

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

199

Total Debt Obligations
 
 
 
 
11,009

11,025

Unamortized discounts
 
 
 
 
(13
)
(16
)
Unamortized debt issuance costs
 
 
 
 
(112
)
(128
)
Current Portion
 
 
 
 
(7
)
(15
)
Total Long-Term Debt
 
 
 
 
$
10,877

$
10,866


(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-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of December 31, 2016 and 2015. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of December 31, 2016 and 2015. The Floating Rate Senior Notes due 2018 had an interest rate of 4.762% as of December 31, 2016 and 4.101% as of December 31, 2015. The interest rate on the Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan are set with a minimum LIBOR of 1.00%, and the Tranche B-II 2022 Term Loan is set with a minimum LIBOR of 0.75%.


Senior Secured Term Loans

As of January 1, 2014, Level 3 Financing, Inc., our direct wholly owned subsidiary ("Level 3 Financing") had a senior credit facility consisting of $815 million Tranche B-III Term Loan due 2019 and $1.796 billion Tranche B Term Loan due 2020.

On October 31, 2014, Level 3 Financing entered into a ninth amendment agreement to the Existing Credit Agreement to incur $2 billion in aggregate borrowings under the Existing Credit Agreement through the creation of a new Tranche B 2022 Term Loan (the "Tranche B 2022 Term Loan"). The Tranche B 2022 Term Loan included an upfront payment to the lenders of 0.75% of par and bears interest equal to LIBOR plus 3.50% with LIBOR set at a minimum of 1.00%.

On May 8, 2015, Level 3 Financing refinanced its existing $2 billion senior secured Tranche B 2022 Term Loan under a tenth amendment agreement to its Existing Credit Agreement through the creation of a new senior secured Tranche B-II 2022 term loan in the aggregate principal amount of $2 billion (the "Tranche B-II 2022 Term Loan"). The Tranche B-II 2022 Term Loan has an interest rate of LIBOR plus 2.75%, with a minimum LIBOR of 0.75%, and will mature on May 31, 2022. The Tranche B-II 2022 Term Loan was priced to lenders at par, with the payment to the lenders of an upfront fee of 25 basis points at closing. As a result of this transaction, we recognized a loss on the refinancing of approximately $27 million.

Senior Notes

We completed several offerings and refinancing of senior notes in 2016 and 2015. 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.


5.375% Senior Notes due 2022

On August 12, 2014, Level 3 Escrow II, Inc. (“Level 3 Escrow”), an indirect, wholly owned subsidiary of Level 3 Communications, Inc., issued $1.0 billion in aggregate principal amount of its 5.375% Senior Notes due 2022 (the “5.375% Senior Notes due 2022”). The 5.375% Senior Notes due 2022 were assumed by Level 3 Financing and the proceeds were used to refinance certain existing indebtedness of tw telecom.

5.75% Senior Notes due 2022

On December 1, 2014, we issued a total of $600 million aggregate principal amount of our 5.75% Senior Notes due 2022 (the “5.75% Senior Notes”). The net proceeds from the offering of the notes, together with cash on hand were used to redeem all of the outstanding 11.875% Senior Notes due 2019 issued by Level 3 Financing, including the payment of accrued interest and applicable premiums, and in connection with that redemption, the indenture relating to the 11.875% Senior Notes due 2019 was discharged on December 31, 2014. Level 3 Financing redeemed its 11.875% Senior Notes due 2017 at a price of 106.859% of the principal amount and recognized a loss on extinguishment of debt of $53 million.

5.625% Senior Notes due 2023

In January 2015, Level 3 Financing issued $500 million in aggregate principal amount of its 5.625% Senior Notes due 2023 (the “5.625% Senior Notes”). The net proceeds from the offering of the 5.625% Senior Notes, together with cash on hand, were used to redeem, on April 1, 2015, all of Level 3 Financing’s approximately $500 million aggregate principal amount of 9.375% Senior Notes due 2019, including accrued interest, applicable premiums and expenses. Total loss on extinguishment of debt related to the 9.375% Senior Notes due 2019 was $36 million.

5.125% Senior Notes due 2023 and 5.375% Senior Notes due 2025

In April 2015, Level 3 Financing issued $700 million in aggregate principal amount of its 5.125% Senior Notes due 2023 (the “5.125% Senior Notes”) and $800 million in aggregate principal amount of its 5.375% Senior Notes due 2025 (the “5.375% Senior Notes due 2025”). The net proceeds from the offering of the 5.125% Senior Notes and 5.375% Senior Notes due 2025, together with cash on hand, were used to redeem all $1.2 billion aggregate principal amount of Level 3 Financing’s 8.125% Senior Notes due 2019 and all $300 million aggregate principal amount of our 8.875% Senior Notes due 2019. Total loss on extinguishment of debt related to the 8.125% Senior Notes due 2019 was $82 million and total loss on extinguishment of debt related to the 8.875% Senior Notes due 2019 was $18 million.

5.375% Senior Notes due 2024

On November 13, 2015, Level 3 Financing issued $900 million in aggregate principal amount of its 5.375% Senior Notes due 2024 (the “5.375% Senior Notes due 2024”). The net proceeds from the offering of the 5.375% Senior Notes due 2014, together with cash on hand, were used to redeem all $900 million aggregate principal amount of Level 3 Financing’s 8.625% Senior Notes due 2020. Total loss on modification and extinguishment of debt related to the 8.625% Senior Notes due 2020 was approximately $55 million.

7% Convertible Senior Notes

During the fourth quarter of 2014, certain holders converted approximately $142 million of the 7% Convertible Senior Notes to common equity. Upon conversion, we issued an aggregate of approximately 5 million shares of our common stock, representing the approximately 37 shares per $1,000 note into which the notes were then convertible.

During the first quarter of 2015, holders converted the remaining $333 million aggregate principal amount of our 7% Convertible Senior Notes due 2015 to common equity. Upon conversion, we issued an aggregate of approximately 12 million shares of our common stock, representing the approximately 37 shares per $1,000 note into which the notes were then convertible.

5.25% Senior Notes due 2026

On March 22, 2016, Level 3 Financing issued $775 million in aggregate principal amount of its 5.25% Senior Notes due 2026 (the “5.25% Senior Notes due 2026”).

The 5.25% Senior Notes due 2026 were not originally registered under the Securities Act of 1933, as amended. A registration statement with respect to these notes has been filed with the Securities and Exchange Commission, and became effective on February 23, 2017.

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 its 5.25% Senior Notes due 2026. We recognized a loss on modification and extinguishment of debt of approximately $40 million in Other Expense in the second quarter of 2016 as a result of the redemption of the 7% Senior Notes due 2020.

Capital Leases

As of December 31, 2016, 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. Interest rates on these capital leases approximated 5.8% on average as of December 31, 2016.

Debt Issuance Costs

For the years ended December 31, 2016, 2015 and 2014, we deferred debt issuance costs of $11 million, $50 million and $49 million, respectively, in connection with debt issuances, that are being amortized to interest expense over the respective terms of the debt. At December 31, 2016 and 2015, there was $112 million and $128 million, respectively, of unamortized debt issuance costs.

Covenant Compliance

At December 31, 2016 and 2015, 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 December 31, 2016 (dollars in millions):

2017
$
7

2018
306

2019
822

2020
1,804

2021
650

Thereafter
7,420

 
$
11,009

Accumulated Other Comprehensive Loss (Notes)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss

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

(dollars in millions)
 
Net Foreign Currency Translation Adjustment
 
Net Defined Benefit Pension Plans
 
Total
Balance at January 1, 2014
 
$
67

 
$
(31
)
 
$
36

Other comprehensive loss before reclassifications
 
(178
)
 
(9
)
 
(187
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
4

 
4

Balance at December 31, 2014
 
(111
)
 
(36
)
 
(147
)
Other comprehensive income (loss) before reclassifications
 
(162
)
 
6

 
(156
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
2

 
2

Balance at December 31, 2015
 
(273
)
 
(28
)
 
(301
)
Other comprehensive loss before reclassifications
 
(80
)
 
(7
)
 
(87
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
1

 
1

Balance at December 31, 2016
 
$
(353
)
 
$
(34
)
 
$
(387
)
Employee Benefits and Stock-Based Compensation
Employee Benefits and Stock-Based Compensation
Employee Benefits and Stock-Based Compensation

We record non-cash compensation expense for our performance restricted stock units, restricted stock units, 401(k) matching contributions and prior to October 1, 2016, outperform stock appreciation rights.

The following table summarizes non-cash compensation expense and capitalized non-cash compensation for each of the three years ended December 31, 2016, 2015 and 2014 (dollars in millions):

 
 
2016
 
2015
 
2014
Outperform Stock Appreciation Rights
 
$
1

 
$
6

 
$
8

Restricted Stock Units
 
76

 
65

 
34

Performance Restricted Stock Units
 
43

 
35

 
14

401(k) Match Expense
 
37

 
36

 
23

Restricted Stock Unit Bonus Grant
 
—

 
—

 
(5
)
 
 
157

 
142

 
74

Capitalized Non-Cash Compensation
 
(1
)
 
(1
)
 
(1
)
 
 
$
156

 
$
141

 
$
73



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

OSOs and restricted stock units are granted under the Level 3 Communications, Inc. Stock Incentive Plan, as amended (the "Stock Plan"), which term extends through May 21, 2025. The Stock Plan provides for accelerated vesting of stock awards upon retirement if an employee meets certain age and years of service requirements and certain other requirements. Under the Stock Compensation guidance, if an employee meets the age and years of service requirements under the accelerated vesting provision, the award would be expensed at grant or expensed over the period from the grant date to the date the employee meets the requirements, even if the employee has not actually retired. We recognized non-cash compensation expense for employees that met the age and years of service requirements for accelerated vesting at retirement of $8 million, $14 million and $4 million in 2016, 2015 and 2014, respectively.

Outperform Stock Appreciation Rights

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

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

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


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

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

OSO units had a three year life and settled 100% on the third anniversary of the date of the award. Recipients had no discretion on the timing to exercise OSO units, thus the expected life of all such OSO units was three years.

Transactions involving OSO units awarded are summarized in the table below. The Option Price Per Unit identified in the table below represents the initial strike price, as determined on the day prior to the OSO grant date for those grants.
 
 
Units
 
Initial Strike Price Per Unit
 
Weighted
Average
Initial
Strike
Price
 
Aggregate
Intrinsic
Value
 
Weighted
Average
Remaining
Contractual
Term (years)
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
Balance January 1, 2014
 
2,148,865

 
$
14.10

 
$
36.60

 
$
23.99

 
$
31.6

 
1.46
OSOs granted
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs forfeited
 
(52,901
)
 
$
16.99

 
$
27.53

 
$
22.99

 
 
 
 
OSOs expired
 
(106,844
)
 
$
36.60

 
$
36.60

 
$
36.60

 
 
 
 
OSOs exercised
 
(771,251
)
 
$
14.70

 
$
27.53

 
$
24.26

 
 
 
 
Balance December 31, 2014
 
1,217,869

 
$
16.99

 
$
27.53

 
$
22.76

 
$
88.0

 
0.90
OSOs granted
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs forfeited
 
(12,945
)
 
$
20.29

 
$
26.69

 
$
22.81

 
 
 
 
OSOs expired
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs exercised
 
(589,944
)
 
$
22.15

 
$
22.97

 
$
22.32

 
 
 
 
Balance December 31, 2015
 
614,980

 
$
20.29

 
$
26.69

 
$
22.77

 
$
48.5

 
0.37
OSOs granted
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs forfeited
 
(6,875
)
 
$
20.29

 
$
26.69

 
$
26.03

 
 
 
 
OSOs expired
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs exercised
 
(608,105
)
 
$
20.29


$
26.69

 
$
22.73

 
 
 
 
Balance December 31, 2016
 
—

 


 


 


 

 





In the table above, the weighted average initial strike price represents the values used to calculate the theoretical value of OSO units on the grant date and the intrinsic value represents the value of OSO units that outperformed the S&P 500® Index as of December 31, 2015 and 2014, respectively.

The total realized value of OSO units settled was $14 million, $13 million and $19 million for the years ended December 31, 2016, 2015 and 2014, respectively. We issued 992,446, 622,755 and 732,593 shares of Level 3 common stock upon the exercise of OSO units for the years ended December 31, 2016, 2015 and 2014, respectively. The number of shares of Level 3 common stock issued upon settlement of an OSO unit varied based upon the relative performance of the Level 3 common stock price and the S&P 500® Index between the initial grant date and settlement date of the OSO.

Restricted Stock Units and Performance Restricted Stock Units

Restricted stock units are generally granted annually on July 1 to certain eligible recipients, including the Board of Directors, at no cost. Restrictions on transfer lapse over one to four year periods.

In April 2014, we began granting Performance Restricted Stock Units ("PRSUs"). PRSUs are designed to provide participants with a long-term stake in our success with both retention and performance components. Under these awards, a participant becomes vested in a number of PRSUs based on our achievement of specified levels of financial performance during the performance period set forth in the applicable award letter issued pursuant to the award agreement, so long as the participant remains continuously employed by us until the applicable scheduled vesting date, subject to certain change in control provisions as outlined in the award agreement. The performance objective is based on our financial performance measures. Participants will be entitled to an award within a range of 50% at a minimum achievement level and 200% at a maximum achievement level.

PRSUs use a two-year performance measurement period and vest 50% on the second anniversary of the grant date (after the relevant performance has been measured) and the second 50% vest in February of the following year.

The weighted-average grant-date fair value of restricted stock units awarded totaled $80 million, $106 million and $72 million for the years ended December 31, 2016, 2015 and 2014, respectively. The fair value of these awards was calculated using the value of Level 3 common stock on the grant date and these awards are being amortized over the periods in which the restrictions lapse. As of December 31, 2016, unamortized compensation cost related to restricted stock units was $77 million and the weighted average period over which this cost will be recognized is 2.45 years.

The changes in restricted stock units are shown in the following table:
 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2014
 
2,924,350

 
$
22.77

Stock and units granted
 
1,650,772

 
$
43.48

Lapse of restrictions
 
(1,150,080
)
 
$
22.92

Stock and units forfeited
 
(206,305
)
 
$
27.14

Nonvested at December 31, 2014
 
3,218,737

 
$
32.95

Stock and units granted
 
2,087,942

 
$
50.60

Lapse of restrictions
 
(1,194,519
)
 
$
31.70

Stock and units forfeited
 
(358,227
)
 
$
44.25

Nonvested at December 31, 2015
 
3,753,933

 
$
42.09

Stock and units granted
 
1,547,229

 
$
51.45

Lapse of restrictions
 
(1,342,027
)
 
$
36.95

Stock and units forfeited
 
(254,712
)
 
$
47.45

Nonvested at December 31, 2016
 
3,704,423

 
$
47.49




The changes in performance restricted stock units are shown in the following table:

 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2014
 
—

 
$
—

Units granted
 
605,111

 
$
39.30

Lapse of restrictions
 
(1,750
)
 
$
39.14

Units forfeited
 
(35,480
)
 
$
39.14

Nonvested at December 31, 2014
 
567,881

 
$
39.31

Units granted
 
713,657

 
$
53.82

Lapse of restrictions
 
—

 
$
—

Units forfeited
 
(53,073
)
 
$
49.25

Nonvested at December 31, 2015
 
1,228,465

 
$
47.31

Units granted
 
498,184

 
$
52.84

Lapse of restrictions
 
(297,940
)
 
$
39.43

Units forfeited
 
(97,298
)
 
$
52.02

Nonvested at December 31, 2016
 
1,331,411

 
$
50.80




The weighted-average grant-date fair value of performance restricted stock units awarded totaled $26 million, $38 million and $24 million for the years ended December 31, 2016, 2015 and 2014, respectively. The fair value of these awards was calculated using the value of Level 3 common stock on the grant date and these awards are being amortized over the periods in which the restrictions lapse. As of December 31, 2016, unamortized compensation cost related to PRSUs was $32 million and the weighted average period over which this cost will be recognized is 1.59 years.

The total fair value of restricted stock units and PRSUs whose restrictions lapsed in the years ended December 31, 2016, 2015 and 2014 was $61 million, $38 million and $27 million, respectively.

Defined Contribution Plans

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

We offer our qualified employees the opportunity to participate in a defined contribution retirement plan qualifying under the provisions of Section 401(k) of the Internal Revenue Code ("401(k) Plan"). Each employee is eligible to contribute, on a tax deferred basis, a portion of annual earnings generally not to exceed $18,000 in 2016 and $18,000 in 2015. We match 100% of employee contributions up to 4% of eligible earnings or applicable regulatory limits.

Our matching contributions are made with Level 3 common stock based on the closing stock price on each pay date. Our matching contributions are made through units in the Level 3 Stock Fund, which represent shares of Level 3 common stock. The Level 3 Stock Fund is the mechanism that is used for Level 3 to make employer matching and other contributions to employees through the Level 3 401(k) Plan. Prior to January 2016, employees were not able to purchase units in the Level 3 Stock Fund but effective January 2016, employees may allocate account balances to the Level 3 Stock Fund subject to a limitation on the total percentage of the employee's 401(K) account balances maintained in the Level 3 Stock Fund. Employees are able to diversify our matching contribution as soon as it is made, even if they are not fully vested, subject to insider trading rules and regulations. Our matching contributions vest ratably over the first three years of service or over such shorter period until the employee has completed three years of service at such time the employee is then 100% vested in all our matching contributions, including future contributions. We made 401(k) Plan matching contributions of $37 million, $36 million and $23 million for the years ended December 31, 2016, 2015 and 2014, respectively. Our matching contributions are recorded as non-cash compensation and included in network related expenses of $5 million, $5 million and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively, and in selling, general and administrative expenses of $32 million, $31 million and $19 million for the years ended December 31, 2016, 2015 and 2014, respectively. Former tw telecom employees became eligible to participate in our 401(k) Plan starting January 1, 2015.

The tw telecom 401(k) Plan ("tw telecom 401(k) Plan") provided 100% matching cash contributions up to a maximum 5% of eligible compensation. Our contributions to the tw telecom 401(k) Plan vest immediately. Expenses recorded relating to the tw telecom 401(k) Plan for the two months in 2014 subsequent to the completion of the tw telecom acquisition were approximately $2 million.

Other defined contribution plans we sponsored are individually not significant. On an aggregate basis the expenses we recorded relating to these plans were approximately $6 million, $6 million and $6 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Defined Benefit Plans

We have certain contributory and non-contributory employee pension plans, which are not significant to our financial position or operating results. We recognize in our balance sheet the funded status of our defined benefit post-retirement plans, which is measured as the difference between the fair value of the plan assets and the plan benefit obligations. We are also required to recognize changes in the funded status within accumulated other comprehensive income, net of tax to the extent such changes are not recognized in earnings as components of periodic net benefit cost. The fair value of the plan assets was $136 million and $142 million as of December 31, 2016 and 2015, respectively. The total plan benefit obligations were $158 million and $158 million as of December 31, 2016 and 2015, respectively. Therefore, the total funded status was an obligation of $22 million and $16 million as of December 31, 2016 and 2015, respectively.

Annual Discretionary Bonus Grant

Our annual discretionary bonus program is intended to motivate employees to achieve our financial and business goals. Each participant is provided a target award expressed as a percentage of base salary. Actual awards under the program are based on corporate results as well as achievement of specific individual performance criteria during the bonus program period, and may be paid in cash, restricted stock units, or a combination of the two, at the sole discretion of the Compensation Committee of the Board of Directors. The annual discretionary bonus will be paid in cash for the 2016 bonus program, and was paid in cash for the 2015 and 2014 bonus programs. We paid out 1.4 million immediately-vested restricted stock units in 2014 for the 2013 bonus plan.
Income Taxes
Income Taxes
Income Taxes

The following table summarizes the income tax (expense) benefit attributable to the income (loss) before income taxes for each of the three years ended December 31, 2016, 2015 and 2014:

 
 
2016
 
2015
 
2014
(dollars in millions)
Current:
 
 
 
 
 
 
United States Federal
 
$
—

 
$
—

 
$
—

State
 
(4
)
 
(3
)
 
(1
)
Foreign
 
(41
)
 
(33
)
 
(40
)
 
 
(45
)
 
(36
)
 
(41
)
Deferred, net of changes in valuation allowances:
 
 
 
 
 
 
United States federal
 
(177
)
 
2,941

 
6

State
 
(27
)
 
246

 
15

Foreign
 
84

 
(1
)
 
96

 
 
(120
)
 
3,186

 
117

Income Tax (Expense) Benefit
 
$
(165
)
 
$
3,150

 
$
76



The United States and Foreign components of income (loss) before income taxes for each of the three years ended December 31, 2016, 2015 and 2014 are as follows (some of the income (loss) is subject to taxation in multiple jurisdictions):

 
 
2016
 
2015
 
2014
(dollars in millions)
United States
 
$
794

 
$
401

 
$
207

Foreign
 
48

 
(118
)
 
31

 
 
$
842

 
$
283

 
$
238



A reconciliation of the actual income tax (expense) benefit and the tax computed by applying the U.S. federal rate (35%) to the income before income taxes for each of the three years ended December 31, 2016, 2015 and 2014 is shown in the following table:

 
 
2016
 
2015
 
2014
 
 
(dollars in millions)
Computed Tax Expense at Statutory Rate
 
$
(295
)
 
$
(99
)
 
$
(83
)
State and Local Income Taxes
 
(31
)
 
(15
)
 
(8
)
Effect of Earnings in Jurisdictions outside of the United States
 
24

 
30

 
13

Change in Valuation Allowance
 
139

 
3,401

 
205

Disallowed Interest
 
(58
)
 
(62
)
 
(25
)
Non-Deductible Deconsolidation Loss
 
—

 
(57
)
 
—

Other Permanent Items
 
(33
)
 
(25
)
 
(19
)
Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting
 
22

 
—

 
—

U.S. Federal Law Changes
 
110

 
—

 
—

Indefinite-Lived Assets
 
—

 
—

 
2

Uncertain Tax Positions
 
(2
)
 
(5
)
 
3

Changes in Tax Rates
 
(24
)
 
(20
)
 
(7
)
Other, net
 
(17
)
 
2

 
(5
)
Income Tax (Expense) Benefit
 
$
(165
)
 
$
3,150

 
$
76




The components of the net deferred tax assets as of December 31, 2016 and 2015 are as follows:

 
 
2016
 
2015
 
 
(dollars in millions)
Deferred Tax Assets:
 
 
 
 
Deferred revenue
 
364

 
351

Unutilized tax net operating loss carry forwards
 
4,550

 
4,959

Fixed assets
 
95

 
115

Other
 
471

 
501

Total Deferred Tax Assets
 
5,480

 
5,926

Deferred Tax Liabilities:
 
 
 
 
Deferred revenue
 
(57
)
 
(58
)
Fixed assets
 
(962
)
 
(924
)
Intangible assets
 
(357
)
 
(399
)
Other
 
(120
)
 
(350
)
Total Deferred Tax Liabilities
 
(1,496
)
 
(1,731
)
Net Deferred Tax Assets before Valuation Allowance
 
3,984

 
4,195

Valuation Allowance
 
(862
)
 
(1,002
)
Net Deferred Tax Assets after Valuation Allowance
 
$
3,122

 
$
3,193





As of December 31, 2016, we had available net operating loss carry forwards of approximately $9.0 billion after taking into account the effects of Section 382 limitation of the Internal Revenue Code for U.S. federal income tax purposes.

As a result of certain realization requirements of applicable accounting guidance, the table of deferred tax asset and liabilities shown above does not include certain deferred tax assets as of December 31, 2015 that arose directly from tax deductions related to equity compensation in excess of compensation recognized for financial reporting. However, effective January 1, 2016 we adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, and the deferred tax assets related to equity compensation are reflected in the table for the year ended December 31, 2016.

Our loss carry forwards expire in future years through 2035 and are subject to examination by the tax authorities up to three years after the carry forwards are utilized. The U.S. net operating tax loss carry forwards available for federal income tax purposes expire as follows (dollars in millions):

Expiring December 31,
Amount
2024
$
891

2025
1,267

2026
1,254

2027
1,645

2028
477

2029
694

2030
663

2031
833

2032
729

2033
194

2034
389

2035
1

 
$
9,037



Under the rules prescribed by Internal Revenue Code Section 382 and applicable regulations, if certain transactions occur with respect to an entity's capital stock that result in a cumulative ownership shift of more than 50 percentage points by 5% stockholders over a three-year testing period, annual limitations are imposed with respect to the entity's ability to utilize its net operating loss carry forwards and certain current deductions against any taxable income the entity achieves in future periods and could result in a substantial income tax expense at the time of the shift. We extended the term of our Stockholder Rights Plan, which was adopted to protect our U.S. federal net operating loss carry forwards from these limitations. This plan was designed to deter trading that would result in a change of control (as defined in Section 382) and therefore protect our ability to use our U.S. federal net operating loss carry forwards in the future.

As of December 31, 2016, we had state net operating loss carry forwards of approximately $9.4 billion that have various expiration periods through 2035. We had approximately $5.5 billion of foreign jurisdiction net operating loss carry forwards that are subject to limitations on their utilization. The majority of these foreign jurisdiction tax loss carry forwards have no expiration period.

We recognize deferred tax assets and liabilities for our domestic and non-U.S. operations, for operating loss and other credit carry forwards and the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns, and future profitability by tax jurisdiction. We have historically provided a valuation allowance to reduce our U.S. federal and state and foreign deferred tax assets to the amount that is more likely than not to be realized. We monitor our cumulative loss position and other evidence each quarter to determine the appropriateness of our valuation allowance. Although we believe our estimates are reasonable, the ultimate determination of the appropriate amount of valuation allowance involves significant judgment.

In the fourth quarter of 2014, we released $100 million of deferred tax valuation allowance primarily related to our business in the U.K. due to a recapitalization and consolidation of legal entities whereby one U.K. entity with a full valuation allowance was merged with an entity that had no valuation allowance against its deferred tax assets, as we had an expectation of future taxable income for the combined entities.

In the fourth quarter of 2015, we released the majority of the valuation allowance against our U.S. federal and state deferred tax assets, resulting in a non-cash benefit to income tax expense of approximately $3.3 billion, $3.1 billion of which was related to future years’ earnings. In making the determination to release the valuation allowance against U.S. federal and state deferred tax assets, we took into consideration our movement into a cumulative income position for the most recent 3-year period, including pro forma adjustments for acquired entities, our 8 out of 9 consecutive quarters of pre-tax operating income, and forecasts of future earnings for our U.S. business. We expect to continue to generate income before taxes in the United States in future periods.

During 2016, we recognized a $22 million income tax benefit from the vesting of stock based compensation due to the adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. We also recognized $82 million of income tax benefit related to the release of deferred tax asset valuation allowances primarily in Germany, Brazil, and Mexico. The determinations to release the foreign valuation allowances were driven by our projection of future profitability for each legal entity due to the recapitalization of our German subsidiary, the planned action to restructure our Brazilian business, and the merger of our Mexican subsidiaries.

We continue to maintain our existing valuation allowance against net deferred tax assets in many of our state and foreign jurisdictions where we do not currently believe the realization of our deferred tax assets is more likely than not.

The valuation allowance for deferred tax assets was approximately $0.9 billion as of December 31, 2016 and $1.0 billion as of December 31, 2015. The change in valuation allowance is primarily due to the release of the valuation allowance against foreign deferred tax assets.

With respect to our foreign corporate subsidiaries, we provide for U.S. income taxes on the undistributed earnings and the other outside basis temporary differences (differences between a parent's book and tax basis in a subsidiary, including currency translation adjustments) unless they are considered indefinitely reinvested outside the United States. The amount of temporary differences related to undistributed earnings and other outside basis temporary differences of investments in foreign subsidiaries upon which U.S. income taxes have not been provided was immaterial.

With respect to our foreign branches, we had historically established deferred tax liabilities for foreign branches with an overall cumulative translation gain, but had not established deferred tax assets for those with an overall translation loss as we had no plans to trigger realization of the losses in the foreseeable future. On December 7, 2016, the Internal Revenue Service issued regulations under Internal Revenue Code Section 987 addressing the taxation of foreign currency translations gains and losses arising from foreign branches. The new regulations require a “fresh start” recalculation of the unrealized gains and losses as of the adoption date. The regulations provide that the tax bases of specified assets, such as fixed assets, will be translated at historic foreign exchange rates. As a result, the deferred taxes related to such foreign currency translation are expected to reverse through the operations of the branch thereby allowing the recognition of deferred tax assets arising from translation losses as well. The issuance of the regulations resulted in us recognizing an estimated one-time tax benefit of $110 million during the fourth quarter 2016.

Our liability for uncertain income tax positions totaled $18 million at December 31, 2016 and $18 million at December 31, 2015. If the remaining balance of unrecognized tax benefits were realized in a future period, it would result in a tax benefit of $17 million ($17 million as of December 31, 2015) and a reduction in the effective tax rate. We do not expect that the liability for uncertain tax positions will materially increase or decrease during the twelve months ended December 31, 2017. A reconciliation of the beginning and ending balance of unrecognized income tax benefits follows (dollars in millions):

 
Amount
Balance as of January 1, 2014
$
13

Tax positions of prior years netted against deferred tax assets
5

Gross increases - tax positions of prior years
1

Gross increases - tax positions during 2014
—

Gross decreases - lapse of statute of limitations
(2
)
Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2014
17

Tax positions of prior years netted against deferred tax assets
(2
)
Gross increases - tax positions of prior years
3

Gross increases - tax positions during 2015
2

Gross decreases - lapse of statute of limitations
(2
)
Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2015
18

Tax positions of prior years netted against deferred tax assets
(1
)
Gross increases - tax positions during 2016
2

Gross decreases - tax positions of prior years
(1
)
Gross decreases - lapse of statute of limitations
—

Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2016
$
18



The unrecognized tax benefits in the table above do not include accrued interest and penalties of $18 million, $16 million and $17 million as of December 31, 2016, 2015 and 2014, respectively. Our policy is to record interest and penalties related to uncertain tax positions in income tax expense. We recognized accrued interest and penalties related to uncertain tax positions in income tax expense in our Consolidated Statements of Income of approximately $1 million, a benefit of less than $1 million and a benefit of approximately $1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

We, or at least one of our subsidiaries, file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2003. The Internal Revenue Service and state and local taxing authorities reserve the right to audit any period where net operating loss carry forwards are available.

We incur tax expense attributable to income in various subsidiaries that are required to file state or foreign income tax returns on a separate legal entity basis. We also recognize accrued interest and penalties in income tax expense related to uncertain tax benefits. Our tax rate is volatile and may move up or down with changes in, among other things, the amount and source of income or loss, our ability to utilize foreign tax credits, changes in tax laws, and the movement of liabilities established for uncertain tax positions as statutes of limitations expire or positions are otherwise effectively settled.
Segment Information
Segment Information
Segment Information

Operating segments are defined under GAAP as components of an enterprise for which separate financial information is available and evaluated regularly by our chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. Our CODM is Jeff K. Storey, President and Chief Executive Officer. Our reportable segments consist of: 1) North America; 2) 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 (loss) 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.

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

Total revenue consists of:

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

•
Wholesale Voice Services revenue from sales to other carriers of long distance voice services.

Core Network Services revenue represents higher profit services and Wholesale Voice Services revenue represents lower profit services. Core Network Services revenue requires different levels of investment and focus and provides different contributions to our operating results than Wholesale Voice Services revenue. Management believes that growth in revenue from our Core Network Services is critical to the long-term success of our business. We also believe we must continue to effectively manage the profitability of the Wholesale Voice Services revenue. We believe trends in our communications business are best gauged by analyzing revenue changes in Core Network Services.

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

(dollars in millions)
 
2016
 
2015
 
2014
Core Network Services Revenue:
 
 
 
 
 
 
North America
 
$
6,362

 
$
6,207

 
$
4,520

EMEA
 
744

 
835

 
904

Latin America
 
661

 
715

 
784

Total Core Network Services Revenue
 
$
7,767

 
$
7,757

 
$
6,208

 
 
 
 
 
 
 
Wholesale Voice Services Revenue:
 
 
 
 
 
 
North America
 
$
386

 
$
447

 
$
535

EMEA
 
11

 
14

 
6

Latin America
 
8

 
11

 
28

Total Wholesale Voice Services Revenue
 
$
405

 
$
472

 
$
569

 
 
 
 
 
 
 
Total Revenue
 
$
8,172

 
$
8,229

 
$
6,777




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

(dollars in millions)
 
2016
 
2015
 
2014
Adjusted EBITDA:
 
 
 
 
 
 
North America
 
$
3,220

 
$
3,048

 
$
2,065

EMEA
 
215

 
235

 
214

Latin America
 
293

 
302

 
348

Unallocated Corporate Expenses
 
(878
)
 
(947
)
 
(732
)
Adjusted EBITDA
 
$
2,850

 
$
2,638

 
$
1,895

Income Tax (Expense) Benefit
 
(165
)
 
3,150

 
76

Total Other Expense
 
(602
)
 
(1,048
)
 
(775
)
Depreciation and Amortization
 
(1,250
)
 
(1,166
)
 
(808
)
Non-Cash Stock Compensation
 
(156
)
 
(141
)
 
(73
)
Non-Cash Impairment
 
—

 
—

 
(1
)
Net Income
 
$
677

 
$
3,433


$
314



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

(dollars in millions)
 
2016
 
2015
 
2014
Capital Expenditures:
 
 
 
 
 
 
North America
 
$
874

 
$
752

 
$
495

EMEA
 
145

 
158

 
117

Latin America
 
166

 
155

 
153

Unallocated Corporate Capital Expenditures
 
149

 
164

 
145

Total Capital Expenditures
 
$
1,334

 
$
1,229

 
$
910



The following table presents total assets by segment:

 
 
As of December 31,
(dollars in millions)
 
2016
 
2015
Assets:
 
 
 
 
North America
 
$
20,818

 
$
19,961

EMEA
 
1,639

 
1,796

Latin America
 
2,304

 
2,131

Other
 
127

 
129

Total Assets
 
$
24,888

 
$
24,017




The changes in the carrying amount of goodwill by segment during year ended December 31, 2016 and 2015 were as follows (in millions):
 
 
North America
 
EMEA
 
Latin America
 
Total
Balance at January 1, 2015
$
6,955

 
$
138

 
$
596

 
$
7,689

Goodwill adjustments including the effect of foreign currency rate change
69

 
(9
)
 
—

 
60

Balance at December 31, 2015
7,024

 
129

 
596

 
7,749

Effect of foreign currency rate change
—

 
(20
)
 
—

 
(20
)
Balance at December 31, 2016
$
7,024

 
$
109

 
$
596

 
$
7,729

Commitments, Contingencies and Other Items
Commitments, Contingencies and Other Items
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 $97 million and are included in “Other” current liabilities and “Other Liabilities” in our Consolidated Balance Sheet at December 31, 2016. 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 adjusts them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Below is a description of material legal proceedings and other contingencies pending at December 31, 2016. 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 December 31, 2016.

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.    

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 $29 million at December 31, 2016.

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 $48 million at December 31, 2016 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 December 31, 2016 and December 31, 2015, we had outstanding letters of credit or other similar obligations of approximately $39 million and $46 million, respectively, of which $33 million and $43 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.

Operating Leases

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

The right-of-way agreements have various expiration dates through 2060. Payments under these right-of-way agreements were $205 million in 2016, $211 million in 2015 and $173 million in 2014.

We have obligations under non-cancelable operating leases for certain colocation, office facilities and other assets, including lease obligations for which facility related restructuring charges have been recorded. The lease agreements have various expiration dates through 2119. Rent expense, including common area maintenance, under non-cancelable lease agreements was $347 million in 2016, $357 million in 2015 and $318 million in 2014.

Future minimum payments for the next five years and thereafter under network and related right-of-way agreements and non-cancelable operating leases for facilities and other assets consist of the following as of December 31, 2016 (dollars in millions):

 
 
Right-of-Way
Agreements
 
Operating Leases
 
Total
 
Future Minimum Sublease Receipts
2017
 
$
162

 
$
282

 
$
444

 
$
4

2018
 
80

 
244

 
324

 
4

2019
 
71

 
222

 
293

 
3

2020
 
55

 
164

 
219

 
1

2021
 
50

 
124

 
174

 
—

Thereafter
 
325

 
501

 
826

 
—

 
 
$
743

 
$
1,537

 
$
2,280

 
$
12



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

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

Certain other right-of-way agreements are currently cancelable or can be terminated under certain conditions by us. We include the payments under such cancelable right-of-way agreements in the table above for a period of 1 year from January 1, 2017, if we do not consider it likely that we will cancel the right of way agreement within the next year.

Cost of Access and Third-Party Maintenance

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

The following table summarizes our purchase commitments at December 31, 2016 (dollars in millions):

 
 
Total
 
Less than
1 Year
 
2 - 3
Years
 
4 - 5
Years
 
After 5
Years
Cost of Access Services
 
$
425

 
$
278

 
$
131

 
$
11

 
$
5

Third-Party Maintenance Services
 
235

 
59

 
69

 
40

 
67

 
 
$
660

 
$
337

 
$
200

 
$
51

 
$
72

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

Level 3 Financing 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)
For the year ended December 31, 2016

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

 
$
—

 
$
3,557

 
$
4,747

 
$
(132
)
 
$
8,172

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Network access costs
—

 
—

 
1,283

 
1,574

 
(132
)
 
2,725

Network related expenses
—

 
—

 
953

 
393

 
—

 
1,346

Depreciation and amortization
—

 
—

 
385

 
865

 
—

 
1,250

Selling, general and administrative expenses
16

 
5

 
1,024

 
362

 
—

 
1,407

Total costs and expenses
16

 
5

 
3,645

 
3,194

 
(132
)
 
6,728

Operating (Loss) Income
(16
)
 
(5
)
 
(88
)
 
1,553

 
—

 
1,444

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
3

 
1

 
—

 
4

Interest expense
(36
)
 
(505
)
 
(2
)
 
(3
)
 
—

 
(546
)
Interest income (expense) affiliates, net
1,385

 
2,113

 
(3,215
)
 
(283
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(669
)
 
(2,033
)
 
757

 
—

 
1,945

 
—

Other, net
(1
)
 
(39
)
 
2

 
(22
)
 
—

 
(60
)
Total other expense
679

 
(464
)
 
(2,455
)
 
(307
)
 
1,945

 
(602
)
Income (Loss) before Income Taxes
663

 
(469
)
 
(2,543
)
 
1,246

 
1,945

 
842

Income Tax (Expense) Benefit
14

 
(200
)
 
(2
)
 
23

 
—

 
(165
)
Net Income (Loss)
677

 
(669
)
 
(2,545
)
 
1,269

 
1,945

 
677

Other Comprehensive Loss, Net of Income Taxes
(86
)
 
—

 
—

 
(86
)
 
86

 
(86
)
Comprehensive Income (Loss)
$
591

 
$
(669
)
 
$
(2,545
)
 
$
1,183

 
$
2,031

 
$
591



Condensed Consolidating Statements of Comprehensive Income (Loss)
For the year ended December 31, 2015

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

 
$
—

 
$
3,325

 
$
5,077

 
$
(173
)
 
$
8,229

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Network access costs
—

 
—

 
1,243

 
1,763

 
(173
)
 
2,833

Network related expenses
—

 
—

 
947

 
485

 
—

 
1,432

Depreciation and amortization
—

 
—

 
309

 
857

 
—

 
1,166

Selling, general and administrative expenses
4

 
—

 
1,064

 
399

 
—

 
1,467

Total costs and expenses
4

 
—

 
3,563

 
3,504

 
(173
)
 
6,898

Operating (Loss) Income
(4
)
 
—

 
(238
)
 
1,573

 
—

 
1,331

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(51
)
 
(574
)
 
(3
)
 
(14
)
 
—

 
(642
)
Interest income (expense) affiliates, net
1,310

 
1,984

 
(3,041
)
 
(253
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
2,162

 
(1,693
)
 
177

 
—

 
(646
)
 
—

Other, net
(18
)
 
(200
)
 
3

 
(192
)
 
—

 
(407
)
Total other expense
3,403

 
(483
)
 
(2,864
)
 
(458
)
 
(646
)
 
(1,048
)
Income (Loss) before Income Taxes
3,399

 
(483
)
 
(3,102
)
 
1,115

 
(646
)
 
283

Income Tax (Expense) Benefit
34

 
2,645

 
(1
)
 
472

 
—

 
3,150

Net Income (Loss)
3,433

 
2,162

 
(3,103
)
 
1,587

 
(646
)
 
3,433

Other Comprehensive (Loss) Income, Net of Income Taxes
(154
)
 
—

 
—

 
(154
)
 
154

 
(154
)
Comprehensive Income (Loss)
$
3,279

 
$
2,162

 
$
(3,103
)
 
$
1,433

 
$
(492
)
 
$
3,279

Condensed Consolidating Statements of Comprehensive Income (Loss)
For the year ended December 31, 2014

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

 
$
—

 
$
3,073

 
$
3,918

 
$
(214
)
 
$
6,777

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Network access costs
—

 
—

 
1,177

 
1,566

 
(214
)
 
2,529

Network related expenses
—

 
—

 
762

 
484

 
—

 
1,246

Depreciation and amortization
—

 
—

 
277

 
531

 
—

 
808

Selling, general and administrative expenses
21

 
2

 
735

 
423

 
—

 
1,181

Total costs and expenses
21

 
2

 
2,951

 
3,004

 
(214
)
 
5,764

Operating (Loss) Income
(21
)
 
(2
)
 
122

 
914

 
—

 
1,013

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(143
)
 
(492
)
 
(2
)
 
(17
)
 
—

 
(654
)
Interest income (expense) affiliates, net
1,227

 
1,827

 
(2,890
)
 
(164
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(710
)
 
(2,047
)
 
663

 
—

 
2,094

 
—

Other, net
(53
)
 
—

 
7

 
(76
)
 
—

 
(122
)
Total other expense
321

 
(712
)
 
(2,222
)
 
(256
)
 
2,094

 
(775
)
Income (Loss) before Income Taxes
300

 
(714
)
 
(2,100
)
 
658

 
2,094

 
238

Income Tax (Expense) Benefit
14

 
4

 
(1
)
 
59

 
—

 
76

Net Income (Loss)
314

 
(710
)
 
(2,101
)
 
717

 
2,094

 
314

Other Comprehensive Income (Loss), Net of Income Taxes
(183
)
 
—

 
—

 
(183
)
 
183

 
(183
)
Comprehensive Income (Loss)
$
131

 
$
(710
)
 
$
(2,101
)
 
$
534

 
$
2,277

 
$
131

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 Balance Sheets
December 31, 2015

 
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
$
12

 
$
6

 
$
727

 
$
109

 
$
—

 
$
854

Restricted cash and securities
—

 
—

 
1

 
7

 
—

 
8

Receivables, less allowances for doubtful accounts
—

 
—

 
47

 
710

 
—

 
757

Due from affiliates
12,415

 
22,759

 
—

 
2,816

 
(37,990
)
 
—

Other
—

 
—

 
56

 
55

 
—

 
111

Total Current Assets
12,427

 
22,765

 
831

 
3,697

 
(37,990
)
 
1,730

Property, Plant, and Equipment, net
—

 
—

 
3,423

 
6,455

 
—

 
9,878

Restricted Cash and Securities
27

 
—

 
14

 
1

 
—

 
42

Goodwill and Other Intangibles, net
—

 
—

 
363

 
8,513

 
—

 
8,876

Investment in Subsidiaries
16,772

 
17,714

 
3,734

 
—

 
(38,220
)
 
—

Deferred Tax Assets
38

 
2,847

 
—

 
556

 
—

 
3,441

Other Assets, net
—

 
—

 
12

 
38

 
—

 
50

Total Assets
$
29,264

 
$
43,326

 
$
8,377

 
$
19,260

 
$
(76,210
)
 
$
24,017

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

 
$
1

 
$
195

 
$
433

 
$
—

 
$
629

Current portion of long-term debt
—

 
—

 
2

 
13

 
—

 
15

Accrued payroll and employee benefits
—

 
—

 
186

 
32

 
—

 
218

Accrued interest
11

 
90

 
—

 
7

 
—

 
108

Current portion of deferred revenue
—

 
—

 
119

 
148

 
—

 
267

Due to affiliates
—

 
—

 
37,990

 
—

 
(37,990
)
 
—

Other
—

 
—

 
115

 
64

 
—

 
179

Total Current Liabilities
11

 
91

 
38,607

 
697

 
(37,990
)
 
1,416

Long-Term Debt, less current portion
591

 
10,092

 
15

 
168

 
—

 
10,866

Deferred Revenue, less current portion
—

 
—

 
680

 
297

 
—

 
977

Other Liabilities
15

 
—

 
133

 
484

 
—

 
632

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit)
28,647

 
33,143

 
(31,058
)
 
17,614

 
(38,220
)
 
10,126

Total Liabilities and Stockholders' Equity (Deficit)
$
29,264

 
$
43,326

 
$
8,377

 
$
19,260

 
$
(76,210
)
 
$
24,017

Condensed Consolidating Statements of Cash Flows
For the year ended December 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 (Used in) Provided by Operating Activities
$
(49
)
 
$
(468
)
 
$
564

 
$
2,296

 
$
—

 
$
2,343

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(704
)
 
(630
)
 
—

 
(1,334
)
Change in restricted cash and securities, net
5

 
—

 
6

 
1

 
—

 
12

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

 
—

 
1

 
2

 
—

 
3

Net Cash Provided by (Used in) Investing Activities
5

 
—

 
(697
)
 
(627
)
 
—

 
(1,319
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
764

 
—

 
—

 
—

 
764

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

 
(806
)
 
(1
)
 
(13
)
 
—

 
(820
)
Increase (decrease) due from/to affiliates, net
47

 
504

 
1,107

 
(1,658
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
47

 
462

 
1,106

 
(1,671
)
 
—

 
(56
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(3
)
 
—

 
(3
)
Net Change in Cash and Cash Equivalents
3

 
(6
)
 
973

 
(5
)
 
—

 
965

Cash and Cash Equivalents at Beginning of Year
12

 
6

 
727

 
109

 
—

 
854

Cash and Cash Equivalents at End of Year
$
15

 
$
—

 
$
1,700

 
$
104

 
$
—

 
$
1,819


Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2015

 
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
$
(40
)
 
$
(617
)
 
$
193

 
$
2,319

 
$
—

 
$
1,855

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(453
)
 
(776
)
 
—

 
(1,229
)
Cash related to deconsolidated Venezuela operations
—

 
—

 
—

 
(83
)
 
—

 
(83
)
Change in restricted cash and securities, net
(25
)
 
—

 
3

 
—

 
—

 
(22
)
Proceeds from sale of property, plant and equipment and other assets
—

 
—

 
—

 
4

 
—

 
4

Other
—

 
—

 
(14
)
 
—

 
—

 
(14
)
Net Cash Provided by (Used in) Investing Activities
(25
)
 
—

 
(464
)
 
(855
)
 
—

 
(1,344
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
4,832

 
—

 
—

 
—

 
4,832

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(313
)
 
(4,725
)
 
(2
)
 
(11
)
 
—

 
(5,051
)
Increase (decrease) due from/to affiliates, net
383

 
511

 
693

 
(1,587
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
70

 
618

 
691

 
(1,598
)
 
—

 
(219
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(18
)
 
—

 
(18
)
Net Change in Cash and Cash Equivalents
5

 
1

 
420

 
(152
)
 
—

 
274

Cash and Cash Equivalents at Beginning of Year
7

 
5

 
307

 
261

 
—

 
580

Cash and Cash Equivalents at End of Year
$
12

 
$
6

 
$
727

 
$
109

 
$
—

 
$
854

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2014

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(178
)
 
$
(458
)
 
$
625

 
$
1,172

 
$
—

 
$
1,161

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(362
)
 
(548
)
 
—

 
(910
)
Change in restricted cash and securities, net
—

 
—

 
2

 
(12
)
 
—

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

 
—

 
—

 
3

 
—

 
3

Investment in tw telecom, net of cash acquired
(474
)
 
—

 
—

 
307

 
—

 
(167
)
Other
—

 
—

 
—

 
(2
)
 
—

 
(2
)
Net Cash Provided by (Used in) Investing Activities
(474
)
 
—

 
(360
)
 
(252
)
 
—

 
(1,086
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
590

 
—

 
—

 
(1
)
 
—

 
589

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(647
)
 
—

 
—

 
(24
)
 
—

 
(671
)
Increase (decrease) due from/to affiliates, net
708

 
457

 
(305
)
 
(860
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
651

 
457

 
(305
)
 
(885
)
 
—

 
(82
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(44
)
 
—

 
(44
)
Net Change in Cash and Cash Equivalents
(1
)
 
(1
)
 
(40
)
 
(9
)
 
—

 
(51
)
Cash and Cash Equivalents at Beginning of Year
8

 
6

 
347

 
270

 
—

 
631

Cash and Cash Equivalents at End of Year
$
7

 
$
5

 
$
307

 
$
261

 
$
—

 
$
580

Unaudited Quarterly Financial Data
Unaudited Quarterly Financial Data
Unaudited Quarterly Financial Data
 
 
Three Months Ended
 
 
March 31,
 
June 30,
 
September 30,
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions except per share data)
Revenue
 
$
2,051

 
$
2,053

 
$
2,056

 
$
2,061

 
$
2,033

 
$
2,062

 
$
2,032

 
$
2,053

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
 
694

 
723

 
676

 
696

 
675

 
706

 
680

 
708

Network Related Expenses
 
338

 
356

 
339

 
363

 
337

 
369

 
332

 
344

Depreciation and Amortization
 
301

 
288

 
310

 
288

 
319

 
296

 
320

 
294

Selling, General and Administrative Expenses
 
356

 
370

 
357

 
364

 
348

 
364

 
346

 
369

Total Costs and Expenses
 
1,689

 
1,737

 
1,682

 
1,711

 
1,679

 
1,735

 
1,678

 
1,715

Operating Income
 
362

 
316

 
374

 
350

 
354

 
327

 
354

 
338

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
1

 
1

 
1

 
—

 
1

 
—

 
1

 
—

Interest Expense
 
(135
)
 
(180
)
 
(140
)
 
(165
)
 
(139
)
 
(145
)
 
(132
)
 
(152
)
Loss on Modification and Extinguishment of Debt
 
—

 
—

 
(40
)
 
(163
)
 
—

 
—

 
—

 
(55
)
Venezuela Deconsolidation Charge
 
—

 
—

 
—

 
—

 
—

 
(171
)
 
—

 
—

Other, net
 
(10
)
 
(10
)
 
(5
)
 
(17
)
 
1

 
6

 
(6
)
 
3

Total Other Expense
 
(144
)
 
(189
)
 
(184
)
 
(345
)
 
(137
)
 
(310
)
 
(137
)
 
(204
)
Income Before Income Taxes
 
218

 
127

 
190

 
5

 
217

 
17

 
217

 
134

Income Tax (Expense) Benefit
 
(90
)
 
(5
)
 
(34
)
 
(18
)
 
(74
)
 
(16
)
 
33

 
3,189

Net Income (Loss)
 
$
128

 
$
122

 
$
156

 
$
(13
)
 
$
143

 
$
1

 
$
250

 
$
3,323

Net Income (Loss) Per Share - Basic
 
$
0.36

 
$
0.35

 
$
0.44

 
$
(0.04
)
 
$
0.40

 
$
—

 
$
0.70

 
$
9.33

Net Income (Loss) Per Share - Diluted
 
$
0.36

 
$
0.35

 
$
0.43

 
$
(0.04
)
 
$
0.39

 
$
—

 
$
0.69

 
$
9.24



Net income (loss) per share for each quarter is computed using the weighted-average number of shares outstanding during that quarter, while net income (loss) per share for the year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the income (loss) per share for each of the four quarters may not equal the net income (loss) per share for the year.

During the second quarter of 2016, we recognized a loss on modification and extinguishment of debt of $40 million, related to the redemption of the 7% Senior Notes due 2020.

In the second quarter of 2016, we recognized approximately $40 million income tax benefit related to the release of our German deferred tax valuation allowance.

In the fourth quarter of 2016, we recognized a $110 million income tax benefit related to the issuance of new regulations under Internal Revenue Code Section 987 addressing the taxation of foreign currency translation gains and losses arising from foreign branches.

In the fourth quarter of 2016, we recognized a $35 million income tax benefit related to releases of deferred tax valuation allowances primarily in Brazil.

In the fourth quarter of 2016, we recognized $16 million income tax expense related to income tax rate changes.

During the fourth quarter of 2015, we recognized a $3.3 billion income tax benefit primarily related to the release of U.S. federal and state deferred tax valuation allowances.

During the fourth quarter of 2015, we recognized a loss on extinguishment of debt of $55 million, related to the refinancing of the 8.625% Senior Notes due 2020.

During the second quarter of 2015, we recognized a loss on extinguishment of debt of $36 million, related to the refinancing of the 9.375% Senior Notes due 2019.

During the second quarter of 2015, we recognized a loss on extinguishment of debt of $82 million, related to the refinancing of the 8.125% Senior Notes due 2019.

During the second quarter of 2015, we recognized a loss on extinguishment of debt of $18 million, related to the refinancing of the 8.875% Senior Notes due 2019.

During the second quarter of 2015, we recognized a loss on modification and extinguishment of debt of $27 million, related to the refinancing of the senior secured Tranche B Term Loan due 2022.
Subsequent Event
Subsequent Event
Subsequent Event

On February 22, 2017, we completed the refinancing of all of our outstanding $4.611 billion senior secured term loans through the issuance of a new Tranche B 2024 Term Loan in the amount of $4.611 billion. The term loans refinanced are 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.
Summary of Significant Accounting Policies (Policies)
Principles of Consolidation and Basis of Presentation 
Principles of Consolidation and Basis of Presentation

The consolidated financial statements include 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.

Prior to October 1, 2015, we included the results of our wholly owned Venezuelan subsidiary in our Consolidated Financial Statements using the consolidation method of accounting. Our Venezuelan subsidiary was in the Latin America segment and had total revenue of $72 million for the nine months ended September 30, 2015. For more information on our segments and non-GAAP measures see Note 16 - Segment Information.
    
Venezuelan exchange control regulations have resulted in an other-than-temporary lack of exchangeability between the Venezuelan bolivar and U.S. dollar, and have restricted our Venezuelan operations’ ability to pay dividends and settle intercompany obligations in U.S. dollars. The severe currency controls imposed by the Venezuelan government have significantly limited the ability to realize the benefits from earnings of our Venezuelan operations and access the resulting liquidity provided by those earnings in U.S. dollars. We expect that this condition will continue for the foreseeable future.



Additionally, government regulations affecting our ability to manage our Venezuelan subsidiary’s capital structure, purchasing, product pricing, customer invoicing and collections, and labor relations; and the current political and economic situation within Venezuela have resulted in an acute degradation in our ability to make key operational decisions for our Venezuelan operations. The lack of exchangeability between the Venezuelan bolivar and the U.S. dollar and the degradation in our ability to control key operational decisions resulting in a lack of control over our Venezuelan subsidiary for U.S. accounting purposes, we concluded it no longer met the accounting criteria for consolidation and deconsolidated our Venezuelan subsidiary on September 30, 2015, and began accounting for our variable interest investment in our Venezuelan operations using the cost method of accounting. As a result of deconsolidating our Venezuelan subsidiary, we recorded a one-time charge of $171 million in the third quarter of 2015, which had no accompanying tax benefit. Our financial results no longer include the operating results of our Venezuelan operations.
Foreign Currency Translation 
Foreign Currency Translation

Local currencies of foreign subsidiaries are the functional currencies for financial reporting purposes except for certain foreign subsidiaries in Latin America. For operations outside the United States that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using average exchange rates prevailing during the year. A significant portion of our non-United States subsidiaries have either the British pound, the euro or the Brazilian real as the functional currency, each of which experienced significant fluctuations against the U.S. dollar during 2016, 2015 and 2014. Foreign currency translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in stockholders' equity and in the Consolidated Statements of Comprehensive Income in accordance with accounting guidance for foreign currency translation. We consider the majority of our investments in our foreign subsidiaries to be long-term in nature. Our non-United States exchange transaction gains (losses), including where transactions with our non-United States subsidiaries are not considered to be long-term in nature, are included within other income (expense) in Other, net on the Consolidated Statements of Income.
Reclassifications 
Reclassifications

Certain amounts in the prior year Consolidated Financial Statements and accompanying footnotes have been reclassified to conform to the current year's presentation primarily pursuant to the adoption of Accounting Standards Update ("ASU") 2015-03, Simplifying the Presentation of Debt Issuance Costs. As of December 31, 2015, approximately $19 million of current debt issuance costs have been reclassified from other current assets to long-term debt, less current portion and approximately $109 million of non-current debt issuance costs have been reclassified from other non-current assets to long-term debt, less current portion.

Use of Estimates 
Use of Estimates

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

Revenue

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

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

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

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

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

Our customer contracts require us to meet certain service level commitments. If we do not meet the required service levels, we may be obligated to provide credits, usually in the form of free service, for a short period of time. The credits are a reduction to revenue and, to date, have not been material.

Network Access Costs

Network Access Costs for the communications business include leased capacity, right-of-way costs, access charges, satellite transponder lease costs and other third party costs directly attributable to providing access to customer locations from our network, but excludes Network Related Expenses, and depreciation and amortization. Network Access Costs do not include any employee expenses or impairment expenses; these expenses are allocated to Network Related Expenses or Selling, General and Administrative Expenses.

We recognize the network access costs as they are incurred in accordance with contractual requirements. We dispute incorrect billings from our suppliers of network services. The most prevalent types of disputes include disputes for circuits that are not disconnected by the supplier on a timely basis, charges from suppliers for circuits that were not timely installed and incorrect rate or other inadequate information needed to determine the appropriate billing from the supplier. Depending on the type and complexity of the issues involved, it may and often does take several quarters to resolve the disputes. We establish appropriate network access costs reserves for disputed supplier billings based on an analysis of our historical experience in resolving disputes with our suppliers and regulatory analysis regarding certain supplier billing matters. Judgment is required in estimating the ultimate outcome of the dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiations or settle any litigation. Actual results may differ from these estimates under different assumptions or conditions and these differences could be material.
Selling, General and Administrative Expenses, Policy [Policy Text Block] 
Network Related Expenses

Network Related Expenses includes certain expenses associated with the delivery of services to customers and the operation and maintenance of our network, such as facility rent, utilities, maintenance and other costs, each related to the operation of our communications network, as well as salaries, wages and related benefits (including non-cash stock-based compensation expenses) associated with personnel who are responsible for the delivery of services, operation and maintenance of our communications network, and accretion expense on asset retirement obligations, but excludes depreciation and amortization.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses includes the salaries, wages and related benefits (including non-cash, stock-based compensation expenses) and the related costs of corporate and sales personnel, travel, insurance, non-network related rent, advertising, and other administrative expenses.

USF and Gross Receipts Taxes 
USF and Gross Receipts Taxes

The revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, gross receipts taxes and certain state regulatory fees. We record Universal Service Fund ("USF") contributions where we are the primary obligor for the taxes assessed in each jurisdiction where we do business on a gross basis in our Consolidated Statements of Income, but generally record gross receipts taxes and certain state regulatory fees billed to our customers on a net basis in our Consolidated Statements of Income. Total revenue and network access costs on the Consolidated Statements of Income include USF contributions totaling $357 million, $323 million and $234 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Share-Based Compensation 
Stock-Based Compensation

We recognize the estimated fair value of stock-based compensation costs, net of an estimated forfeiture rate, over the requisite service period of the award, which is generally the vesting term or term for restrictions on transfer that lapse, as the case may be. We estimate forfeiture rates based on our historical experience for the type of award, adjusted for expected activities as necessary.
Income Taxes 
Income Taxes

We recognize deferred tax assets and liabilities for our United States and non-U.S. operations, for operating loss and other credit carry forwards and the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income by tax jurisdiction.
Cash and Cash Equivalents 
Cash and Cash Equivalents

We classify investments as cash equivalents if they are readily convertible to cash and have original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist primarily of highly liquid investments in government and government agency securities and government money market funds issued or managed by financial institutions in the United States, Europe and Latin America and commercial paper depending on liquidity requirements. As of December 31, 2016 and 2015, the carrying value of cash equivalents approximates fair value due to the short period of time to maturity.
Restricted Cash and Securities 
Restricted Cash and Securities

Restricted cash and securities consists primarily of cash and investments that serve to collateralize our outstanding letters of credit and certain performance and operating obligations. Restricted cash and securities are recorded as current or non-current assets in the Consolidated Balance Sheets depending on the duration of the restriction and the purpose for which the restriction exists. Restricted securities are stated at cost which approximates fair value as of December 31, 2016 and 2015.
Allowance for Doubtful Accounts 
Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and can bear interest. We establish an allowance for doubtful accounts for accounts receivable amounts that may not be collectible. We determine the allowance for doubtful accounts based on the aging of our accounts receivable balances, the credit quality of our customers and an analysis of our historical experience of bad debt write-offs. Accounts receivable balances are written off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. We recognized bad debt expense, net of recoveries, of approximately $18 million in 2016, $23 million in 2015 and $22 million in
Property, Plant and Equipment 
Property, Plant and Equipment

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

Facility and Leasehold Improvements
15
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
5
-
15
years
Furniture, Fixtures, Office Equipment and Other
3
-
7
years


We perform internal reviews to evaluate the depreciable lives of our property, plant and equipment annually, or more frequently if new facts and circumstances arise, that may affect management's original estimates. Due to the rapid changes in technology and the competitive environment, selecting the estimated economic life of telecommunications property, plant, and equipment requires a significant amount of judgment. Our internal reviews take into account input from our global engineering and network services personnel, actual usage, the physical condition of our property, plant, and equipment, industry data, and other relevant factors. In connection with our periodic review of the estimated useful lives of property, plant and equipment, we may determine that the period we expect to use certain assets is different than the remaining previously estimated useful lives.

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

We capitalize costs directly associated with expansions and improvements of our communications network and customer installations, including employee-related costs, and generally capitalize costs associated with network construction and provisioning of services. We amortize such costs over an estimated useful life of 3 to 5 years.

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

Capitalized labor and related costs associated with employees and contract labor working on capital projects were approximately $271 million, $244 million and $187 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Impairment of Finite Lived Intangible Assets and Property Plant and Equipment 
Long-Lived Assets Including Finite-Lived Intangible Assets

We amortize intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 4 to 12 years.

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

We conducted a long-lived asset impairment analysis in 2016, 2015 and 2014 and in each case concluded that our long-lived assets, including finite-lived intangible assets, were not impaired.
Asset Retirement Obligations 
Asset Retirement Obligations

We recognize a liability for the estimated fair value of legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset in the period incurred. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Increases to the asset retirement obligation liability due to the passage of time are recognized as accretion expense and included within network related expenses. Changes in the liability due to revisions to the amount or timing of future cash flows are recognized by increasing or decreasing the liability with the offset adjusting the carrying amount of the related long-lived asset. To the extent that the downward revisions exceed the carrying amount of the related long-lived asset initially recorded when the asset retirement obligation liability was established, we record the remaining adjustment as a reduction to depreciation expense, to the extent of historical depreciation of the related long-lived asset, and then to network related expenses.

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

Accounting guidance prohibits the amortization of goodwill and intangible assets with indefinite useful lives. We review goodwill and intangible assets with indefinite lives for impairment annually as of October 1st and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

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

At the time of each impairment assessment date in 2016, 2015, and 2014, our reporting units consisted of three regional operating units in: North America; Europe, the Middle East and Africa ("EMEA"); and Latin America. We conducted our annual goodwill impairment analysis as of October 1, and concluded that our goodwill was not impaired in 2016 and 2014. As a result of the deconsolidation of our Venezuelan subsidiary, we completed an assessment of the Latin American and our other reporting units' goodwill as of September 30, 2015 and concluded there was no impairment in 2015.

Our indefinite-lived intangible assets impairment review process compares the estimated fair value of the indefinite-lived intangible assets to their respective carrying values. If the fair value of the indefinite-lived intangible assets exceeds their carrying values, then the indefinite-lived intangible assets are not impaired. If the carrying value of the indefinite-lived intangible assets exceeds their fair value, then an impairment loss equal to the difference will be recorded. In accordance with applicable accounting guidance, an entity may assess qualitative factors to determine whether it is more likely than not that the fair value exceeds the carrying value prior to performing the two step evaluation. If it is determined that it is unlikely the carrying value exceeds the fair value, then the entity is not required to complete the indefinite-lived intangible assets impairment evaluation.

Concentration of Credit Risk 
Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, accounts receivable, restricted cash and securities. We maintain our cash equivalents, restricted cash and securities with various financial institutions. These financial institutions are primarily located in the United States, Europe and Latin America and our policy is to limit exposure with any one institution. As part of our cash and risk management processes, we perform periodic evaluations of the relative credit standing of the financial institutions. We also have established guidelines relative to financial instrument credit ratings, diversification and maturities that seek to maintain safety and liquidity. Our investment strategy generally results in lower yields on investments but reduces the risk to principal in the short term prior to these funds being used in our business. Notwithstanding the devaluation of the Venezuelan bolivar, we have not experienced any material losses on financial instruments held at financial institutions.

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

A relatively small number of customers account for a significant percentage of our revenue. Our top ten customers accounted for approximately 16%, 16% and 17% of our revenue for the years ended December 31, 2016, 2015 and 2014, respectively.
Summary of Significant Accounting Policies (Tables)
Property, Plant and Equipment
Property, Plant and Equipment

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

Facility and Leasehold Improvements
15
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
5
-
15
years
Furniture, Fixtures, Office Equipment and Other
3
-
7
years


We perform internal reviews to evaluate the depreciable lives of our property, plant and equipment annually, or more frequently if new facts and circumstances arise, that may affect management's original estimates. Due to the rapid changes in technology and the competitive environment, selecting the estimated economic life of telecommunications property, plant, and equipment requires a significant amount of judgment. Our internal reviews take into account input from our global engineering and network services personnel, actual usage, the physical condition of our property, plant, and equipment, industry data, and other relevant factors. In connection with our periodic review of the estimated useful lives of property, plant and equipment, we may determine that the period we expect to use certain assets is different than the remaining previously estimated useful lives.
The components of our property, plant and equipment as of December 31, 2016 and 2015 are as follows (dollars in millions):

 
 
Cost
 
Accumulated
Depreciation
 
Net
December 31, 2016
 
 
 
 
 
 
Land
 
$
179

 
$
—

 
$
179

Land Improvements
 
77

 
(58
)
 
19

Facility and Leasehold Improvements
 
2,679

 
(1,447
)
 
1,232

Network Infrastructure
 
9,110

 
(3,899
)
 
5,211

Operating Equipment
 
8,846

 
(5,626
)
 
3,220

Furniture, Fixtures and Office Equipment
 
241

 
(196
)
 
45

Other
 
26

 
(23
)
 
3

Construction-in-Progress
 
230

 
—

 
230

 
 
$
21,388

 
$
(11,249
)
 
$
10,139

December 31, 2015
 
 
 
 
 
 
Land
 
$
180

 
$
—

 
$
180

Land Improvements
 
76

 
(53
)
 
23

Facility and Leasehold Improvements
 
2,582

 
(1,352
)
 
1,230

Network Infrastructure
 
8,979

 
(3,669
)
 
5,310

Operating Equipment
 
7,988

 
(5,079
)
 
2,909

Furniture, Fixtures and Office Equipment
 
242

 
(189
)
 
53

Other
 
28

 
(23
)
 
5

Construction-in-Progress
 
168

 
—

 
168

 
 
$
20,243

 
$
(10,365
)
 
$
9,878

Events Associated with the Acquisition of tw telecom inc. (Tables)
Schedule of the Final Purchase Price Allocation 
 
Purchase Price Allocation
 
(dollars in millions)
Assets:
 
Cash, Cash Equivalents and Restricted Cash
$
309

Property, Plant and Equipment
1,553

Goodwill
5,181

Identifiable Intangible Assets
1,263

Other Assets
140

Total Assets
8,446

 
 
Liabilities:
 
Long-Term Debt
(2,099
)
Deferred Revenue
(57
)
Other Liabilities
(279
)
Total Liabilities
(2,435
)
Total Consideration to be Allocated
$
6,011

Schedule of Unaudited Pro Forma Financial Information for the Amalgamation 
The following unaudited pro forma financial information presents our combined results with tw telecom as if the completion of the acquisition had occurred as of January 1, 2014 (dollars in millions, except per share data).
 
Year Ended December 31,
 
2014
Total Revenue
$
8,123

Net Income
$
149

Net Income per Share - Basic
$
0.44

Net Income per Share - Diluted
$
0.44

Property, Plant and Equipment (Tables)
Property, Plant and Equipment
Property, Plant and Equipment

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

Facility and Leasehold Improvements
15
-
40
years
Network Infrastructure (including fiber and conduit)
25
-
50
years
Operating Equipment
5
-
15
years
Furniture, Fixtures, Office Equipment and Other
3
-
7
years


We perform internal reviews to evaluate the depreciable lives of our property, plant and equipment annually, or more frequently if new facts and circumstances arise, that may affect management's original estimates. Due to the rapid changes in technology and the competitive environment, selecting the estimated economic life of telecommunications property, plant, and equipment requires a significant amount of judgment. Our internal reviews take into account input from our global engineering and network services personnel, actual usage, the physical condition of our property, plant, and equipment, industry data, and other relevant factors. In connection with our periodic review of the estimated useful lives of property, plant and equipment, we may determine that the period we expect to use certain assets is different than the remaining previously estimated useful lives.
The components of our property, plant and equipment as of December 31, 2016 and 2015 are as follows (dollars in millions):

 
 
Cost
 
Accumulated
Depreciation
 
Net
December 31, 2016
 
 
 
 
 
 
Land
 
$
179

 
$
—

 
$
179

Land Improvements
 
77

 
(58
)
 
19

Facility and Leasehold Improvements
 
2,679

 
(1,447
)
 
1,232

Network Infrastructure
 
9,110

 
(3,899
)
 
5,211

Operating Equipment
 
8,846

 
(5,626
)
 
3,220

Furniture, Fixtures and Office Equipment
 
241

 
(196
)
 
45

Other
 
26

 
(23
)
 
3

Construction-in-Progress
 
230

 
—

 
230

 
 
$
21,388

 
$
(11,249
)
 
$
10,139

December 31, 2015
 
 
 
 
 
 
Land
 
$
180

 
$
—

 
$
180

Land Improvements
 
76

 
(53
)
 
23

Facility and Leasehold Improvements
 
2,582

 
(1,352
)
 
1,230

Network Infrastructure
 
8,979

 
(3,669
)
 
5,310

Operating Equipment
 
7,988

 
(5,079
)
 
2,909

Furniture, Fixtures and Office Equipment
 
242

 
(189
)
 
53

Other
 
28

 
(23
)
 
5

Construction-in-Progress
 
168

 
—

 
168

 
 
$
20,243

 
$
(10,365
)
 
$
9,878

Asset Retirement Obligations (Tables)
Schedule of Asset Retirement Obligations [Table Text Block]
The following table provides asset retirement obligation activity for the years ended December 31, 2016 and 2015 (dollars in millions):
 
 
2016
 
2015
Asset retirement obligation at January 1
 
$
90

 
$
85

Accretion expense
 
10

 
9

Liabilities settled
 
(9
)
 
(8
)
Revision in estimated cash flows
 
—

 
5

Effect of foreign currency rate change
 
(2
)
 
(1
)
Asset retirement obligation at December 31
 
$
89

 
$
90

Other Intangible Assets (Tables)
Schedule of acquisition-related intangible assets 
intangible assets as of December 31, 2016 and 2015 were as follows (dollars in millions):

 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
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

December 31, 2015
 
 
 
 
 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer Contracts and Relationships
$
1,975

 
$
(932
)
 
$
1,043

Trademarks
55

 
(55
)
 
—

Patents and Developed Technology
230

 
(161
)
 
69

 
2,260

 
(1,148
)
 
1,112

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Trade Name
15

 
—

 
15

 
$
2,275

 
$
(1,148
)
 
$
1,127

Schedule of estimated amortization expense of acquired finite-lived intangible asset 
As of December 31, 2016, estimated amortization expense for our finite-lived intangible assets over the next five years and thereafter is as follows (dollars in millions):

2017
$
196

2018
193

2019
181

2020
166

2021
143

Thereafter
21

 
$
900

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 December 31, 2016 and 2015:

 
 
 
 
 
 
Fair Value Measurement Using
 
 
Total Carrying Value in Consolidated Balance Sheets
 
Unadjusted Quoted Prices in Active
Markets for Identical Assets or Liabilities (Level 1)
 
Significant Other Observable Inputs (Level 2)
(dollars in millions)
 
December 31,
2016
 
December 31,
2015
 
December 31,
2016
 
December 31,
2015
 
December 31,
2016
 
December 31,
2015
Liabilities Not Recorded at Fair Value in the Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, including the current portion:
 
 
 
 
 
 
 
 
 
 
 
 
Term Loans
 
$
4,566

 
$
4,556

 
$
4,671

 
$
4,570

 
$
—

 
$
—

Senior Notes
 
6,135

 
6,126

 
6,283

 
6,298

 
—

 
—

Capital Leases and Other
 
183

 
199

 
—

 
—

 
183

 
199

Total Long-term Debt, including the current portion:
 
$
10,884

 
$
10,881

 
$
10,954

 
$
10,868

 
$
183

 
$
199



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
 
December 31, 2016
December 31, 2015
 
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
Aug 2019
Quarterly
LIBOR +3.00%
$
815

$
815

Tranche B 2020 Term Loan (1)(4)
Oct 2013
Jan 2020
Quarterly
LIBOR +3.00%
1,796

1,796

Tranche B-II 2022 Term Loan (1)(4)
May 2015
May 2022
Quarterly
LIBOR +2.75%
2,000

2,000

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

7% Senior Notes due 2020 (2)
Aug 2012
Jun 2020
Jun/Dec
7.000%
—

775

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

—

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

199

Total Debt Obligations
 
 
 
 
11,009

11,025

Unamortized discounts
 
 
 
 
(13
)
(16
)
Unamortized debt issuance costs
 
 
 
 
(112
)
(128
)
Current Portion
 
 
 
 
(7
)
(15
)
Total Long-Term Debt
 
 
 
 
$
10,877

$
10,866


(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-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of December 31, 2016 and 2015. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of December 31, 2016 and 2015. The Floating Rate Senior Notes due 2018 had an interest rate of 4.762% as of December 31, 2016 and 4.101% as of December 31, 2015. The interest rate on the Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan are set with a minimum LIBOR of 1.00%, and the Tranche B-II 2022 Term Loan is set with a minimum LIBOR of 0.75%.

Schedule of aggregate future contractual maturities of long-term debt and capital leases (excluding issue discounts and fair value adjustments) 
Aggregate future contractual maturities of long-term debt and capital leases (excluding discounts and debt issuance costs) were as follows as of December 31, 2016 (dollars in millions):

2017
$
7

2018
306

2019
822

2020
1,804

2021
650

Thereafter
7,420

 
$
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 loss are as follows:

(dollars in millions)
 
Net Foreign Currency Translation Adjustment
 
Net Defined Benefit Pension Plans
 
Total
Balance at January 1, 2014
 
$
67

 
$
(31
)
 
$
36

Other comprehensive loss before reclassifications
 
(178
)
 
(9
)
 
(187
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
4

 
4

Balance at December 31, 2014
 
(111
)
 
(36
)
 
(147
)
Other comprehensive income (loss) before reclassifications
 
(162
)
 
6

 
(156
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
2

 
2

Balance at December 31, 2015
 
(273
)
 
(28
)
 
(301
)
Other comprehensive loss before reclassifications
 
(80
)
 
(7
)
 
(87
)
Amounts reclassified from accumulated other comprehensive loss
 
—

 
1

 
1

Balance at December 31, 2016
 
$
(353
)
 
$
(34
)
 
$
(387
)
Employee Benefits and Stock-Based Compensation (Tables)
Schedule of non-cash compensation expense and capitalized non-cash compensation 
The following table summarizes non-cash compensation expense and capitalized non-cash compensation for each of the three years ended December 31, 2016, 2015 and 2014 (dollars in millions):

 
 
2016
 
2015
 
2014
Outperform Stock Appreciation Rights
 
$
1

 
$
6

 
$
8

Restricted Stock Units
 
76

 
65

 
34

Performance Restricted Stock Units
 
43

 
35

 
14

401(k) Match Expense
 
37

 
36

 
23

Restricted Stock Unit Bonus Grant
 
—

 
—

 
(5
)
 
 
157

 
142

 
74

Capitalized Non-Cash Compensation
 
(1
)
 
(1
)
 
(1
)
 
 
$
156

 
$
141

 
$
73

Schedule of OSO valuation assumptions 
OSO units had a multiplier range from zero to four depending upon the performance of Level 3 common stock relative to the S&P 500® Index as shown in the following table.

If Level 3 Stock Outperforms the S&P 500® Index by:
 
Then the Pre-multiplier Gain Multiplied by a Success Multiplier of:
0% or Less
 
—
More than 0% but Less than 11%
 
Outperformance percentage multiplied by 4/11
11% or More
 
4.00
Schedule OSO activity 
Transactions involving OSO units awarded are summarized in the table below. The Option Price Per Unit identified in the table below represents the initial strike price, as determined on the day prior to the OSO grant date for those grants.
 
 
Units
 
Initial Strike Price Per Unit
 
Weighted
Average
Initial
Strike
Price
 
Aggregate
Intrinsic
Value
 
Weighted
Average
Remaining
Contractual
Term (years)
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
Balance January 1, 2014
 
2,148,865

 
$
14.10

 
$
36.60

 
$
23.99

 
$
31.6

 
1.46
OSOs granted
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs forfeited
 
(52,901
)
 
$
16.99

 
$
27.53

 
$
22.99

 
 
 
 
OSOs expired
 
(106,844
)
 
$
36.60

 
$
36.60

 
$
36.60

 
 
 
 
OSOs exercised
 
(771,251
)
 
$
14.70

 
$
27.53

 
$
24.26

 
 
 
 
Balance December 31, 2014
 
1,217,869

 
$
16.99

 
$
27.53

 
$
22.76

 
$
88.0

 
0.90
OSOs granted
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs forfeited
 
(12,945
)
 
$
20.29

 
$
26.69

 
$
22.81

 
 
 
 
OSOs expired
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs exercised
 
(589,944
)
 
$
22.15

 
$
22.97

 
$
22.32

 
 
 
 
Balance December 31, 2015
 
614,980

 
$
20.29

 
$
26.69

 
$
22.77

 
$
48.5

 
0.37
OSOs granted
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs forfeited
 
(6,875
)
 
$
20.29

 
$
26.69

 
$
26.03

 
 
 
 
OSOs expired
 
—

 
$
—

 
$
—

 
$
—

 
 
 
 
OSOs exercised
 
(608,105
)
 
$
20.29


$
26.69

 
$
22.73

 
 
 
 
Balance December 31, 2016
 
—

 


 


 


 

 

Schedule of restricted stock and restricted stock units 
The changes in restricted stock units are shown in the following table:
 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2014
 
2,924,350

 
$
22.77

Stock and units granted
 
1,650,772

 
$
43.48

Lapse of restrictions
 
(1,150,080
)
 
$
22.92

Stock and units forfeited
 
(206,305
)
 
$
27.14

Nonvested at December 31, 2014
 
3,218,737

 
$
32.95

Stock and units granted
 
2,087,942

 
$
50.60

Lapse of restrictions
 
(1,194,519
)
 
$
31.70

Stock and units forfeited
 
(358,227
)
 
$
44.25

Nonvested at December 31, 2015
 
3,753,933

 
$
42.09

Stock and units granted
 
1,547,229

 
$
51.45

Lapse of restrictions
 
(1,342,027
)
 
$
36.95

Stock and units forfeited
 
(254,712
)
 
$
47.45

Nonvested at December 31, 2016
 
3,704,423

 
$
47.49

Share-based Compensation, Performance Shares Award Outstanding Activity [Table Text Block] 
The changes in performance restricted stock units are shown in the following table:

 
 
Number
 
Weighted Average
Grant Date
Fair Value
Nonvested at January 1, 2014
 
—

 
$
—

Units granted
 
605,111

 
$
39.30

Lapse of restrictions
 
(1,750
)
 
$
39.14

Units forfeited
 
(35,480
)
 
$
39.14

Nonvested at December 31, 2014
 
567,881

 
$
39.31

Units granted
 
713,657

 
$
53.82

Lapse of restrictions
 
—

 
$
—

Units forfeited
 
(53,073
)
 
$
49.25

Nonvested at December 31, 2015
 
1,228,465

 
$
47.31

Units granted
 
498,184

 
$
52.84

Lapse of restrictions
 
(297,940
)
 
$
39.43

Units forfeited
 
(97,298
)
 
$
52.02

Nonvested at December 31, 2016
 
1,331,411

 
$
50.80

Income Taxes (Tables)
Components of income tax expense (benefit) 
The following table summarizes the income tax (expense) benefit attributable to the income (loss) before income taxes for each of the three years ended December 31, 2016, 2015 and 2014:

 
 
2016
 
2015
 
2014
(dollars in millions)
Current:
 
 
 
 
 
 
United States Federal
 
$
—

 
$
—

 
$
—

State
 
(4
)
 
(3
)
 
(1
)
Foreign
 
(41
)
 
(33
)
 
(40
)
 
 
(45
)
 
(36
)
 
(41
)
Deferred, net of changes in valuation allowances:
 
 
 
 
 
 
United States federal
 
(177
)
 
2,941

 
6

State
 
(27
)
 
246

 
15

Foreign
 
84

 
(1
)
 
96

 
 
(120
)
 
3,186

 
117

Income Tax (Expense) Benefit
 
$
(165
)
 
$
3,150

 
$
76

Schedule of income before income tax, domestic and foreign 
(loss) before income taxes for each of the three years ended December 31, 2016, 2015 and 2014 are as follows (some of the income (loss) is subject to taxation in multiple jurisdictions):

 
 
2016
 
2015
 
2014
(dollars in millions)
United States
 
$
794

 
$
401

 
$
207

Foreign
 
48

 
(118
)
 
31

 
 
$
842

 
$
283

 
$
238

Schedule of effective income tax rate reconciliation 
A reconciliation of the actual income tax (expense) benefit and the tax computed by applying the U.S. federal rate (35%) to the income before income taxes for each of the three years ended December 31, 2016, 2015 and 2014 is shown in the following table:

 
 
2016
 
2015
 
2014
 
 
(dollars in millions)
Computed Tax Expense at Statutory Rate
 
$
(295
)
 
$
(99
)
 
$
(83
)
State and Local Income Taxes
 
(31
)
 
(15
)
 
(8
)
Effect of Earnings in Jurisdictions outside of the United States
 
24

 
30

 
13

Change in Valuation Allowance
 
139

 
3,401

 
205

Disallowed Interest
 
(58
)
 
(62
)
 
(25
)
Non-Deductible Deconsolidation Loss
 
—

 
(57
)
 
—

Other Permanent Items
 
(33
)
 
(25
)
 
(19
)
Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting
 
22

 
—

 
—

U.S. Federal Law Changes
 
110

 
—

 
—

Indefinite-Lived Assets
 
—

 
—

 
2

Uncertain Tax Positions
 
(2
)
 
(5
)
 
3

Changes in Tax Rates
 
(24
)
 
(20
)
 
(7
)
Other, net
 
(17
)
 
2

 
(5
)
Income Tax (Expense) Benefit
 
$
(165
)
 
$
3,150

 
$
76

Deferred tax assets and liabilities 
The components of the net deferred tax assets as of December 31, 2016 and 2015 are as follows:

 
 
2016
 
2015
 
 
(dollars in millions)
Deferred Tax Assets:
 
 
 
 
Deferred revenue
 
364

 
351

Unutilized tax net operating loss carry forwards
 
4,550

 
4,959

Fixed assets
 
95

 
115

Other
 
471

 
501

Total Deferred Tax Assets
 
5,480

 
5,926

Deferred Tax Liabilities:
 
 
 
 
Deferred revenue
 
(57
)
 
(58
)
Fixed assets
 
(962
)
 
(924
)
Intangible assets
 
(357
)
 
(399
)
Other
 
(120
)
 
(350
)
Total Deferred Tax Liabilities
 
(1,496
)
 
(1,731
)
Net Deferred Tax Assets before Valuation Allowance
 
3,984

 
4,195

Valuation Allowance
 
(862
)
 
(1,002
)
Net Deferred Tax Assets after Valuation Allowance
 
$
3,122

 
$
3,193

Operating loss carryforwards 
The U.S. net operating tax loss carry forwards available for federal income tax purposes expire as follows (dollars in millions):

Expiring December 31,
Amount
2024
$
891

2025
1,267

2026
1,254

2027
1,645

2028
477

2029
694

2030
663

2031
833

2032
729

2033
194

2034
389

2035
1

 
$
9,037

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

 
Amount
Balance as of January 1, 2014
$
13

Tax positions of prior years netted against deferred tax assets
5

Gross increases - tax positions of prior years
1

Gross increases - tax positions during 2014
—

Gross decreases - lapse of statute of limitations
(2
)
Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2014
17

Tax positions of prior years netted against deferred tax assets
(2
)
Gross increases - tax positions of prior years
3

Gross increases - tax positions during 2015
2

Gross decreases - lapse of statute of limitations
(2
)
Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2015
18

Tax positions of prior years netted against deferred tax assets
(1
)
Gross increases - tax positions during 2016
2

Gross decreases - tax positions of prior years
(1
)
Gross decreases - lapse of statute of limitations
—

Gross decreases - settlement with taxing authorities
—

Balance as of December 31, 2016
$
18

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

(dollars in millions)
 
2016
 
2015
 
2014
Core Network Services Revenue:
 
 
 
 
 
 
North America
 
$
6,362

 
$
6,207

 
$
4,520

EMEA
 
744

 
835

 
904

Latin America
 
661

 
715

 
784

Total Core Network Services Revenue
 
$
7,767

 
$
7,757

 
$
6,208

 
 
 
 
 
 
 
Wholesale Voice Services Revenue:
 
 
 
 
 
 
North America
 
$
386

 
$
447

 
$
535

EMEA
 
11

 
14

 
6

Latin America
 
8

 
11

 
28

Total Wholesale Voice Services Revenue
 
$
405

 
$
472

 
$
569

 
 
 
 
 
 
 
Total Revenue
 
$
8,172

 
$
8,229

 
$
6,777

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

(dollars in millions)
 
2016
 
2015
 
2014
Adjusted EBITDA:
 
 
 
 
 
 
North America
 
$
3,220

 
$
3,048

 
$
2,065

EMEA
 
215

 
235

 
214

Latin America
 
293

 
302

 
348

Unallocated Corporate Expenses
 
(878
)
 
(947
)
 
(732
)
Adjusted EBITDA
 
$
2,850

 
$
2,638

 
$
1,895

Income Tax (Expense) Benefit
 
(165
)
 
3,150

 
76

Total Other Expense
 
(602
)
 
(1,048
)
 
(775
)
Depreciation and Amortization
 
(1,250
)
 
(1,166
)
 
(808
)
Non-Cash Stock Compensation
 
(156
)
 
(141
)
 
(73
)
Non-Cash Impairment
 
—

 
—

 
(1
)
Net Income
 
$
677

 
$
3,433


$
314

Summary of segment information 
The following table presents capital expenditures by segment and reconciles capital expenditures to total capital expenditures for each of the years ended December 31:

(dollars in millions)
 
2016
 
2015
 
2014
Capital Expenditures:
 
 
 
 
 
 
North America
 
$
874

 
$
752

 
$
495

EMEA
 
145

 
158

 
117

Latin America
 
166

 
155

 
153

Unallocated Corporate Capital Expenditures
 
149

 
164

 
145

Total Capital Expenditures
 
$
1,334

 
$
1,229

 
$
910

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

 
 
As of December 31,
(dollars in millions)
 
2016
 
2015
Assets:
 
 
 
 
North America
 
$
20,818

 
$
19,961

EMEA
 
1,639

 
1,796

Latin America
 
2,304

 
2,131

Other
 
127

 
129

Total Assets
 
$
24,888

 
$
24,017

Schedule of changes in carrying amount of goodwill 
The changes in the carrying amount of goodwill by segment during year ended December 31, 2016 and 2015 were as follows (in millions):
 
 
North America
 
EMEA
 
Latin America
 
Total
Balance at January 1, 2015
$
6,955

 
$
138

 
$
596

 
$
7,689

Goodwill adjustments including the effect of foreign currency rate change
69

 
(9
)
 
—

 
60

Balance at December 31, 2015
7,024

 
129

 
596

 
7,749

Effect of foreign currency rate change
—

 
(20
)
 
—

 
(20
)
Balance at December 31, 2016
$
7,024

 
$
109

 
$
596

 
$
7,729

Commitments, Contingencies and Other Items (Tables)
Schedule of Operating Leases, Future Minimum Payments Due and Unrecorded Unconditional Purchase Obligation 
Future minimum payments for the next five years and thereafter under network and related right-of-way agreements and non-cancelable operating leases for facilities and other assets consist of the following as of December 31, 2016 (dollars in millions):

 
 
Right-of-Way
Agreements
 
Operating Leases
 
Total
 
Future Minimum Sublease Receipts
2017
 
$
162

 
$
282

 
$
444

 
$
4

2018
 
80

 
244

 
324

 
4

2019
 
71

 
222

 
293

 
3

2020
 
55

 
164

 
219

 
1

2021
 
50

 
124

 
174

 
—

Thereafter
 
325

 
501

 
826

 
—

 
 
$
743

 
$
1,537

 
$
2,280

 
$
12

Schedule of long-term purchase commitments 
The following table summarizes our purchase commitments at December 31, 2016 (dollars in millions):

 
 
Total
 
Less than
1 Year
 
2 - 3
Years
 
4 - 5
Years
 
After 5
Years
Cost of Access Services
 
$
425

 
$
278

 
$
131

 
$
11

 
$
5

Third-Party Maintenance Services
 
235

 
59

 
69

 
40

 
67

 
 
$
660

 
$
337

 
$
200

 
$
51

 
$
72

Condensed Consolidating Financial Information (Tables)
Schedule of Condensed Consolidating Statements of Operations 
Condensed Consolidating Statements of Comprehensive Income (Loss)
For the year ended December 31, 2016

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

 
$
—

 
$
3,557

 
$
4,747

 
$
(132
)
 
$
8,172

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Network access costs
—

 
—

 
1,283

 
1,574

 
(132
)
 
2,725

Network related expenses
—

 
—

 
953

 
393

 
—

 
1,346

Depreciation and amortization
—

 
—

 
385

 
865

 
—

 
1,250

Selling, general and administrative expenses
16

 
5

 
1,024

 
362

 
—

 
1,407

Total costs and expenses
16

 
5

 
3,645

 
3,194

 
(132
)
 
6,728

Operating (Loss) Income
(16
)
 
(5
)
 
(88
)
 
1,553

 
—

 
1,444

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
3

 
1

 
—

 
4

Interest expense
(36
)
 
(505
)
 
(2
)
 
(3
)
 
—

 
(546
)
Interest income (expense) affiliates, net
1,385

 
2,113

 
(3,215
)
 
(283
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(669
)
 
(2,033
)
 
757

 
—

 
1,945

 
—

Other, net
(1
)
 
(39
)
 
2

 
(22
)
 
—

 
(60
)
Total other expense
679

 
(464
)
 
(2,455
)
 
(307
)
 
1,945

 
(602
)
Income (Loss) before Income Taxes
663

 
(469
)
 
(2,543
)
 
1,246

 
1,945

 
842

Income Tax (Expense) Benefit
14

 
(200
)
 
(2
)
 
23

 
—

 
(165
)
Net Income (Loss)
677

 
(669
)
 
(2,545
)
 
1,269

 
1,945

 
677

Other Comprehensive Loss, Net of Income Taxes
(86
)
 
—

 
—

 
(86
)
 
86

 
(86
)
Comprehensive Income (Loss)
$
591

 
$
(669
)
 
$
(2,545
)
 
$
1,183

 
$
2,031

 
$
591

Condensed Consolidating Statements of Comprehensive Income (Loss)
For the year ended December 31, 2015

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

 
$
—

 
$
3,325

 
$
5,077

 
$
(173
)
 
$
8,229

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Network access costs
—

 
—

 
1,243

 
1,763

 
(173
)
 
2,833

Network related expenses
—

 
—

 
947

 
485

 
—

 
1,432

Depreciation and amortization
—

 
—

 
309

 
857

 
—

 
1,166

Selling, general and administrative expenses
4

 
—

 
1,064

 
399

 
—

 
1,467

Total costs and expenses
4

 
—

 
3,563

 
3,504

 
(173
)
 
6,898

Operating (Loss) Income
(4
)
 
—

 
(238
)
 
1,573

 
—

 
1,331

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(51
)
 
(574
)
 
(3
)
 
(14
)
 
—

 
(642
)
Interest income (expense) affiliates, net
1,310

 
1,984

 
(3,041
)
 
(253
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
2,162

 
(1,693
)
 
177

 
—

 
(646
)
 
—

Other, net
(18
)
 
(200
)
 
3

 
(192
)
 
—

 
(407
)
Total other expense
3,403

 
(483
)
 
(2,864
)
 
(458
)
 
(646
)
 
(1,048
)
Income (Loss) before Income Taxes
3,399

 
(483
)
 
(3,102
)
 
1,115

 
(646
)
 
283

Income Tax (Expense) Benefit
34

 
2,645

 
(1
)
 
472

 
—

 
3,150

Net Income (Loss)
3,433

 
2,162

 
(3,103
)
 
1,587

 
(646
)
 
3,433

Other Comprehensive (Loss) Income, Net of Income Taxes
(154
)
 
—

 
—

 
(154
)
 
154

 
(154
)
Comprehensive Income (Loss)
$
3,279

 
$
2,162

 
$
(3,103
)
 
$
1,433

 
$
(492
)
 
$
3,279

Condensed Consolidating Statements of Comprehensive Income (Loss)
For the year ended December 31, 2014

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

 
$
—

 
$
3,073

 
$
3,918

 
$
(214
)
 
$
6,777

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Network access costs
—

 
—

 
1,177

 
1,566

 
(214
)
 
2,529

Network related expenses
—

 
—

 
762

 
484

 
—

 
1,246

Depreciation and amortization
—

 
—

 
277

 
531

 
—

 
808

Selling, general and administrative expenses
21

 
2

 
735

 
423

 
—

 
1,181

Total costs and expenses
21

 
2

 
2,951

 
3,004

 
(214
)
 
5,764

Operating (Loss) Income
(21
)
 
(2
)
 
122

 
914

 
—

 
1,013

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
1

 
—

 
1

Interest expense
(143
)
 
(492
)
 
(2
)
 
(17
)
 
—

 
(654
)
Interest income (expense) affiliates, net
1,227

 
1,827

 
(2,890
)
 
(164
)
 
—

 
—

Equity in net earnings (losses) of subsidiaries
(710
)
 
(2,047
)
 
663

 
—

 
2,094

 
—

Other, net
(53
)
 
—

 
7

 
(76
)
 
—

 
(122
)
Total other expense
321

 
(712
)
 
(2,222
)
 
(256
)
 
2,094

 
(775
)
Income (Loss) before Income Taxes
300

 
(714
)
 
(2,100
)
 
658

 
2,094

 
238

Income Tax (Expense) Benefit
14

 
4

 
(1
)
 
59

 
—

 
76

Net Income (Loss)
314

 
(710
)
 
(2,101
)
 
717

 
2,094

 
314

Other Comprehensive Income (Loss), Net of Income Taxes
(183
)
 
—

 
—

 
(183
)
 
183

 
(183
)
Comprehensive Income (Loss)
$
131

 
$
(710
)
 
$
(2,101
)
 
$
534

 
$
2,277

 
$
131



Schedule of Condensed Consolidating Balance Sheets 
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 Balance Sheets
December 31, 2015

 
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
$
12

 
$
6

 
$
727

 
$
109

 
$
—

 
$
854

Restricted cash and securities
—

 
—

 
1

 
7

 
—

 
8

Receivables, less allowances for doubtful accounts
—

 
—

 
47

 
710

 
—

 
757

Due from affiliates
12,415

 
22,759

 
—

 
2,816

 
(37,990
)
 
—

Other
—

 
—

 
56

 
55

 
—

 
111

Total Current Assets
12,427

 
22,765

 
831

 
3,697

 
(37,990
)
 
1,730

Property, Plant, and Equipment, net
—

 
—

 
3,423

 
6,455

 
—

 
9,878

Restricted Cash and Securities
27

 
—

 
14

 
1

 
—

 
42

Goodwill and Other Intangibles, net
—

 
—

 
363

 
8,513

 
—

 
8,876

Investment in Subsidiaries
16,772

 
17,714

 
3,734

 
—

 
(38,220
)
 
—

Deferred Tax Assets
38

 
2,847

 
—

 
556

 
—

 
3,441

Other Assets, net
—

 
—

 
12

 
38

 
—

 
50

Total Assets
$
29,264

 
$
43,326

 
$
8,377

 
$
19,260

 
$
(76,210
)
 
$
24,017

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

 
$
1

 
$
195

 
$
433

 
$
—

 
$
629

Current portion of long-term debt
—

 
—

 
2

 
13

 
—

 
15

Accrued payroll and employee benefits
—

 
—

 
186

 
32

 
—

 
218

Accrued interest
11

 
90

 
—

 
7

 
—

 
108

Current portion of deferred revenue
—

 
—

 
119

 
148

 
—

 
267

Due to affiliates
—

 
—

 
37,990

 
—

 
(37,990
)
 
—

Other
—

 
—

 
115

 
64

 
—

 
179

Total Current Liabilities
11

 
91

 
38,607

 
697

 
(37,990
)
 
1,416

Long-Term Debt, less current portion
591

 
10,092

 
15

 
168

 
—

 
10,866

Deferred Revenue, less current portion
—

 
—

 
680

 
297

 
—

 
977

Other Liabilities
15

 
—

 
133

 
484

 
—

 
632

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit)
28,647

 
33,143

 
(31,058
)
 
17,614

 
(38,220
)
 
10,126

Total Liabilities and Stockholders' Equity (Deficit)
$
29,264

 
$
43,326

 
$
8,377

 
$
19,260

 
$
(76,210
)
 
$
24,017

Schedule of Condensed Consolidating Statements of Cash Flows 
Condensed Consolidating Statements of Cash Flows
For the year ended December 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 (Used in) Provided by Operating Activities
$
(49
)
 
$
(468
)
 
$
564

 
$
2,296

 
$
—

 
$
2,343

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(704
)
 
(630
)
 
—

 
(1,334
)
Change in restricted cash and securities, net
5

 
—

 
6

 
1

 
—

 
12

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

 
—

 
1

 
2

 
—

 
3

Net Cash Provided by (Used in) Investing Activities
5

 
—

 
(697
)
 
(627
)
 
—

 
(1,319
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
764

 
—

 
—

 
—

 
764

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

 
(806
)
 
(1
)
 
(13
)
 
—

 
(820
)
Increase (decrease) due from/to affiliates, net
47

 
504

 
1,107

 
(1,658
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
47

 
462

 
1,106

 
(1,671
)
 
—

 
(56
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(3
)
 
—

 
(3
)
Net Change in Cash and Cash Equivalents
3

 
(6
)
 
973

 
(5
)
 
—

 
965

Cash and Cash Equivalents at Beginning of Year
12

 
6

 
727

 
109

 
—

 
854

Cash and Cash Equivalents at End of Year
$
15

 
$
—

 
$
1,700

 
$
104

 
$
—

 
$
1,819


Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2015

 
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
$
(40
)
 
$
(617
)
 
$
193

 
$
2,319

 
$
—

 
$
1,855

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(453
)
 
(776
)
 
—

 
(1,229
)
Cash related to deconsolidated Venezuela operations
—

 
—

 
—

 
(83
)
 
—

 
(83
)
Change in restricted cash and securities, net
(25
)
 
—

 
3

 
—

 
—

 
(22
)
Proceeds from sale of property, plant and equipment and other assets
—

 
—

 
—

 
4

 
—

 
4

Other
—

 
—

 
(14
)
 
—

 
—

 
(14
)
Net Cash Provided by (Used in) Investing Activities
(25
)
 
—

 
(464
)
 
(855
)
 
—

 
(1,344
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
—

 
4,832

 
—

 
—

 
—

 
4,832

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(313
)
 
(4,725
)
 
(2
)
 
(11
)
 
—

 
(5,051
)
Increase (decrease) due from/to affiliates, net
383

 
511

 
693

 
(1,587
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
70

 
618

 
691

 
(1,598
)
 
—

 
(219
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(18
)
 
—

 
(18
)
Net Change in Cash and Cash Equivalents
5

 
1

 
420

 
(152
)
 
—

 
274

Cash and Cash Equivalents at Beginning of Year
7

 
5

 
307

 
261

 
—

 
580

Cash and Cash Equivalents at End of Year
$
12

 
$
6

 
$
727

 
$
109

 
$
—

 
$
854

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2014

 
Level 3 Communications, Inc.
 
Level 3 Financing, Inc.
 
Level 3 Communications, LLC
 
Other Non-Guarantor Subsidiaries
 
Eliminations
 
Total
(dollars in millions)
Net Cash Provided by (Used in) Operating Activities
$
(178
)
 
$
(458
)
 
$
625

 
$
1,172

 
$
—

 
$
1,161

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
—

 
(362
)
 
(548
)
 
—

 
(910
)
Change in restricted cash and securities, net
—

 
—

 
2

 
(12
)
 
—

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

 
—

 
—

 
3

 
—

 
3

Investment in tw telecom, net of cash acquired
(474
)
 
—

 
—

 
307

 
—

 
(167
)
Other
—

 
—

 
—

 
(2
)
 
—

 
(2
)
Net Cash Provided by (Used in) Investing Activities
(474
)
 
—

 
(360
)
 
(252
)
 
—

 
(1,086
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt borrowings, net of issuance costs
590

 
—

 
—

 
(1
)
 
—

 
589

Payments on and repurchases of long-term debt, including current portion and refinancing costs
(647
)
 
—

 
—

 
(24
)
 
—

 
(671
)
Increase (decrease) due from/to affiliates, net
708

 
457

 
(305
)
 
(860
)
 
—

 
—

Net Cash Provided by (Used in) Financing Activities
651

 
457

 
(305
)
 
(885
)
 
—

 
(82
)
Effect of Exchange Rates on Cash and Cash Equivalents
—

 
—

 
—

 
(44
)
 
—

 
(44
)
Net Change in Cash and Cash Equivalents
(1
)
 
(1
)
 
(40
)
 
(9
)
 
—

 
(51
)
Cash and Cash Equivalents at Beginning of Year
8

 
6

 
347

 
270

 
—

 
631

Cash and Cash Equivalents at End of Year
$
7

 
$
5

 
$
307

 
$
261

 
$
—

 
$
580

Unaudited Quarterly Financial Data (Tables)
Unaudited Quarterly Financial Data
 
 
Three Months Ended
 
 
March 31,
 
June 30,
 
September 30,
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions except per share data)
Revenue
 
$
2,051

 
$
2,053

 
$
2,056

 
$
2,061

 
$
2,033

 
$
2,062

 
$
2,032

 
$
2,053

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Network Access Costs
 
694

 
723

 
676

 
696

 
675

 
706

 
680

 
708

Network Related Expenses
 
338

 
356

 
339

 
363

 
337

 
369

 
332

 
344

Depreciation and Amortization
 
301

 
288

 
310

 
288

 
319

 
296

 
320

 
294

Selling, General and Administrative Expenses
 
356

 
370

 
357

 
364

 
348

 
364

 
346

 
369

Total Costs and Expenses
 
1,689

 
1,737

 
1,682

 
1,711

 
1,679

 
1,735

 
1,678

 
1,715

Operating Income
 
362

 
316

 
374

 
350

 
354

 
327

 
354

 
338

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
1

 
1

 
1

 
—

 
1

 
—

 
1

 
—

Interest Expense
 
(135
)
 
(180
)
 
(140
)
 
(165
)
 
(139
)
 
(145
)
 
(132
)
 
(152
)
Loss on Modification and Extinguishment of Debt
 
—

 
—

 
(40
)
 
(163
)
 
—

 
—

 
—

 
(55
)
Venezuela Deconsolidation Charge
 
—

 
—

 
—

 
—

 
—

 
(171
)
 
—

 
—

Other, net
 
(10
)
 
(10
)
 
(5
)
 
(17
)
 
1

 
6

 
(6
)
 
3

Total Other Expense
 
(144
)
 
(189
)
 
(184
)
 
(345
)
 
(137
)
 
(310
)
 
(137
)
 
(204
)
Income Before Income Taxes
 
218

 
127

 
190

 
5

 
217

 
17

 
217

 
134

Income Tax (Expense) Benefit
 
(90
)
 
(5
)
 
(34
)
 
(18
)
 
(74
)
 
(16
)
 
33

 
3,189

Net Income (Loss)
 
$
128

 
$
122

 
$
156

 
$
(13
)
 
$
143

 
$
1

 
$
250

 
$
3,323

Net Income (Loss) Per Share - Basic
 
$
0.36

 
$
0.35

 
$
0.44

 
$
(0.04
)
 
$
0.40

 
$
—

 
$
0.70

 
$
9.33

Net Income (Loss) Per Share - Diluted
 
$
0.36

 
$
0.35

 
$
0.43

 
$
(0.04
)
 
$
0.39

 
$
—

 
$
0.69

 
$
9.24

Summary of Significant Accounting Policies (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended 12 Months Ended 9 Months Ended
Dec. 31, 2016
regional_operating_unit
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
regional_operating_unit
Dec. 31, 2015
Dec. 31, 2014
Jan. 1, 2016
Dec. 31, 2016
Sales Revenue
Customer Concentration Risk
Dec. 31, 2015
Sales Revenue
Customer Concentration Risk
Dec. 31, 2014
Sales Revenue
Customer Concentration Risk
Dec. 31, 2016
Minimum [Member]
Dec. 31, 2016
Minimum [Member]
Facility and Leasehold Improvements
Dec. 31, 2016
Minimum [Member]
Network infrastructure (including fiber and conduit)
Dec. 31, 2016
Minimum [Member]
Operating Equipment
Dec. 31, 2016
Minimum [Member]
Expansion and improvements of communications network and customer installations
Dec. 31, 2016
Minimum [Member]
Office Equipment [Member]
Dec. 31, 2016
Maximum
Dec. 31, 2016
Maximum
Facility and Leasehold Improvements
Dec. 31, 2016
Maximum
Network infrastructure (including fiber and conduit)
Dec. 31, 2016
Maximum
Operating Equipment
Dec. 31, 2016
Maximum
Expansion and improvements of communications network and customer installations
Dec. 31, 2016
Maximum
Software development
Dec. 31, 2016
Maximum
Office Equipment [Member]
Sep. 30, 2015
Venezuela [Member]
Description of Business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region Operating Units
3 
 
 
 
 
 
 
 
3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Effective Date of Acquisition
 
 
 
 
Oct. 31, 2014 
 
 
 
Oct. 31, 2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 2,032 
$ 2,033 
$ 2,056 
$ 2,051 
$ 2,053 
$ 2,062 
$ 2,061 
$ 2,053 
$ 8,172 
$ 8,229 
$ 6,777 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 72 
Venezuela deconsolidation charge
0 
0 
0 
0 
0 
(171)
0 
0 
0 
(171)
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Finance Costs, Current, Net
 
 
 
 
19 
 
 
 
 
19 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Issuance Costs, Noncurrent, Net
 
 
 
 
109 
 
 
 
 
109 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period company may receive up front payments for services to be provided in the future (in years)
 
 
 
 
 
 
 
 
25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USF contributions
 
 
 
 
 
 
 
 
357 
323 
234 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bad debt expense
 
 
 
 
 
 
 
 
18 
23 
22 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15 years 
25 years 
5 years 
3 years 
3 years 
 
40 years 
50 years 
15 years 
5 years 
3 years 
7 years 
 
Capitalized labor and related costs associated with employee and contract labor working on capital projects
 
 
 
 
 
 
 
 
271 
244 
187 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-lived intangible assets, useful life, minimum (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
12 years 
 
 
 
 
 
 
 
Percentage of communications revenue from top ten customers
 
 
 
 
 
 
 
 
 
 
 
 
16.00% 
16.00% 
17.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification, Per Share
 
 
 
 
 
 
 
 
$ 0.06 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Issuance Costs, Net
 
 
 
 
$ 128 
 
 
 
 
$ 128 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Events Associated with the Acquisition of tw telecom inc. (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Oct. 31, 2014
Oct. 30, 2014
Dec. 31, 2016
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2015
Senior Notes 5.375percent Due 2022 [Member]
Aug. 12, 2014
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2016
Guarantor Subsidiaries [Member]
TrancheB2022TermLoanTotal [Member]
Acquisition
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Effective Date of Acquisition
Oct. 31, 2014 
 
Oct. 31, 2014 
 
 
 
 
 
 
 
 
Stock consideration per share
 
0.7 
 
 
 
 
 
 
 
 
 
business acquisition, cash consideration per share
 
$ 10 
 
 
 
 
 
 
 
 
 
Long-term Debt, Gross
$ 11,025,000,000 
 
$ 11,009,000,000 
$ 11,025,000,000 
 
 
 
$ 1,000,000,000 
$ 1,000,000,000 
 
$ 2,000,000,000 
Debt Instrument, Face Amount
 
 
 
 
 
 
 
 
 
1,000,000,000 
 
Debt instrument, stated interest rate (as a percent)
 
 
7.00% 
 
 
 
 
5.375% 
 
 
 
Common Stock, Shares Authorized
433,333,333 
 
433,333,333 
433,333,333 
 
 
433,333,333 
 
 
 
 
Shares issued in Amalgamation transaction (in shares)
 
96,900,000 
 
 
 
 
 
 
 
 
 
Business Acquisition, Debt Assumed
 
 
 
 
 
1,793,000,000 
 
 
 
 
 
Business combination debt premiums incurred
 
 
154,000,000 
 
 
 
 
 
 
 
 
Business Acquisition, Share Price
 
 
 
 
 
$ 46.91 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Capital Lease Obligation
 
 
 
 
 
152,000,000 
 
 
 
 
 
Business Combination, Consideration Transferred
 
8,100,000,000 
 
 
 
 
 
 
 
 
 
Final Purchase Price Allocation [Abstract]
 
 
Text Block 
 
 
 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents
 
 
 
 
 
309,000,000 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Property and Equipment
 
 
 
 
 
1,553,000,000 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Goodwill
7,749,000,000 
7,689,000,000 
7,729,000,000 
7,749,000,000 
7,689,000,000 
5,181,000,000 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Intangible Assets not Goodwill
 
 
 
 
 
1,263,000,000 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets
 
 
 
 
 
140,000,000 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Other Assets Acquired
 
 
 
 
 
8,446,000,000 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt
 
 
 
 
 
(2,099,000,000)
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Noncurrent Liabilities, Deferred Revenue
 
 
 
 
 
(57,000,000)
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Other Liabilities Assumed
 
 
 
 
 
(279,000,000)
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Total Liabilities Assumed
 
 
 
 
 
2,435,000,000 
 
 
 
 
 
Estimated total Amalgamation transaction consideration
 
 
 
 
 
6,011,000,000 
 
 
 
 
 
Purchase price allocation adjustment
 
 
60,000,000 
 
 
 
 
 
 
 
 
Pro Forma Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
8,123,000,000 
 
 
 
 
 
 
Net Loss
 
 
 
 
149,000,000 
 
 
 
 
 
 
Net income per share - basic (in dollars per share)
 
 
 
 
$ 0.44 
 
 
 
 
 
 
Net income per share - diluted (in dollars per share)
 
 
 
 
$ 0.44 
 
 
 
 
 
 
Business Combination, Integration Related Costs
 
 
$ 81,000,000 
$ 32,000,000 
 
 
 
 
 
 
 
Final Purchase Price Allocation [Abstract] 
 
Purchase Price Allocation
 
(dollars in millions)
Assets:
 
Cash, Cash Equivalents and Restricted Cash
$
309

Property, Plant and Equipment
1,553

Goodwill
5,181

Identifiable Intangible Assets
1,263

Other Assets
140

Total Assets
8,446

 
 
Liabilities:
 
Long-Term Debt
(2,099
)
Deferred Revenue
(57
)
Other Liabilities
(279
)
Total Liabilities
(2,435
)
Total Consideration to be Allocated
$
6,011

Earnings Per Share (Details)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2016
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Loss per share
 
 
 
 
Stock Awards Included in Computation of Earnings Per Share, Amount
 
3 
3 
4 
Securities not included in computation of diluted loss per share (in millions of shares)
1 
 
 
 
Convertible Senior Notes
 
 
 
 
Loss per share
 
 
 
 
Securities not included in computation of diluted loss per share (in millions of shares)
 
 
 
17 
Property, Plant and Equipment (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
$ 21,388 
$ 20,243 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(11,249)
(10,365)
 
Net
10,139 
9,878 
 
Depreciation expense
1,039 
939 
713 
Land
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
179 
180 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
0 
0 
 
Net
179 
180 
 
Land Improvements
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
77 
76 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(58)
(53)
 
Net
19 
23 
 
Facility and Leasehold Improvements
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
2,679 
2,582 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(1,447)
(1,352)
 
Net
1,232 
1,230 
 
Network infrastructure
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
9,110 
8,979 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(3,899)
(3,669)
 
Net
5,211 
5,310 
 
Operating Equipment
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
8,846 
7,988 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(5,626)
(5,079)
 
Net
3,220 
2,909 
 
Furniture, Fixtures and Office Equipment
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
241 
242 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(196)
(189)
 
Net
45 
53 
 
Other
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
26 
28 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(23)
(23)
 
Net
3 
5 
 
Construction-in-Progress
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, Plant and Equipment, Gross
230 
168 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
0 
0 
 
Net
$ 230 
$ 168 
 
Asset Retirement Obligations (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
Asset retirement obligation, beginning balance
$ 90 
$ 85 
Accretion expense
10 
9 
Liabilities settled
(9)
(8)
Revision in estimate cash flows
0 
5 
Effect of foreign currency rate change
(2)
(1)
Asset retirement obligation, ending balance
$ 89 
$ 90 
Other Intangible Assets (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
$ 2,257,000,000 
$ 2,260,000,000 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(1,357,000,000)
(1,148,000,000)
 
Finite-Lived Intangible Assets, Net
900,000,000 
1,112,000,000 
 
Total Acquired Intangible Assets
 
 
 
Total Intangible assets, Gross Carrying Amount
2,272,000,000 
2,275,000,000 
 
Total intangible assets, Net
915,000,000 
1,127,000,000 
 
Impairment of Long-Lived Assets Held-for-use
0 
0 
 
Impairment of Intangible Assets (Excluding Goodwill)
0 
0 
 
Acquired finite-lived intangible asset amortization expense
211,000,000 
227,000,000 
95,000,000 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
2017
196,000,000 
 
 
2018
193,000,000 
 
 
2019
181,000,000 
 
 
2020
166,000,000 
 
 
2021
143,000,000 
 
 
Thereafter
21,000,000 
 
 
Finite-Lived Intangible Assets, Net
900,000,000 
1,112,000,000 
 
Vyvx Trade Name
 
 
 
Indefinite-Lived Intangible Assets:
 
 
 
Indefinite-Lived Intangible Assets, Net
15,000,000 
15,000,000 
 
Customer Contracts and Relationships
 
 
 
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
1,973,000,000 
1,975,000,000 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(1,113,000,000)
(932,000,000)
 
Finite-Lived Intangible Assets, Net
860,000,000 
1,043,000,000 
 
Total Acquired Intangible Assets
 
 
 
Acquired finite-lived intangible assets, amortization period (in years)
4 years 10 months 24 days 
 
 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
Finite-Lived Intangible Assets, Net
860,000,000 
1,043,000,000 
 
Trademarks
 
 
 
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
55,000,000 
55,000,000 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(55,000,000)
(55,000,000)
 
Finite-Lived Intangible Assets, Net
0 
0 
 
Total Acquired Intangible Assets
 
 
 
Acquired finite-lived intangible assets, amortization period (in years)
4 years 9 months 18 days 
 
 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
Finite-Lived Intangible Assets, Net
0 
0 
 
Patents and Developed Technology
 
 
 
Finite-Lived Intangible Assets:
 
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
229,000,000 
230,000,000 
 
Finite-Lived Intangible Assets, Accumulated Amortization
(189,000,000)
(161,000,000)
 
Finite-Lived Intangible Assets, Net
40,000,000 
69,000,000 
 
Total Acquired Intangible Assets
 
 
 
Acquired finite-lived intangible assets, amortization period (in years)
2 years 9 months 18 days 
 
 
Estimated amortization expense of acquired finite-lived intangible asset
 
 
 
Finite-Lived Intangible Assets, Net
$ 40,000,000 
$ 69,000,000 
 
Restructuring Charges (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Employee Separations
 
 
 
Restructuring charge and reserve
 
 
 
Restructuring charges
 
$ 24 
$ 45 
Restructuring reserve
3 
4 
 
Facility Closings
 
 
 
Restructuring charge and reserve
 
 
 
Restructuring reserve
5 
11 
 
Benefit (loss) recognized as a result of lease modification
0 
3 
1 
Network Related Expenses [Member] |
Employee Separations
 
 
 
Restructuring charge and reserve
 
 
 
Restructuring charges
 
8 
11 
General and Administrative Expense [Member] |
Employee Separations
 
 
 
Restructuring charge and reserve
 
 
 
Restructuring charges
 
$ 16 
$ 34 
Fair Value of Financial Instruments - Liabilities, Recurring (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Liabilities measured on a recurring basis
 
 
Debt Instrument, Interest Rate, Stated Percentage
7.00% 
 
Fair Value, Measurements, Recurring |
Reported Value Measurement [Member]
 
 
Liabilities measured on a recurring basis
 
 
Term Loans
$ 4,566 
$ 4,556 
Senior Notes
6,135 
6,126 
Capital Leases and Other
183 
199 
Total Long-term Debt, including the current portion:
10,884 
10,881 
Fair Value, Measurements, Recurring |
Unadjusted quoted prices in active markets for identical assets or liabilities (Level 1)
 
 
Liabilities measured on a recurring basis
 
 
Term Loans
4,671 
4,570 
Senior Notes
6,283 
6,298 
Capital Leases and Other
0 
0 
Total Long-term Debt, including the current portion:
10,954 
10,868 
Fair Value, Measurements, Recurring |
Significant Other Observable Inputs (Level 2)
 
 
Liabilities measured on a recurring basis
 
 
Term Loans
0 
0 
Senior Notes
0 
0 
Capital Leases and Other
183 
199 
Total Long-term Debt, including the current portion:
$ 183 
$ 199 
2.0 Billion Tranche B-II 2022 Term Loan [Member]
 
 
Liabilities measured on a recurring basis
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.50% 
 
Floating Rate Senior Notes due 2018 [Member]
 
 
Liabilities measured on a recurring basis
 
 
Debt Instrument, Interest Rate, Stated Percentage
4.762% 
4.101% 
London Interbank Offered Rate (LIBOR) [Member] |
TrancheBIII2019TermLoan [Member]
 
 
Liabilities measured on a recurring basis
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.00% 
 
London Interbank Offered Rate (LIBOR) [Member] |
TrancheB2020TermLoanTotal [Member]
 
 
Liabilities measured on a recurring basis
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.00% 
 
London Interbank Offered Rate (LIBOR) [Member] |
2.0 Billion Tranche B-II 2022 Term Loan [Member]
 
 
Liabilities measured on a recurring basis
 
 
Debt Instrument, Interest Rate, Stated Percentage
2.75% 
 
London Interbank Offered Rate (LIBOR) [Member] |
Floating Rate Senior Notes due 2018 [Member]
 
 
Liabilities measured on a recurring basis
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.50% 
 
Long-Term Debt - Schedule of Long Term Debt (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended 3 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
TrancheBIII2019TermLoan [Member]
Dec. 31, 2015
TrancheBIII2019TermLoan [Member]
Dec. 31, 2016
TrancheB2020TermLoanTotal [Member]
Dec. 31, 2015
TrancheB2020TermLoanTotal [Member]
Dec. 31, 2016
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Dec. 31, 2015
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Dec. 31, 2016
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2015
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2016
Senior Notes due 2020 (7.0%)
Dec. 31, 2015
Senior Notes due 2020 (7.0%)
Dec. 31, 2016
Senior Notes due 2021 (6.125%)
Dec. 31, 2015
Senior Notes due 2021 (6.125%)
Dec. 31, 2016
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2015
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2016
Senior Notes 5point 625Percent Due 2023 [Member]
Dec. 31, 2015
Senior Notes 5point 625Percent Due 2023 [Member]
Dec. 31, 2016
Senior Notes 5point 125Percent Due 2023 [Member]
Dec. 31, 2015
Senior Notes 5point 125Percent Due 2023 [Member]
Dec. 31, 2016
Senior Notes 5point 375Percent Due 2025 [Member]
Dec. 31, 2015
Senior Notes 5point 375Percent Due 2025 [Member]
Dec. 31, 2016
Senior Notes 5.375 Percent Due 2024 [Member]
Dec. 31, 2015
Senior Notes 5.375 Percent Due 2024 [Member]
Dec. 31, 2016
Convertible Senior Notes 7 Percent Due 2015 [Member]
Dec. 31, 2015
Convertible Senior Notes 7 Percent Due 2015 [Member]
Dec. 31, 2016
Senior Notes 5point75Percent Due 2022 [Member]
Dec. 31, 2015
Senior Notes 5point75Percent Due 2022 [Member]
Dec. 31, 2016
Capital Leases
Dec. 31, 2015
Capital Leases
Dec. 31, 2016
Tranche B III 2019 and Tranche B 2020 Term Loans [Member]
Dec. 31, 2016
Level 3 Financing [Member]
Senior Notes due 2020 (7.0%)
Dec. 31, 2016
Level 3 Financing [Member]
Senior Notes due 2021 (6.125%)
Dec. 31, 2016
Level 3 Financing [Member]
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2016
Level 3 Financing [Member]
Senior Notes 5point 625Percent Due 2023 [Member]
Dec. 31, 2016
Level 3 Financing [Member]
Senior Notes 5point 125Percent Due 2023 [Member]
Dec. 31, 2016
Level 3 Financing [Member]
Senior Notes 5point 375Percent Due 2025 [Member]
Dec. 31, 2016
Level 3 Financing [Member]
Senior Notes 5.375 Percent Due 2024 [Member]
Dec. 31, 2016
Guarantor Subsidiaries [Member]
Dec. 31, 2015
Guarantor Subsidiaries [Member]
Dec. 31, 2016
Guarantor Subsidiaries [Member]
TrancheBIII2019TermLoan [Member]
Dec. 31, 2016
Guarantor Subsidiaries [Member]
TrancheB2020TermLoanTotal [Member]
Jan. 1, 2014
Guarantor Subsidiaries [Member]
TrancheB2020TermLoanTotal [Member]
Dec. 31, 2016
Level 3 Communications, Inc.
Dec. 31, 2015
Level 3 Communications, Inc.
Dec. 31, 2016
Level 3 Communications, Inc.
Convertible Senior Notes 7 Percent Due 2015 [Member]
Dec. 31, 2016
Level 3 Communications, Inc.
Senior Notes 5point75Percent Due 2022 [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
TrancheBIII2019TermLoan [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
TrancheB2020TermLoanTotal [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
Level 3 Financing [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Sep. 30, 2016
London Interbank Offered Rate (LIBOR) [Member]
Level 3 Financing [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Dec. 31, 2015
London Interbank Offered Rate (LIBOR) [Member]
Level 3 Financing [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Sep. 30, 2016
London Interbank Offered Rate (LIBOR) [Member]
Guarantor Subsidiaries [Member]
Tranche B-III 2019, Tranche B 2020 and Tranche B 2022 Term Loans [Member]
Dec. 31, 2016
Maximum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Level 3 Financing [Member]
Tranche B-III 2019, Tranche B 2020 and Tranche B 2022 Term Loans [Member]
Sep. 30, 2016
Minimum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Level 3 Financing [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Interest Rate Terms
 
 
 
 
 
 
LIBOR +2.75% 
 
6-Month LIBOR +3.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR +3.00% 
LIBOR +3.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
7.00% 
 
 
 
 
 
3.50% 
 
4.762% 
4.101% 
 
 
 
 
5.375% 
 
 
 
 
 
 
 
 
 
5.25% 
 
 
 
 
 
4.00% 
7.00% 
6.125% 
5.375% 
5.625% 
5.125% 
5.375% 
5.375% 
 
 
 
 
 
 
 
7.00% 
5.75% 
3.00% 
3.00% 
2.75% 
3.50% 
 
 
 
 
1.00% 
0.75% 
Total Debt Obligations
$ 11,009 
$ 11,025 
$ 815 
$ 815 
$ 1,796 
$ 1,796 
$ 2,000 
$ 2,000 
$ 300 
$ 300 
$ 0 
$ 775 
$ 640 
$ 640 
$ 1,000 
$ 1,000 
$ 500 
$ 500 
$ 700 
$ 700 
$ 800 
$ 800 
$ 900 
$ 900 
$ 775 
$ 0 
$ 600 
$ 600 
$ 183 
$ 199 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,796 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Unamortized (Discount) Premium
(13)
16 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized Debt Issuance Expense
(112)
(128)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less current portion
(7)
(15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2)
(2)
 
 
 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
Long-Term Debt, less current portion
$ 10,877 
$ 10,866 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 13 
$ 15 
 
 
 
$ 592 
$ 591 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Description of Variable Rate Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
LIBOR 
LIBOR 
LIBOR 
 
 
Long-Term Debt - Textuals (Details) (USD $)
3 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
days
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Dec. 31, 2015
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Sep. 30, 2016
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Level 3 Financing [Member]
May 8, 2015
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Level 3 Financing [Member]
Dec. 31, 2016
TrancheB2022TermLoanTotal [Member]
Guarantor Subsidiaries [Member]
Jun. 30, 2016
Tranche B 2022 Term Loans
Dec. 31, 2016
Tranche B 2022 Term Loans
Level 3 Financing [Member]
Oct. 31, 2014
Tranche B 2022 Term Loans
Level 3 Financing [Member]
Oct. 31, 2014
Tranche B 2022 Term Loans
Guarantor Subsidiaries [Member]
Dec. 31, 2016
SeniorNotes6Point125PercentDue2021 [Member]
Dec. 31, 2015
SeniorNotes6Point125PercentDue2021 [Member]
Dec. 31, 2016
SeniorNotes6Point125PercentDue2021 [Member]
Level 3 Financing [Member]
Dec. 31, 2016
Senior Notes 7 Percent Due 2020 [Member]
Dec. 31, 2015
Senior Notes 7 Percent Due 2020 [Member]
Sep. 30, 2016
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing [Member]
Dec. 31, 2016
Senior Notes 7 Percent Due 2020 [Member]
Level 3 Financing [Member]
Dec. 31, 2016
TrancheB2020TermLoanTotal [Member]
Dec. 31, 2015
TrancheB2020TermLoanTotal [Member]
Jan. 1, 2014
TrancheB2020TermLoanTotal [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2016
Tranche B III 2019 and Tranche B 2020 Term Loans [Member]
Dec. 31, 2016
TrancheBIII2019TermLoan [Member]
Dec. 31, 2015
TrancheBIII2019TermLoan [Member]
Jan. 1, 2014
TrancheBIII2019TermLoan [Member]
Guarantor Subsidiaries [Member]
Dec. 31, 2016
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2015
Floating Rate Senior Notes due 2018 [Member]
Dec. 31, 2015
Senior Notes 11 Point 875 Percent Due 2019 [Member]
Level 3 Communications, Inc.
Dec. 31, 2016
Senior Notes 11 Point 875 Percent Due 2019 [Member]
Level 3 Communications, Inc.
Jun. 30, 2016
Senior Notes due 2019 (9.375%)
Dec. 31, 2016
Senior Notes due 2019 (9.375%)
Dec. 31, 2016
Senior Notes due 2019 (9.375%)
Level 3 Financing [Member]
Mar. 4, 2011
Senior Notes due 2019 (9.375%)
Level 3 Financing [Member]
Dec. 31, 2016
Senior Notes 5point 625Percent Due 2023 [Member]
Dec. 31, 2015
Senior Notes 5point 625Percent Due 2023 [Member]
Dec. 31, 2016
Senior Notes 5point 625Percent Due 2023 [Member]
Level 3 Financing [Member]
Jan. 29, 2015
Senior Notes 5point 625Percent Due 2023 [Member]
Level 3 Financing [Member]
Jun. 30, 2016
Senior Notes due 2019 (8.125%)
Dec. 31, 2016
Senior Notes due 2019 (8.125%)
Dec. 31, 2016
Senior Notes due 2019 (8.125%)
Level 3 Financing [Member]
Jun. 9, 2011
Senior Notes due 2019 (8.125%)
Level 3 Financing [Member]
Jun. 30, 2016
Senior Notes due 2019 (8.875%)
Dec. 31, 2016
Senior Notes due 2019 (8.875%)
Dec. 31, 2016
Senior Notes due 2019 (8.875%)
Level 3 Communications, Inc.
Dec. 31, 2016
Senior Notes due 2019 (8.875%)
Level 3 Financing [Member]
Jul. 31, 2012
Senior Notes due 2019 (8.875%)
Level 3 Financing [Member]
Dec. 31, 2016
Senior Notes 5point 125Percent Due 2023 [Member]
Dec. 31, 2015
Senior Notes 5point 125Percent Due 2023 [Member]
Dec. 31, 2016
Senior Notes 5point 125Percent Due 2023 [Member]
Level 3 Financing [Member]
Apr. 28, 2015
Senior Notes 5point 125Percent Due 2023 [Member]
Level 3 Financing [Member]
Dec. 31, 2016
Senior Notes 5point 375Percent Due 2025 [Member]
Dec. 31, 2015
Senior Notes 5point 375Percent Due 2025 [Member]
Dec. 31, 2016
Senior Notes 5point 375Percent Due 2025 [Member]
Level 3 Financing [Member]
Apr. 28, 2015
Senior Notes 5point 375Percent Due 2025 [Member]
Level 3 Financing [Member]
Dec. 31, 2015
Senior Notes due 2020 (8.625%)
Dec. 31, 2016
Senior Notes due 2020 (8.625%)
Dec. 31, 2016
Senior Notes due 2020 (8.625%)
Level 3 Financing [Member]
Jan. 13, 2012
Senior Notes due 2020 (8.625%)
Level 3 Financing [Member]
Dec. 31, 2016
Senior Notes due 2024 (5.375%)
Level 3 Financing [Member]
Nov. 13, 2015
Senior Notes due 2024 (5.375%)
Level 3 Financing [Member]
Dec. 31, 2016
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2015
Senior Notes 5.375percent Due 2022 [Member]
Aug. 12, 2014
Senior Notes 5.375percent Due 2022 [Member]
Dec. 31, 2016
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Financing [Member]
Aug. 12, 2014
Senior Notes 5.375percent Due 2022 [Member]
Level 3 Escrow II, Inc. [Member]
Dec. 31, 2016
Senior Notes 5point75Percent Due 2022 [Member]
Dec. 31, 2015
Senior Notes 5point75Percent Due 2022 [Member]
Dec. 31, 2016
Senior Notes 5point75Percent Due 2022 [Member]
Level 3 Communications, Inc.
Dec. 1, 2014
Senior Notes 5point75Percent Due 2022 [Member]
Level 3 Communications, Inc.
Mar. 31, 2016
Convertible Senior Notes 7 Percent Due 2015 [Member]
Dec. 31, 2015
Convertible Senior Notes 7 Percent Due 2015 [Member]
Dec. 31, 2016
Convertible Senior Notes 7 Percent Due 2015 [Member]
Dec. 31, 2016
Convertible Senior Notes 7 Percent Due 2015 [Member]
Level 3 Communications, Inc.
Dec. 31, 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]
Dec. 31, 2016
Convertible Senior Notes due 2015 Series B (7.0%)
Level 3 Communications, Inc.
Dec. 31, 2016
Capital Leases
Dec. 31, 2015
Capital Leases
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Level 3 Financing [Member]
Sep. 30, 2016
London Interbank Offered Rate (LIBOR) [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Level 3 Financing [Member]
Dec. 31, 2015
London Interbank Offered Rate (LIBOR) [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Level 3 Financing [Member]
Sep. 30, 2016
London Interbank Offered Rate (LIBOR) [Member]
2.0 Billion Tranche B-II 2022 Term Loan [Member]
Level 3 Financing [Member]
Minimum [Member]
Dec. 31, 2015
London Interbank Offered Rate (LIBOR) [Member]
Tranche B 2022 Term Loans
Guarantor Subsidiaries [Member]
Oct. 31, 2014
London Interbank Offered Rate (LIBOR) [Member]
Tranche B 2022 Term Loans
Guarantor Subsidiaries [Member]
Minimum [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
TrancheB2020TermLoanTotal [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
TrancheBIII2019TermLoan [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
Floating Rate Senior Notes due 2018 [Member]
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Face Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,000,000,000 
 
 
 
$ 2,000,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 815,000,000 
 
 
 
 
 
 
 
$ 500,000,000 
 
 
 
$ 500,000,000 
 
 
 
$ 1,200,000,000 
 
 
 
 
$ 300,000,000 
 
 
 
$ 700,000,000 
 
 
 
$ 800,000,000 
 
 
 
$ 900,000,000 
 
$ 900,000,000 
 
 
$ 1,000,000,000 
 
$ 1,000,000,000 
 
 
 
$ 600,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Gross
11,009,000,000 
 
 
 
11,025,000,000 
 
 
 
11,009,000,000 
11,025,000,000 
 
2,000,000,000 
2,000,000,000 
 
 
2,000,000,000 
 
 
 
 
640,000,000 
640,000,000 
 
0 
775,000,000 
 
 
1,796,000,000 
1,796,000,000 
1,796,000,000 
 
815,000,000 
815,000,000 
 
300,000,000 
300,000,000 
 
 
 
 
 
 
500,000,000 
500,000,000 
 
 
 
 
 
 
 
 
 
 
 
700,000,000 
700,000,000 
 
 
800,000,000 
800,000,000 
 
 
 
 
 
 
 
 
1,000,000,000 
1,000,000,000 
 
 
 
600,000,000 
600,000,000 
 
 
 
0 
775,000,000 
 
 
775,000,000 
 
183,000,000 
199,000,000 
 
 
 
 
 
 
 
 
 
 
Tranche B Term Loan 2022 upfront payment percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.75% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, Interest spread on debt (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.75% 
 
 
3.50% 
 
 
 
 
Debt Instrument, Description of Variable Rate Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
LIBOR 
LIBOR 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
7.00% 
 
 
 
 
 
 
 
7.00% 
 
 
3.50% 
 
 
 
 
 
 
 
 
 
 
6.125% 
 
 
 
7.00% 
 
 
 
4.00% 
 
 
 
4.762% 
4.101% 
 
11.875% 
 
9.375% 
9.375% 
 
 
 
5.625% 
 
 
8.125% 
8.125% 
 
 
8.875% 
8.875% 
 
 
 
 
5.125% 
 
 
 
5.375% 
 
 
8.625% 
8.625% 
 
5.375% 
 
5.375% 
 
 
5.375% 
 
 
 
5.75% 
 
 
 
5.25% 
7.00% 
5.25% 
 
7.00% 
 
 
2.75% 
 
 
 
0.75% 
 
1.00% 
3.00% 
3.00% 
3.50% 
Debt Conversion, Original Debt, Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
333,000,000 
142,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Redemption Price, Percentage
 
 
 
 
 
 
 
 
101.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
104.138% 
 
 
 
 
 
 
 
 
 
 
106.859% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Conversion, Converted Instrument, Amount
 
 
 
 
 
 
 
 
0 
333,000,000 
142,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,000 
1,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Upfront basis point
 
 
 
 
 
 
 
 
 
 
 
 
 
25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, weighted average interest rate (as percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.80% 
 
 
 
 
 
 
 
 
 
 
 
Debt Issuance Costs, Net
11,000,000 
 
 
 
50,000,000 
 
 
 
11,000,000 
50,000,000 
49,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Unamortized Debt Issuance Costs
112,000,000 
 
 
 
128,000,000 
 
 
 
112,000,000 
128,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
0 
0 
(40,000,000)
0 
(55,000,000)
0 
(163,000,000)
0 
(40,000,000)
(218,000,000)
(53,000,000)
 
 
 
 
 
27,000,000 
27,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(53,000,000)
 
(36,000,000)
(36,000,000)
 
 
 
 
 
 
(82,000,000)
 
(82,000,000)
 
(18,000,000)
 
 
(18,000,000)
 
 
 
 
 
 
 
 
 
(55,000,000)
 
 
 
(55,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt conversion, shares issued upon conversion (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,000,000 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion of Stock, Shares Converted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37 
37 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption period notice minimum (number of days)
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption period notice maximum (number of days)
 
 
 
 
 
 
 
 
60 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future contractual maturities of long-term debt and capital leases (excluding issue discounts, premiums and fair value adjustments)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
7,000,000 
 
 
 
 
 
 
 
7,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
306,000,000 
 
 
 
 
 
 
 
306,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
822,000,000 
 
 
 
 
 
 
 
822,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2020
1,804,000,000 
 
 
 
 
 
 
 
1,804,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2021
650,000,000 
 
 
 
 
 
 
 
650,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thereafter
7,420,000,000 
 
 
 
 
 
 
 
7,420,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt Obligations
$ 11,009,000,000 
 
 
 
 
 
 
 
$ 11,009,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 183,000,000 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
$ (387)
$ (301)
$ (147)
$ 36 
Other comprehensive income before reclassifications
(87)
(156)
(187)
 
Amounts reclassified from accumulated other comprehensive income
1 
2 
4 
 
Accumulated Translation Adjustment [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
(353)
(273)
(111)
67 
Other comprehensive income before reclassifications
(80)
(162)
(178)
 
Amounts reclassified from accumulated other comprehensive income
0 
0 
0 
 
Accumulated Defined Benefit Plans Adjustment [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
(34)
(28)
(36)
(31)
Other comprehensive income before reclassifications
(7)
6 
(9)
 
Amounts reclassified from accumulated other comprehensive income
$ 1 
$ 2 
$ 4 
 
Employee Benefits and Stock-Based Compensation - Non-cash compensation expensed and capitalized (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Stock-based compensation expense
 
 
 
Stock- based compensation expense
$ 157 
$ 142 
$ 74 
Capitalized Noncash Compensation
(1)
(1)
(1)
Non-cash compensation expense
156 
141 
73 
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost
8 
14 
4 
Outperform Stock Options
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
1 
6 
8 
Restricted Stock Units and Shares
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
76 
65 
34 
Performance Restricted Stock Units [Member]
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
43 
35 
14 
401 (K) Match [Member]
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
37 
36 
23 
Restricted Stock Unit Bonus Grant
 
 
 
Stock-based compensation expense
 
 
 
Stock- based compensation expense
$ 0 
$ 0 
$ (5)
Employee Benefits and Stock-Based Compensation - Outperform Stock Options (Details) (Outperform Stock Options, USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding
 
 
 
 
Options outstanding, beginning (in shares)
614,980.00000 
1,217,869.000000 
2,148,865 
 
Options granted (in shares)
0 
0 
0 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period
(6,875)
(12,945)
(52,901)
 
Options expired (in shares)
0 
0 
(106,844)
 
Options exercised (in shares)
(608,105)
(589,944)
(771,251)
 
Options outstanding, ending (in shares)
0 
614,980.00000 
1,217,869.000000 
2,148,865 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures
 
 
 
 
Options, Beginning, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 20.29 
$ 16.99 
$ 14.1 
 
Options, Beginning, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 26.69 
$ 27.53 
$ 36.60 
 
Options, Beginning, Weighted Average Initial Strike Price (in dollars per share)
$ 22.77 
$ 22.76 
$ 23.99 
 
Options, Beginning, Aggregate Intrinsic Value
   
$ 48,500,000 
$ 88,040,000.00 
$ 31,600,000 
OSO units Outstanding, Average Remaining Contractual Term
   
4 months 13 days 
10 months 24 days 
1 year 5 months 15 days 
Options granted, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 0 
$ 0 
$ 0 
 
Options granted, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 0 
$ 0 
$ 0 
 
Options granted, Weighted Average Initial Strike Price (in dollars per share)
$ 0.00 
$ 0.00 
$ 0.00 
 
Options forfeited, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 20.29 
$ 20.29 
$ 16.99 
 
Options forfeited, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 26.69 
$ 26.69 
$ 27.53 
 
Options forfeited, Weighted Average Initial Strike Price (in dollars per share)
$ 26.03 
$ 22.81 
$ 22.99 
 
Options expired, Initial Strke Price Per Unit, Minimum (in dollars per share)
$ 0 
$ 0 
$ 36.6 
 
Options expired, Initial Strke Price Per Unit, Maximum (in dollars per share)
$ 0 
$ 0 
$ 36.6 
 
Options expired, Weighted Average Initial Strike Price (in dollars per share)
$ 0.00 
$ 0.00 
$ 36.60 
 
Options exercised, Initial Strike Price Per Unit, Minimum (in dollars per share)
$ 20.29 
$ 22.15 
$ 14.7 
 
Options exercised, Initial Strike Price Per Unit, Maximum (in dollars per share)
$ 26.69 
$ 22.97 
$ 27.53 
 
Options exercised, Weighted Average Initial Strike Price (in dollars per share)
$ 22.73 
$ 22.32 
$ 24.26 
 
Options, Ending, Initial Strike Price Per Unit, Minimum (in dollars per share)
   
$ 20.29 
$ 16.99 
$ 14.1 
Options, Ending, Initial Strike Price Per Unit, Maximum (in dollars per share)
   
$ 26.69 
$ 27.53 
$ 36.60 
Options, Ending, Weighted Average Initial Strike Price (in dollars per share)
   
$ 22.77 
$ 22.76 
$ 23.99 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value
$ 14,000,000 
$ 13,000,000 
$ 19,000,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period
992,446 
622,755 
1,000,000 
 
On or After April 1, 2007
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Life of Award
3 
 
 
 
Percent vested after three years
100.00% 
 
 
 
Performance Range 1
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Maximum
0.00% 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Success Multiplier of Pre Multiplier Gain
0.00 
 
 
 
Performance Range 2
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Minimum
0.00% 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Maximum
11.00% 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Success Multiplier of Pre Multiplier Gain
0.36 
 
 
 
Performance Range 3
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Performance Qualifier to Index, Minimum
11.00% 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Success Multiplier of Pre Multiplier Gain
4.00 
 
 
 
Employee Benefits and Stock-Based Compensation - Restricted Stock and Units (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
year
Dec. 31, 2015
Dec. 31, 2014
Restricted Stock Units and Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Restrictions on transfer lapse, minimum (in years)
1 
 
 
Restrictions on transfer lapse, maximum (in years)
4 
 
 
Fair value of units and shares awarded
$ 80 
$ 106 
$ 72 
Unamortized compensation expense
77 
 
 
Weighted average period over which unamortized compensation cost will be recognized (in years)
2 years 5 months 12 days 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares
 
 
 
Nonvested, Beginning balance (in shares)
3,753,933 
3,218,737 
2,924,350 
Stock and units granted (in shares)
1,547,229 
2,087,942 
1,650,772 
Lapse of restrictions (in shares)
(1,342,027)
(1,194,519)
(1,150,080)
Stock and units forfeited (in shares)
(254,712)
(358,227)
(206,305)
Nonvested, Ending balance (in shares)
3,704,423 
3,753,933 
3,218,737 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
 
 
 
Nonvested, Beginning balance, Weighted Average Grant Date Fair Value (in dollars per share)
$ 42.09 
$ 32.95 
$ 22.77 
Stock and units granted, Weighted Average Grant Date Fair Value (in dollars per share)
$ 51.45 
$ 50.60 
$ 43.48 
Lapse of restrictions, Weighted Average Grant Date Fair Value (in dollars per share)
$ 36.95 
$ 31.70 
$ 22.92 
Stock and units forfeited, Weighted Average Grant Date Fair Value (in dollars per share)
$ 47.45 
$ 44.25 
$ 27.14 
Nonvested, Ending balance, Weighted Average Grant Date Fair Value (in dollars per share)
$ 47.49 
$ 42.09 
$ 32.95 
Total fair value of restricted stock and restricted stock units whose restriction lapsed
61 
38 
27 
Performance Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Life of Award
2 years 
 
 
Fair value of units and shares awarded
26 
38 
24 
Unamortized compensation expense
$ 32 
 
 
Weighted average period over which unamortized compensation cost will be recognized (in years)
1 year 7 months 2 days 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares
 
 
 
Nonvested, Beginning balance (in shares)
1,228,465 
567,881 
0 
Stock and units granted (in shares)
498,184 
713,657 
605,111 
Lapse of restrictions (in shares)
(297,940)
0 
(1,750)
Stock and units forfeited (in shares)
(97,298)
(53,073)
(35,480)
Nonvested, Ending balance (in shares)
1,331,411 
1,228,465 
567,881 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
 
 
 
Nonvested, Beginning balance, Weighted Average Grant Date Fair Value (in dollars per share)
$ 47.31 
$ 39.31 
$ 0.00 
Stock and units granted, Weighted Average Grant Date Fair Value (in dollars per share)
$ 52.84 
$ 53.82 
$ 39.30 
Lapse of restrictions, Weighted Average Grant Date Fair Value (in dollars per share)
$ 39.43 
$ 0.00 
$ 39.14 
Stock and units forfeited, Weighted Average Grant Date Fair Value (in dollars per share)
$ 52.02 
$ 49.25 
$ 39.14 
Nonvested, Ending balance, Weighted Average Grant Date Fair Value (in dollars per share)
$ 50.80 
$ 47.31 
$ 39.31 
second anniversary of grant date [Member] |
Performance Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage
50.00% 
 
 
third anniversary of grant date [Member] |
Performance Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage
50.00% 
 
 
Minimum [Member] |
Performance Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
share based compensation arrangement by share-based payment award, achievement level percent
50.00% 
 
 
Maximum [Member] |
Performance Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
share based compensation arrangement by share-based payment award, achievement level percent
200.00% 
 
 
Employee Benefits and Stock-Based Compensation - Defined Contribution (Details) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2016
year
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
After January 1, 2012
Dec. 31, 2015
tw telecom 401(K) Plan [Member]
Dec. 31, 2016
tw telecom 401(K) Plan [Member]
Dec. 31, 2016
All Other Defined Contribution
Dec. 31, 2015
All Other Defined Contribution
Dec. 31, 2014
All Other Defined Contribution
Dec. 31, 2016
Network Related Expenses [Member]
Dec. 31, 2015
Network Related Expenses [Member]
Dec. 31, 2014
Network Related Expenses [Member]
Dec. 31, 2016
Selling, General and Administrative Expenses [Member]
Dec. 31, 2015
Selling, General and Administrative Expenses [Member]
Dec. 31, 2014
Selling, General and Administrative Expenses [Member]
Schedule of Defined Contribution Plans Disclosures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Contribution Plan, Maximum Annual Contribution Per Employee
$ 18,000 
$ 18,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percentage
 
 
 
100.00% 
 
100.00% 
 
 
 
 
 
 
 
 
 
Defined Contribution Plan, Employer Matching Contribution, Percentage
 
 
 
4.00% 
 
5.00% 
 
 
 
 
 
 
 
 
 
Defined Contribution Plan, Vesting Period (in years)
3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Contribution Plan, Vesting Percentage After Vesting Period
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Contribution Plan, Cost Recognized
$ 37,000,000 
$ 36,000,000 
$ 23,000,000 
 
$ 2,000,000 
 
$ 6,000,000 
$ 6,000,000 
$ 6,000,000 
$ 5,000,000 
$ 5,000,000 
$ 4,000,000 
$ 32,000,000 
$ 31,000,000 
$ 19,000,000 
Employee Benefits and Stock-Based Compensation - Defined Benefits (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Compensation and Retirement and Compensation Related Costs, Share-based Payments Disclosure [Abstract]
 
 
Defined Benefit Plan, Fair Value of Plan Assets
$ 136 
$ 142 
Defined Benefit Plan, Benefit Obligation
158 
158 
Defined Benefit Plan, Funded Status of Plan
$ 22 
$ 16 
Employee Benefits and Stock-Based Compensation - Annual Discretionary Bonus Grant (Details) (Restricted Stock Unit Bonus Grant)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Restricted Stock Unit Bonus Grant
 
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Granted or Expected to Be Granted in Next Fiscal Period
1.4 
Income Taxes - Income Tax Expense (Benefit) by Current and Deferred (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Current:
 
 
 
 
 
 
 
 
 
 
 
United States federal
 
 
 
 
 
 
 
 
$ 0 
$ 0 
$ 0 
State
 
 
 
 
 
 
 
 
4 
3 
1 
Foreign
 
 
 
 
 
 
 
 
41 
33 
40 
Current income tax provision (benefit)
 
 
 
 
 
 
 
 
45 
36 
41 
Deferred, net of changes in valuation allowances:
 
 
 
 
 
 
 
 
 
 
 
United States federal
 
 
 
 
 
 
 
 
177 
(2,941)
(6)
State
 
 
 
 
 
 
 
 
27 
(246)
(15)
Foreign
 
 
 
 
 
 
 
 
(84)
1 
(96)
Deferred Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
(120)
3,186 
117 
Income Tax Benefit (Expense)
$ 33 
$ (74)
$ (34)
$ (90)
$ 3,189 
$ (16)
$ (18)
$ (5)
$ (165)
$ 3,150 
$ 76 
Income Taxes - Income (Loss) by Geographic Region (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
United States
 
 
 
 
 
 
 
 
$ 794 
$ 401 
$ 207 
Foreign
 
 
 
 
 
 
 
 
48 
(118)
31 
Income (Loss) Before Income Taxes
$ 217 
$ 217 
$ 190 
$ 218 
$ 134 
$ 17 
$ 5 
$ 127 
$ 842 
$ 283 
$ 238 
Income Taxes - Reconciliation of Income Tax Expense (Benefit) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Reconciliation [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent
 
 
 
 
 
 
 
 
35.00% 
35.00% 
35.00% 
Effective Income Tax Rate Reconciliation, Amount [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Computed Tax (Expense) Benefit at Statutory Rate
 
 
 
 
 
 
 
 
$ (295)
$ (99)
$ (83)
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount
 
 
 
 
 
 
 
 
(31)
(15)
(8)
Effect of Earnings in Jurisdictions outside of the United States
 
 
 
 
 
 
 
 
24 
30 
13 
Change in Valuation Allowance
 
 
 
 
 
 
 
 
139 
3,401 
205 
Disallowed Interest
 
 
 
 
 
 
 
 
(58)
(62)
(25)
Non-Deductible Deconsolidation Loss
 
 
 
 
 
 
 
 
0 
(57)
0 
Other Permanent Items
 
 
 
 
 
 
 
 
(33)
(25)
(19)
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount
 
 
 
 
 
 
 
 
22 
0 
0 
Effective Income Tax Rate Reconciliation, Federal Law Changes
 
 
 
 
 
 
 
 
110 
0 
0 
Indefinite-lived assets
 
 
 
 
 
 
 
 
0 
0 
2 
Uncertain Tax Positions
 
 
 
 
 
 
 
 
(2)
(5)
3 
Change in Tax Rate
 
 
 
 
 
 
 
 
(24)
(20)
(7)
Other, net
 
 
 
 
 
 
 
 
(17)
2 
(5)
Income Tax Benefit (Expense)
$ 33 
$ (74)
$ (34)
$ (90)
$ 3,189 
$ (16)
$ (18)
$ (5)
$ (165)
$ 3,150 
$ 76 
Income Taxes - Deferred Tax Assets (Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Jun. 30, 2016
Dec. 31, 2015
Dec. 31, 2016
U.S. Internal Revenue Service (IRS)
Dec. 31, 2015
U.S. Internal Revenue Service (IRS)
Dec. 31, 2014
U.S. Internal Revenue Service (IRS)
Dec. 31, 2016
Geographic Distribution, Foreign [Member]
Deferred Tax Assets (Liabilities) [Line Items]
 
 
 
 
 
 
 
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount
 
 
 
 
 
$ 100 
 
Recognized Income Tax Benefit
16 
0 
3,300 
(110)
3,300 
 
82 
Deferred Tax Assets:
 
 
 
 
 
 
 
Deferred revenue
364 
 
351 
 
 
 
 
Unutilized tax net operating loss carry forwards
4,550 
 
4,959 
 
 
 
 
Fixed assets and intangible assets
95 
 
115 
 
 
 
 
Other
471 
 
501 
 
 
 
 
Total Deferred Tax Assets
5,480 
 
5,926 
 
 
 
 
Deferred Tax Liabilities:
 
 
 
 
 
 
 
Deferred revenue
(57)
 
(58)
 
 
 
 
Fixed assets and intangible assets
(962)
 
(924)
 
 
 
 
Deferred Tax Liabilities, Intangible Assets
(357)
 
(399)
 
 
 
 
Other
(120)
 
(350)
 
 
 
 
Total Deferred Tax Liabilities
(1,496)
 
(1,731)
 
 
 
 
Net Deferred Tax Assets before valuation allowance
3,984 
 
4,195 
 
 
 
 
Valuation Allowance
(862)
 
(1,002)
(900)
(1,000)
 
 
Net Deferred Tax (Liability) Asset after Valuation Allowance
(3,122)
 
(3,193)
 
 
 
 
Operating Loss Carryforwards
 
 
 
$ 9,037 
 
 
 
Income Taxes - Operating Loss Carryforward (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Jun. 30, 2016
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
percentage change in a cumulative ownership shift
 
 
 
50 
 
 
percent of stockholders
 
 
 
5.00% 
 
 
Recognized Income Tax Benefit
$ 16,000,000 
$ 0 
$ 3,300,000,000 
 
 
 
Deferred Income Tax Expense (Benefit)
 
 
 
(120,000,000)
3,186,000,000 
117,000,000 
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax Benefit, Amount
 
 
 
22,000,000 
 
 
Deferred Tax Assets, Valuation Allowance
862,000,000 
 
1,002,000,000 
862,000,000 
1,002,000,000 
 
U.S. Internal Revenue Service (IRS)
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
9,037,000,000 
 
 
9,037,000,000 
 
 
Recognized Income Tax Benefit
(110,000,000)
 
3,300,000,000 
 
 
 
Deferred Income Tax Expense (Benefit)
 
 
3,100,000,000 
 
 
 
Deferred Tax Assets, Valuation Allowance
900,000,000 
 
1,000,000,000 
900,000,000 
1,000,000,000 
 
U.S. Internal Revenue Service (IRS) |
2024
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
891,000,000 
 
 
891,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2025
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
1,267,000,000 
 
 
1,267,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2026
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
1,254,000,000 
 
 
1,254,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2027
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
1,645,000,000 
 
 
1,645,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2028
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
477,000,000 
 
 
477,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2029
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
694,000,000 
 
 
694,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2030
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
663,000,000 
 
 
663,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2031
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
833,000,000 
 
 
833,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2032
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
729,000,000 
 
 
729,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2033
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
194,000,000 
 
 
194,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2034
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
389,000,000 
 
 
389,000,000 
 
 
U.S. Internal Revenue Service (IRS) |
2035
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
1,000,000 
 
 
1,000,000 
 
 
Foreign jurisdiction
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforward, Disregarded for Domestic Country Tax Purposes
5,500,000,000 
 
 
5,500,000,000 
 
 
State jurisdiction
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
$ 9,400,000,000 
 
 
$ 9,400,000,000 
 
 
Income Taxes - Unrecognized Tax Benefits (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
Tax Benefit, Federal Law Changes
$ 110 
$ 0 
$ 0 
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
17 
17 
 
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Unrecognized tax benefits, Beginning balance
18 
17 
13 
Unrecognized tax benefits, increase from prior years positions netted against DTA
(1)
(2)
5 
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions
 
3 
1 
Gross increases - tax positions during 2012
2 
2 
0 
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions
(1)
 
 
Gross decreases - lapse of statue of limitations
0 
(2)
(2)
Gross decreases - settlements with taxing authorities
0 
0 
0 
Unrecognized tax benefits, Ending Balance
18 
18 
17 
Accrued interest and penalties in the Company's liability for uncertain tax positions
(18)
(16)
(17)
Unrecognized Tax Benefits, Interest on Income Taxes Expense
1 
 
 
Accrued interest and penalties related to uncertain tax positions in income tax expense in its consolidated statements of operation
 
$ (1)
$ (1)
Segment Information Summarized Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Available to Common Stockholders, Basic
 
 
 
 
 
 
 
 
$ 677 
$ 3,433 
$ 314 
Other Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
(602)
(1,048)
(775)
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
2,850 
2,638 
1,895 
Income Tax Benefit (Expense)
33 
(74)
(34)
(90)
3,189 
(16)
(18)
(5)
(165)
3,150 
76 
Revenue
2,032 
2,033 
2,056 
2,051 
2,053 
2,062 
2,061 
2,053 
8,172 
8,229 
6,777 
Capital expenditures
 
 
 
 
 
 
 
 
(1,334)
(1,229)
(910)
Depreciation and amortization
(320)
(319)
(310)
(301)
(294)
(296)
(288)
(288)
(1,250)
(1,166)
(808)
Total Assets
24,888 
 
 
 
24,017 
 
 
 
24,888 
24,017 
 
Share-based Compensation
 
 
 
 
 
 
 
 
(156)
(141)
(73)
non-cash impairment
 
 
 
 
 
 
 
 
0 
0 
(1)
Corporate and Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
(878)
(947)
(732)
Capital expenditures
 
 
 
 
 
 
 
 
(149)
(164)
(145)
Total Assets
127 
 
 
 
129 
 
 
 
127 
129 
 
North America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
3,220 
3,048 
2,065 
Capital expenditures
 
 
 
 
 
 
 
 
(874)
(752)
(495)
Total Assets
20,818 
 
 
 
19,961 
 
 
 
20,818 
19,961 
 
Europe
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
215 
235 
214 
Capital expenditures
 
 
 
 
 
 
 
 
(145)
(158)
(117)
Total Assets
1,639 
 
 
 
1,796 
 
 
 
1,639 
1,796 
 
Latin America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
293 
302 
348 
Capital expenditures
 
 
 
 
 
 
 
 
(166)
(155)
(153)
Total Assets
$ 2,304 
 
 
 
$ 2,131 
 
 
 
$ 2,304 
$ 2,131 
 
Segment Information Revenue From External Customers (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
$ 2,032 
$ 2,033 
$ 2,056 
$ 2,051 
$ 2,053 
$ 2,062 
$ 2,061 
$ 2,053 
$ 8,172 
$ 8,229 
$ 6,777 
Core Network Service [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
7,767 
7,757 
6,208 
Core Network Service [Member] |
North America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
6,362 
6,207 
4,520 
Core Network Service [Member] |
Europe
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
744 
835 
904 
Core Network Service [Member] |
Latin America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
661 
715 
784 
Wholesale Voice Services and Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
405 
472 
569 
Wholesale Voice Services and Other [Member] |
North America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
386 
447 
535 
Wholesale Voice Services and Other [Member] |
Europe
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
11 
14 
6 
Wholesale Voice Services and Other [Member] |
Latin America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue from external customers
 
 
 
 
 
 
 
 
$ 8 
$ 11 
$ 28 
Segment Information Adjusted EBITDA by Segment (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
$ 2,850 
$ 2,638 
$ 1,895 
Income Tax Expense (Benefit)
(33)
74 
34 
90 
(3,189)
16 
18 
5 
165 
(3,150)
(76)
Other Income
 
 
 
 
 
 
 
 
(602)
(1,048)
(775)
Depreciation and amortization
320 
319 
310 
301 
294 
296 
288 
288 
1,250 
1,166 
808 
Share-based Compensation
 
 
 
 
 
 
 
 
156 
141 
73 
non-cash impairment
 
 
 
 
 
 
 
 
0 
0 
1 
Net Income (Loss) Available to Common Stockholders, Basic
 
 
 
 
 
 
 
 
677 
3,433 
314 
Corporate and Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
(878)
(947)
(732)
North America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
3,220 
3,048 
2,065 
Europe
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
215 
235 
214 
Latin America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
$ 293 
$ 302 
$ 348 
Segment Information Capital Expenditures by Segment (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information [Line Items]
 
 
 
Capital expenditures
$ 1,334 
$ 1,229 
$ 910 
Corporate and Other [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Capital expenditures
149 
164 
145 
North America
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Capital expenditures
874 
752 
495 
Europe
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Capital expenditures
145 
158 
117 
Latin America
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Capital expenditures
$ 166 
$ 155 
$ 153 
Segment Information Assets by Segment (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Segment Reporting Information [Line Items]
 
 
Total Assets
$ 24,888 
$ 24,017 
Corporate and Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Assets
127 
129 
North America
 
 
Segment Reporting Information [Line Items]
 
 
Total Assets
20,818 
19,961 
Europe
 
 
Segment Reporting Information [Line Items]
 
 
Total Assets
1,639 
1,796 
Latin America
 
 
Segment Reporting Information [Line Items]
 
 
Total Assets
$ 2,304 
$ 2,131 
Segment Information Goodwill (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Oct. 31, 2014
Segment Reporting Information [Line Items]
 
 
 
 
Goodwill
$ 7,729 
$ 7,749 
$ 7,689 
$ 5,181 
Goodwill adjustments including the effect of foreign currency rate change
 
60 
 
 
Effect of foreign currency rate change
(20)
 
 
 
North America
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Goodwill
7,024 
7,024 
6,955 
 
Goodwill adjustments including the effect of foreign currency rate change
 
69 
 
 
Effect of foreign currency rate change
0 
 
 
 
EMEA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Goodwill
109 
129 
138 
 
Goodwill adjustments including the effect of foreign currency rate change
 
(9)
 
 
Effect of foreign currency rate change
(20)
 
 
 
Latin America
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Goodwill
596 
596 
596 
 
Goodwill adjustments including the effect of foreign currency rate change
 
0 
 
 
Effect of foreign currency rate change
$ 0 
 
 
 
Commitments, Contingencies and Other Items - Lawsuits (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2016
Peruvian Tax Litigation [Member]
Pending Litigation
Dec. 31, 2016
Peruvian Tax Litigation [Member]
Pending Litigation
Dec. 31, 2016
Employee Severance and Contractor Termination Disputes
Pending Litigation
Dec. 31, 2016
Maximum
Brazilian Tax Claims [Member]
Pending Litigation
Dec. 31, 2014
Brazilian Tax Reserve Release [Member]
Brazilian Tax Claims [Member]
Pending Litigation
Dec. 31, 2016
Brazilian Tax Reserve Release [Member]
Brazilian Tax Claims [Member]
Pending Litigation
Dec. 31, 2016
Peruvian Tax Litigation, Before Interest [Member]
Pending Litigation
Dec. 31, 2016
Peruvian Tax Litigation, Income Taxwitholding 2001 and 2002 [Member]
Pending Litigation
Dec. 31, 2016
Peruvian Tax Litigation, Vat for 2001 and 2002 [Member]
Pending Litigation
Dec. 31, 2016
Peruvian Tax Litigation, Disallowance of VAT in 2005 [Member]
Pending Litigation
Dec. 31, 2016
Peruvian Tax Litigation [Member]
Pending Litigation
Loss Contingencies
 
 
 
 
 
 
 
 
 
 
 
 
Estimated Litigation Liability
$ 97 
 
 
 
 
 
 
 
 
 
 
 
Loss Contingency, Asserted Claim
 
 
 
29 
 
 
 
26 
3 
7 
16 
18 
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
 
 
 
 
$ 48 
 
 
 
 
 
 
 
Commitments, Contingencies and Other Items - Other Commitments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
year
Dec. 31, 2015
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Amount outstanding under letters of credit
$ 39 
$ 46 
 
Collateralized Financings
33 
43 
 
Payments under these right-of-way agreements
205 
211 
173 
Rent expense, including common area maintenance, under non-cancelable lease agreements
347 
357 
318 
Right-of-Way Agreements
 
 
 
Right-of-Way Agreements, 2017
162 
 
 
Right-of-Way Agreements, 2018
80 
 
 
Right-of-Way Agreements, 2019
71 
 
 
Right-of-Way Agreements, 2020
55 
 
 
Right-of-Way Agreements, 2021
50 
 
 
Right-of-Way Agreements, Thereafter
325 
 
 
Right-of-Way Agreements, Total
743 
 
 
Facilities
 
 
 
Facilities, 2017
282 
 
 
Facilities, 2018
244 
 
 
Facilities, 2019
222 
 
 
Facilities, 2020
164 
 
 
Facilities, 2021
124 
 
 
Facilities, Thereafter
501 
 
 
Facilities, Total
1,537 
 
 
Total
 
 
 
Right-of-Way Agreements and Facilities, 2017
444 
 
 
Right-of-Way Agreements and Facilities, 2018
324 
 
 
Right-of-Way Agreements and Facilities, 2019
293 
 
 
Right-of-Way Agreements and Facilities, 2020
219 
 
 
Right-of-Way Agreements and Facilities, 2021
174 
 
 
Right-of-Way Agreements and Facilities, Thereafter
826 
 
 
Right-of-Way Agreements and Facilities, Total
2,280 
 
 
Future Minimum Sublease Receipts
 
 
 
2017
4 
 
 
2018
4 
 
 
2019
3 
 
 
2020
1 
 
 
2021
0 
 
 
Thereafter
0 
 
 
Total
$ 12 
 
 
Period of Right-of-Way Agreements with cancelable agreements (in years)
1 
 
 
Commitments, Contingencies and Other Items - Purchase Commitments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Long-term Purchase Commitment
 
Total
$ 660 
Less than 1 Year
337 
2 - 3 Years
200 
4 - 5 Years
51 
After 5 Years
72 
Cost of Access Services
 
Long-term Purchase Commitment
 
Total
425 
Less than 1 Year
278 
2 - 3 Years
131 
4 - 5 Years
11 
After 5 Years
5 
Third Party Maintenance Services
 
Long-term Purchase Commitment
 
Total
235 
Less than 1 Year
59 
2 - 3 Years
69 
4 - 5 Years
40 
After 5 Years
$ 67 
Condensed Consolidating Financial Information - Narrative (Details)
Dec. 31, 2016
Long-term debt
 
Debt instrument, stated interest rate (as a percent)
7.00% 
Level 3 Financing [Member] |
Senior Notes due 2020 (7.0%)
 
Long-term debt
 
Debt instrument, stated interest rate (as a percent)
7.00% 
Condensed Consolidating Financial Information - Statements of Operations (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 2,032 
$ 2,033 
$ 2,056 
$ 2,051 
$ 2,053 
$ 2,062 
$ 2,061 
$ 2,053 
$ 8,172 
$ 8,229 
$ 6,777 
Network Access Costs
680 
675 
676 
694 
708 
706 
696 
723 
2,725 
2,833 
2,529 
Network Related Expenses
332 
337 
339 
338 
344 
369 
363 
356 
1,346 
1,432 
1,246 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
320 
319 
310 
301 
294 
296 
288 
288 
1,250 
1,166 
808 
Selling, General and Administrative Expenses
346 
348 
357 
356 
369 
364 
364 
370 
1,407 
1,467 
1,181 
Total Costs and Expenses
1,678 
1,679 
1,682 
1,689 
1,715 
1,735 
1,711 
1,737 
6,728 
6,898 
5,764 
Operating Income (Loss)
354 
354 
374 
362 
338 
327 
350 
316 
1,444 
1,331 
1,013 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
1 
1 
1 
1 
0 
0 
0 
1 
4 
1 
1 
Interest expense
(132)
(139)
(140)
(135)
(152)
(145)
(165)
(180)
(546)
(642)
(654)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
0 
0 
0 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
0 
0 
0 
Other income (expense), net
 
 
 
 
 
 
 
 
(60)
(407)
(122)
Total Other Expense
(137)
(137)
(184)
(144)
(204)
(310)
(345)
(189)
(602)
(1,048)
(775)
Income (Loss) Before Income Taxes
217 
217 
190 
218 
134 
17 
5 
127 
842 
283 
238 
Income Tax Benefit (Expense)
33 
(74)
(34)
(90)
3,189 
(16)
(18)
(5)
(165)
3,150 
76 
Net income (loss)
 
 
 
 
 
 
 
 
 
 
314 
Net Income
250 
143 
156 
128 
3,323 
1 
(13)
122 
677 
3,433 
314 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
(86)
(154)
(183)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
591 
3,279 
131 
Level 3 Communications, Inc.
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Network Access Costs
 
 
 
 
 
 
 
 
0 
0 
0 
Network Related Expenses
 
 
 
 
 
 
 
 
0 
0 
0 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Selling, General and Administrative Expenses
 
 
 
 
 
 
 
 
16 
4 
21 
Total Costs and Expenses
 
 
 
 
 
 
 
 
16 
4 
21 
Operating Income (Loss)
 
 
 
 
 
 
 
 
(16)
(4)
(21)
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
(36)
(51)
(143)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
1,385 
1,310 
1,227 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
(669)
2,162 
(710)
Other income (expense), net
 
 
 
 
 
 
 
 
(1)
(18)
(53)
Total Other Expense
 
 
 
 
 
 
 
 
679 
3,403 
321 
Income (Loss) Before Income Taxes
 
 
 
 
 
 
 
 
663 
3,399 
300 
Income Tax Benefit (Expense)
 
 
 
 
 
 
 
 
14 
34 
14 
Net income (loss)
 
 
 
 
 
 
 
 
 
 
314 
Net Income
 
 
 
 
 
 
 
 
677 
3,433 
 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
(86)
(154)
(183)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
591 
3,279 
131 
Level 3 Financing, Inc.
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Network Access Costs
 
 
 
 
 
 
 
 
0 
0 
0 
Network Related Expenses
 
 
 
 
 
 
 
 
0 
0 
0 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Selling, General and Administrative Expenses
 
 
 
 
 
 
 
 
5 
0 
2 
Total Costs and Expenses
 
 
 
 
 
 
 
 
5 
0 
2 
Operating Income (Loss)
 
 
 
 
 
 
 
 
(5)
0 
(2)
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
(505)
(574)
(492)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
2,113 
1,984 
1,827 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
(2,033)
(1,693)
(2,047)
Other income (expense), net
 
 
 
 
 
 
 
 
(39)
(200)
0 
Total Other Expense
 
 
 
 
 
 
 
 
(464)
(483)
(712)
Income (Loss) Before Income Taxes
 
 
 
 
 
 
 
 
(469)
(483)
(714)
Income Tax Benefit (Expense)
 
 
 
 
 
 
 
 
(200)
2,645 
4 
Net income (loss)
 
 
 
 
 
 
 
 
 
 
(710)
Net Income
 
 
 
 
 
 
 
 
(669)
2,162 
 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
0 
0 
0 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
(669)
2,162 
(710)
Level 3 Communications, LLC
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
3,557 
3,325 
3,073 
Network Access Costs
 
 
 
 
 
 
 
 
1,283 
1,243 
1,177 
Network Related Expenses
 
 
 
 
 
 
 
 
953 
947 
762 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
 
 
 
 
 
 
 
 
385 
309 
277 
Selling, General and Administrative Expenses
 
 
 
 
 
 
 
 
1,024 
1,064 
735 
Total Costs and Expenses
 
 
 
 
 
 
 
 
3,645 
3,563 
2,951 
Operating Income (Loss)
 
 
 
 
 
 
 
 
(88)
(238)
122 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
3 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
(2)
(3)
(2)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
(3,215)
(3,041)
(2,890)
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
757 
177 
663 
Other income (expense), net
 
 
 
 
 
 
 
 
2 
3 
7 
Total Other Expense
 
 
 
 
 
 
 
 
(2,455)
(2,864)
(2,222)
Income (Loss) Before Income Taxes
 
 
 
 
 
 
 
 
(2,543)
(3,102)
(2,100)
Income Tax Benefit (Expense)
 
 
 
 
 
 
 
 
(2)
(1)
(1)
Net income (loss)
 
 
 
 
 
 
 
 
 
 
(2,101)
Net Income
 
 
 
 
 
 
 
 
(2,545)
(3,103)
 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
0 
0 
0 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
(2,545)
(3,103)
(2,101)
Other Non-Guarantor Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
4,747 
5,077 
3,918 
Network Access Costs
 
 
 
 
 
 
 
 
1,574 
1,763 
1,566 
Network Related Expenses
 
 
 
 
 
 
 
 
393 
485 
484 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
 
 
 
 
 
 
 
 
865 
857 
531 
Selling, General and Administrative Expenses
 
 
 
 
 
 
 
 
362 
399 
423 
Total Costs and Expenses
 
 
 
 
 
 
 
 
3,194 
3,504 
3,004 
Operating Income (Loss)
 
 
 
 
 
 
 
 
1,553 
1,573 
914 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
1 
1 
1 
Interest expense
 
 
 
 
 
 
 
 
(3)
(14)
(17)
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
(283)
(253)
(164)
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
0 
0 
0 
Other income (expense), net
 
 
 
 
 
 
 
 
(22)
(192)
(76)
Total Other Expense
 
 
 
 
 
 
 
 
(307)
(458)
(256)
Income (Loss) Before Income Taxes
 
 
 
 
 
 
 
 
1,246 
1,115 
658 
Income Tax Benefit (Expense)
 
 
 
 
 
 
 
 
23 
472 
59 
Net income (loss)
 
 
 
 
 
 
 
 
 
 
717 
Net Income
 
 
 
 
 
 
 
 
1,269 
1,587 
 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
(86)
(154)
(183)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
1,183 
1,433 
534 
Eliminations
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
(132)
(173)
(214)
Network Access Costs
 
 
 
 
 
 
 
 
(132)
(173)
(214)
Network Related Expenses
 
 
 
 
 
 
 
 
0 
0 
0 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Selling, General and Administrative Expenses
 
 
 
 
 
 
 
 
0 
0 
0 
Total Costs and Expenses
 
 
 
 
 
 
 
 
(132)
(173)
(214)
Operating Income (Loss)
 
 
 
 
 
 
 
 
0 
0 
0 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
0 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
0 
0 
0 
Interest income (expense) affiliates, net
 
 
 
 
 
 
 
 
0 
0 
0 
Equity in net earnings (losses) of subsidiaries
 
 
 
 
 
 
 
 
1,945 
(646)
2,094 
Other income (expense), net
 
 
 
 
 
 
 
 
0 
0 
0 
Total Other Expense
 
 
 
 
 
 
 
 
1,945 
(646)
2,094 
Income (Loss) Before Income Taxes
 
 
 
 
 
 
 
 
1,945 
(646)
2,094 
Income Tax Benefit (Expense)
 
 
 
 
 
 
 
 
0 
0 
0 
Net income (loss)
 
 
 
 
 
 
 
 
 
 
2,094 
Net Income
 
 
 
 
 
 
 
 
1,945 
(646)
 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
 
 
 
 
 
 
 
 
86 
154 
183 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
$ 2,031 
$ (492)
$ 2,277 
Condensed Consolidating Financial Information - Balance Sheets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Current Assets:
 
 
 
 
Cash and cash equivalents
$ 1,819 
$ 854 
$ 580 
$ 631 
Restricted cash and securities
7 
8 
 
 
Receivables, less allowances for doubtful accounts
712 
757 
 
 
Due from affiliates
0 
0 
 
 
Other
115 
111 
 
 
Total Current Assets
2,653 
1,730 
 
 
Property, Plant and Equipment, net
10,139 
9,878 
 
 
Restricted Cash and Securities
31 
42 
 
 
Goodwill and Other Intangibles Assets, net
8,644 
8,876 
 
 
Investment in Subsidiaries
0 
0 
 
 
Deferred Tax Assets
3,370 
3,441 
 
 
Other Assets, net
51 
50 
 
 
Total Assets
24,888 
24,017 
 
 
Liabilities:
 
 
 
 
Accounts payable
706 
629 
 
 
Current portion of long-term debt
7 
15 
 
 
Accrued payroll and employee benefits
195 
218 
 
 
Accrued interest
129 
108 
 
 
Current portion of deferred revenue
266 
267 
 
 
Due to affiliates
0 
0 
 
 
Other
168 
179 
 
 
Total Current Liabilities
1,471 
1,416 
 
 
Long-Term Debt, less current portion
10,877 
10,866 
 
 
Deferred Revenue, less current portion
1,001 
977 
 
 
Other Liabilities
622 
632 
 
 
Commitments and Contingencies
0 
0 
 
 
Stockholders' Equity (Deficit)
10,917 
10,126 
6,363 
1,411 
Total Liabilities and Stockholders’ Equity
24,888 
24,017 
 
 
Level 3 Communications, Inc.
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
15 
12 
7 
8 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
17,032 
12,415 
 
 
Other
0 
0 
 
 
Total Current Assets
17,047 
12,427 
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
22 
27 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
16,869 
16,772 
 
 
Deferred Tax Assets
51 
38 
 
 
Other Assets, net
0 
0 
 
 
Total Assets
33,989 
29,264 
 
 
Liabilities:
 
 
 
 
Accounts payable
0 
0 
 
 
Current portion of long-term debt
0 
0 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
11 
11 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
0 
0 
 
 
Other
0 
0 
 
 
Total Current Liabilities
11 
11 
 
 
Long-Term Debt, less current portion
592 
591 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
16 
15 
 
 
Stockholders' Equity (Deficit)
33,370 
28,647 
 
 
Total Liabilities and Stockholders’ Equity
33,989 
29,264 
 
 
Level 3 Financing, Inc.
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
0 
6 
5 
6 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
21,715 
22,759 
 
 
Other
0 
0 
 
 
Total Current Assets
21,715 
22,765 
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
0 
0 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
17,599 
17,714 
 
 
Deferred Tax Assets
2,687 
2,847 
 
 
Other Assets, net
0 
0 
 
 
Total Assets
42,001 
43,326 
 
 
Liabilities:
 
 
 
 
Accounts payable
0 
1 
 
 
Current portion of long-term debt
0 
0 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
110 
90 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
0 
0 
 
 
Other
0 
0 
 
 
Total Current Liabilities
110 
91 
 
 
Long-Term Debt, less current portion
10,108 
10,092 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
0 
0 
 
 
Stockholders' Equity (Deficit)
31,783 
33,143 
 
 
Total Liabilities and Stockholders’ Equity
42,001 
43,326 
 
 
Level 3 Communications, LLC
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
1,700 
727 
307 
347 
Restricted cash and securities
1 
1 
 
 
Receivables, less allowances for doubtful accounts
26 
47 
 
 
Due from affiliates
0 
0 
 
 
Other
87 
56 
 
 
Total Current Assets
1,814 
831 
 
 
Property, Plant and Equipment, net
3,869 
3,423 
 
 
Restricted Cash and Securities
9 
14 
 
 
Goodwill and Other Intangibles Assets, net
353 
363 
 
 
Investment in Subsidiaries
3,674 
3,734 
 
 
Deferred Tax Assets
0 
0 
 
 
Other Assets, net
16 
12 
 
 
Total Assets
9,735 
8,377 
 
 
Liabilities:
 
 
 
 
Accounts payable
307 
195 
 
 
Current portion of long-term debt
2 
2 
 
 
Accrued payroll and employee benefits
160 
186 
 
 
Accrued interest
0 
0 
 
 
Current portion of deferred revenue
116 
119 
 
 
Due to affiliates
40,927 
37,990 
 
 
Other
127 
115 
 
 
Total Current Liabilities
41,639 
38,607 
 
 
Long-Term Debt, less current portion
13 
15 
 
 
Deferred Revenue, less current portion
719 
680 
 
 
Other Liabilities
155 
133 
 
 
Stockholders' Equity (Deficit)
(32,791)
(31,058)
 
 
Total Liabilities and Stockholders’ Equity
9,735 
8,377 
 
 
Other Non-Guarantor Subsidiaries
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
104 
109 
261 
270 
Restricted cash and securities
6 
7 
 
 
Receivables, less allowances for doubtful accounts
686 
710 
 
 
Due from affiliates
2,180 
2,816 
 
 
Other
28 
55 
 
 
Total Current Assets
3,004 
3,697 
 
 
Property, Plant and Equipment, net
6,270 
6,455 
 
 
Restricted Cash and Securities
0 
1 
 
 
Goodwill and Other Intangibles Assets, net
8,291 
8,513 
 
 
Investment in Subsidiaries
0 
0 
 
 
Deferred Tax Assets
632 
556 
 
 
Other Assets, net
35 
38 
 
 
Total Assets
18,232 
19,260 
 
 
Liabilities:
 
 
 
 
Accounts payable
399 
433 
 
 
Current portion of long-term debt
5 
13 
 
 
Accrued payroll and employee benefits
35 
32 
 
 
Accrued interest
8 
7 
 
 
Current portion of deferred revenue
150 
148 
 
 
Due to affiliates
0 
0 
 
 
Other
41 
64 
 
 
Total Current Liabilities
638 
697 
 
 
Long-Term Debt, less current portion
164 
168 
 
 
Deferred Revenue, less current portion
282 
297 
 
 
Other Liabilities
451 
484 
 
 
Stockholders' Equity (Deficit)
16,697 
17,614 
 
 
Total Liabilities and Stockholders’ Equity
18,232 
19,260 
 
 
Eliminations
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
0 
0 
0 
0 
Restricted cash and securities
0 
0 
 
 
Receivables, less allowances for doubtful accounts
0 
0 
 
 
Due from affiliates
(40,927)
(37,990)
 
 
Other
0 
0 
 
 
Total Current Assets
(40,927)
(37,990)
 
 
Property, Plant and Equipment, net
0 
0 
 
 
Restricted Cash and Securities
0 
0 
 
 
Goodwill and Other Intangibles Assets, net
0 
0 
 
 
Investment in Subsidiaries
(38,142)
(38,220)
 
 
Deferred Tax Assets
0 
0 
 
 
Other Assets, net
0 
0 
 
 
Total Assets
(79,069)
(76,210)
 
 
Liabilities:
 
 
 
 
Accounts payable
0 
0 
 
 
Current portion of long-term debt
0 
0 
 
 
Accrued payroll and employee benefits
0 
0 
 
 
Accrued interest
0 
0 
 
 
Current portion of deferred revenue
0 
0 
 
 
Due to affiliates
(40,927)
(37,990)
 
 
Other
0 
0 
 
 
Total Current Liabilities
(40,927)
(37,990)
 
 
Long-Term Debt, less current portion
0 
0 
 
 
Deferred Revenue, less current portion
0 
0 
 
 
Other Liabilities
0 
0 
 
 
Stockholders' Equity (Deficit)
(38,142)
(38,220)
 
 
Total Liabilities and Stockholders’ Equity
$ (79,069)
$ (76,210)
 
 
Condensed Consolidating Financial Information - Statements of Cash Flows (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by Operating Activities
$ 2,343 
$ 1,855 
$ 1,161 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(1,334)
(1,229)
(910)
Cash related to deconsolidated Venezuela operations
0 
(83)
0 
Increase (Decrease) in Restricted Cash and Investments
12 
(22)
(10)
Proceeds from sale of property, plant and equipment and other assets
3 
4 
3 
Payments to Acquire Businesses, Net of Cash Acquired
0 
0 
(167)
Other
0 
(14)
(2)
Net Cash Used in Investing Activities
(1,319)
(1,344)
(1,086)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
764 
4,832 
589 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(820)
(5,051)
(671)
Increase (decrease) due from affiliates, net
0 
0 
0 
Net Cash Used in Financing Activities
(56)
(219)
(82)
Effect of Exchange Rates on Cash and Cash Equivalents
(3)
(18)
(44)
Net Change in Cash and Cash Equivalents
965 
274 
(51)
Cash and Cash Equivalents at Beginning of Year
854 
580 
631 
Cash and Cash Equivalents at End of Year
1,819 
854 
580 
Level 3 Communications, Inc.
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by Operating Activities
(49)
(40)
(178)
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
0 
0 
0 
Cash related to deconsolidated Venezuela operations
 
0 
 
Increase (Decrease) in Restricted Cash and Investments
5 
(25)
0 
Proceeds from sale of property, plant and equipment and other assets
0 
0 
0 
Payments to Acquire Businesses, Net of Cash Acquired
 
 
(474)
Other
 
0 
0 
Net Cash Used in Investing Activities
5 
(25)
(474)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
590 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
0 
(313)
(647)
Increase (decrease) due from affiliates, net
47 
383 
708 
Net Cash Used in Financing Activities
47 
70 
651 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
3 
5 
(1)
Cash and Cash Equivalents at Beginning of Year
12 
7 
8 
Cash and Cash Equivalents at End of Year
15 
12 
7 
Level 3 Financing, Inc.
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by Operating Activities
(468)
(617)
(458)
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
0 
0 
0 
Cash related to deconsolidated Venezuela operations
 
0 
 
Increase (Decrease) in Restricted Cash and Investments
0 
0 
0 
Proceeds from sale of property, plant and equipment and other assets
0 
0 
0 
Payments to Acquire Businesses, Net of Cash Acquired
 
 
0 
Other
 
0 
0 
Net Cash Used in Investing Activities
0 
0 
0 
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
764 
4,832 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(806)
(4,725)
0 
Increase (decrease) due from affiliates, net
504 
511 
457 
Net Cash Used in Financing Activities
462 
618 
457 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
(6)
1 
(1)
Cash and Cash Equivalents at Beginning of Year
6 
5 
6 
Cash and Cash Equivalents at End of Year
0 
6 
5 
Level 3 Communications, LLC
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by Operating Activities
564 
193 
625 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(704)
(453)
(362)
Cash related to deconsolidated Venezuela operations
 
0 
 
Increase (Decrease) in Restricted Cash and Investments
6 
3 
2 
Proceeds from sale of property, plant and equipment and other assets
(1)
0 
0 
Payments to Acquire Businesses, Net of Cash Acquired
 
 
0 
Other
 
(14)
0 
Net Cash Used in Investing Activities
(697)
(464)
(360)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(1)
(2)
0 
Increase (decrease) due from affiliates, net
1,107 
693 
(305)
Net Cash Used in Financing Activities
1,106 
691 
(305)
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
973 
420 
(40)
Cash and Cash Equivalents at Beginning of Year
727 
307 
347 
Cash and Cash Equivalents at End of Year
1,700 
727 
307 
Other Non-Guarantor Subsidiaries
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by Operating Activities
2,296 
2,319 
1,172 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(630)
(776)
(548)
Cash related to deconsolidated Venezuela operations
 
(83)
 
Increase (Decrease) in Restricted Cash and Investments
1 
0 
(12)
Proceeds from sale of property, plant and equipment and other assets
2 
4 
3 
Payments to Acquire Businesses, Net of Cash Acquired
 
 
307 
Other
 
0 
(2)
Net Cash Used in Investing Activities
(627)
(855)
(252)
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
(1)
Payments on and repurchases of long-term debt, including current portions and refinancing costs
(13)
(11)
(24)
Increase (decrease) due from affiliates, net
(1,658)
(1,587)
(860)
Net Cash Used in Financing Activities
(1,671)
(1,598)
(885)
Effect of Exchange Rates on Cash and Cash Equivalents
(3)
(18)
(44)
Net Change in Cash and Cash Equivalents
(5)
(152)
(9)
Cash and Cash Equivalents at Beginning of Year
109 
261 
270 
Cash and Cash Equivalents at End of Year
104 
109 
261 
Eliminations
 
 
 
Condensed Consolidating Financial Information
 
 
 
Net Cash Provided by Operating Activities
0 
0 
0 
Cash Flows from Investing Activities:
 
 
 
Capital expenditures
0 
0 
0 
Cash related to deconsolidated Venezuela operations
 
0 
 
Increase (Decrease) in Restricted Cash and Investments
0 
0 
0 
Proceeds from sale of property, plant and equipment and other assets
0 
0 
0 
Payments to Acquire Businesses, Net of Cash Acquired
 
 
0 
Other
 
0 
0 
Net Cash Used in Investing Activities
0 
0 
0 
Cash Flows from Financing Activities:
 
 
 
Long-term debt borrowings, net of issuance costs
0 
0 
0 
Payments on and repurchases of long-term debt, including current portions and refinancing costs
0 
0 
0 
Increase (decrease) due from affiliates, net
0 
0 
0 
Net Cash Used in Financing Activities
0 
0 
0 
Effect of Exchange Rates on Cash and Cash Equivalents
0 
0 
0 
Net Change in Cash and Cash Equivalents
0 
0 
0 
Cash and Cash Equivalents at Beginning of Year
0 
0 
0 
Cash and Cash Equivalents at End of Year
$ 0 
$ 0 
$ 0 
Unaudited Quarterly Financial Data (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 2,032 
$ 2,033 
$ 2,056 
$ 2,051 
$ 2,053 
$ 2,062 
$ 2,061 
$ 2,053 
$ 8,172 
$ 8,229 
$ 6,777 
Network Access Costs
680 
675 
676 
694 
708 
706 
696 
723 
2,725 
2,833 
2,529 
Network Related Expenses
332 
337 
339 
338 
344 
369 
363 
356 
1,346 
1,432 
1,246 
Depreciation and Amortization
320 
319 
310 
301 
294 
296 
288 
288 
1,250 
1,166 
808 
Selling, General and Administrative Expenses
346 
348 
357 
356 
369 
364 
364 
370 
1,407 
1,467 
1,181 
Total Costs and Expenses
1,678 
1,679 
1,682 
1,689 
1,715 
1,735 
1,711 
1,737 
6,728 
6,898 
5,764 
Operating Income (Loss)
354 
354 
374 
362 
338 
327 
350 
316 
1,444 
1,331 
1,013 
Interest Income
1 
1 
1 
1 
0 
0 
0 
1 
4 
1 
1 
Interest Expense
(132)
(139)
(140)
(135)
(152)
(145)
(165)
(180)
(546)
(642)
(654)
Loss on modification and extinguishment of debt
0 
0 
(40)
0 
(55)
0 
(163)
0 
(40)
(218)
(53)
Venezuela deconsolidation charge
0 
0 
0 
0 
0 
(171)
0 
0 
0 
(171)
0 
Other, net
(6)
1 
(5)
(10)
3 
6 
(17)
(10)
(20)
(18)
(69)
Total Other Expense
(137)
(137)
(184)
(144)
(204)
(310)
(345)
(189)
(602)
(1,048)
(775)
Income (Loss) Before Income Taxes
217 
217 
190 
218 
134 
17 
5 
127 
842 
283 
238 
Income Tax Expense (Benefit)
(33)
74 
34 
90 
(3,189)
16 
18 
5 
165 
(3,150)
(76)
Net Income
250 
143 
156 
128 
3,323 
1 
(13)
122 
677 
3,433 
314 
Net Income (Loss) Per Share -Basic
$ 0.70 
$ 0.40 
$ 0.44 
$ 0.36 
$ 9.33 
$ 0.00 
$ (0.04)
$ 0.35 
$ 1.89 
$ 9.71 
$ 1.23 
Net Income (Loss) Per Share - Diluted
$ 0.69 
$ 0.39 
$ 0.43 
$ 0.36 
$ 9.24 
$ 0.00 
$ (0.04)
$ 0.35 
$ 1.87 
$ 9.58 
$ 1.21 
Recognized Income Tax Benefit
(16)
 
0 
 
(3,300)
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
7.00% 
 
 
 
 
 
 
 
7.00% 
 
 
Senior Notes due 2020 (8.625%)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on modification and extinguishment of debt
 
 
 
 
(55)
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
8.625% 
 
 
 
 
 
 
 
8.625% 
 
 
Senior Notes due 2019 (9.375%)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on modification and extinguishment of debt
 
 
(36)
 
 
 
 
 
(36)
 
 
Debt instrument, stated interest rate (as a percent)
9.375% 
 
 
 
 
 
 
 
9.375% 
 
 
Senior Notes due 2019 (8.125%)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on modification and extinguishment of debt
 
 
(82)
 
 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
8.125% 
 
 
 
 
 
 
 
8.125% 
 
 
Senior Notes due 2019 (8.875%)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on modification and extinguishment of debt
 
 
(18)
 
 
 
 
 
 
 
 
Debt instrument, stated interest rate (as a percent)
8.875% 
 
 
 
 
 
 
 
8.875% 
 
 
Tranche B 2022 Term Loans
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss on modification and extinguishment of debt
 
 
27 
 
 
 
 
 
 
 
 
BRAZIL
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Recognized Income Tax Benefit
35 
 
 
 
 
 
 
 
 
 
 
U.S. Internal Revenue Service (IRS)
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Recognized Income Tax Benefit
$ 110 
 
 
 
$ (3,300)
 
 
 
 
 
 
Subsequent Event (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Feb. 17, 2017
Tranche B 2024 [Member]
Subsequent Event [Member]
Feb. 17, 2017
Level 3 Financing [Member]
Tranche B 2024 [Member]
London Interbank Offered Rate (LIBOR) [Member]
Subsequent Event [Member]
Feb. 17, 2017
Level 3 Financing [Member]
Tranche B 2024 [Member]
London Interbank Offered Rate (LIBOR) [Member]
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
 
 
Long-term Debt, Gross
$ 11,009 
$ 11,025 
$ 4,611 
 
 
Debt Instrument, Interest Rate, Stated Percentage
7.00% 
 
 
 
225.00% 
Upfront basis point
 
 
 
0.25