Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | LEVEL 3 PARENT, LLC | |
Entity Central Index Key | 794,323 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $ 17.5 | |
Entity Common Stock, Shares Outstanding | 0 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | FY |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING REVENUES | ||||
Operating revenues | $ 1,391 | |||
Operating revenues - affiliate | 16 | |||
Total operating revenues | 1,407 | |||
OPERATING EXPENSES | ||||
Cost of services and products (exclusive of depreciation and amortization) | 690 | |||
Selling, general and administrative | 253 | |||
Operating expenses - affiliate | 24 | |||
Depreciation and amortization | 282 | |||
Total operating expenses | 1,249 | |||
OPERATING INCOME | 158 | |||
OTHER INCOME (EXPENSE) | ||||
Interest income | 1 | |||
Interest income - affiliate | 11 | |||
Interest expense | (80) | |||
Loss on modification and extinguishment of debt | 0 | |||
Venezuela deconsolidation charge | 0 | |||
Other income (expense), net | 3 | |||
Total other expense, net | (65) | |||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 93 | |||
Income tax (expense) benefit | (234) | |||
NET (LOSS) INCOME | $ (141) | |||
Predecessor | ||||
OPERATING REVENUES | ||||
Operating revenues | $ 6,870 | $ 8,173 | $ 8,230 | |
Operating revenues - affiliate | 0 | 0 | 0 | |
Total operating revenues | 6,870 | 8,173 | 8,230 | |
OPERATING EXPENSES | ||||
Cost of services and products (exclusive of depreciation and amortization) | 3,493 | 4,162 | 4,349 | |
Selling, general and administrative | 1,208 | 1,407 | 1,469 | |
Operating expenses - affiliate | 0 | 0 | 0 | |
Depreciation and amortization | 1,018 | 1,159 | 1,082 | |
Total operating expenses | 5,719 | 6,728 | 6,900 | |
OPERATING INCOME | 1,151 | 1,445 | 1,330 | |
OTHER INCOME (EXPENSE) | ||||
Interest income | 13 | 4 | 1 | |
Interest income - affiliate | 0 | 0 | 0 | |
Interest expense | (441) | (544) | (640) | |
Loss on modification and extinguishment of debt | (44) | (40) | (218) | |
Venezuela deconsolidation charge | 0 | 0 | (171) | |
Other income (expense), net | 14 | (23) | (19) | |
Total other expense, net | (458) | (603) | (1,047) | |
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 693 | 842 | 283 | |
Income tax (expense) benefit | (268) | (165) | 3,150 | |
NET (LOSS) INCOME | $ 425 | $ 677 | $ 3,433 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
NET (LOSS) INCOME | $ (141) | |||
OTHER COMPREHENSIVE (LOSS) INCOME: | ||||
Defined benefit pension plan adjustment, net of $0, ($3), $4 and ($2) tax. | 0 | |||
Foreign currency translation adjustment, net of ($17), ($46), $39 and $13 tax. | 18 | |||
Other comprehensive (loss) income | 18 | |||
COMPREHENSIVE (LOSS) INCOME | $ (123) | |||
Predecessor | ||||
NET (LOSS) INCOME | $ 425 | $ 677 | $ 3,433 | |
OTHER COMPREHENSIVE (LOSS) INCOME: | ||||
Defined benefit pension plan adjustment, net of $0, ($3), $4 and ($2) tax. | (1) | (6) | 8 | |
Foreign currency translation adjustment, net of ($17), ($46), $39 and $13 tax. | 81 | (80) | (162) | |
Other comprehensive (loss) income | 80 | (86) | (154) | |
COMPREHENSIVE (LOSS) INCOME | $ 505 | $ 591 | $ 3,279 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined benefit pension plan adjustments, tax effect | $ 0 | |||
Foreign currency translation adjustments, tax effect | $ (17) | |||
Predecessor | ||||
Defined benefit pension plan adjustments, tax effect | $ (3) | $ 4 | $ (2) | |
Foreign currency translation adjustments, tax effect | $ (46) | $ 39 | $ 13 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 297 | |
Restricted cash and securities | 5 | |
Assets held for sale | 140 | |
Accounts receivable, less allowance of $3 and $29 | 748 | |
Accounts receivable - affiliate | 13 | |
Note receivable - affiliate | 1,825 | |
Other | 117 | |
Total current assets | 3,145 | |
NET PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 9,555 | |
Accumulated depreciation | (143) | |
Net property, plant and equipment | 9,412 | |
Restricted cash and securities | 29 | |
GOODWILL AND OTHER ASSETS | ||
Goodwill | 10,837 | |
Customer relationships, net | 8,845 | |
Other intangible assets, net | 378 | |
Deferred tax assets | 426 | |
Other, net | 63 | |
Total goodwill and other assets | 20,549 | |
TOTAL ASSETS | 33,135 | |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 8 | |
Accounts payable | 695 | |
Accounts payable - affiliate | 41 | |
Accrued expenses and other liabilities | ||
Income and other taxes | 100 | |
Salaries and benefits | 136 | |
Interest | 109 | |
Current portion of deferred revenue | 258 | |
Current portion of deferred revenue - affiliate | 2 | |
Other | 57 | |
Total current liabilities | 1,406 | |
LONG-TERM DEBT | 10,882 | |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred credits | 1,093 | |
Deferred credits - affiliate | 6 | |
Deferred tax liability | 212 | |
Other | 264 | |
Total deferred credits and other liabilities | 1,575 | |
COMMITMENTS AND CONTINGENCIES (Note 14) | ||
MEMBER'S/STOCKHOLDERS' EQUITY | ||
Member's equity | 19,254 | |
Preferred stock, $.01 par value, authorized 0 and 10,000,000 shares, no shares issued or outstanding | 0 | |
Common stock, $.01 par value, authorized 0 and 433,333,333 shares, issued and outstanding 0 and 360,021,098 shares | 0 | |
Additional paid-in capital | 0 | |
Accumulated other comprehensive gain (loss) | 18 | |
(Accumulated deficit) | 0 | |
Total member's/stockholders’ equity | 19,272 | |
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | $ 33,135 | |
Predecessor | ||
ASSETS | ||
Cash and cash equivalents | $ 1,819 | |
Restricted cash and securities | 7 | |
Assets held for sale | 0 | |
Accounts receivable, less allowance of $3 and $29 | 712 | |
Accounts receivable - affiliate | 0 | |
Note receivable - affiliate | 0 | |
Other | 115 | |
Total current assets | 2,653 | |
NET PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 21,388 | |
Accumulated depreciation | (11,249) | |
Net property, plant and equipment | 10,139 | |
Restricted cash and securities | 31 | |
GOODWILL AND OTHER ASSETS | ||
Goodwill | 7,729 | |
Customer relationships, net | 860 | |
Other intangible assets, net | 55 | |
Deferred tax assets | 3,370 | |
Other, net | 51 | |
Total goodwill and other assets | 12,065 | |
TOTAL ASSETS | 24,888 | |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 7 | |
Accounts payable | 706 | |
Accounts payable - affiliate | 0 | |
Accrued expenses and other liabilities | ||
Income and other taxes | 116 | |
Salaries and benefits | 195 | |
Interest | 129 | |
Current portion of deferred revenue | 266 | |
Current portion of deferred revenue - affiliate | 0 | |
Other | 52 | |
Total current liabilities | 1,471 | |
LONG-TERM DEBT | 10,877 | |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred credits | 1,001 | |
Deferred credits - affiliate | 0 | |
Deferred tax liability | 248 | |
Other | 374 | |
Total deferred credits and other liabilities | 1,623 | |
COMMITMENTS AND CONTINGENCIES (Note 14) | ||
MEMBER'S/STOCKHOLDERS' EQUITY | ||
Member's equity | 0 | |
Preferred stock, $.01 par value, authorized 0 and 10,000,000 shares, no shares issued or outstanding | 0 | |
Common stock, $.01 par value, authorized 0 and 433,333,333 shares, issued and outstanding 0 and 360,021,098 shares | 4 | |
Additional paid-in capital | 19,800 | |
Accumulated other comprehensive gain (loss) | (387) | |
(Accumulated deficit) | (8,500) | |
Total member's/stockholders’ equity | 10,917 | |
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | $ 24,888 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 3 | |
Preferred stock, par value (in USD per share) | ||
Preferred stock, shares authorized | ||
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in USD per share) | ||
Common stock, shares authorized | ||
Common stock, shares issued | ||
Common stock, shares outstanding | ||
Predecessor | ||
Allowance for doubtful accounts | $ 29 | |
Preferred stock, par value (in USD per share) | $ 0.01 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Common stock, par value (in USD per share) | $ 0.01 | |
Common stock, shares authorized | 433,333,333 | |
Common stock, shares issued | 356,374,473 | |
Common stock, shares outstanding | 356,374,473 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING ACTIVITIES | ||||
Net (loss) income | $ (141) | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||
Depreciation and amortization | 282 | |||
Share-based compensation | 26 | |||
Loss on modification and extinguishment of debt | 0 | |||
Venezuela deconsolidation charge | 0 | |||
Net long-term debt issuance costs and premium amortization | (5) | |||
Accrued interest on long-term debt, net | 27 | |||
Deferred income taxes | 270 | |||
Other, net | (14) | |||
Changes in current assets and liabilities: | ||||
Accounts receivable | (1) | |||
Accounts payable | 35 | |||
Deferred revenue | (15) | |||
Other current assets and liabilities | (138) | |||
Other current assets and liabilities, affiliate | (17) | |||
Affiliate obligations | (1) | |||
Net cash provided by operating activities | 308 | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | (207) | |||
Cash related to deconsolidated Venezuela operations | 0 | |||
Purchase of marketable securities | 0 | |||
Maturity of marketable securities | 0 | |||
Proceeds from sale of property, plant and equipment and other assets | 0 | |||
Note receivable - affiliate | (1,825) | |||
Other, net | 0 | |||
Net cash used in investing activities | (2,032) | |||
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 0 | |||
Payments of long-term debt | (1) | |||
Distributions | (250) | |||
Net cash used in financing activities | (251) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | (2) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | (1,977) | |||
Cash, cash equivalents and restricted cash and securities at beginning of period | 2,308 | |||
Cash, cash equivalents and restricted cash and securities at end of period | 331 | $ 2,308 | ||
Supplemental cash flow information: | ||||
Income taxes paid, net | 10 | |||
Interest paid | 56 | |||
Non-cash investing and financing activities: | ||||
Long-term debt conversion into equity | 0 | |||
Accrued interest conversion into equity | 0 | |||
Predecessor | ||||
OPERATING ACTIVITIES | ||||
Net (loss) income | 425 | $ 677 | $ 3,433 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||
Depreciation and amortization | 1,018 | 1,159 | 1,082 | |
Share-based compensation | 132 | 156 | 141 | |
Loss on modification and extinguishment of debt | 44 | 40 | 218 | |
Venezuela deconsolidation charge | 0 | 0 | 171 | |
Net long-term debt issuance costs and premium amortization | 14 | 21 | 24 | |
Accrued interest on long-term debt, net | (47) | 21 | (57) | |
Deferred income taxes | 217 | 123 | (3,202) | |
Other, net | 13 | (12) | 36 | |
Changes in current assets and liabilities: | ||||
Accounts receivable | (16) | 31 | (87) | |
Accounts payable | (102) | 83 | 4 | |
Deferred revenue | 146 | 18 | 88 | |
Other current assets and liabilities | 70 | 26 | 4 | |
Other current assets and liabilities, affiliate | 0 | 0 | 0 | |
Affiliate obligations | 0 | 0 | 0 | |
Net cash provided by operating activities | 1,914 | 2,343 | 1,855 | |
INVESTING ACTIVITIES | ||||
Capital expenditures | (1,119) | (1,334) | (1,229) | |
Cash related to deconsolidated Venezuela operations | 0 | 0 | (83) | |
Purchase of marketable securities | (1,127) | 0 | 0 | |
Maturity of marketable securities | 1,127 | 0 | 0 | |
Proceeds from sale of property, plant and equipment and other assets | 1 | 3 | 4 | |
Note receivable - affiliate | 0 | 0 | 0 | |
Other, net | 0 | 0 | (14) | |
Net cash used in investing activities | (1,118) | (1,331) | (1,322) | |
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 4,569 | 764 | 4,832 | |
Payments of long-term debt | (4,917) | (820) | (5,051) | |
Distributions | 0 | 0 | 0 | |
Net cash used in financing activities | (348) | (56) | (219) | |
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 3 | (3) | (18) | |
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 451 | 953 | 296 | |
Cash, cash equivalents and restricted cash and securities at beginning of period | $ 2,308 | 1,857 | 904 | 608 |
Cash, cash equivalents and restricted cash and securities at end of period | 2,308 | 1,857 | 904 | |
Supplemental cash flow information: | ||||
Income taxes paid, net | 49 | 35 | 50 | |
Interest paid | 468 | 508 | 668 | |
Non-cash investing and financing activities: | ||||
Long-term debt conversion into equity | 0 | 0 | 333 | |
Accrued interest conversion into equity | $ 0 | $ 0 | $ 10 |
Consolidated Statements of Memb
Consolidated Statements of Member's/Stockholders' Equity - USD ($) $ in Millions | Total | MEMBER'S EQUITY | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED DEFICIT |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | Predecessor | $ 0 | |||||
Beginning balance (Predecessor) at Dec. 31, 2014 | $ 0 | $ 3 | $ 19,159 | $ (147) | (12,652) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Contributions | Predecessor | 0 | |||||
Distributions | Predecessor | 0 | |||||
Issuance of common stock through conversion of debt to equity | Predecessor | 1 | |||||
Common stock issued under employee stock benefit plans and other | Predecessor | 35 | |||||
Share-based compensation | Predecessor | 106 | |||||
Conversion of debt to equity | Predecessor | 342 | |||||
Contribution from affiliate | Predecessor | 0 | |||||
Other comprehensive (loss) income | Predecessor | (154) | |||||
Net (loss) income | Predecessor | $ 3,433 | 0 | 3,433 | |||
Ending balance (Predecessor) at Dec. 31, 2015 | 10,126 | 0 | 4 | 19,642 | (301) | (9,219) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | Predecessor | 42 | |||||
Contributions | Predecessor | 0 | |||||
Distributions | Predecessor | 0 | |||||
Issuance of common stock through conversion of debt to equity | Predecessor | 0 | |||||
Common stock issued under employee stock benefit plans and other | Predecessor | 37 | |||||
Share-based compensation | Predecessor | 121 | |||||
Conversion of debt to equity | Predecessor | 0 | |||||
Contribution from affiliate | Predecessor | 0 | |||||
Other comprehensive (loss) income | Predecessor | (86) | |||||
Net (loss) income | Predecessor | 677 | 0 | 677 | |||
Ending balance (Predecessor) at Dec. 31, 2016 | 10,917 | 0 | 4 | 19,800 | (387) | (8,500) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | Predecessor | 0 | |||||
Contributions | Predecessor | 0 | |||||
Distributions | Predecessor | 0 | |||||
Issuance of common stock through conversion of debt to equity | Predecessor | 0 | |||||
Common stock issued under employee stock benefit plans and other | Predecessor | 30 | |||||
Share-based compensation | Predecessor | 102 | |||||
Conversion of debt to equity | Predecessor | 0 | |||||
Contribution from affiliate | Predecessor | 0 | |||||
Other comprehensive (loss) income | Predecessor | 80 | |||||
Net (loss) income | Predecessor | 425 | 0 | 425 | |||
Ending balance (Predecessor) at Oct. 31, 2017 | 11,554 | 0 | 4 | 19,932 | (307) | (8,075) |
Beginning balance (Predecessor) at Dec. 31, 2016 | 10,917 | 0 | 4 | 19,800 | (387) | (8,500) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | 284 | |||||
Ending balance at Dec. 31, 2017 | 19,272 | 19,254 | 0 | 0 | 18 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | 0 | |||||
Beginning balance (Predecessor) at Oct. 31, 2017 | 11,554 | 0 | 4 | 19,932 | (307) | (8,075) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (141) | |||||
Ending balance at Dec. 31, 2017 | 19,272 | 19,254 | 0 | 0 | 18 | 0 |
Beginning balance at Nov. 01, 2017 | 19,617 | 0 | 0 | 0 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Contributions | 28 | |||||
Distributions | (250) | |||||
Issuance of common stock through conversion of debt to equity | 0 | |||||
Common stock issued under employee stock benefit plans and other | 0 | |||||
Share-based compensation | 0 | |||||
Conversion of debt to equity | 0 | |||||
Contribution from affiliate | 0 | |||||
Other comprehensive (loss) income | 18 | |||||
Net (loss) income | (141) | 0 | ||||
Ending balance at Dec. 31, 2017 | $ 19,272 | $ 19,254 | $ 0 | $ 0 | $ 18 | $ 0 |
Background and Summary of Signi
Background and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Background and Summary of Significant Accounting Policies | Background and Summary of Significant Accounting Policies General We are a facilities-based provider (that is, a provider that owns or leases a substantial portion of the property, plant and equipment necessary to provide our services) of a broad range of integrated communications services. We created our communications network by constructing our own assets and through a combination of purchasing other companies and purchasing or leasing facilities from others. Our network is an international, facilities-based communications network. We designed our network to provide communications services that employ and take advantage of rapidly improving underlying optical, Internet Protocol, computing and storage technologies. On October 31, 2016, we entered into an agreement and plan of merger (the "Merger Agreement") with CenturyLink, Inc., a Louisiana corporation ("CenturyLink"), Wildcat Merger Sub 1 LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink ("Merger Sub 1"), and WWG Merger Sub LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of CenturyLink ("Merger Sub 2"), pursuant to which, effective November 1, 2017, we were acquired by CenturyLink in a cash and stock transaction, including the assumption of our debt (the "CenturyLink Merger"). See Note 2 - CenturyLink Merger . Basis of Presentation On November 1, 2017, we became a wholly owned subsidiary of CenturyLink. On the date of the acquisition, our assets and liabilities were recognized at fair value. This revaluation has been reflected in our financial statements and, therefore, has resulted in a new basis of accounting for the successor period beginning on November 1, 2017. This new basis of accounting means that our financial statements for the successor periods will not be comparable to our previously reported financial statements, including the predecessor period financial statements in this report. The consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. As part of our consolidation policy, we consider our controlled subsidiaries, investments in businesses in which we are not the primary beneficiary or do not have effective control but have the ability to significantly influence operating and financial policies, and variable interests resulting from economic arrangements that give us rights to economic risks or rewards of a legal entity. We do not have variable interests in a variable interest entity where we are required to consolidate the entity as the primary beneficiary. Due to exchange restrictions and other conditions, effective at the end of the third quarter of 2015 we deconsolidated our Venezuelan subsidiary and began accounting for our investment in our Venezuelan subsidiary using the cost method of accounting. The factors that led to our conclusions at the end of the third quarter of 2015 continued to exist through the end of 2017. All significant intercompany accounts and transactions have been eliminated. Transactions with our non-consolidated affiliates (CenturyLink and its other subsidiaries, referred to herein as affiliates) have not been eliminated. In conjunction with our acquisition on November 1, 2017, we changed the definitions we use to classify expenses as cost of services and products and selling, general and administrative, and as a result, we reclassified previously reported amounts to conform to the current period presentation. We revised our definitions so that our expense classifications are more consistent with the expense classifications used by our new ultimate parent company, CenturyLink. These revisions resulted in the reclassification of $11 million , $0 million and $2 million from other income (expense) to selling, general and administrative for the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016 and 2015, respectively. These revisions also resulted in the reclassification of $77 million , $91 million and $84 million from depreciation and amortization to cost of services and products for the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016 and 2015, respectively. Although we continued as a surviving corporation and legal entity after the acquisition, the accompanying consolidated statements of operations, comprehensive income (loss), cash flows and member's/stockholder's equity (deficit) are presented for two periods: predecessor and successor, which relates to the period preceding the acquisition and the period succeeding the acquisition. Our current definitions are as follows: • Cost of services and products (exclusive of depreciation and amortization) are expenses incurred in providing products and services to our customers. These expenses include: employee-related expenses directly attributable to operating and maintaining our network (such as salaries, wages, benefits and professional fees); facilities expenses (which are third-party telecommunications expenses we incur for using other carriers' networks to provide services to our customers); rents and utilities expenses; costs for universal service funds ("USF") (which are federal and state funds that are established to promote the availability of telecommunications services to all consumers at reasonable and affordable rates, among other things, and to which we are often required to contribute); taxes (such as property and other taxes); and other expenses directly related to our network. • Selling, general and administrative expenses are expenses incurred in selling products and services to our customers, corporate overhead and other operating expenses. These expenses include: employee-related expenses (such as salaries, wages, internal commissions, benefits and professional fees) directly attributable to selling products or services and employee-related expenses for administrative functions; marketing and advertising; taxes (such as state and local franchise taxes and sales and use taxes) and fees; external commissions; bad debt expense; and other selling, general and administrative expenses. These expense classifications may not be comparable to those of other companies. We also have reclassified certain other prior period amounts to conform to the current period presentation. These changes had no impact on net income (loss) for any period. 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 2017, 2016 and 2015 . Foreign currency translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in member's/stockholders' equity and in the consolidated statements of comprehensive income (loss) 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 operations. Summary of Significant Accounting Policies Use of Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, revenue recognition, revenue reserves, network access costs, network access cost dispute reserves, allowance for doubtful accounts, depreciation, amortization, asset valuations, recoverability of assets (including deferred tax assets), impairment assessments, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of member's/stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenues, expenses and components of cash flows during the periods presented in our other consolidated financial statements. For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable. For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions. For all of these and other matters, actual results could differ materially from our estimates. Revenue Recognition 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 contracts, including and long-term indefeasible right of use, or IRUs, involving private line, wavelengths and certain leases for dark fiber, 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 estimated 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 billing credits. The credits are a reduction to revenue and, to date, have not been material. Affiliate Transactions We provide to our affiliates telecommunications services that we also provide to external customers. Services provided by us to our affiliates are recognized as operating revenue-affiliates in our consolidated statements of operations. Services provided to us from our affiliates are recognized as operating expenses-affiliates on our consolidated statements of operations. Because of the significance of the services we provide to our affiliates and our affiliates provide to us, the results of operations, financial position and cash flows presented herein are not necessarily indicative of the results of operations, financial position and cash flows we would have achieved had we operated as a stand-alone entity during the periods presented. We recognize intercompany charges at the amounts billed to us by our affiliates and we recognize intercompany revenue for services we bill to our affiliates. From time to time we make distributions to CenturyLink. Distributions are reflected on our consolidated statements of member's/stockholders' equity and the consolidated statements of cash flows reflects distributions made as financing activities. USF Surcharges, Gross Receipts Taxes and Other Surcharges In determining whether to include in our revenues and expenses the taxes and surcharges collected from customers and remitted to government authorities, including USF surcharges, sales, use, value added and some excise taxes, we assess, among other things, whether we are the primary obligor or principal taxpayer for the taxes assessed in each jurisdiction where we do business. In jurisdictions where we determine that we are the principal taxpayer, we record the surcharges on a gross basis and include them in our revenues and costs of services and products. In jurisdictions where we determine that we are merely a collection agent for the government authority, we record the taxes on a net basis and do not include them in our revenues and costs of services and products. Total revenue and cost of services and products on the consolidated statements of operations include USF contributions totaled $71 million , $331 million , $414 million and $364 million for the successor period ended December 31, 2017 , the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016 and 2015, respectively. Income Taxes Until November 1, 2017, we filed a consolidated federal income tax return with our eligible subsidiaries. Since CenturyLink's acquisition of us on November 1, 2017, we have been included in the consolidated federal income tax return of CenturyLink. Under CenturyLink's tax allocation policy, CenturyLink treats our consolidated results as if we were a separate taxpayer. The policy requires us to pay our tax liabilities in cash based upon our separate return taxable income. We are also included in the combined state tax returns filed by CenturyLink and the same payment and allocation policy applies. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating loss carryforwards ("NOLs"), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution. 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, 2017 and 2016 . Accounts Receivable and Allowance for Doubtful Accounts For predecessor periods, accounts receivable balances were recorded at the invoiced amount. 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. For predecessor periods, accounts receivable balances were written off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. For the successor period, accounts receivable balances were recorded at fair value for all balances receivable at the acquisition date and at the invoiced amount for those amounts invoiced after the acquisition date. We recognized bad debt expense, net of recoveries, of approximately $3 million for the successor period ended December 31, 2017, $16 million for the predecessor period ended October 31, 2017, $18 million for the predecessor year ended December 31, 2016 and $ 23 million in the predecessor year ended December 31, 2015 . Accounts receivable for all periods can bear interest. Concentration of Credit Risk 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 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 19% , 18% , 16% and 16% for the successor period ended December 31, 2017, for the predecessor period ended October 31, 2017 and for the predecessor years ended December 31, 2016 and 2015, respectively. Property, Plant and Equipment As a result of CenturyLink's acquisition of us, the purchase price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values at the date of acquisition. Therefore, the allocated fair values of the assets represent their new basis of accounting in our consolidated financial statements. This resulted in adjustments to our property, plant and equipment accounts, including accumulated depreciation at the acquisition date. The adjustments related to CenturyLink's acquisition of us are described in Note 2—CenturyLink Merger and Note 6—Property, Plant and Equipment. Property, plant and equipment acquired since the acquisition date is stated at original cost plus the estimated value of any associated legally or contractually required retirement obligations. Property, plant and equipment is depreciated using the straight-line method. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase. We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining useful life of our asset base. Our remaining useful life assessments anticipate the loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers leave the network. However, the asset is not retired until all customers no longer utilize the asset and we determine there is no alternative use for the asset. Capitalized labor and related costs associated with employees and contract labor working on capital projects were approximately $45 million for the successor period ended December 31, 2017, $239 million for the predecessor period ended October 31, 2017, $ 271 million for the predecessor year ended December 31, 2016 and $ 244 million for the predecessor year ended December 31, 2015. We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. We determine fair values by using a combination of comparable market values and discounted cash flows, as appropriate. Goodwill and Other Indefinite-Lived Intangible Assets Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 7 to 14 years, depending on the type of customer, using the straight-line method. We amortize our other intangible assets over an estimated life of 5 years. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized. Our long-lived intangible assets, other than goodwill, with indefinite lives are assessed for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment. These assets are carried at the estimated fair value at the time of acquisition and assets not acquired in acquisitions are recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other indefinite-lived intangible assets are reduced to their estimated fair value through an impairment charge to our consolidated statements of operations. We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment assessment is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment assessment. At the time of each impairment assessment date in 2017, 2016, and 2015, 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 no t impaired in 2017 and 2016. 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. Note that as a result of the merger the impairment testing date will change to October 31 for future successor periods. We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. As a result of CenturyLink's acquisition of us, we are now comprised of one reporting unit. See Note 3—Goodwill, Customer Relationships and Other Intangible Assets for additional information. Recently Adopted Accounting Pronouncements Restricted Cash On November 17, 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents as compared to the previous presentation, which explains only the change in cash and cash equivalents. ASU 2016-18 is effective January 1, 2018, but early adoption is permitted and requires retrospective application of the requirements to all previous periods presented. We early adopted ASU 2016-18 in the fourth quarter of 2017. Share-based Compensation In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 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 were 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. 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 flows. Adoption of the new standard also resulted in the recognition of excess tax benefits as a reduction to income tax expense of $22 million for 2016. Recent Accounting Pronouncements Goodwill Impairment On January 26, 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 simplifies the impairment testing for goodwill by changing the measurement for goodwill impairment. Under current rules, we are required to compute the implied fair value of goodwill to measure the impairment amount if the carrying value of a reporting unit exceeds its fair value. Under ASU 2017-04, the goodwill impairment charge will equal the excess of the reporting unit carrying value above fair value, limited to the amount of goodwill assigned to the reporting unit. We are required to adopt the provisions of ASU 2017-04 for any goodwill impairment tests, including our required annual test, occurring after January 1, 2020, but have the option to early adopt for any impairment test that we are required to perform. We have not determined if we will elect to early adopt the provisions of ASU 2017-04. The provisions of ASU 2017-04 would not have affected our last goodwill impairment assessment, but no assurance can be provided that the simplified testing methodology will not affect our goodwill impairment assessment in the future. Income Taxes On October 24, 2016, the FASB issued Accounting Standards Update 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory” ("ASU 2016-16"). ASU 2016-16 eliminates the current prohibition on the recognition of the income tax effects on the transfer of assets among our subsidiaries. After adoption of this ASU, the income tax effects associated with these asset transfers, except for the transfer of inventory, will be recognized in the period the asset is transferred versus the current deferral and recognition upon either the sale of the asset to a third party or over the remaining useful life of the asset. We adopted the provisions of ASU 2016-16 on January 1, 2018. The impact of adopting ASU 2016-16 had no material impact to our con |
CenturyLink Merger
CenturyLink Merger | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
CenturyLink Merger | CenturyLink Merger On November 1, 2017, pursuant to the terms and conditions of the previously-announced Merger Agreement, dated as of October 31, 2016, among Level 3, CenturyLink, Merger Sub I and Merger Sub 2, Merger Sub 1 merged with and into Level 3 (the “Initial Merger”) and immediately thereafter Level 3 merged with and into Merger Sub 2 (the “Subsequent Merger”), with Merger Sub 2 surviving such merger as an indirect wholly owned subsidiary of CenturyLink under the name of Level 3 Parent, LLC. In connection with the Initial Merger, each outstanding share of Level 3 Communications, Inc. common stock, par value $0.01 per share (the “LVLT Common Stock”), other than shares held by holders who have properly exercised appraisal rights and shares owned by CenturyLink, Level 3 or their respective subsidiaries, was converted into the right to receive $26.50 in cash, without interest, and 1.4286 shares of CenturyLink common stock, par value $1.00 per share (“CTL Common Stock”), with cash paid in lieu of fractional shares. In addition, as a result of the Initial Merger, (i) each outstanding Level 3 restricted stock unit award granted prior to April 1, 2014 or granted to an outside director of Level 3 was converted into the right to receive $26.50 in cash and 1.4286 shares of CTL Common Stock (and cash in lieu of fractional shares) with respect to each Level 3 share covered by such award, less applicable tax withholdings, and (ii) each outstanding Level 3 restricted stock unit award granted on or after April 1, 2014 (other than those granted to outside directors of Level 3) was converted into a restricted stock unit award relating to such number of shares of CTL Common Stock determined in accordance with a formula set forth in the Merger Agreement (the “Continuing RSU Awards”). The Continuing RSU Awards will remain subject to the same terms and conditions applicable to the original Level 3 awards immediately prior to their conversion, subject to certain exceptions. In connection with the closing of the Merger Agreement, we loaned $1.825 billion to CenturyLink in exchange for an unsecured demand note that bears interest at 3.5% per annum. The principal amount of such note is payable upon demand by Level 3 Parent but no later than November 1, 2020, and may be prepaid by CenturyLink at any time. The U.S. Department of Justice approved the acquisition subject to conditions of a consent decree on October 2, 2017, which requires the combined company to divest certain Level 3 metro network assets in the markets located in Albuquerque, New Mexico; Boise, Idaho; and Tucson, Arizona and the combined company will divest 24 strands of dark fiber connecting 30 specified city-pairs across the United States in the form of an Indefeasible Right of Use agreement. The metro network assets are classified as assets held for sale on the consolidated balance sheets. Our results of operations have been included in the consolidated results of operations of CenturyLink beginning November 1, 2017. CenturyLink recognized our assets and liabilities based on CenturyLink’s preliminary estimates of the fair value of the acquired tangible and intangible assets and assumed liabilities of us as of November 1, 2017, the consummation date of the acquisition, with the excess aggregate consideration recorded as goodwill. The final determination of the allocation of the aggregate consideration paid by CenturyLink in the combination will be based on the fair value of such assets and liabilities as of the acquisition date with any excess aggregate consideration to be recorded as goodwill. The estimation of such fair values and the estimation of lives of depreciable tangible assets and amortizable intangible assets will require significant judgment. As such, we have not completed our valuation analysis and calculations in sufficient detail necessary to arrive at the final estimates of the fair value of our assets acquired and liabilities assumed by CenturyLink, along with the related allocation to goodwill. The fair values of certain tangible assets, intangible assets, certain liabilities and residual goodwill are the most significant areas not yet finalized and therefore are subject to change. We expect to complete our final fair value determinations prior to the anniversary date of the acquisition. Our final fair value determinations may be significantly different than those reflected in our consolidated financial statements at December 31, 2017. The recognition of assets and liabilities at fair value will be reflected in our financial statements and therefore will result in a new basis of accounting for the “successor period” beginning on November 1, 2017. This new basis of accounting means that our financial statements for the successor periods will not be comparable to our previously reported financial statements, including the financial statements in this report. The following is our preliminary assignment of the aggregate consideration: November 1, 2017 (Dollars in millions) Cash, accounts receivable and other current assets $ 3,317 Property, plant and equipment 9,311 Identifiable intangible assets Customer relationships 8,964 Other 391 Other non-current assets 782 Current liabilities, excluding the current portion of long-term debt (1,461 ) Current portion of long-term debt (7 ) Long-term debt (10,888 ) Deferred credits and other liabilities (1,613 ) Goodwill 10,821 Aggregate consideration $ 19,617 We recognized $28 million , $85 million and $15 million of expenses associated with our activities surrounding the CenturyLink Merger for the successor period ended December 31, 2017, for the predecessor period ended October 31, 2017 and for the predecessor year ended December 31, 2016, respectively. As part of the acquisition accounting on November 1, 2017, we also included in our goodwill approximately $1 million for certain restricted stock awards and $47 million related to transaction costs, all of which were contingent on the completion of the acquisition and had no benefit to CenturyLink after the acquisition. The goodwill is attributable to strategic benefits, including enhanced financial and operational scale, market diversification and leveraged combined networks that we expect to realize. |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Customer Relationships and Other Intangible Assets | Goodwill, Customer Relationships and Other Intangible Assets Goodwill, customer relationships and other intangible assets consisted of the following: Successor Predecessor December 31, December 31, (Dollars in millions) Goodwill $ 10,837 7,729 Customer relationships, less accumulated amortization of $126 and $1,113 8,845 860 Other indefinite-life intangible assets — 15 Other intangible assets subject to amortization: Trade names, less accumulated amortization of $4 and $0 126 — Developed technology, less accumulated amortization of $9 and $189 252 40 Total other intangible assets, net $ 378 55 Our goodwill balance at December 31, 2017 includes $16 million of goodwill that was allocated to us from CenturyLink associated with differences in the deferred state income taxes that CenturyLink expects to realize due to its consolidation of our results of operations into its state tax returns. Total amortization expense for intangible assets for the successor period ended December 31, 2017 , the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016 and 2015 was $139 million , $168 million , $211 million and $ 227 million , respectively. As of December 31, 2017 , the gross carrying amount of goodwill, customer relationships, indefinite-life and other intangible assets was $ 20.199 billion . As of the successor date of December 31, 2017, the weighted average remaining useful lives of our finite-lived intangible assets was 11.9 years in total; 12.2 years for customer contracts and relationships, 4.8 years for trademarks, and 4.8 years for developed technology. We estimate that total amortization expense for intangible assets for the successor years ending December 31, 2018 through 2022 will be as follows: (Dollars in millions) 2018 $ 829 2019 829 2020 829 2021 829 2022 816 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following chart reflects our consolidated long-term debt, including unamortized discounts, premiums and debt issuance costs, but excluding intercompany debt: Successor Predecessor Interest Rates Maturities December 31, December 31, (Dollars in millions) Level 3 Parent, LLC 5.750% Senior Notes due 2022 (3) 5.750% 2022 $ 600 600 Subsidiaries Level 3 Financing, Inc. Senior Notes: Floating Rate Senior Notes due 2018 (2)(4) 6-Month LIBOR + 3.50% 2018 — 300 6.125% Senior Notes due 2021 (2) 6.125% 2021 640 640 5.375% Senior Notes due 2022 (2) 5.375% 2022 1,000 1,000 5.625% Senior Notes due 2023 (2) 5.625% 2023 500 500 5.125% Senior Notes due 2023 (2) 5.125% 2023 700 700 5.375% Senior Notes due 2025 (2) 5.375% 2025 800 800 5.375% Senior Notes due 2024 (2) 5.375% 2024 900 900 5.25% Senior Notes due 2026 (2) 5.250% 2026 775 775 Term Loans: Tranche B-III 2019 Term Loan (1)(4) LIBOR + 3.00% 2019 — 815 Tranche B 2020 Term Loan (1)(4) LIBOR + 3.00% 2020 — 1,796 Tranche B-II 2022 Term Loan (1)(4) LIBOR + 2.75% 2022 — 2,000 Tranche B 2024 Term Loan (4)(5) LIBOR + 2.25% 2024 4,611 — Capital Leases and other debt Various Various 179 183 Unamortized premiums (discounts), net 185 (13 ) Unamortized debt issuance costs — (112 ) Total long-term debt 10,890 10,884 Less current maturities (8 ) (7 ) Long-term debt, excluding current maturities $ 10,882 10,877 (1) The term loans were 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 Parent, LLC and Level 3 Communications, LLC. (3) The notes are not guaranteed by any of Level 3 Parent, LLC's subsidiaries. (4) The Tranche B 2024 Term Loan had an interest rate of 3.557% as of December 31, 2017. All other term loans were refinanced on February 22, 2017 as described below. The Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of the predecessor date of December 31, 2016. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of the predecessor date of December 31, 2016. The interest rate on the Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan were set with a minimum LIBOR of 1.00% . The interest rate on the Tranche B-II 2022 Term Loan was set with a minimum LIBOR of 0.75% and the interest rate on the Tranche B 2024 Term Loan is set with a minimum LIBOR of zero percent. The Floating Rate Senior Notes due 2018 had an interest rate of 4.762% as of the predecessor date of December 31, 2016. (5) The Tranche B 2024 Term Loan is a secured obligation and is guaranteed by Level 3 Parent, LLC and certain of its non-regulated subsidiaries. Senior Secured Term Loans As of the successor date of December 31, 2017, Level 3 Financing, Inc., Level 3 Parent, LLC's direct wholly owned subsidiary ("Level 3 Financing") had a senior secured credit facility consisting of a $4.611 billion Tranche B Term Loan due 2024. The Tranche B 2024 Term Loan carries an interest rate, in the case of base rate borrowings, equal to (i) the greater of the Prime Rate, the Federal Funds Effective Rate plus 50 basis points , or LIBOR plus 100 basis points (with all such terms and calculations as defined or further specified in the applicable credit agreement) plus (ii) 1.25% per annum. Any Eurodollar borrowings under the Tranche B 2024 Term Loan bear interest at LIBOR plus 2.25% per annum. The Tranche B 2024 Term Loan requires certain specified mandatory prepayments in connection with certain asset sales and other transactions, subject to certain significant exceptions. The obligations of Level 3 Financing, under the Tranche B 2024 Term Loan are, subject to certain exceptions, secured by certain assets of Level 3 Parent, LLC and, subject to pending regulatory approvals, certain of its material domestic telecommunication subsidiaries. Also, Level 3 Parent, LLC has guaranteed and, upon receipt of pending regulatory approvals, certain of its subsidiaries will guarantee the obligations of Level 3 Financing, under the Tranche B 2024 Term Loan. Subject to the receipt of pending regulatory approvals, Level 3 Communications, LLC and its material domestic subsidiaries will guarantee and, subject to certain exceptions, will pledge certain of their assets to secure the obligations of Level 3 Financing, under the Tranche B 2024 Term Loan. Senior Notes All of the notes reflected in the table above 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. Capital Leases As of the successor date of December 31, 2017 , we had $179 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 6.0% on average as of the successor date of December 31, 2017 . Debt Issuance Costs For the successor period ended December 31, 2017 , the predecessor period ended October 31, 2017, the predecessor years ended 2016 and 2015 , we deferred costs of $0 , $40 million , $11 million and $50 million , respectively, in connection with debt issuances. At the predecessor date of December 31, 2016 , there was $112 million of unamortized debt issuance costs. New Issuances On the predecessor date of February 22, 2017, we completed the refinancing of all of our then outstanding $4.611 billion senior secured term loans through the issuance of a new Tranche B 2024 Term Loan in the principal amount of $4.611 billion . The term loans refinanced were our Tranche B-III 2019 Term Loan, Tranche B 2020 Term Loan, and the Tranche B-II 2022 Term Loan. The new Tranche B 2024 Term Loan bears interest at LIBOR plus 2.25 percent, with a zero percent minimum LIBOR, and will mature on February 22, 2024. The Tranche B 2024 Term Loan was priced to lenders at par, with the payment to the lenders at closing of an upfront 25 basis point fee. We recognized a charge of approximately $44 million for modification and extinguishment in the first quarter of 2017 related to this refinancing. Repayments On the predecessor date of September 29, 2017, the $300 million aggregate principal amount plus accrued and unpaid interest due under the Floating Rate Senior Notes due 2018 was paid and we recognized a loss on extinguishment of less than $1 million . Aggregate Maturities of Long-Term Debt Set forth below is the aggregate principal amount of our long-term debt and capital leases (excluding unamortized premiums) maturing during the following years: (Dollars in millions) (1) 2018 $ 8 2019 7 2020 8 2021 650 2022 1,610 2023 and thereafter 8,422 Total long-term debt $ 10,705 (1) Actual principal paid in any year may differ due to the possible future refinancing of outstanding debt or the issuance of new debt. Covenants The term loan and senior notes of Level 3 Parent, LLC and Level 3 Financing, Inc. contain extensive affirmative and negative covenants. Such covenants include, among other things and subject to certain significant exceptions, restrictions on their ability to declare or pay dividends, repay certain other indebtedness, create liens, incur additional indebtedness, make investments, engage in transactions with their affiliates including CenturyLink and its other subsidiaries, dispose of assets and merge or consolidate with any other person. Also, Level 3 Parent, LLC, as well as Level 3 Financing, Inc., will be required to offer to purchase certain of its long-term debt securities under certain circumstances in connection with a "change of control" of Level 3 Parent, LLC. Certain of CenturyLink's and our debt instruments contain cross acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument. Compliance At the successor date of December 31, 2017 and the predecessor date of December 31, 2016, we believe we were in compliance with the financial covenants contained in their respective material debt agreements. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable The following table presents details of our accounts receivable balances: Successor Predecessor December 31, December 31, (Dollars in millions) Trade and purchased receivables $ 562 588 Earned and unbilled receivables 165 140 Other 24 13 Total accounts receivable 751 741 Less: allowance for doubtful accounts (1) (3 ) (29 ) Accounts receivable, less allowance $ 748 712 (1) CenturyLink's acquisition of us caused our assets and liabilities to be recognized at fair value and resulted in the allowance for doubtful accounts being reset as of the date of acquisition. We are exposed to concentrations of credit risk from our customers and other telecommunications service providers. We generally do not require collateral to secure our receivable balances. The following table presents details of our allowance for doubtful accounts: Beginning Balance Additions Deductions Ending Balance (Dollars in millions) December 31, 2017 (Successor) $ — 3 — 3 October 31, 2017 (Predecessor) 29 16 (12 ) 33 2016 (Predecessor) 32 18 (21 ) 29 2015 (Predecessor) $ 30 23 (21 ) 32 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Net property, plant and equipment is composed of the following: Successor Predecessor Depreciable Lives December 31, December 31, (Dollars in millions) Land N/A $ 348 179 Fiber conduit and other outside plant (1) 15-45 years 4,750 9,110 Central office and other network electronics (2) 3-10 years 2,134 8,846 Support assets (3) 3-30 years 2,019 3,023 Construction-in-progress (4) N/A 304 230 Gross property, plant and equipment 9,555 21,388 Accumulated depreciation (5) (143 ) (11,249 ) Net property, plant and equipment $ 9,412 10,139 (1) Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures. (2) Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers. (3) Support assets consist of buildings, data centers, computers and other administrative and support equipment. (4) Construction in progress includes construction and property of the aforementioned categories that has not been placed in service as it is still under construction. (5) CenturyLink's acquisition of us caused our assets and liabilities to be recognized at fair value and resulted in accumulated depreciation being reset as of the date of acquisition. Depreciation expense was $143 million for the successor period ended December 31, 2017 , $850 million for the predecessor period ended October 31, 2017, $948 million for the predecessor year ended December 31, 2016 and $855 million for the predecessor year ended December 31, 2015 . Asset Retirement Obligations At the successor date of December 31, 2017, our asset retirement obligations consisted of restoration requirements for leased facilities. At the predecessor dates of December 31, 2016 and 2015, our asset retirement obligations balance was primarily related to estimated future costs 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: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Balance at beginning of period (1) $ 45 89 90 85 Accretion expense 1 12 10 9 Liabilities settled (1 ) (7 ) (9 ) (8 ) Revision in estimated cash flows — — — 5 Effect of foreign currency rate change — — (2 ) (1 ) Balance at end of period $ 45 94 89 90 (1) CenturyLink's acquisition of us caused our assets and liabilities, including our asset retirement obligations, to be recognized at fair value as of the date of acquisition. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits Defined Contribution Plans Prior to the CenturyLink acquisition on November 1, 2017, we offered 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 was eligible to contribute, on a tax deferred basis, a portion of annual earnings generally not to exceed $18,000 in 2017 and $18,000 in 2016 . We matched 100% of employee contributions up to 4% of eligible earnings or applicable regulatory limits. Prior to the CenturyLink acquisition on November 1, 2017, our matching contributions were made with Level 3 common stock based on the closing stock price on each pay date. After our acquisition, matching contributions were made in cash. We made 401(k) Plan matching contributions of $7 million , $30 million , $37 million and $36 million for the successor period ended December 31, 2017, the predecessor period ended October 31, 2017, and for the predecessor years ended December 31, 2016 and 2015, respectively. Our matching contributions are recorded as compensation and included in cost of services of $1 million , $4 million , $5 million and $5 million for the successor period ended December 31, 2017, the predecessor period ended October 31, 2017 and for the predecessor years ended December 31, 2016 and 2015, respectively, and in selling, general and administrative expenses of $5 million , $26 million , $32 million and $31 million for the successor period ended December 31, 2017, the predecessor period ended October 31, 2017, and for the predecessor years ended December 31, 2016 and 2015, respectively. Other defined contribution plans we sponsored are individually not significant. On an aggregate basis, the expenses we recorded relating to these plans were approximately $1 million , $5 million , $6 million and $6 million for the successor period ended December 31, 2017, the predecessor period ended October 31, 2017, and for the predecessor years ended December 31, 2016 and 2015, 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 $147 million and $136 million as of December 31, 2017 and 2016 , respectively. The total plan benefit obligations were $165 million and $158 million as of December 31, 2017 and 2016 , respectively. Therefore, the total funded status was an obligation of $18 million and $22 million as of December 31, 2017 and 2016 , respectively. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation Prior to our acquisition by CenturyLink on November 1, 2017, we recorded share-based 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. Due to CenturyLink's acquisition of us, we now record share-based compensation expense that is allocated to us from CenturyLink. Based on many factors that affect the allocation, the amount of share-based compensation expense recorded at CenturyLink and ultimately allocated to us may fluctuate. We cash settle the share-based compensation expense allocated to us from CenturyLink. Share-based compensation expenses were included in cost of services and products, and selling, general, and administrative expenses in our consolidated statements of operations. During our predecessor period and years, we recognized compensation expense relating to awards granted to our employees under the Level 3 Communications, Inc. Stock Incentive Plan, as amended (the "Stock Plan"). The Stock Plan provided for accelerated vesting of stock awards upon retirement if an employee met 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. For the successor period ended December 31, 2017, the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016, and 2015, our total share-based compensation expense was approximately $26 million , $132 million , $156 million and $141 million , 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. For the predecessor period, actual awards under the program were based on corporate results as well as achievement of specific individual performance criteria during the bonus program period, and were paid in cash, at the sole discretion of the Compensation Committee of Level 3's predecessor Board of Directors. The annual discretionary bonus for the period through the closing of the merger on November 1, 2017 was paid in cash in November 2017 and the discretionary bonus awarded for the last two months of 2017 will be paid in cash in 2018 at the sole discretion of the Compensation Committee of CenturyLink's Board of Directors. The annual discretionary bonus was paid in cash for the 2016 and 2015 bonus programs. |
Products and Services Revenues
Products and Services Revenues | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Products and Services Revenues | Products and Services Revenues We are an integrated communications company engaged primarily in providing an array of communications services, including local voice, broadband, private line (including special access), network access, Ethernet, information technology, video and other ancillary services. We strive to maintain our customer relationships by, among other things, bundling our service offerings to provide our customers with a complete offering of integrated communications services. Since the November 1, 2017 closing of CenturyLink's acquisition of us, our operations are integrated into and are reported as part of the segments of CenturyLink. CenturyLink's chief operating decision maker ("CODM") has become our CODM, but reviews our financial information on an aggregate basis only in connection with our quarterly and annual reports that we file with the Securities and Exchange Commission ("SEC"). Otherwise, we do not provide our discrete financial information to the CODM on a regular basis. As such, we now have one reportable segment and we have reclassified our prior period results to conform to our current view. Total revenue consists of: • Core Network Services revenue from Internet Protocol ("IP") 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 our carrier of long distance voice services. • Affiliate revenues. 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 performance in our communications business is best gauged by analyzing revenue changes in Core Network Services. Core Network Services IP and data services primarily include our Internet services, Virtual Private Network ("VPN"), Content Delivery Network ("CDN"), media delivery, Vyvx broadcast and Managed Services. Our IP and high speed IP service is high quality and is offered in a variety of capacities. Our VPN service permits businesses of any size to replace multiple networks with a single, cost-effective solution that greatly simplifies the converged transmission of voice, video, and data. This convergence to a single platform can be obtained without sacrificing the quality of service or security levels of traditional ATM and frame relay offerings. VPN service also permits customers to prioritize network application traffic so that high priority applications, such as voice and video, are not compromised in performance by the flow of low priority applications such as email. Growth in transport (such as private line and wavelengths) and fiber revenue is largely dependent on increased demand for bandwidth services and available capital of companies requiring communications capacity for their own use or in providing capacity as a service provider to their customers. These expenditures may be in the form of monthly payments or, in the case of private line, wavelength or dark fiber services, either monthly payments or upfront payments. We are focused on providing end-to-end transport and fiber services to our customers to directly connect customer locations with a private network. Voice services comprise a broad range of local and enterprise voice services using VoIP and traditional circuit switch based technologies, including VoIP enhanced local service, SIP Trunking, local inbound service, Primary Rate Interface service, long distance service and toll-free service. Our voice services also include our comprehensive suite of audio, Web and video collaboration services. Colocation and data center services allow customers to place their network equipment and servers in suitable environments maintained by us with high-speed links providing on-net access to more than 60 countries. These services are secure, redundant and flexible to fit the varying needs of our customers. Services, which vary by location, include hosting network equipment used to transport high speed data and voice over our global network; providing managed IT services, installation, maintenance, storage and monitoring of enterprise services; and providing comprehensive IT outsource solutions. Security Services can be used to enable customers to address the growing threat of cyber-attack and allow customers to create a secure network, safeguard brand value, enable business continuity, and avoid complexity and cost. Our Security Services include: Secure Access which provides secure and encrypted connectivity for mobile users or remote offices; Cloud and Premises based Managed Firewall and Unified Threat Management Services including Intrusion Prevention and Detection service and Web Content filtering; network-based Distributed Denial of Service (DDoS) Mitigation, which protects against Internet based DDoS attacks; and Security Consulting services for Governance, Risk Management and Compliance. Security Services are sold stand-alone or in conjunction with Data Services. We believe a source of future incremental demand for our Core Network Services will be from customers that are seeking to distribute their feature rich content or video over the Internet. Revenue growth in this area is dependent on the continued increase in demand from customers and the pricing environment. An increase in the reliability and security of information transmitted over the Internet and declines in the cost to transmit data have resulted in increased utilization of e-commerce or Web-based services by businesses. Although the pricing for data services is currently relatively stable, the IP market is generally characterized by price compression and high unit growth rates depending upon the type of service. We have continued to experience price compression in the high-speed IP and voice services markets. Wholesale Voice Services We offer wholesale voice services that target large and existing markets. The revenue potential for wholesale voice services is large; however, pricing is expected to continue to decline over time as a result of the new low-cost IP and optical-based technologies. In addition, the market for wholesale voice services is being targeted by many competitors, several of which are larger and have more financial resources than us. Our total revenues for our products and services consisted of the following categories: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Core network services revenues $ 1,331 6,543 7,767 7,757 Wholesale voice services 60 327 406 473 Affiliate revenues 16 — — — Total operating revenues $ 1,407 6,870 8,173 8,230 The following table presents operating revenues for the predecessor period ended October 31, 2017 and the successor period ended December 31, 2017 as well as total assets as of the successor date of December 31, 2017 by geographic region: Total Assets Revenues Successor Successor Predecessor December 31, 2017 Period Ended December 31, 2017 Period Ended October 31, 2017 (Dollars in millions) North America $ 27,776 1,155 5,651 EMEA 1,192 128 607 Latin America 4,167 124 612 Total $ 33,135 1,407 6,870 |
Affiliate Transactions
Affiliate Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Affiliate Transactions | Affiliate Transactions We provide to our affiliates telecommunications services that we also provide to external customers. Whenever possible, costs are directly assigned to our affiliates for the services they use. If costs cannot be directly assigned, they are allocated among all affiliates based upon cost causative measures; or if no cost causative measure is available, these costs are allocated based on a general allocator. These cost allocation methodologies are reasonable. From time to time, we adjust the basis for allocating the costs of a shared service among affiliates. Such changes in allocation methodologies are generally billed prospectively. We also purchase services from our affiliates including telecommunication services, insurance, flight services and other support services such as legal, regulatory, finance and accounting, tax, human resources and executive support. Subsequent Event In January 2018, we distributed $150 million to CenturyLink. |
Fair Value Disclosure
Fair Value Disclosure | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosure | Fair Value Disclosure Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, note receivable-affiliate and long-term debt, excluding capital lease and other obligations. Due to their short-term nature, the carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair values. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB. We determined the fair values of our long-term debt, including the current portion, based primarily on inputs other than quoted market prices in active markets that are either directly or indirectly observable such as discounted future cash flows using current market interest rates. The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: Input Level Description of Input Level 1 Observable inputs such as quoted market prices in active markets. Level 2 Inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 Unobservable inputs in which little or no market data exists. The following table presents the carrying amounts and estimated fair values of our long-term debt, excluding capital lease and other obligations, as well as the input level used to determine the fair values indicated below: As of December 31, 2017 (Successor) As of December 31, 2016 (Predecessor) Input Level Carrying Amount Fair Value Carrying Amount Fair Value (Dollars in million) Liabilities-Long-term debt, excluding capital lease and other obligations 2 $ 10,711 10,528 10,701 10,954 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was signed into law. The Tax Act significantly changes U.S. tax law. The Tax Act reduces the U.S. corporate income tax rate from a maximum of 35% to 21% for all corporations, effective January 1, 2018, and makes certain changes to U.S. taxation of income earned by foreign subsidiaries, capital expenditures, interest expense and various other items. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21%, we revalued our net deferred tax assets at December 31, 2017 and recognized a provisional $195 million tax expense in our consolidated statement of operations for the year ended December 31, 2017. The Tax Act imposed a one-time repatriation tax on certain earnings of foreign subsidiaries. The Tax Act also includes certain anti-abuse and base erosion provisions that may impact the amount of U.S. tax that we pay with respect to income earned by our foreign subsidiaries. We have not yet been able to make a reasonable estimate of the impact of these provisions and continue to account for these items based on our existing accounting under U.S. GAAP and the provisions of the tax laws that were in effect prior to the Tax Act's enactment. On December 22, 2017, the SEC staff addressed the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. We have provisionally recognized the tax impacts related to the revaluation of deferred tax assets and liabilities in the amount noted above in our consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from our provisional amount due to additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the Tax Act. The change from our current provisional estimates will be reflected in our future statements of operations and could be material. We expect to complete the accounting by the time CenturyLink files its 2017 U.S. corporate income tax return in the fourth quarter of 2018, although we cannot assure you of this. Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Income tax expense (benefit) was as follows: Federal Current $ — — — — Deferred 231 193 177 (2,941 ) State Current 2 7 4 3 Deferred 6 16 27 (246 ) Foreign Current 4 39 41 33 Deferred (9 ) 13 (84 ) 1 Total income tax expense (benefit) $ 234 268 165 (3,150 ) Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Income tax expense was allocated as follows: Income tax expense in the consolidated statements of operations: Attributable to income $ 234 268 165 (3,150 ) Member's/Stockholders' equity: Tax effect of the change in accumulated other comprehensive loss $ 17 49 (43 ) (11 ) The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Statutory federal income tax rate 35.0 % 35.0 % 35.0 % 35.0 % State income taxes, net of federal income tax benefit 3.6 % 2.9 % 3.7 % 5.2 % Tax Reform/US Federal Law Changes 210.6 % — % (13.2 )% — % Transaction costs 11.3 % — % — % — % Change in liability of unrecognized tax position 1.2 % 0.1 % 0.1 % (0.1 )% Net foreign income tax (19.3 )% 0.9 % (6.7 )% 26.6 % Permanent items 5.0 % 1.8 % 1.2 % 2.6 % Change in US valuation allowance — % — % — % (1,199.8 )% Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting 0.1 % (0.5 )% (2.4 )% — % Research and development costs (0.9 )% (1.2 )% — % — % Non-deductible loss on deconsolidation — % — % — % 20.2 % Other, net 5.0 % (0.3 )% 1.9 % (2.7 )% Effective income tax rate 251.6 % 38.7 % 19.6 % (1,113.0 )% The successor period ended December 31, 2017 effective tax rate is 251.6% compared to 38.7% for the predecessor period ended October 31, 2017, 19.6% for the predecessor year ended December 31, 2016 and (1,113)% for the predecessor year ended December 31, 2015. The effective tax rate for the successor period ended December 31, 2017 reflects $195 million of an estimated one-time income tax expense related to income tax law changes under the Tax Act enacted in 2017. The predecessor year ended December 31, 2016 reflects a $110 million estimated one-time income tax benefit related to newly issued regulations under Internal Revenue Code Section 987 addressing the taxation of foreign currency translations gains and losses arising from foreign branches, as well as $82 million of income tax benefit related to the release of foreign valuation allowances, primarily in Germany, Brazil and Mexico. The predecessor year ended December 31, 2015 effective tax rate reflects an estimated $3.3 billion income tax benefit related to the release of the majority of the valuation allowance against our U.S. federal and state deferred tax assets. The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows: Successor Predecessor December 31, December 31, (Dollars in millions) Deferred tax assets Deferred revenue $ 256 364 Net operating loss carry forwards 3,633 4,550 Property, plant and equipment 63 95 Other 282 471 Gross deferred tax assets 4,234 5,480 Less valuation allowance (942 ) (862 ) Net deferred tax assets 3,292 4,618 Deferred tax liabilities Deferred revenue (44 ) (57 ) Property, plant and equipment (689 ) (962 ) Intangible assets (2,329 ) (357 ) Other (16 ) (120 ) Gross deferred tax liabilities (3,078 ) (1,496 ) Net deferred tax assets $ 214 3,122 Of the $214 million and $3.122 billion net deferred tax assets at December 31, 2017 and 2016, respectively, $212 million and $248 million is reflected as a long-term liability and $426 million and $3.370 billion is reflected as a net noncurrent deferred tax asset at December 31, 2017 and 2016, respectively. During the twelve months ended December 31, 2017, we completed an extensive analysis of our Internal Revenue Code ("IRC") Section 382 limitation that resulted in an increase of the amount of net operating loss carry forwards as of December 31, 2017 by approximately $1.0 billion on a pre-tax basis that was recorded in purchase accounting. At December 31, 2017, we had federal NOLs of $9.9 billion and state NOLs of $10 billion . If unused, the NOLs will expire between 2022 and 2035. At the successor date of December 31, 2017, we had $15 million of federal tax credits. At December 31, 2017, we had foreign NOLs of $5.8 billion . We establish valuation allowances when necessary to reduce the deferred tax assets to amounts we expect to realize. As of December 31, 2017, a valuation allowance of $0.9 billion was established as it is more likely than not that this amount of net operating loss and tax credit carryforwards will not be utilized prior to expiration. Our valuation allowance at December 31, 2017 and 2016 is primarily related to foreign and state NOL carryforwards. This valuation allowance increased by $80 million during 2017. 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 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 share 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. 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. A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from the successor period November 1 to December 31, 2017, the predecessor period January 1 to October 31, 2017 and the predecessor year ended December 31, 2016 is as follows: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 (Dollars in millions) Unrecognized tax benefits at beginning of period $ 20 18 18 Tax positions of prior periods netted against deferred tax assets — — (1 ) Increase (decrease) in tax positions taken in the prior period 1 — (1 ) Increase in tax positions taken in the current period — 2 2 Decrease from the lapse of statute of limitations — — — Unrecognized tax benefits at end of period $ 21 20 18 The total amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate was $20 million , $19 million and $17 million for the successor period ended December 31, 2017, the predecessor period ended October 31, 2017 and the predecessor year ended 2016, respectively. Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense. We had accrued interest (presented before related tax benefits) of approximately $20 million and $18 million at December 31, 2017 and 2016, respectively. We, or at least one of our affiliates, 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. Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement of certain disputed issues, and (iv) the administrative practices of applicable taxing jurisdictions, it is reasonably possible that the related unrecognized tax benefits for uncertain tax positions previously taken may decrease by up to $3 million within the next 12 months. The actual amount of such decrease, if any, will depend on several future developments and events, many of which are outside our control. 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. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) Operating Revenues Operating Income Net Income (Loss) (Dollars in millions) 2016 First quarter (predecessor) $ 2,051 362 128 Second quarter (predecessor) 2,057 375 156 Third quarter (predecessor) 2,033 354 143 Fourth quarter (predecessor) 2,032 354 250 Total $ 8,173 1,445 677 2017 First quarter (predecessor) $ 2,048 337 95 Second quarter (predecessor) 2,062 353 154 Third quarter (predecessor) 2,059 349 157 Month ended October 31 (predecessor) 701 112 19 Two months ended December 31 (successor) 1,407 158 (141 ) Total $ 8,277 1,309 284 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. In the two months ended December 31, 2017 we recognized a $195 million income tax expense related to the Tax Act. |
Commitments, Contingencies and
Commitments, Contingencies and Other Items | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 $88 million and are included in “Other” current liabilities and “Other Liabilities” in our consolidated balance sheet at the successor date of December 31, 2017. The establishment of an accrual does not mean that actual funds have been set aside to satisfy a given contingency. Thus, the resolution of a particular contingency for the amount accrued would have no effect on our results of operations but could materially adversely affect our cash flows for the affected period. We review our accruals at least quarterly and adjust them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Below is a description of material legal proceedings and other contingencies pending at December 31, 2017. Although we believe we have accrued for these matters in accordance with the accounting guidance for contingencies, contingencies are inherently unpredictable and it is possible that results of operations or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, one or more of these matters. For those contingencies in respect of which we believe it is reasonably possible that a loss may result that is materially in excess of the accrual (if any) established for the matter, we have either provided an estimate of such possible loss or range of loss or included a statement that such an estimate cannot be made. In addition to the contingencies described below, we are party to many other legal proceedings and contingencies, the resolution of which are not expected to materially affect our financial condition or future results of operations beyond the amounts accrued. Rights-of-Way Litigation We have been 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 asserted 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 sought damages on theories of trespass, unjust enrichment and slander of title and property, as well as punitive damages. We 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 expected that, absent settlement of these actions, plaintiffs in the pending lawsuits would 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 and thereafter presented these proposed settlements to the applicable courts. 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 the remaining action and intends to defend it vigorously if a satisfactory settlement is not ultimately approved for all affected landowners. Additionally, given the now-final resolution of all but the last of these matters, management anticipates excluding specific discussion of them in our future reports. 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 $15 million at the successor date of December 31, 2017. We challenged the 2002 tax period assessments via administrative and then judicial review processes. In October 2011, the highest administrative review tribunal (the Tribunal) decided the central issue underlying the 2002 tax period assessments in the government's favor, while denying a portion of the assessment on procedural grounds. We then appealed the Tribunal's decision to the judicial court in Peru. After further development of the record, the first judicial level decided the central issue in our favor. We and SUNAT filed cross-appeals. In May 2017, the court of appeal issued a decision reversing the first judicial level. In June 2017, we filed an appeal of the decision to the Supreme Court of Justice, the final judicial level. A final decision on this case is pending. In October 2013, the Tribunal decided the central issue underlying the year 2001 tax period assessments in the government's favor, while denying a portion of the assessment on procedural grounds. We appealed that decision to the judicial court in Peru. After further development of the record, the first judicial court issued a ruling against us. In June 2017, we filed an appeal with the court of appeal. An oral hearing took place before the court of appeals on October 18, 2017. In November 2017, the court of appeals issued a decision affirming the lower court’s decision and we filed an appeal of the decision to the Supreme Court of Justice, the final judicial level. That appeal is pending. 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 against the asserted claims, which aggregate to approximately $29 million at the successor date of December 31, 2017. Brazilian Tax Claims In December 2004, March 2009, April 2009 and July 2014, the São Paulo state tax authorities issued tax assessments against one of our Brazilian subsidiaries for the Tax on Distribution of Goods and Services (“ICMS”) with respect to revenue from leasing movable properties (in the case of the December 2004, March 2009 and July 2014 assessments) and revenue from the provision of Internet access services (in the case of the April 2009 and July 2014 assessments), by treating such activities as the provision of communications services, to which the ICMS tax applies. During the third quarter of 2014, we released an accrual of $6 million for tax, penalty and associated interest corresponding to the ICMS applicable on the provision of Internet access services due to the expiration of the statute of limitations for the January 2008 to June 2009 tax periods. In September 2002, July 2009 and May 2012, the Rio de Janeiro state tax authorities issued tax assessments to the same Brazilian subsidiary on similar issues. We have filed objections to these assessments, arguing that the lease of assets and the provision of Internet access are not communication services subject to ICMS. The objections to the September 2002, December 2004 and March 2009 assessments were rejected by the respective state administrative courts, and we have appealed those decisions to the judicial courts. In October 2012 and June 2014, we received favorable rulings from the lower court on the December 2004 and March 2009 assessments regarding equipment leasing, but those rulings are subject to appeal by the state. No ruling has been obtained with respect to the September 2002 assessment. The objections to the April and July 2009 and May 2012 assessments are still pending final administrative decisions. The July 2014 assessment was confirmed during the fourth quarter of 2014 at the first administrative level and we appealed this decision to the second administrative level. During the fourth quarter of 2014, we entered into an amnesty with the Rio de Janeiro state tax authorities with respect to potential ICMS liability for the 2008 tax period. As a result, we paid $5 million and released an accrual of $3 million of tax corresponding to the ICMS applicable on the provision of Internet access services in the fourth quarter of 2014. We are vigorously contesting all such assessments in both states and, in particular, view the assessment of ICMS on revenue from leasing movable properties to be without merit. Nevertheless, we believe it is reasonably possible that these assessments could result in a loss of up to $53 million at the successor date of December 31, 2017 in excess of the accruals established for these matters. Other Matters We have recently been notified of a qui tam action pending against Level 3 Communications, Inc., certain former employees and others in the United States District Court for the Eastern District of Virginia, captioned United States of America ex rel., Stephen Bishop v. Level 3 Communications, Inc. et al. The original qui tam complaint was filed under seal on November 26, 2013, and an amended complaint was filed under seal on June 16, 2014. The court unsealed the complaints on October 26, 2017. The amended complaint alleges that we, principally through two former employees, submitted false claims and made false statements to the government in connection with two government contracts. The relator seeks damages in this lawsuit of approximately $50 million , subject to trebling, plus statutory penalties, pre-and-post judgment interest, and attorney’s fees. The case is currently stayed. We are evaluating our defenses to the claims. At this time, we do not believe it is probable we will incur a material loss. If, contrary to our expectations, the relator prevails in this matter and proves damages at or near $50 million , and is successful in having those damages trebled, the outcome could have a material adverse effect on our results of operations in the period in which a liability is recognized and on our cash flows for the period in which any damages are paid. The two former Level 3 employees named in the qui tam amended complaint and others were also indicted in the United States District Court for the Eastern District of Virginia on October 3, 2017, and charged with, among other things, accepting kickbacks from a subcontractor, who was also indicted, for work to be performed under a prime government contract. We are fully cooperating in the government’s investigations in this matter. 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, 2017 and December 31, 2016 , we had outstanding letters of credit or other similar obligations of approximately $36 million and $39 million , respectively, of which $30 million and $33 million are collateralized by cash that is reflected on the consolidated balance sheets as restricted cash and securities. We do not believe exposure to loss related to our letters of credit is material. 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. The right-of-way agreements and leases have various expiration dates through 2118 . Payments under these right-of-way agreements were $35 million in the successor period ended December 31, 2017 , $164 million in the predecessor period ended October 31, 2017, $205 million in the predecessor year ended December 31, 2016 and $211 million in the predecessor year ended December 31, 2015 . 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 2150 . Rent expense, including common area maintenance, under non-cancelable lease agreements was $60 million in the successor period ended December 31, 2017 , $283 million in the predecessor period ended October 31, 2017, $347 million in the predecessor year ended December 31, 2016 and $357 million in the predecessor year ended December 31, 2015 . 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, 2017 (dollars in millions): Right-of-Way Agreements Operating Leases Total Future Minimum Sublease Receipts 2018 $ 173 288 461 3 2019 90 251 341 2 2020 77 217 294 1 2021 60 151 211 1 2022 56 128 184 1 Thereafter 464 507 971 1 $ 920 1,542 2,462 9 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, 2018 , if we do not consider it likely that we will cancel the right of way agreement within the next year. Environmental Contingencies In connection with largely historical operations, we have responded to or been notified of potential environmental liability at approximately 180 properties. We are engaged in addressing or have litigated environmental liabilities at many of those properties. We could potentially be held liable, jointly, or severally, and without regard to fault, for the costs of investigation and remediation of these sites. The discovery of additional environmental liabilities or changes in existing environmental requirements could have a material adverse effect on our business. 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. The following table summarizes our purchase commitments at December 31, 2017 (dollars in millions): 2018 2019 2020 2021 2022 Thereafter Total Cost of Access Services $ 115 52 35 15 7 2 226 Third-Party Maintenance Services 60 41 32 19 18 68 238 $ 175 93 67 34 25 70 464 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The table below summarizes changes in accumulated other comprehensive income (loss) recorded on our consolidated balance sheet by component for the predecessor period ended October 31, 2017 and the successor period ended December 31, 2017: Pension Plans Foreign Currency Translation Adjustments and Other Total (Dollars in millions) Balance at December 31, 2016 (predecessor) $ (34 ) (353 ) (387 ) Other comprehensive (loss) income before reclassifications (3 ) 81 78 Amounts reclassified from accumulated other comprehensive loss 2 — 2 Net other comprehensive (loss) income (1 ) 81 80 Balance at October 31, 2017 (predecessor) $ (35 ) (272 ) (307 ) Balance at November 1, 2017 (successor) $ — — — Other comprehensive income before reclassifications — 18 18 Amounts reclassified from accumulated other comprehensive loss — — — Net other comprehensive income — 18 18 Balance at December 31, 2017 (successor) $ — 18 18 |
Other Financial Information
Other Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Financial Information | Other Financial Information Other Current Assets The following table presents details of other current assets in our consolidated balance sheets: Successor Predecessor December 31, December 31, (Dollars in millions) Prepaid expenses $ 68 82 Material, supplies and inventory 3 3 Deferred activation and installation charges 17 5 Other 29 25 Total other current assets $ 117 115 Other Current Liabilities The following table presents details of other current liabilities in our consolidated balance sheets: Successor Predecessor December 31, December 31, (Dollars in millions) Self insurance $ 11 12 Legal and tax reserves 31 18 Other 15 22 Total other current liabilities $ 57 52 |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Consolidating Financial Information [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information Level 3 Financing, Inc., a wholly owned subsidiary, has issued Senior Notes that are unsecured obligations of Level 3 Financing, Inc.; however, they are also fully and unconditionally and jointly and severally guaranteed on an unsecured senior basis by Level 3 Parent, LLC 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 (loss), 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 Parent, LLC. These transactions are eliminated in our consolidated results. Condensed Consolidating Statements of Comprehensive Income (Loss) For the period ended December 31, 2017 (Successor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUE Operating revenues $ — — 748 671 (28 ) 1,391 Operating revenues - affiliate — — 16 — — 16 Total operating revenues — — 764 671 (28 ) 1,407 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 418 300 (28 ) 690 Selling, general and administrative 1 3 179 70 — 253 Operating expenses - affiliate — — 24 — — 24 Depreciation and amortization — — 117 165 — 282 Total costs and expenses 1 3 738 535 (28 ) 1,249 OPERATING (LOSS) INCOME (1 ) (3 ) 26 136 — 158 OTHER INCOME (EXPENSE) Interest income — — 1 — — 1 Interest income - affiliate 11 — — — — 11 Interest expense (5 ) (72 ) — (3 ) — (80 ) Interest income (expense) - affiliates, net 251 368 (578 ) (41 ) — — Equity in net (losses) earnings of subsidiaries (827 ) (15 ) 71 — 771 — Other income, net 1 — 2 — — 3 Total other expense, net (569 ) 281 (504 ) (44 ) 771 (65 ) (LOSS) INCOME BEFORE INCOME TAXES (570 ) 278 (478 ) 92 771 93 Income tax benefit (expense) 429 (1,105 ) 433 9 — (234 ) NET INCOME (LOSS) (141 ) (827 ) (45 ) 101 771 (141 ) Other comprehensive income, net of income taxes 18 — — 18 (18 ) 18 COMPREHENSIVE INCOME (LOSS) $ (123 ) $ (827 ) $ (45 ) $ 119 $ 753 $ (123 ) Condensed Consolidating Statements of Comprehensive Income (Loss) For the period ended October 31, 2017 (Predecessor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUES Operating revenues $ — — 3,108 3,891 (129 ) 6,870 Total operating revenues — — 3,108 3,891 (129 ) 6,870 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 1,942 1,680 (129 ) 3,493 Selling, general and administrative 4 3 942 259 — 1,208 Depreciation and amortization — — 356 662 — 1,018 Total costs and expenses 4 3 3,240 2,601 (129 ) 5,719 OPERATING (LOSS) INCOME (4 ) (3 ) (132 ) 1,290 — 1,151 OTHER INCOME (EXPENSE) Interest income — — 12 1 — 13 Interest income (expense) - affiliate, net 1,260 1,890 (2,896 ) (254 ) — — Interest expense (30 ) (397 ) (2 ) (12 ) — (441 ) Loss on modification and extinguishment of debt — (44 ) — — — (44 ) Equity in net (losses) earnings of subsidiaries (815 ) (2,138 ) 692 — 2,261 — Other income (expense) , net 3 — 15 (4 ) — 14 Total other expense, net 418 (689 ) (2,179 ) (269 ) 2,261 (458 ) INCOME (LOSS) BEFORE INCOME TAXES 414 (692 ) (2,311 ) 1,021 2,261 693 Income tax benefit (expense) 11 (123 ) (2 ) (154 ) — (268 ) NET INCOME (LOSS) 425 (815 ) (2,313 ) 867 2,261 425 Other comprehensive income, net of income taxes 80 — — — — 80 COMPREHENSIVE INCOME (LOSS) $ 505 (815 ) (2,313 ) 867 2,261 505 Condensed Consolidating Statements of Comprehensive Income (Loss) For the year ended December 31, 2016 (Predecessor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUES Operating revenues $ — $ — $ 3,558 $ 4,747 $ (132 ) 8,173 Total operating revenues — — 3,558 4,747 (132 ) 8,173 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 2,249 2,045 (132 ) 4,162 Selling, general and administrative 16 5 1,025 361 — 1,407 Depreciation and amortization — — 372 787 — 1,159 Total costs and expenses 16 5 3,646 3,193 (132 ) 6,728 OPERATING (LOSS) INCOME (16 ) (5 ) (88 ) 1,554 — 1,445 OTHER INCOME (EXPENSE) Interest income — — 3 1 — 4 Interest income (expense) - affiliate, net 1,385 2,113 (3,215 ) (283 ) — — Interest expense (36 ) (505 ) (2 ) (1 ) — (544 ) Equity in net (losses) earnings of subsidiaries (669 ) (2,033 ) 757 — 1,945 — Other (expense) income, net (1 ) (39 ) 2 (25 ) — (63 ) Total other income (expense), net 679 (464 ) (2,455 ) (308 ) 1,945 (603 ) INCOME (LOSS) BEFORE INCOME TAXES 663 (469 ) (2,543 ) 1,246 1,945 842 Income tax benefit (expense) 14 (200 ) (2 ) 23 — (165 ) NET INCOME (LOSS) 677 (669 ) (2,545 ) 1,269 1,945 677 Other comprehensive (loss) income, 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 (Predecessor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUES Operating revenues $ — — 3,326 5,077 (173 ) 8,230 Total operating revenues — — 3,326 5,077 (173 ) 8,230 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 2,201 2,321 (173 ) 4,349 Selling, general and administrative 4 — 1,064 401 — 1,469 Depreciation and amortization — — 298 784 — 1,082 Total costs and expenses 4 — 3,563 3,506 (173 ) 6,900 OPERATING (LOSS) INCOME (4 ) — (237 ) 1,571 — 1,330 OTHER INCOME (EXPENSE) Interest income — — — 1 — 1 Interest income (expense) - affiliates, net 1,310 1,984 (3,041 ) (253 ) — — Interest expense (51 ) (574 ) (3 ) (12 ) — (640 ) Equity in net earnings (losses) of subsidiaries 2,162 (1,693 ) 177 — (646 ) — Other (expense) income, net (18 ) (200 ) 2 (192 ) — (408 ) Total other income (expense), net 3,403 (483 ) (2,865 ) (456 ) (646 ) (1,047 ) INCOME (LOSS) BEFORE INCOME TAXES 3,399 (483 ) (3,102 ) 1,115 (646 ) 283 Income tax benefit (expense) 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 Balance Sheets December 31, 2017 (Successor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) ASSETS CURRENT ASSETS Cash and cash equivalents $ 13 — 175 109 — 297 Restricted cash and securities — — 1 4 — 5 Assets held for sale 68 — 5 67 — 140 Accounts receivable — — 26 722 — 748 Accounts receivable - affiliate — — 60 4 (51 ) 13 Advances to affiliates 16,251 21,032 — 5,200 (42,483 ) — Note receivable - affiliate 1,825 — — — — 1,825 Other — — 54 63 — 117 Total Current Assets 18,157 21,032 321 6,169 (42,534 ) 3,145 NET PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment — — 3,285 6,270 — 9,555 Accumulated depreciation — — (48 ) (95 ) — (143 ) Net property, plant and equipment — — 3,237 6,175 — 9,412 Restricted cash and securities 19 — 10 — — 29 GOODWILL AND OTHER ASSETS Goodwill — — 1,200 9,637 — 10,837 Customer relationships, net — — 4,324 4,521 — 8,845 Other intangible assets, net — — 378 — — 378 Investment in subsidiaries 16,954 18,403 3,616 — (38,973 ) — Deferred tax assets 280 1,795 — 122 (1,771 ) 426 Other, net — — 32 31 — 63 Total goodwill and other assets 17,234 20,198 9,550 14,311 (40,744 ) 20,549 TOTAL ASSETS 35,410 41,230 13,118 26,655 (83,278 ) 33,135 LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES — Current maturities of long-term debt — — 2 6 — 8 Accounts payable — 1 323 371 — 695 Accounts payable - affiliate 11 — — 81 (51 ) 41 Accrued expenses and other liabilities Income and other taxes — — 55 45 — 100 Salaries and benefits — — 109 27 — 136 Interest 11 91 — 7 — 109 Current portion of deferred revenue — — 127 131 — 258 Current portion of deferred revenue - affiliate — — 2 — — 2 Other 16 — 23 18 — 57 Due to affiliates — — 42,483 — (42,483 ) — Total current liabilities 38 92 43,124 686 (42,534 ) 1,406 LONG-TERM DEBT 616 10,096 13 157 — 10,882 DEFERRED CREDITS AND OTHER LIABILITES Deferred credits — — 841 252 — 1,093 Deferred credits - affiliate — — 5 1 — 6 Deferred tax liability 648 — 870 465 (1,771 ) 212 Other 1 1 98 164 — 264 Total deferred revenues and other liabilities 649 1 1,814 882 (1,771 ) 1,575 COMMITMENTS AND CONTINGENCIES MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) 34,107 31,041 (31,833 ) 24,930 (38,973 ) 19,272 TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) $ 35,410 41,230 13,118 26,655 (83,278 ) 33,135 Condensed Consolidating Balance Sheets December 31, 2016 (Predecessor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) ASSETS CURRENT ASSETS Cash and cash equivalents $ 15 — 1,700 104 — 1,819 Restricted cash and securities — — 1 6 — 7 Accounts receivable — — 26 686 — 712 Advances to 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 NET PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment — — 10,424 10,964 — 21,388 Accumulated Depreciation — — (6,555 ) (4,694 ) — (11,249 ) Net property, plant and equipment — — 3,869 6,270 — 10,139 Restricted cash and securities 22 — 9 — — 31 GOODWILL AND OTHER ASSETS Goodwill — — 352 7,377 — 7,729 Customer relationships, net — — — 860 — 860 Other intangible assets, net — — 1 54 55 Investment in subsidiaries 16,869 17,599 3,674 — (38,142 ) — Deferred tax assets 51 2,687 — 632 — 3,370 Other, net — — 16 35 — 51 Total goodwill and other assets 16,920 20,286 4,043 8,958 (38,142 ) 12,065 TOTAL ASSETS $ 33,989 42,001 9,735 18,232 (79,069 ) 24,888 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Current maturities of long-term debt — — 2 5 — 7 Accounts payable — — 307 399 — 706 Accrued expenses and other liabilities Income and other taxes — — 103 13 — 116 Salaries and benefits — — 160 35 — 195 Interest 11 110 — 8 — 129 Due to affiliates — — 40,927 — (40,927 ) — Current portion of deferred revenue — — 116 150 — 266 Other — — 24 28 — 52 Total current liabilities 11 110 41,639 638 (40,927 ) 1,471 LONG-TERM DEBT 592 10,108 13 164 — 10,877 DEFERRED REVENUES AND OTHER LIABILITES Deferred credits — — 719 282 — 1,001 Deferred tax liability — — — 248 — 248 Other 16 — 155 203 — 374 Total deferred revenues and other liabilities 16 — 874 733 — 1,623 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) 33,370 31,783 (32,791 ) 16,697 (38,142 ) 10,917 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 33,989 42,001 9,735 18,232 (79,069 ) 24,888 Condensed Consolidating Statements of Cash Flows For the period ended December 31, 2017 (Successor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (1 ) — 172 137 — 308 INVESTING ACTIVITIES Capital expenditures — — (110 ) (97 ) — (207 ) Note receivable - affiliate — — (1,825 ) — — (1,825 ) Net cash used in investing activities — — (1,935 ) (97 ) — (2,032 ) FINANCING ACTIVITIES Payments of long-term debt — — — (1 ) — (1 ) Distributions (250 ) — — — — (250 ) Increase (decrease) due to from affiliate, net 250 — (250 ) — — — Net cash used in financing activities — — (250 ) (1 ) — (251 ) Effect of exchange rates on cash, cash equivalents and restricted cash and securities — — — (2 ) — (2 ) Net increase (decrease) in cash, cash equivalents and restricted cash and securities (1 ) — (2,013 ) 37 — (1,977 ) Cash, cash equivalents and restricted cash and securities at beginning of period 33 — 2,199 76 — 2,308 Cash, cash equivalents and restricted cash and securities at end of period $ 32 — 186 113 — 331 Condensed Consolidating Statements of Cash Flows For the period ended October 31, 2017 (Predecessor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (61 ) (401 ) 1,615 761 — 1,914 INVESTING ACTIVITIES Capital expenditures — — (667 ) (452 ) — (1,119 ) Purchase of marketable securities — — (1,127 ) — — (1,127 ) Maturity of marketable securities — — 1,127 — — 1,127 Proceeds from sale of property, plant and equipment and other assets — — 1 — — 1 Net cash used in investing activities — — (666 ) (452 ) — (1,118 ) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt — 4,569 — — — 4,569 Payments of long-term debt — (4,911 ) 1 (7 ) — (4,917 ) Increase (decrease) due from/to affiliates, net 57 743 (460 ) (340 ) — — Net cash provided by (used in) financing activities 57 401 (459 ) (347 ) — (348 ) Effect of exchange rates on cash, cash equivalents and restricted cash and securities — — — 3 — 3 Net increase (decrease) in cash, cash equivalents, and restricted cash and securities (4 ) — 490 (35 ) — 451 Cash, cash equivalents and restricted cash and securities at beginning of period 37 — 1,710 110 — 1,857 Cash, cash equivalents and restricted cash and securities at end of period $ 33 — 2,200 75 — 2,308 Condensed Consolidating Statements of Cash Flows For the year ended December 31, 2016 (Predecessor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (49 ) (468 ) 565 2,295 — 2,343 INVESTING ACTIVITIES Capital expenditures — — (704 ) (630 ) — (1,334 ) Proceeds from sale of property, plant and equipment and other assets — — 1 2 — 3 Net cash used in investing activities — — (703 ) (628 ) — (1,331 ) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt — 764 — — — 764 Payments of long-term debt — (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, cash equivalents, restricted cash and securities — — — (3 ) — (3 ) Net increase (decrease) in cash, cash equivalents, and restricted cash and securities (2 ) (6 ) 968 (7 ) — 953 Cash, cash equivalents and restricted cash and securities at beginning of period 39 6 742 117 — 904 Cash, cash equivalents and restricted cash and securities at end of period $ 37 — 1,710 110 — 1,857 Condensed Consolidating Statements of Cash Flows For the year ended December 31, 2015 (Predecessor) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (41 ) (617 ) 193 2,320 — 1,855 INVESTING ACTIVITIES Capital expenditures — — (453 ) (776 ) — (1,229 ) Cash related to deconsolidated Venezuela operations — — — (83 ) — (83 ) Proceeds from sale of property, plant and equipment and other assets — — — 4 — 4 Other — — (14 ) — — (14 ) Net cash used in investing activities — — (467 ) (855 ) — (1,322 ) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt — 4,832 — — — 4,832 Payments of long-term debt (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, cash equivalents, restricted cash and securities — — — (18 ) — (18 ) Net increase (decrease) in cash, cash equivalents, and restricted cash and securities 29 1 417 (151 ) — 296 Cash, cash equivalents and restricted cash and securities at beginning of period 10 5 325 268 — 608 Cash, cash equivalents and restricted cash and securities at end of period $ 39 6 742 117 — 904 |
Background and Summary of Sig26
Background and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation On November 1, 2017, we became a wholly owned subsidiary of CenturyLink. On the date of the acquisition, our assets and liabilities were recognized at fair value. This revaluation has been reflected in our financial statements and, therefore, has resulted in a new basis of accounting for the successor period beginning on November 1, 2017. This new basis of accounting means that our financial statements for the successor periods will not be comparable to our previously reported financial statements, including the predecessor period financial statements in this report. The consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. As part of our consolidation policy, we consider our controlled subsidiaries, investments in businesses in which we are not the primary beneficiary or do not have effective control but have the ability to significantly influence operating and financial policies, and variable interests resulting from economic arrangements that give us rights to economic risks or rewards of a legal entity. We do not have variable interests in a variable interest entity where we are required to consolidate the entity as the primary beneficiary. Due to exchange restrictions and other conditions, effective at the end of the third quarter of 2015 we deconsolidated our Venezuelan subsidiary and began accounting for our investment in our Venezuelan subsidiary using the cost method of accounting. The factors that led to our conclusions at the end of the third quarter of 2015 continued to exist through the end of 2017. All significant intercompany accounts and transactions have been eliminated. Transactions with our non-consolidated affiliates (CenturyLink and its other subsidiaries, referred to herein as affiliates) have not been eliminated. |
Reclassifications | In conjunction with our acquisition on November 1, 2017, we changed the definitions we use to classify expenses as cost of services and products and selling, general and administrative, and as a result, we reclassified previously reported amounts to conform to the current period presentation. We revised our definitions so that our expense classifications are more consistent with the expense classifications used by our new ultimate parent company, CenturyLink. These revisions resulted in the reclassification of $11 million , $0 million and $2 million from other income (expense) to selling, general and administrative for the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016 and 2015, respectively. These revisions also resulted in the reclassification of $77 million , $91 million and $84 million from depreciation and amortization to cost of services and products for the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016 and 2015, respectively. Although we continued as a surviving corporation and legal entity after the acquisition, the accompanying consolidated statements of operations, comprehensive income (loss), cash flows and member's/stockholder's equity (deficit) are presented for two periods: predecessor and successor, which relates to the period preceding the acquisition and the period succeeding the acquisition. Our current definitions are as follows: • Cost of services and products (exclusive of depreciation and amortization) are expenses incurred in providing products and services to our customers. These expenses include: employee-related expenses directly attributable to operating and maintaining our network (such as salaries, wages, benefits and professional fees); facilities expenses (which are third-party telecommunications expenses we incur for using other carriers' networks to provide services to our customers); rents and utilities expenses; costs for universal service funds ("USF") (which are federal and state funds that are established to promote the availability of telecommunications services to all consumers at reasonable and affordable rates, among other things, and to which we are often required to contribute); taxes (such as property and other taxes); and other expenses directly related to our network. • Selling, general and administrative expenses are expenses incurred in selling products and services to our customers, corporate overhead and other operating expenses. These expenses include: employee-related expenses (such as salaries, wages, internal commissions, benefits and professional fees) directly attributable to selling products or services and employee-related expenses for administrative functions; marketing and advertising; taxes (such as state and local franchise taxes and sales and use taxes) and fees; external commissions; bad debt expense; and other selling, general and administrative expenses. These expense classifications may not be comparable to those of other companies. We also have reclassified certain other prior period amounts to conform to the current period presentation. These changes had no impact on net income (loss) for any period. |
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 2017, 2016 and 2015 . Foreign currency translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in member's/stockholders' equity and in the consolidated statements of comprehensive income (loss) 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 operations. |
Use of Estimates | Use of Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, revenue recognition, revenue reserves, network access costs, network access cost dispute reserves, allowance for doubtful accounts, depreciation, amortization, asset valuations, recoverability of assets (including deferred tax assets), impairment assessments, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of member's/stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenues, expenses and components of cash flows during the periods presented in our other consolidated financial statements. For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable. For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions. For all of these and other matters, actual results could differ materially from our estimates. |
Revenue Recognition | Revenue Recognition 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 contracts, including and long-term indefeasible right of use, or IRUs, involving private line, wavelengths and certain leases for dark fiber, 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 estimated 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 billing credits. The credits are a reduction to revenue and, to date, have not been material. |
Affiliate Transactions | Affiliate Transactions We provide to our affiliates telecommunications services that we also provide to external customers. Services provided by us to our affiliates are recognized as operating revenue-affiliates in our consolidated statements of operations. Services provided to us from our affiliates are recognized as operating expenses-affiliates on our consolidated statements of operations. Because of the significance of the services we provide to our affiliates and our affiliates provide to us, the results of operations, financial position and cash flows presented herein are not necessarily indicative of the results of operations, financial position and cash flows we would have achieved had we operated as a stand-alone entity during the periods presented. We recognize intercompany charges at the amounts billed to us by our affiliates and we recognize intercompany revenue for services we bill to our affiliates. From time to time we make distributions to CenturyLink. Distributions are reflected on our consolidated statements of member's/stockholders' equity and the consolidated statements of cash flows reflects distributions made as financing activities. |
USF and Gross Receipts Taxes | USF Surcharges, Gross Receipts Taxes and Other Surcharges In determining whether to include in our revenues and expenses the taxes and surcharges collected from customers and remitted to government authorities, including USF surcharges, sales, use, value added and some excise taxes, we assess, among other things, whether we are the primary obligor or principal taxpayer for the taxes assessed in each jurisdiction where we do business. In jurisdictions where we determine that we are the principal taxpayer, we record the surcharges on a gross basis and include them in our revenues and costs of services and products. In jurisdictions where we determine that we are merely a collection agent for the government authority, we record the taxes on a net basis and do not include them in our revenues and costs of services and products. Total revenue and cost of services and products on the consolidated statements of operations include USF contributions totaled $71 million , $331 million , $414 million and $364 million for the successor period ended December 31, 2017 , the predecessor period ended October 31, 2017 and the predecessor years ended December 31, 2016 and 2015, respectively. |
Income Taxes | Income Taxes Until November 1, 2017, we filed a consolidated federal income tax return with our eligible subsidiaries. Since CenturyLink's acquisition of us on November 1, 2017, we have been included in the consolidated federal income tax return of CenturyLink. Under CenturyLink's tax allocation policy, CenturyLink treats our consolidated results as if we were a separate taxpayer. The policy requires us to pay our tax liabilities in cash based upon our separate return taxable income. We are also included in the combined state tax returns filed by CenturyLink and the same payment and allocation policy applies. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating loss carryforwards ("NOLs"), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution. |
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, 2017 and 2016 . |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts For predecessor periods, accounts receivable balances were recorded at the invoiced amount. 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. For predecessor periods, accounts receivable balances were written off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. For the successor period, accounts receivable balances were recorded at fair value for all balances receivable at the acquisition date and at the invoiced amount for those amounts invoiced after the acquisition date. |
Concentration of Credit Risk | Concentration of Credit Risk 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 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. |
Property, Plant and Equipment | Property, Plant and Equipment As a result of CenturyLink's acquisition of us, the purchase price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values at the date of acquisition. Therefore, the allocated fair values of the assets represent their new basis of accounting in our consolidated financial statements. This resulted in adjustments to our property, plant and equipment accounts, including accumulated depreciation at the acquisition date. The adjustments related to CenturyLink's acquisition of us are described in Note 2—CenturyLink Merger and Note 6—Property, Plant and Equipment. Property, plant and equipment acquired since the acquisition date is stated at original cost plus the estimated value of any associated legally or contractually required retirement obligations. Property, plant and equipment is depreciated using the straight-line method. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase. We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining useful life of our asset base. Our remaining useful life assessments anticipate the loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers leave the network. However, the asset is not retired until all customers no longer utilize the asset and we determine there is no alternative use for the asset. Capitalized labor and related costs associated with employees and contract labor working on capital projects were approximately $45 million for the successor period ended December 31, 2017, $239 million for the predecessor period ended October 31, 2017, $ 271 million for the predecessor year ended December 31, 2016 and $ 244 million for the predecessor year ended December 31, 2015. We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. We determine fair values by using a combination of comparable market values and discounted cash flows, as appropriate. |
Goodwill and Other Indefinite-Lived Intangible Assets | Goodwill and Other Indefinite-Lived Intangible Assets Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 7 to 14 years, depending on the type of customer, using the straight-line method. We amortize our other intangible assets over an estimated life of 5 years. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized. Our long-lived intangible assets, other than goodwill, with indefinite lives are assessed for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment. These assets are carried at the estimated fair value at the time of acquisition and assets not acquired in acquisitions are recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other indefinite-lived intangible assets are reduced to their estimated fair value through an impairment charge to our consolidated statements of operations. We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment assessment is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment assessment. At the time of each impairment assessment date in 2017, 2016, and 2015, 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 no t impaired in 2017 and 2016. 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. Note that as a result of the merger the impairment testing date will change to October 31 for future successor periods. We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. As a result of CenturyLink's acquisition of us, we are now comprised of one reporting unit. See Note 3—Goodwill, Customer Relationships and Other Intangible Assets for additional information. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Restricted Cash On November 17, 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents as compared to the previous presentation, which explains only the change in cash and cash equivalents. ASU 2016-18 is effective January 1, 2018, but early adoption is permitted and requires retrospective application of the requirements to all previous periods presented. We early adopted ASU 2016-18 in the fourth quarter of 2017. Share-based Compensation In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 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 were 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. 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 flows. Adoption of the new standard also resulted in the recognition of excess tax benefits as a reduction to income tax expense of $22 million for 2016. Recent Accounting Pronouncements Goodwill Impairment On January 26, 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 simplifies the impairment testing for goodwill by changing the measurement for goodwill impairment. Under current rules, we are required to compute the implied fair value of goodwill to measure the impairment amount if the carrying value of a reporting unit exceeds its fair value. Under ASU 2017-04, the goodwill impairment charge will equal the excess of the reporting unit carrying value above fair value, limited to the amount of goodwill assigned to the reporting unit. We are required to adopt the provisions of ASU 2017-04 for any goodwill impairment tests, including our required annual test, occurring after January 1, 2020, but have the option to early adopt for any impairment test that we are required to perform. We have not determined if we will elect to early adopt the provisions of ASU 2017-04. The provisions of ASU 2017-04 would not have affected our last goodwill impairment assessment, but no assurance can be provided that the simplified testing methodology will not affect our goodwill impairment assessment in the future. Income Taxes On October 24, 2016, the FASB issued Accounting Standards Update 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory” ("ASU 2016-16"). ASU 2016-16 eliminates the current prohibition on the recognition of the income tax effects on the transfer of assets among our subsidiaries. After adoption of this ASU, the income tax effects associated with these asset transfers, except for the transfer of inventory, will be recognized in the period the asset is transferred versus the current deferral and recognition upon either the sale of the asset to a third party or over the remaining useful life of the asset. We adopted the provisions of ASU 2016-16 on January 1, 2018. The impact of adopting ASU 2016-16 had no material impact to our consolidated financial statements. Financial Instruments On June 16, 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). The primary impact of ASU 2016-13 for us is a change in the model for the recognition of credit losses related to our financial instruments from an incurred loss model, which recognized credit losses only if it was probable that a loss had been incurred, to an expected loss model, which requires our management team to estimate the total credit losses expected on the portfolio of financial instruments. We are currently reviewing the requirements of the standard and evaluating the impact on our consolidated financial statements. We are required to adopt the provisions of ASU 2016-13 effective January 1, 2020, but could elect to early adopt the provisions as of January 1, 2019. We expect to recognize any impacts of adopting ASU 2016-13 through a cumulative adjustment to retained earnings as of the date of adoption. As of the date of this annual report, we have not yet determined the date we will adopt ASU 2016-13. Leases On February 25, 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The core principle of ASU 2016-02 will require lessees to present right-of-use assets and lease liabilities on their balance sheets for operating leases, which are currently not reflected on their balance sheets. ASU 2016-02 is effective for annual and interim periods beginning January 1, 2019. Early adoption of ASU 2016-02 is permitted. Upon adoption of ASU 2016-02, we are required to recognize and measure leases at the beginning of the earliest period presented in our consolidated financial statements using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that we may elect to apply. We have completed our initial assessment of our business and system requirements and we are currently developing and implementing a new lease accounting and administrative system to comply with the requirements of ASU 2016-02. We plan to adopt the standard when it becomes effective for us beginning January 1, 2019 and the adoption of the standard will result in the recognition of right of use assets and lease liabilities that have not previously been recorded. Although we believe it is premature as of the date of this report to provide any estimate of the impact of adopting ASU 2016-02, we do expect that it will have a material impact on our consolidated financial statements. Revenue Recognition On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, 2018, which is the date we plan to adopt this standard. ASU 2014-09 may be adopted by applying the provisions of this standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2018. We adopted the new revenue recognition standard under the modified retrospective transition method. Upon adoption, we will defer (i.e. capitalize) incremental contract acquisition costs and recognize (i.e. amortize) them over the term of the initial contract and anticipated renewal contracts to which the costs relate. Our deferred contract costs for our customers have average amortization periods of approximately 30 months and are subject to being monitored every period to reflect any significant change in assumptions. In addition, we will assess our deferred contract cost asset for impairment on a periodic basis. We have material obligations to our customers in our indefeasible right of use arrangements, including certain long-term prepaid customer capacity arrangements, which are accounted for as operating leases and service contracts. As our service contracts contain a significant financing component that are not separately accounted for, we are required to estimate and record incremental revenue and interest cost associated with these contractual terms. Most of our indefeasible right of use arrangements are accounted for as operating leases. We are in the process of implementing new processes and internal controls over revenue recognition to assist us in the application of the new standard. The cumulative effect of initially applying the new revenue standard on January 1, 2018 is not material. |
Goodwill, Customer Relationsh27
Goodwill, Customer Relationships and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill, customer relationships and other intangible assets | Goodwill, customer relationships and other intangible assets consisted of the following: Successor Predecessor December 31, December 31, (Dollars in millions) Goodwill $ 10,837 7,729 Customer relationships, less accumulated amortization of $126 and $1,113 8,845 860 Other indefinite-life intangible assets — 15 Other intangible assets subject to amortization: Trade names, less accumulated amortization of $4 and $0 126 — Developed technology, less accumulated amortization of $9 and $189 252 40 Total other intangible assets, net $ 378 55 |
Schedule of estimated amortization expense of intangible asset | We estimate that total amortization expense for intangible assets for the successor years ending December 31, 2018 through 2022 will be as follows: (Dollars in millions) 2018 $ 829 2019 829 2020 829 2021 829 2022 816 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The following chart reflects our consolidated long-term debt, including unamortized discounts, premiums and debt issuance costs, but excluding intercompany debt: Successor Predecessor Interest Rates Maturities December 31, December 31, (Dollars in millions) Level 3 Parent, LLC 5.750% Senior Notes due 2022 (3) 5.750% 2022 $ 600 600 Subsidiaries Level 3 Financing, Inc. Senior Notes: Floating Rate Senior Notes due 2018 (2)(4) 6-Month LIBOR + 3.50% 2018 — 300 6.125% Senior Notes due 2021 (2) 6.125% 2021 640 640 5.375% Senior Notes due 2022 (2) 5.375% 2022 1,000 1,000 5.625% Senior Notes due 2023 (2) 5.625% 2023 500 500 5.125% Senior Notes due 2023 (2) 5.125% 2023 700 700 5.375% Senior Notes due 2025 (2) 5.375% 2025 800 800 5.375% Senior Notes due 2024 (2) 5.375% 2024 900 900 5.25% Senior Notes due 2026 (2) 5.250% 2026 775 775 Term Loans: Tranche B-III 2019 Term Loan (1)(4) LIBOR + 3.00% 2019 — 815 Tranche B 2020 Term Loan (1)(4) LIBOR + 3.00% 2020 — 1,796 Tranche B-II 2022 Term Loan (1)(4) LIBOR + 2.75% 2022 — 2,000 Tranche B 2024 Term Loan (4)(5) LIBOR + 2.25% 2024 4,611 — Capital Leases and other debt Various Various 179 183 Unamortized premiums (discounts), net 185 (13 ) Unamortized debt issuance costs — (112 ) Total long-term debt 10,890 10,884 Less current maturities (8 ) (7 ) Long-term debt, excluding current maturities $ 10,882 10,877 (1) The term loans were 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 Parent, LLC and Level 3 Communications, LLC. (3) The notes are not guaranteed by any of Level 3 Parent, LLC's subsidiaries. (4) The Tranche B 2024 Term Loan had an interest rate of 3.557% as of December 31, 2017. All other term loans were refinanced on February 22, 2017 as described below. The Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of the predecessor date of December 31, 2016. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of the predecessor date of December 31, 2016. The interest rate on the Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan were set with a minimum LIBOR of 1.00% . The interest rate on the Tranche B-II 2022 Term Loan was set with a minimum LIBOR of 0.75% and the interest rate on the Tranche B 2024 Term Loan is set with a minimum LIBOR of zero percent. The Floating Rate Senior Notes due 2018 had an interest rate of 4.762% as of the predecessor date of December 31, 2016. (5) The Tranche B 2024 Term Loan is a secured obligation and is guaranteed by Level 3 Parent, LLC and certain of its non-regulated subsidiaries. |
Schedule of aggregate future contractual maturities of long-term debt and capital leases (excluding unamortized premiums) | Set forth below is the aggregate principal amount of our long-term debt and capital leases (excluding unamortized premiums) maturing during the following years: (Dollars in millions) (1) 2018 $ 8 2019 7 2020 8 2021 650 2022 1,610 2023 and thereafter 8,422 Total long-term debt $ 10,705 (1) Actual principal paid in any year may differ due to the possible future refinancing of outstanding debt or the issuance of new debt. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | The following table presents details of our accounts receivable balances: Successor Predecessor December 31, December 31, (Dollars in millions) Trade and purchased receivables $ 562 588 Earned and unbilled receivables 165 140 Other 24 13 Total accounts receivable 751 741 Less: allowance for doubtful accounts (1) (3 ) (29 ) Accounts receivable, less allowance $ 748 712 (1) CenturyLink's acquisition of us caused our assets and liabilities to be recognized at fair value and resulted in the allowance for doubtful accounts being reset as of the date of acquisition. |
Allowance for Credit Losses on Financing Receivables | The following table presents details of our allowance for doubtful accounts: Beginning Balance Additions Deductions Ending Balance (Dollars in millions) December 31, 2017 (Successor) $ — 3 — 3 October 31, 2017 (Predecessor) 29 16 (12 ) 33 2016 (Predecessor) 32 18 (21 ) 29 2015 (Predecessor) $ 30 23 (21 ) 32 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Net property, plant and equipment is composed of the following: Successor Predecessor Depreciable Lives December 31, December 31, (Dollars in millions) Land N/A $ 348 179 Fiber conduit and other outside plant (1) 15-45 years 4,750 9,110 Central office and other network electronics (2) 3-10 years 2,134 8,846 Support assets (3) 3-30 years 2,019 3,023 Construction-in-progress (4) N/A 304 230 Gross property, plant and equipment 9,555 21,388 Accumulated depreciation (5) (143 ) (11,249 ) Net property, plant and equipment $ 9,412 10,139 (1) Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures. (2) Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers. (3) Support assets consist of buildings, data centers, computers and other administrative and support equipment. (4) Construction in progress includes construction and property of the aforementioned categories that has not been placed in service as it is still under construction. (5) CenturyLink's acquisition of us caused our assets and liabilities to be recognized at fair value and resulted in accumulated depreciation being reset as of the date of acquisition. |
Schedule of Change in Asset Retirement Obligation | The following table provides asset retirement obligation activity: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Balance at beginning of period (1) $ 45 89 90 85 Accretion expense 1 12 10 9 Liabilities settled (1 ) (7 ) (9 ) (8 ) Revision in estimated cash flows — — — 5 Effect of foreign currency rate change — — (2 ) (1 ) Balance at end of period $ 45 94 89 90 (1) CenturyLink's acquisition of us caused our assets and liabilities, including our asset retirement obligations, to be recognized at fair value as of the date of acquisition. |
Products and Services Revenues
Products and Services Revenues (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of operating revenues by product and services | Our total revenues for our products and services consisted of the following categories: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Core network services revenues $ 1,331 6,543 7,767 7,757 Wholesale voice services 60 327 406 473 Affiliate revenues 16 — — — Total operating revenues $ 1,407 6,870 8,173 8,230 |
Schedule of operating revenues by geographic region | The following table presents operating revenues for the predecessor period ended October 31, 2017 and the successor period ended December 31, 2017 as well as total assets as of the successor date of December 31, 2017 by geographic region: Total Assets Revenues Successor Successor Predecessor December 31, 2017 Period Ended December 31, 2017 Period Ended October 31, 2017 (Dollars in millions) North America $ 27,776 1,155 5,651 EMEA 1,192 128 607 Latin America 4,167 124 612 Total $ 33,135 1,407 6,870 |
Fair Value Disclosure (Tables)
Fair Value Disclosure (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of liabilities measured on a recurring basis | The following table presents the carrying amounts and estimated fair values of our long-term debt, excluding capital lease and other obligations, as well as the input level used to determine the fair values indicated below: As of December 31, 2017 (Successor) As of December 31, 2016 (Predecessor) Input Level Carrying Amount Fair Value Carrying Amount Fair Value (Dollars in million) Liabilities-Long-term debt, excluding capital lease and other obligations 2 $ 10,711 10,528 10,701 10,954 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) | Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Income tax expense (benefit) was as follows: Federal Current $ — — — — Deferred 231 193 177 (2,941 ) State Current 2 7 4 3 Deferred 6 16 27 (246 ) Foreign Current 4 39 41 33 Deferred (9 ) 13 (84 ) 1 Total income tax expense (benefit) $ 234 268 165 (3,150 ) |
Schedule of income before income tax, domestic and foreign | Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Income tax expense was allocated as follows: Income tax expense in the consolidated statements of operations: Attributable to income $ 234 268 165 (3,150 ) Member's/Stockholders' equity: Tax effect of the change in accumulated other comprehensive loss $ 17 49 (43 ) (11 ) |
Schedule of effective income tax rate reconciliation | The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 (Dollars in millions) Statutory federal income tax rate 35.0 % 35.0 % 35.0 % 35.0 % State income taxes, net of federal income tax benefit 3.6 % 2.9 % 3.7 % 5.2 % Tax Reform/US Federal Law Changes 210.6 % — % (13.2 )% — % Transaction costs 11.3 % — % — % — % Change in liability of unrecognized tax position 1.2 % 0.1 % 0.1 % (0.1 )% Net foreign income tax (19.3 )% 0.9 % (6.7 )% 26.6 % Permanent items 5.0 % 1.8 % 1.2 % 2.6 % Change in US valuation allowance — % — % — % (1,199.8 )% Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting 0.1 % (0.5 )% (2.4 )% — % Research and development costs (0.9 )% (1.2 )% — % — % Non-deductible loss on deconsolidation — % — % — % 20.2 % Other, net 5.0 % (0.3 )% 1.9 % (2.7 )% Effective income tax rate 251.6 % 38.7 % 19.6 % (1,113.0 )% |
Deferred tax assets and liabilities | The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows: Successor Predecessor December 31, December 31, (Dollars in millions) Deferred tax assets Deferred revenue $ 256 364 Net operating loss carry forwards 3,633 4,550 Property, plant and equipment 63 95 Other 282 471 Gross deferred tax assets 4,234 5,480 Less valuation allowance (942 ) (862 ) Net deferred tax assets 3,292 4,618 Deferred tax liabilities Deferred revenue (44 ) (57 ) Property, plant and equipment (689 ) (962 ) Intangible assets (2,329 ) (357 ) Other (16 ) (120 ) Gross deferred tax liabilities (3,078 ) (1,496 ) Net deferred tax assets $ 214 3,122 |
Schedule of unrecognized tax benefits | A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from the successor period November 1 to December 31, 2017, the predecessor period January 1 to October 31, 2017 and the predecessor year ended December 31, 2016 is as follows: Successor Predecessor Period Ended December 31, 2017 Period Ended October 31, 2017 Year Ended December 31, 2016 (Dollars in millions) Unrecognized tax benefits at beginning of period $ 20 18 18 Tax positions of prior periods netted against deferred tax assets — — (1 ) Increase (decrease) in tax positions taken in the prior period 1 — (1 ) Increase in tax positions taken in the current period — 2 2 Decrease from the lapse of statute of limitations — — — Unrecognized tax benefits at end of period $ 21 20 18 |
Quarterly Financial Data (Una34
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data (unaudited) | Operating Revenues Operating Income Net Income (Loss) (Dollars in millions) 2016 First quarter (predecessor) $ 2,051 362 128 Second quarter (predecessor) 2,057 375 156 Third quarter (predecessor) 2,033 354 143 Fourth quarter (predecessor) 2,032 354 250 Total $ 8,173 1,445 677 2017 First quarter (predecessor) $ 2,048 337 95 Second quarter (predecessor) 2,062 353 154 Third quarter (predecessor) 2,059 349 157 Month ended October 31 (predecessor) 701 112 19 Two months ended December 31 (successor) 1,407 158 (141 ) Total $ 8,277 1,309 284 |
Commitments, Contingencies an35
Commitments, Contingencies and Other Items (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
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, 2017 (dollars in millions): Right-of-Way Agreements Operating Leases Total Future Minimum Sublease Receipts 2018 $ 173 288 461 3 2019 90 251 341 2 2020 77 217 294 1 2021 60 151 211 1 2022 56 128 184 1 Thereafter 464 507 971 1 $ 920 1,542 2,462 9 |
Schedule of long-term purchase commitments | The following table summarizes our purchase commitments at December 31, 2017 (dollars in millions): 2018 2019 2020 2021 2022 Thereafter Total Cost of Access Services $ 115 52 35 15 7 2 226 Third-Party Maintenance Services 60 41 32 19 18 68 238 $ 175 93 67 34 25 70 464 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The table below summarizes changes in accumulated other comprehensive income (loss) recorded on our consolidated balance sheet by component for the predecessor period ended October 31, 2017 and the successor period ended December 31, 2017: Pension Plans Foreign Currency Translation Adjustments and Other Total (Dollars in millions) Balance at December 31, 2016 (predecessor) $ (34 ) (353 ) (387 ) Other comprehensive (loss) income before reclassifications (3 ) 81 78 Amounts reclassified from accumulated other comprehensive loss 2 — 2 Net other comprehensive (loss) income (1 ) 81 80 Balance at October 31, 2017 (predecessor) $ (35 ) (272 ) (307 ) Balance at November 1, 2017 (successor) $ — — — Other comprehensive income before reclassifications — 18 18 Amounts reclassified from accumulated other comprehensive loss — — — Net other comprehensive income — 18 18 Balance at December 31, 2017 (successor) $ — 18 18 |
Other Financial Information (Ta
Other Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Current Assets | The following table presents details of other current assets in our consolidated balance sheets: Successor Predecessor December 31, December 31, (Dollars in millions) Prepaid expenses $ 68 82 Material, supplies and inventory 3 3 Deferred activation and installation charges 17 5 Other 29 25 Total other current assets $ 117 115 |
Selected Current Liabilities | Successor Predecessor December 31, December 31, (Dollars in millions) Self insurance $ 11 12 Legal and tax reserves 31 18 Other 15 22 Total other current liabilities $ 57 52 |
Condensed Consolidating Finan38
Condensed Consolidating Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Consolidating Financial Information [Abstract] | |
Schedule of Condensed Consolidating Statements of Operations | Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUE Operating revenues $ — — 748 671 (28 ) 1,391 Operating revenues - affiliate — — 16 — — 16 Total operating revenues — — 764 671 (28 ) 1,407 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 418 300 (28 ) 690 Selling, general and administrative 1 3 179 70 — 253 Operating expenses - affiliate — — 24 — — 24 Depreciation and amortization — — 117 165 — 282 Total costs and expenses 1 3 738 535 (28 ) 1,249 OPERATING (LOSS) INCOME (1 ) (3 ) 26 136 — 158 OTHER INCOME (EXPENSE) Interest income — — 1 — — 1 Interest income - affiliate 11 — — — — 11 Interest expense (5 ) (72 ) — (3 ) — (80 ) Interest income (expense) - affiliates, net 251 368 (578 ) (41 ) — — Equity in net (losses) earnings of subsidiaries (827 ) (15 ) 71 — 771 — Other income, net 1 — 2 — — 3 Total other expense, net (569 ) 281 (504 ) (44 ) 771 (65 ) (LOSS) INCOME BEFORE INCOME TAXES (570 ) 278 (478 ) 92 771 93 Income tax benefit (expense) 429 (1,105 ) 433 9 — (234 ) NET INCOME (LOSS) (141 ) (827 ) (45 ) 101 771 (141 ) Other comprehensive income, net of income taxes 18 — — 18 (18 ) 18 COMPREHENSIVE INCOME (LOSS) $ (123 ) $ (827 ) $ (45 ) $ 119 $ 753 $ (123 ) Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUES Operating revenues $ — — 3,108 3,891 (129 ) 6,870 Total operating revenues — — 3,108 3,891 (129 ) 6,870 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 1,942 1,680 (129 ) 3,493 Selling, general and administrative 4 3 942 259 — 1,208 Depreciation and amortization — — 356 662 — 1,018 Total costs and expenses 4 3 3,240 2,601 (129 ) 5,719 OPERATING (LOSS) INCOME (4 ) (3 ) (132 ) 1,290 — 1,151 OTHER INCOME (EXPENSE) Interest income — — 12 1 — 13 Interest income (expense) - affiliate, net 1,260 1,890 (2,896 ) (254 ) — — Interest expense (30 ) (397 ) (2 ) (12 ) — (441 ) Loss on modification and extinguishment of debt — (44 ) — — — (44 ) Equity in net (losses) earnings of subsidiaries (815 ) (2,138 ) 692 — 2,261 — Other income (expense) , net 3 — 15 (4 ) — 14 Total other expense, net 418 (689 ) (2,179 ) (269 ) 2,261 (458 ) INCOME (LOSS) BEFORE INCOME TAXES 414 (692 ) (2,311 ) 1,021 2,261 693 Income tax benefit (expense) 11 (123 ) (2 ) (154 ) — (268 ) NET INCOME (LOSS) 425 (815 ) (2,313 ) 867 2,261 425 Other comprehensive income, net of income taxes 80 — — — — 80 COMPREHENSIVE INCOME (LOSS) $ 505 (815 ) (2,313 ) 867 2,261 505 Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUES Operating revenues $ — $ — $ 3,558 $ 4,747 $ (132 ) 8,173 Total operating revenues — — 3,558 4,747 (132 ) 8,173 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 2,249 2,045 (132 ) 4,162 Selling, general and administrative 16 5 1,025 361 — 1,407 Depreciation and amortization — — 372 787 — 1,159 Total costs and expenses 16 5 3,646 3,193 (132 ) 6,728 OPERATING (LOSS) INCOME (16 ) (5 ) (88 ) 1,554 — 1,445 OTHER INCOME (EXPENSE) Interest income — — 3 1 — 4 Interest income (expense) - affiliate, net 1,385 2,113 (3,215 ) (283 ) — — Interest expense (36 ) (505 ) (2 ) (1 ) — (544 ) Equity in net (losses) earnings of subsidiaries (669 ) (2,033 ) 757 — 1,945 — Other (expense) income, net (1 ) (39 ) 2 (25 ) — (63 ) Total other income (expense), net 679 (464 ) (2,455 ) (308 ) 1,945 (603 ) INCOME (LOSS) BEFORE INCOME TAXES 663 (469 ) (2,543 ) 1,246 1,945 842 Income tax benefit (expense) 14 (200 ) (2 ) 23 — (165 ) NET INCOME (LOSS) 677 (669 ) (2,545 ) 1,269 1,945 677 Other comprehensive (loss) income, net of income taxes (86 ) — — (86 ) 86 (86 ) COMPREHENSIVE INCOME (LOSS) $ 591 (669 ) (2,545 ) 1,183 2,031 591 Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING REVENUES Operating revenues $ — — 3,326 5,077 (173 ) 8,230 Total operating revenues — — 3,326 5,077 (173 ) 8,230 OPERATING EXPENSES Cost of services and products (exclusive of depreciation and amortization) — — 2,201 2,321 (173 ) 4,349 Selling, general and administrative 4 — 1,064 401 — 1,469 Depreciation and amortization — — 298 784 — 1,082 Total costs and expenses 4 — 3,563 3,506 (173 ) 6,900 OPERATING (LOSS) INCOME (4 ) — (237 ) 1,571 — 1,330 OTHER INCOME (EXPENSE) Interest income — — — 1 — 1 Interest income (expense) - affiliates, net 1,310 1,984 (3,041 ) (253 ) — — Interest expense (51 ) (574 ) (3 ) (12 ) — (640 ) Equity in net earnings (losses) of subsidiaries 2,162 (1,693 ) 177 — (646 ) — Other (expense) income, net (18 ) (200 ) 2 (192 ) — (408 ) Total other income (expense), net 3,403 (483 ) (2,865 ) (456 ) (646 ) (1,047 ) INCOME (LOSS) BEFORE INCOME TAXES 3,399 (483 ) (3,102 ) 1,115 (646 ) 283 Income tax benefit (expense) 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 |
Schedule of Condensed Consolidating Balance Sheets | Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) ASSETS CURRENT ASSETS Cash and cash equivalents $ 13 — 175 109 — 297 Restricted cash and securities — — 1 4 — 5 Assets held for sale 68 — 5 67 — 140 Accounts receivable — — 26 722 — 748 Accounts receivable - affiliate — — 60 4 (51 ) 13 Advances to affiliates 16,251 21,032 — 5,200 (42,483 ) — Note receivable - affiliate 1,825 — — — — 1,825 Other — — 54 63 — 117 Total Current Assets 18,157 21,032 321 6,169 (42,534 ) 3,145 NET PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment — — 3,285 6,270 — 9,555 Accumulated depreciation — — (48 ) (95 ) — (143 ) Net property, plant and equipment — — 3,237 6,175 — 9,412 Restricted cash and securities 19 — 10 — — 29 GOODWILL AND OTHER ASSETS Goodwill — — 1,200 9,637 — 10,837 Customer relationships, net — — 4,324 4,521 — 8,845 Other intangible assets, net — — 378 — — 378 Investment in subsidiaries 16,954 18,403 3,616 — (38,973 ) — Deferred tax assets 280 1,795 — 122 (1,771 ) 426 Other, net — — 32 31 — 63 Total goodwill and other assets 17,234 20,198 9,550 14,311 (40,744 ) 20,549 TOTAL ASSETS 35,410 41,230 13,118 26,655 (83,278 ) 33,135 LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES — Current maturities of long-term debt — — 2 6 — 8 Accounts payable — 1 323 371 — 695 Accounts payable - affiliate 11 — — 81 (51 ) 41 Accrued expenses and other liabilities Income and other taxes — — 55 45 — 100 Salaries and benefits — — 109 27 — 136 Interest 11 91 — 7 — 109 Current portion of deferred revenue — — 127 131 — 258 Current portion of deferred revenue - affiliate — — 2 — — 2 Other 16 — 23 18 — 57 Due to affiliates — — 42,483 — (42,483 ) — Total current liabilities 38 92 43,124 686 (42,534 ) 1,406 LONG-TERM DEBT 616 10,096 13 157 — 10,882 DEFERRED CREDITS AND OTHER LIABILITES Deferred credits — — 841 252 — 1,093 Deferred credits - affiliate — — 5 1 — 6 Deferred tax liability 648 — 870 465 (1,771 ) 212 Other 1 1 98 164 — 264 Total deferred revenues and other liabilities 649 1 1,814 882 (1,771 ) 1,575 COMMITMENTS AND CONTINGENCIES MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) 34,107 31,041 (31,833 ) 24,930 (38,973 ) 19,272 TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) $ 35,410 41,230 13,118 26,655 (83,278 ) 33,135 Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) ASSETS CURRENT ASSETS Cash and cash equivalents $ 15 — 1,700 104 — 1,819 Restricted cash and securities — — 1 6 — 7 Accounts receivable — — 26 686 — 712 Advances to 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 NET PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment — — 10,424 10,964 — 21,388 Accumulated Depreciation — — (6,555 ) (4,694 ) — (11,249 ) Net property, plant and equipment — — 3,869 6,270 — 10,139 Restricted cash and securities 22 — 9 — — 31 GOODWILL AND OTHER ASSETS Goodwill — — 352 7,377 — 7,729 Customer relationships, net — — — 860 — 860 Other intangible assets, net — — 1 54 55 Investment in subsidiaries 16,869 17,599 3,674 — (38,142 ) — Deferred tax assets 51 2,687 — 632 — 3,370 Other, net — — 16 35 — 51 Total goodwill and other assets 16,920 20,286 4,043 8,958 (38,142 ) 12,065 TOTAL ASSETS $ 33,989 42,001 9,735 18,232 (79,069 ) 24,888 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Current maturities of long-term debt — — 2 5 — 7 Accounts payable — — 307 399 — 706 Accrued expenses and other liabilities Income and other taxes — — 103 13 — 116 Salaries and benefits — — 160 35 — 195 Interest 11 110 — 8 — 129 Due to affiliates — — 40,927 — (40,927 ) — Current portion of deferred revenue — — 116 150 — 266 Other — — 24 28 — 52 Total current liabilities 11 110 41,639 638 (40,927 ) 1,471 LONG-TERM DEBT 592 10,108 13 164 — 10,877 DEFERRED REVENUES AND OTHER LIABILITES Deferred credits — — 719 282 — 1,001 Deferred tax liability — — — 248 — 248 Other 16 — 155 203 — 374 Total deferred revenues and other liabilities 16 — 874 733 — 1,623 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) 33,370 31,783 (32,791 ) 16,697 (38,142 ) 10,917 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 33,989 42,001 9,735 18,232 (79,069 ) 24,888 |
Schedule of Condensed Consolidating Statements of Cash Flows | Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (1 ) — 172 137 — 308 INVESTING ACTIVITIES Capital expenditures — — (110 ) (97 ) — (207 ) Note receivable - affiliate — — (1,825 ) — — (1,825 ) Net cash used in investing activities — — (1,935 ) (97 ) — (2,032 ) FINANCING ACTIVITIES Payments of long-term debt — — — (1 ) — (1 ) Distributions (250 ) — — — — (250 ) Increase (decrease) due to from affiliate, net 250 — (250 ) — — — Net cash used in financing activities — — (250 ) (1 ) — (251 ) Effect of exchange rates on cash, cash equivalents and restricted cash and securities — — — (2 ) — (2 ) Net increase (decrease) in cash, cash equivalents and restricted cash and securities (1 ) — (2,013 ) 37 — (1,977 ) Cash, cash equivalents and restricted cash and securities at beginning of period 33 — 2,199 76 — 2,308 Cash, cash equivalents and restricted cash and securities at end of period $ 32 — 186 113 — 331 Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (61 ) (401 ) 1,615 761 — 1,914 INVESTING ACTIVITIES Capital expenditures — — (667 ) (452 ) — (1,119 ) Purchase of marketable securities — — (1,127 ) — — (1,127 ) Maturity of marketable securities — — 1,127 — — 1,127 Proceeds from sale of property, plant and equipment and other assets — — 1 — — 1 Net cash used in investing activities — — (666 ) (452 ) — (1,118 ) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt — 4,569 — — — 4,569 Payments of long-term debt — (4,911 ) 1 (7 ) — (4,917 ) Increase (decrease) due from/to affiliates, net 57 743 (460 ) (340 ) — — Net cash provided by (used in) financing activities 57 401 (459 ) (347 ) — (348 ) Effect of exchange rates on cash, cash equivalents and restricted cash and securities — — — 3 — 3 Net increase (decrease) in cash, cash equivalents, and restricted cash and securities (4 ) — 490 (35 ) — 451 Cash, cash equivalents and restricted cash and securities at beginning of period 37 — 1,710 110 — 1,857 Cash, cash equivalents and restricted cash and securities at end of period $ 33 — 2,200 75 — 2,308 Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (49 ) (468 ) 565 2,295 — 2,343 INVESTING ACTIVITIES Capital expenditures — — (704 ) (630 ) — (1,334 ) Proceeds from sale of property, plant and equipment and other assets — — 1 2 — 3 Net cash used in investing activities — — (703 ) (628 ) — (1,331 ) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt — 764 — — — 764 Payments of long-term debt — (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, cash equivalents, restricted cash and securities — — — (3 ) — (3 ) Net increase (decrease) in cash, cash equivalents, and restricted cash and securities (2 ) (6 ) 968 (7 ) — 953 Cash, cash equivalents and restricted cash and securities at beginning of period 39 6 742 117 — 904 Cash, cash equivalents and restricted cash and securities at end of period $ 37 — 1,710 110 — 1,857 Level 3 Parent, LLC Level 3 Financing, Inc. Level 3 Communications, LLC Other Non-Guarantor Subsidiaries Eliminations Total (Dollars in millions) OPERATING ACTIVITIES Net cash (used in) provided by operating activities $ (41 ) (617 ) 193 2,320 — 1,855 INVESTING ACTIVITIES Capital expenditures — — (453 ) (776 ) — (1,229 ) Cash related to deconsolidated Venezuela operations — — — (83 ) — (83 ) Proceeds from sale of property, plant and equipment and other assets — — — 4 — 4 Other — — (14 ) — — (14 ) Net cash used in investing activities — — (467 ) (855 ) — (1,322 ) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt — 4,832 — — — 4,832 Payments of long-term debt (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, cash equivalents, restricted cash and securities — — — (18 ) — (18 ) Net increase (decrease) in cash, cash equivalents, and restricted cash and securities 29 1 417 (151 ) — 296 Cash, cash equivalents and restricted cash and securities at beginning of period 10 5 325 268 — 608 Cash, cash equivalents and restricted cash and securities at end of period $ 39 6 742 117 — 904 |
Background and Summary of Sig39
Background and Summary of Significant Accounting Policies (Details) | 2 Months Ended | 10 Months Ended | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Oct. 31, 2017USD ($) | Dec. 31, 2017USD ($)year | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Description of Business | ||||||
Period company may receive up front payments for services to be provided in the future (in years) | year | 25 | |||||
USF contributions | $ 71,000,000 | |||||
Bad debt expense | 3,000,000 | |||||
Capitalized labor and related costs associated with employee and contract labor working on capital projects | $ 45,000,000 | |||||
Finite-lived intangible assets, useful life | 11 years 10 months 24 days | |||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | |||
New accounting pronouncement or change in accounting principle, effect of adoption, quantification | 22,000,000 | |||||
Deferred customer contract amortization period | 30 months | |||||
Accumulated deficit | ||||||
Description of Business | ||||||
Cumulative effect of adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | $ 0 | |||||
Accumulated deficit | ASU 2016-09 | ||||||
Description of Business | ||||||
Cumulative effect of adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | 42,000,000 | |||||
Customer relationships | ||||||
Description of Business | ||||||
Finite-lived intangible assets, useful life | 12 years 2 months 12 days | |||||
Customer relationships | Minimum | ||||||
Description of Business | ||||||
Finite-lived intangible assets, useful life | 7 years | |||||
Customer relationships | Maximum | ||||||
Description of Business | ||||||
Finite-lived intangible assets, useful life | 14 years | |||||
Other | ||||||
Description of Business | ||||||
Finite-lived intangible assets, useful life | 5 years | |||||
Sales Revenue | Customer Concentration Risk | ||||||
Description of Business | ||||||
Percentage of communications revenue from top ten customers | 19.00% | |||||
Predecessor | ||||||
Description of Business | ||||||
USF contributions | 331,000,000 | 414,000,000 | 364,000,000 | |||
Bad debt expense | 16,000,000 | 18,000,000 | 23,000,000 | |||
Capitalized labor and related costs associated with employee and contract labor working on capital projects | $ 239,000,000 | 271,000,000 | 244,000,000 | |||
Predecessor | Accumulated deficit | ||||||
Description of Business | ||||||
Cumulative effect of adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | $ 0 | $ 42,000,000 | $ 0 | |||
Predecessor | Sales Revenue | Customer Concentration Risk | ||||||
Description of Business | ||||||
Percentage of communications revenue from top ten customers | 18.00% | 16.00% | 16.00% | |||
Predecessor | Other income (expense) | ||||||
Description of Business | ||||||
Reclassification (from) to | $ (11,000,000) | $ 0 | $ (2,000,000) | |||
Predecessor | Selling, general and administrative expense | ||||||
Description of Business | ||||||
Reclassification (from) to | 11,000,000 | 0 | 2,000,000 | |||
Predecessor | Depreciation and amortization expense | ||||||
Description of Business | ||||||
Reclassification (from) to | (77,000,000) | (91,000,000) | (84,000,000) | |||
Predecessor | Cost of services and products | ||||||
Description of Business | ||||||
Reclassification (from) to | $ 65,000,000 | $ 57,000,000 | $ 84,000,000 |
CenturyLink Merger - Narrative
CenturyLink Merger - Narrative (Details) $ / shares in Units, $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / shares | Oct. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / shares | Nov. 01, 2017USD ($)citydark_fiber$ / shares | |
Business Acquisition [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | ||||
Goodwill | $ 10,837 | |||
Predecessor | ||||
Business Acquisition [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.01 | |||
Acquisition-related expenses | $ 28 | $ 85 | $ 15 | |
Goodwill | $ 7,729 | |||
Level 3 Parent, LLC | Level 3 Communications, Inc. | ||||
Business Acquisition [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.01 | |||
Cash consideration per share (in dollars per share) | $ / shares | 26.50 | |||
Level 3 Parent, LLC | CenturyLink | ||||
Business Acquisition [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | $ 1 | |||
Stock conversion ratio | 1.4286 | |||
Number of strands of dark fiber divested | dark_fiber | 24 | |||
Number of cities connected by dark fiber | city | 30 | |||
Goodwill | $ 10,821 | |||
Transaction costs | 47 | |||
Level 3 Parent, LLC | CenturyLink | Restricted stock awards | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 1 | |||
Level 3 Parent, LLC | CenturyLink | Unsecured Debt | ||||
Business Acquisition [Line Items] | ||||
Long-term debt | $ 1,825 | |||
Stated interest rate (as a percent) | 3.50% |
CenturyLink Merger - Considerat
CenturyLink Merger - Consideration (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Nov. 01, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 10,837 | |
CenturyLink | Level 3 Parent, LLC | ||
Business Acquisition [Line Items] | ||
Cash, accounts receivable and other current assets | $ 3,317 | |
Property, plant and equipment | 9,311 | |
Other non-current assets | 782 | |
Current liabilities, excluding the current portion of long-term debt | (1,461) | |
Current portion of long-term debt | (7) | |
Long-term debt | (10,888) | |
Deferred credits and other liabilities | (1,613) | |
Goodwill | 10,821 | |
Aggregate consideration | 19,617 | |
CenturyLink | Level 3 Parent, LLC | Customer relationships | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | 8,964 | |
CenturyLink | Level 3 Parent, LLC | Other | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | $ 391 |
Goodwill, Customer Relationsh42
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Goodwill | $ 10,837 | $ 10,837 | |||
Finite-lived intangible assets, net | 8,845 | 8,845 | |||
Other indefinite-life intangible assets | 0 | 0 | |||
Total other intangible assets, net | 378 | 378 | |||
Impact to goodwill from business combination deferred state income tax differences | 16 | 16 | |||
Acquired finite-lived intangible asset amortization expense | 139 | ||||
Intangible assets and goodwill | 20,199 | $ 20,199 | |||
Finite-lived intangible assets, useful life | 11 years 10 months 24 days | ||||
Predecessor | |||||
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Goodwill | $ 7,729 | ||||
Finite-lived intangible assets, net | 860 | ||||
Other indefinite-life intangible assets | 15 | ||||
Total other intangible assets, net | 55 | ||||
Acquired finite-lived intangible asset amortization expense | $ 168 | 211 | $ 227 | ||
Customer relationships | |||||
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Finite-lived intangible assets, net | 8,845 | $ 8,845 | |||
Finite-lived intangible assets, accumulated amortization | 126 | $ 126 | |||
Finite-lived intangible assets, useful life | 12 years 2 months 12 days | ||||
Customer relationships | Predecessor | |||||
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Finite-lived intangible assets, net | 860 | ||||
Finite-lived intangible assets, accumulated amortization | 1,113 | ||||
Trade names | |||||
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Finite-lived intangible assets, net | 126 | $ 126 | |||
Finite-lived intangible assets, accumulated amortization | 4 | $ 4 | |||
Finite-lived intangible assets, useful life | 4 years 9 months 18 days | ||||
Trade names | Predecessor | |||||
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Finite-lived intangible assets, net | 0 | ||||
Finite-lived intangible assets, accumulated amortization | 0 | ||||
Developed technology | |||||
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Finite-lived intangible assets, net | 252 | $ 252 | |||
Finite-lived intangible assets, accumulated amortization | $ 9 | $ 9 | |||
Finite-lived intangible assets, useful life | 4 years 9 months 18 days | ||||
Developed technology | Predecessor | |||||
Finite-Lived and Indefinite-Lived Intangible Assets | |||||
Finite-lived intangible assets, net | 40 | ||||
Finite-lived intangible assets, accumulated amortization | $ 189 |
Goodwill, Customer Relationsh43
Goodwill, Customer Relationships and Other Intangible Assets - Future Amortization Expense (Details) $ in Millions | Dec. 31, 2017USD ($) |
Estimated amortization expense of acquired finite-lived intangible asset | |
2,018 | $ 829 |
2,019 | 829 |
2,020 | 829 |
2,021 | 829 |
2,022 | $ 816 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Millions | Feb. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 29, 2017 |
Long-term debt | ||||
Unamortized premiums (discounts), net | $ 185 | |||
Unamortized debt issuance costs | 0 | |||
Total long-term debt | 10,890 | |||
Less current maturities | (8) | |||
Long-term debt, excluding current maturities | $ 10,882 | |||
Predecessor | ||||
Long-term debt | ||||
Unamortized premiums (discounts), net | $ (13) | |||
Unamortized debt issuance costs | (112) | |||
Total long-term debt | 10,884 | |||
Less current maturities | (7) | |||
Long-term debt, excluding current maturities | 10,877 | |||
5.750% Senior Notes due 2022 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 5.75% | |||
Debt Obligations | $ 600 | |||
5.750% Senior Notes due 2022 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 600 | |||
Floating Rate Senior Notes due 2018 | ||||
Long-term debt | ||||
Debt Obligations | $ 0 | |||
Floating Rate Senior Notes due 2018 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | $ 300 | $ 300 | ||
Debt instrument, interest rate during period | 4.762% | |||
6.125% Senior Notes due 2021 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 6.125% | |||
Debt Obligations | $ 640 | |||
6.125% Senior Notes due 2021 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | $ 640 | |||
5.375% Senior Notes due 2022 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 5.375% | |||
Debt Obligations | $ 1,000 | |||
5.375% Senior Notes due 2022 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 1,000 | |||
5.625% Senior Notes due 2023 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 5.625% | |||
Debt Obligations | $ 500 | |||
5.625% Senior Notes due 2023 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 500 | |||
5.125% Senior Notes due 2023 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 5.125% | |||
Debt Obligations | $ 700 | |||
5.125% Senior Notes due 2023 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 700 | |||
5.375% Senior Notes due 2025 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 5.375% | |||
Debt Obligations | $ 800 | |||
5.375% Senior Notes due 2025 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 800 | |||
5.375% Senior Notes due 2024 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 5.375% | |||
Debt Obligations | $ 900 | |||
5.375% Senior Notes due 2024 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 900 | |||
5.25% Senior Notes due 2026 | ||||
Long-term debt | ||||
Debt instrument, stated interest rate | 5.25% | |||
Debt Obligations | $ 775 | |||
5.25% Senior Notes due 2026 | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 775 | |||
Tranche B-III 2019 Term Loan | ||||
Long-term debt | ||||
Debt Obligations | 0 | |||
Tranche B-III 2019 Term Loan | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 815 | |||
Tranche B 2020 Term Loan | ||||
Long-term debt | ||||
Debt Obligations | 0 | |||
Tranche B 2020 Term Loan | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | 1,796 | |||
Tranche B-II 2022 Term Loan | ||||
Long-term debt | ||||
Debt Obligations | $ 0 | |||
Tranche B-II 2022 Term Loan | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | $ 2,000 | |||
Debt instrument, interest rate during period | 3.50% | |||
Tranche B 2024 Term Loan | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 1.25% | |||
Debt Obligations | $ 4,611 | |||
Debt instrument, interest rate during period | 3.557% | |||
Tranche B 2024 Term Loan | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | $ 4,611 | $ 0 | ||
Capital Leases and other debt | ||||
Long-term debt | ||||
Debt Obligations | $ 179 | |||
Capital Leases and other debt | Predecessor | ||||
Long-term debt | ||||
Debt Obligations | $ 183 | |||
Tranche B-III 2019 and Tranche B 2020 Term Loans | Predecessor | ||||
Long-term debt | ||||
Debt instrument, interest rate during period | 4.00% | |||
LIBOR | Floating Rate Senior Notes due 2018 | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 3.50% | |||
LIBOR | Tranche B-III 2019 Term Loan | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 3.00% | |||
LIBOR | Tranche B 2020 Term Loan | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 3.00% | |||
LIBOR | Tranche B-II 2022 Term Loan | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 2.75% | |||
LIBOR | Tranche B-II 2022 Term Loan | Minimum | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 0.75% | |||
LIBOR | Tranche B 2024 Term Loan | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 2.25% | |||
LIBOR | Tranche B 2024 Term Loan | Minimum | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 1.00% | |||
LIBOR | Tranche B 2024 Term Loan | Predecessor | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 2.25% | |||
LIBOR | Tranche B 2024 Term Loan | Predecessor | Minimum | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 0.00% | |||
LIBOR | Tranche B-III 2019 and Tranche B 2020 Term Loans | Minimum | ||||
Long-term debt | ||||
Debt instrument, interest rate spread on debt | 1.00% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Sep. 29, 2017 | Feb. 22, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Long-term debt | ||||||||
Debt instrument, redemption period notice minimum | 30 days | |||||||
Debt instrument, redemption period notice maximum | 60 days | |||||||
Debt instrument, redemption price, percentage | 101.00% | |||||||
Deferred debt issuance costs, net | $ 0 | $ 0 | ||||||
Unamortized debt issuance costs | 0 | 0 | ||||||
Gain (loss) on extinguishment of debt | 0 | |||||||
Predecessor | ||||||||
Long-term debt | ||||||||
Deferred debt issuance costs, net | $ 40,000,000 | $ 11,000,000 | $ 50,000,000 | |||||
Unamortized debt issuance costs | 112,000,000 | |||||||
Payments of debt extinguishment costs | $ 44,000,000 | |||||||
Gain (loss) on extinguishment of debt | $ (44,000,000) | (40,000,000) | $ (218,000,000) | |||||
Tranche B 2024 Term Loan | ||||||||
Long-term debt | ||||||||
Debt Obligations | 4,611,000,000 | $ 4,611,000,000 | ||||||
Debt instrument, interest rate spread on debt | 1.25% | |||||||
Tranche B 2024 Term Loan | Predecessor | ||||||||
Long-term debt | ||||||||
Debt Obligations | $ 4,611,000,000 | 0 | ||||||
Upfront basis point | 0.25% | |||||||
Tranche B 2024 Term Loan | Federal Funds Effective Rate | ||||||||
Long-term debt | ||||||||
Debt instrument, interest rate spread on debt | 0.50% | |||||||
Tranche B 2024 Term Loan | LIBOR | ||||||||
Long-term debt | ||||||||
Debt instrument, interest rate spread on debt | 2.25% | |||||||
Tranche B 2024 Term Loan | LIBOR | Predecessor | ||||||||
Long-term debt | ||||||||
Debt instrument, interest rate spread on debt | 2.25% | |||||||
Tranche B 2024 Term Loan | LIBOR | Minimum | ||||||||
Long-term debt | ||||||||
Debt instrument, interest rate spread on debt | 1.00% | |||||||
Tranche B 2024 Term Loan | LIBOR | Minimum | Predecessor | ||||||||
Long-term debt | ||||||||
Debt instrument, interest rate spread on debt | 0.00% | |||||||
Capital Leases and other debt | ||||||||
Long-term debt | ||||||||
Debt Obligations | $ 179,000,000 | $ 179,000,000 | ||||||
Debt instrument, weighted average interest rate | 6.00% | 6.00% | ||||||
Capital Leases and other debt | Predecessor | ||||||||
Long-term debt | ||||||||
Debt Obligations | 183,000,000 | |||||||
Floating Rate Senior Notes due 2018 | ||||||||
Long-term debt | ||||||||
Debt Obligations | $ 0 | $ 0 | ||||||
Floating Rate Senior Notes due 2018 | Predecessor | ||||||||
Long-term debt | ||||||||
Debt Obligations | $ 300,000,000 | $ 300,000,000 | ||||||
Gain (loss) on extinguishment of debt | $ (1,000,000) | |||||||
Floating Rate Senior Notes due 2018 | LIBOR | ||||||||
Long-term debt | ||||||||
Debt instrument, interest rate spread on debt | 3.50% |
Long-Term Debt - Maturities of
Long-Term Debt - Maturities of Debt (Details) $ in Millions | Dec. 31, 2017USD ($) |
Future contractual maturities of long-term debt and capital leases (excluding issue discounts, premiums and fair value adjustments) | |
2,018 | $ 8 |
2,019 | 7 |
2,020 | 8 |
2,021 | 650 |
2,022 | 1,610 |
2023 and thereafter | 8,422 |
Total long-term debt | $ 10,705 |
Accounts Receivable - Accounts
Accounts Receivable - Accounts Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 751 | |
Less: allowance for doubtful accounts | (3) | |
Accounts receivable, less allowance | 748 | |
Trade and purchased receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 562 | |
Earned and unbilled receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 165 | |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 24 | |
Predecessor | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 741 | |
Less: allowance for doubtful accounts | (29) | |
Accounts receivable, less allowance | 712 | |
Predecessor | Trade and purchased receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 588 | |
Predecessor | Earned and unbilled receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 140 | |
Predecessor | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 13 |
Accounts Receivable - Allowance
Accounts Receivable - Allowance for Doubtful Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Beginning Balance | $ 0 | |||
Additions | 3 | |||
Deductions | 0 | |||
Ending Balance | 3 | $ 0 | ||
Predecessor | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Beginning Balance | $ 33 | 29 | $ 32 | $ 30 |
Additions | 16 | 18 | 23 | |
Deductions | (12) | (21) | (21) | |
Ending Balance | $ 33 | $ 29 | $ 32 |
Property, Plant and Equipment -
Property, Plant and Equipment - Net Property, Plant and Equipment (Details) - USD ($) $ in Millions | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | $ 9,555 | |||
Accumulated depreciation | (143) | |||
Net property, plant and equipment | 9,412 | |||
Depreciation expense | 143 | |||
Land | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | 348 | |||
Fiber conduit and other outside plant | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | $ 4,750 | |||
Fiber conduit and other outside plant | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable Lives | 15 years | |||
Fiber conduit and other outside plant | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable Lives | 45 years | |||
Central office and other network electronics | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | $ 2,134 | |||
Central office and other network electronics | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable Lives | 3 years | |||
Central office and other network electronics | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable Lives | 10 years | |||
Support assets | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | $ 2,019 | |||
Support assets | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable Lives | 3 years | |||
Support assets | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable Lives | 30 years | |||
Construction-in-progress | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | $ 304 | |||
Predecessor | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | $ 21,388 | |||
Accumulated depreciation | (11,249) | |||
Net property, plant and equipment | 10,139 | |||
Depreciation expense | $ 850 | 948 | $ 855 | |
Predecessor | Land | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | 179 | |||
Predecessor | Fiber conduit and other outside plant | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | 9,110 | |||
Predecessor | Central office and other network electronics | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | 8,846 | |||
Predecessor | Support assets | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | 3,023 | |||
Predecessor | Construction-in-progress | ||||
Property, Plant and Equipment, Net [Abstract] | ||||
Property, plant and equipment | $ 230 |
Property, Plant and Equipment50
Property, Plant and Equipment - Asset Retirement Obligations (Details) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||
Balance at beginning of period | $ 45 | |||
Accretion expense | 1 | |||
Liabilities settled | (1) | |||
Revision in estimated cash flows | 0 | |||
Effect of foreign currency rate change | 0 | |||
Balance at end of period | 45 | $ 45 | ||
Predecessor | ||||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||
Balance at beginning of period | $ 94 | 89 | $ 90 | $ 85 |
Accretion expense | 12 | 10 | 9 | |
Liabilities settled | (7) | (9) | (8) | |
Revision in estimated cash flows | 0 | 0 | 5 | |
Effect of foreign currency rate change | 0 | (2) | (1) | |
Balance at end of period | $ 94 | $ 89 | $ 90 |
Employee Benefits - Defined Con
Employee Benefits - Defined Contribution (Details) - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, maximum annual contribution per employee | $ 18 | $ 18 | |||
Defined contribution plan, maximum annual contribution per employee, percentage | 100.00% | ||||
Defined contribution plan, employer matching contribution, percentage | 4.00% | ||||
Defined contribution plan, cost | $ 7,000 | ||||
All Other Defined Contribution | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, cost | 1,000 | ||||
Cost of services and products | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, cost | 1,000 | ||||
Selling, general and administrative expense | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, cost | $ 5,000 | ||||
Predecessor | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, cost | $ 30,000 | 37,000 | $ 36,000 | ||
Predecessor | All Other Defined Contribution | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, cost | 5,000 | 6,000 | 6,000 | ||
Predecessor | Cost of services and products | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, cost | 4,000 | 5,000 | 5,000 | ||
Predecessor | Selling, general and administrative expense | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, cost | $ 26,000 | $ 32,000 | $ 31,000 |
Employee Benefits - Defined Ben
Employee Benefits - Defined Benefits (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Retirement Benefits [Abstract] | ||
Defined Benefit Plan, Fair Value of Plan Assets | $ 147 | $ 136 |
Defined Benefit Plan, Benefit Obligation | 165 | 158 |
Defined Benefit Plan, Funded (Unfunded) Status of Plan | $ (18) | $ (22) |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | $ 26 | |||
Predecessor | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | $ 132 | $ 156 | $ 141 |
Products and Services Revenue54
Products and Services Revenues - Revenue From Products and Services (Details) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||
Oct. 31, 2017USD ($) | Dec. 31, 2017USD ($)segment | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Oct. 31, 2017USD ($) | Dec. 31, 2017USD ($)country | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | |||||||||||||
Number of reportable segments | segment | 1 | ||||||||||||
Number of countries with on-net access (more than) | country | 60 | ||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Operating revenues | $ 1,391 | ||||||||||||
Affiliate revenues | 16 | ||||||||||||
Total operating revenues | 1,407 | $ 8,277 | |||||||||||
Core network services revenues | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Operating revenues | 1,331 | ||||||||||||
Wholesale voice services | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Operating revenues | $ 60 | ||||||||||||
Predecessor | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Operating revenues | $ 6,870 | $ 8,173 | $ 8,230 | ||||||||||
Affiliate revenues | 0 | 0 | 0 | ||||||||||
Total operating revenues | $ 701 | $ 2,059 | $ 2,062 | $ 2,048 | $ 2,032 | $ 2,033 | $ 2,057 | $ 2,051 | 6,870 | 8,173 | 8,230 | ||
Predecessor | Core network services revenues | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Operating revenues | 6,543 | 7,767 | 7,757 | ||||||||||
Predecessor | Wholesale voice services | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Operating revenues | $ 327 | $ 406 | $ 473 |
Products and Services Revenue55
Products and Services Revenues - Revenue from Geographic Region (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||
Oct. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Assets | $ 33,135 | $ 33,135 | |||||||||||
Revenues | 1,407 | 8,277 | |||||||||||
Predecessor | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Assets | $ 24,888 | $ 24,888 | |||||||||||
Revenues | $ 701 | $ 2,059 | $ 2,062 | $ 2,048 | $ 2,032 | $ 2,033 | $ 2,057 | $ 2,051 | $ 6,870 | $ 8,173 | $ 8,230 | ||
North America | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Assets | 27,776 | 27,776 | |||||||||||
Revenues | 1,155 | ||||||||||||
North America | Predecessor | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Revenues | 5,651 | ||||||||||||
EMEA | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Assets | 1,192 | 1,192 | |||||||||||
Revenues | 128 | ||||||||||||
EMEA | Predecessor | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Revenues | 607 | ||||||||||||
Latin America | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Assets | 4,167 | $ 4,167 | |||||||||||
Revenues | $ 124 | ||||||||||||
Latin America | Predecessor | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Revenues | $ 612 |
Affiliate Transactions (Details
Affiliate Transactions (Details) $ in Millions | 1 Months Ended |
Jan. 31, 2018USD ($) | |
Subsequent event | |
Subsequent Event [Line Items] | |
Distributions from subsidiaries | $ 150 |
Fair Value Disclosure (Details)
Fair Value Disclosure (Details) - Input Level 2 - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Liabilities measured on a recurring basis | ||
Liabilities-Long-term debt, excluding capital lease and other obligations | $ 10,711 | |
Carrying Amount | Predecessor | ||
Liabilities measured on a recurring basis | ||
Liabilities-Long-term debt, excluding capital lease and other obligations | $ 10,701 | |
Fair Value | ||
Liabilities measured on a recurring basis | ||
Liabilities-Long-term debt, excluding capital lease and other obligations | $ 10,528 | |
Fair Value | Predecessor | ||
Liabilities measured on a recurring basis | ||
Liabilities-Long-term debt, excluding capital lease and other obligations | $ 10,954 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Tax Cuts and Jobs Act, provisional tax expense | $ 195 | $ 195 | |||||
Effective income tax rate | 251.60% | ||||||
Net deferred tax assets | $ 214 | 214 | |||||
Deferred tax liabilities, noncurrent | 212 | 212 | |||||
Deferred tax assets, noncurrent | 426 | 426 | |||||
Increase in operating loss carryforwards | 1,000 | ||||||
Deferred tax assets, valuation allowance | 942 | 942 | |||||
Valuation allowance increase (decrease) | 80 | ||||||
Unrecognized tax benefits that would impact effective tax rate | 20 | 20 | |||||
Unrecognized tax benefits, accrued interest | 20 | 20 | |||||
Decrease in unrecognized tax benefits is reasonably possible | 3 | 3 | |||||
Foreign jurisdiction | |||||||
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Operating loss carryforwards | 5,800 | 5,800 | |||||
Tax credits | 15 | 15 | |||||
U.S. Internal Revenue Service (IRS) | |||||||
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Operating loss carryforwards | 9,900 | 9,900 | |||||
State jurisdiction | |||||||
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Operating loss carryforwards | $ 10,000 | $ 10,000 | |||||
Predecessor | |||||||
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Effective income tax rate | 38.70% | 19.60% | (1113.00%) | ||||
Income tax expense (benefit) from change in valuation allowances | $ 82 | $ 3,300 | |||||
Net deferred tax assets | $ 3,122 | 3,122 | |||||
Deferred tax liabilities, noncurrent | 248 | 248 | |||||
Deferred tax assets, noncurrent | 3,370 | 3,370 | |||||
Deferred tax assets, valuation allowance | 862 | 862 | |||||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | 22 | ||||||
Effective income tax rate reconciliation, federal law changes | 110 | ||||||
Unrecognized tax benefits that would impact effective tax rate | 17 | $ 19 | 17 | ||||
Unrecognized tax benefits, accrued interest | $ 18 | 18 | |||||
Predecessor | Geographic distribution, foreign | |||||||
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Recognized income tax benefit | 82 | ||||||
Predecessor | Foreign jurisdiction | |||||||
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Recognized income tax benefit | $ 110 | ||||||
Predecessor | U.S. Internal Revenue Service (IRS) | |||||||
Components of Income Tax Expense (Benefit) [Line Items] | |||||||
Recognized income tax benefit | $ 3,300 | ||||||
Deferred income tax expense (benefit) | $ 3,100 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) by Current and Deferred (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Federal | ||||||
Current | $ 0 | |||||
Deferred | 231 | |||||
State | ||||||
Current | 2 | |||||
Deferred | 6 | |||||
Foreign | ||||||
Current | 4 | |||||
Deferred | (9) | |||||
Total income tax expense (benefit) | $ 234 | $ 16 | $ (40) | |||
Predecessor | ||||||
Federal | ||||||
Current | $ 0 | $ 0 | $ 0 | |||
Deferred | 193 | 177 | (2,941) | |||
State | ||||||
Current | 7 | 4 | 3 | |||
Deferred | 16 | 27 | (246) | |||
Foreign | ||||||
Current | 39 | 41 | 33 | |||
Deferred | 13 | (84) | 1 | |||
Total income tax expense (benefit) | $ 268 | $ 165 | $ (3,150) |
Income Taxes - Allocation of In
Income Taxes - Allocation of Income Tax Expense (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income tax expense in the consolidated statements of operations: | ||||||
Attributable to income | $ 234 | $ 16 | $ (40) | |||
Member's/Stockholders' equity: | ||||||
Tax effect of the change in accumulated other comprehensive loss | $ 17 | |||||
Predecessor | ||||||
Income tax expense in the consolidated statements of operations: | ||||||
Attributable to income | $ 268 | $ 165 | $ (3,150) | |||
Member's/Stockholders' equity: | ||||||
Tax effect of the change in accumulated other comprehensive loss | $ 49 | $ (43) | $ (11) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Benefit) (Details) | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Reconciliation [Line Items] | ||||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% | |
State income taxes, net of federal income tax benefit | 3.60% | |||
Tax Reform/US Federal Law Changes | 210.60% | |||
Transaction costs | 11.30% | |||
Change in liability of unrecognized tax position | 1.20% | |||
Net foreign income tax | (19.30%) | |||
Permanent items | 5.00% | |||
Change in US valuation allowance | 0.00% | |||
Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | 0.10% | |||
Research and development costs | (0.90%) | |||
Non-deductible loss on deconsolidation | 0.00% | |||
Other, net | 5.00% | |||
Effective income tax rate | 251.60% | |||
Predecessor | ||||
Income Tax Reconciliation [Line Items] | ||||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% | |
State income taxes, net of federal income tax benefit | 2.90% | 3.70% | 5.20% | |
Tax Reform/US Federal Law Changes | 0.00% | (13.20%) | 0.00% | |
Transaction costs | 0.00% | 0.00% | 0.00% | |
Change in liability of unrecognized tax position | 0.10% | 0.10% | (0.10%) | |
Net foreign income tax | 0.90% | (6.70%) | 26.60% | |
Permanent items | 1.80% | 1.20% | 2.60% | |
Change in US valuation allowance | 0.00% | 0.00% | (1199.80%) | |
Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting | (0.50%) | (2.40%) | 0.00% | |
Research and development costs | (1.20%) | (0.00%) | (0.00%) | |
Non-deductible loss on deconsolidation | 0.00% | 0.00% | 20.20% | |
Other, net | (0.30%) | 1.90% | (2.70%) | |
Effective income tax rate | 38.70% | 19.60% | (1113.00%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | ||
Deferred revenue | $ 256 | |
Net operating loss carry forwards | 3,633 | |
Property, plant and equipment | 63 | |
Other | 282 | |
Gross deferred tax assets | 4,234 | |
Less valuation allowance | (942) | |
Net deferred tax assets | 3,292 | |
Deferred tax liabilities | ||
Deferred revenue | (44) | |
Property, plant and equipment | (689) | |
Intangible assets | (2,329) | |
Other | (16) | |
Gross deferred tax liabilities | (3,078) | |
Net deferred tax assets | $ 214 | |
Predecessor | ||
Deferred tax assets | ||
Deferred revenue | $ 364 | |
Net operating loss carry forwards | 4,550 | |
Property, plant and equipment | 95 | |
Other | 471 | |
Gross deferred tax assets | 5,480 | |
Less valuation allowance | (862) | |
Net deferred tax assets | 4,618 | |
Deferred tax liabilities | ||
Deferred revenue | (57) | |
Property, plant and equipment | (962) | |
Intangible assets | (357) | |
Other | (120) | |
Gross deferred tax liabilities | (1,496) | |
Net deferred tax assets | $ 3,122 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at beginning of period | $ 20 | ||
Tax positions of prior periods netted against deferred tax assets | 0 | ||
Increase (decrease) in tax positions taken in the prior period | 1 | ||
Increase in tax positions taken in the current period | 0 | ||
Decrease from the lapse of statute of limitations | 0 | ||
Unrecognized tax benefits at end of period | 21 | $ 20 | |
Predecessor | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at beginning of period | $ 20 | 18 | $ 18 |
Tax positions of prior periods netted against deferred tax assets | 0 | (1) | |
Increase (decrease) in tax positions taken in the prior period | 0 | 1 | |
Increase in tax positions taken in the current period | 2 | 2 | |
Decrease from the lapse of statute of limitations | 0 | 0 | |
Unrecognized tax benefits at end of period | $ 20 | $ 18 |
Quarterly Financial Data (Una64
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||
Oct. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||||
Operating Revenues | $ 1,407 | $ 8,277 | |||||||||||
Operating Income | 158 | 1,309 | |||||||||||
Net (loss) income | (141) | 284 | |||||||||||
Loss on modification and extinguishment of debt | 0 | ||||||||||||
Income tax expense (benefit) | 234 | $ 16 | $ (40) | ||||||||||
Tax Cuts and Jobs Act, provisional tax expense | $ 195 | $ 195 | |||||||||||
Brazil | |||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||
Income tax expense (benefit) | (35) | ||||||||||||
U.S. Internal Revenue Service (IRS) | |||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||
Income tax expense (benefit) | (110) | ||||||||||||
Senior Notes due 2020 | |||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||
Loss on modification and extinguishment of debt | 40 | ||||||||||||
Debt instrument, stated interest rate | 7.00% | 7.00% | |||||||||||
Predecessor | |||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||
Operating Revenues | $ 701 | $ 2,059 | $ 2,062 | $ 2,048 | 2,032 | $ 2,033 | 2,057 | $ 2,051 | $ 6,870 | $ 8,173 | $ 8,230 | ||
Operating Income | 112 | 349 | 353 | 337 | 354 | 354 | 375 | 362 | 1,151 | 1,445 | 1,330 | ||
Net (loss) income | $ 19 | $ 157 | $ 154 | $ 95 | $ 250 | $ 143 | $ 156 | $ 128 | 425 | 677 | 3,433 | ||
Loss on modification and extinguishment of debt | 44 | 40 | 218 | ||||||||||
Income tax expense (benefit) | $ 268 | $ 165 | $ (3,150) |
Commitments, Contingencies an65
Commitments, Contingencies and Other Items - Lawsuits (Details) $ in Millions | Nov. 26, 2013USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2017USD ($)property |
Loss Contingencies | ||||
Estimated Litigation Liability | $ 88 | |||
Number of properties with potential environmental liability | property | 180 | |||
Peruvian Tax Litigation, Before Interest | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency, Asserted Claim | $ 26 | |||
Peruvian Tax Litigation, Income Taxwitholding 2001 and 2002 | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency, Asserted Claim | 3 | |||
Peruvian Tax Litigation, Vat for 2001 and 2002 | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency, Asserted Claim | 7 | |||
Peruvian Tax Litigation, Disallowance of VAT in 2005 | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency, Asserted Claim | 16 | |||
Peruvian Tax Litigation | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency, Asserted Claim | 15 | |||
Employee Severance and Contractor Termination Disputes | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency, Asserted Claim | 29 | |||
Brazilian Tax Claims | Maximum | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency, Range of Possible Loss, Portion Not Accrued | $ 53 | |||
Brazilian Tax Claims | Brazilian Tax Reserve Release | Pending Litigation | ||||
Loss Contingencies | ||||
Loss Contingency Accrual, Period Increase (Decrease) | $ (3) | $ (6) | ||
Loss Contingency Accrual, Payments | $ 5 | |||
United States of America ex rel., v. Level 3 Communications, Inc. et al. | Pending Litigation | ||||
Loss Contingencies | ||||
Loss contingency, damages sought, value | $ 50 |
Commitments, Contingencies an66
Commitments, Contingencies and Other Items - Other Commitments (Details) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Amount outstanding under letters of credit | $ 36 | $ 36 | $ 39 | ||
Collateralized Financings | 30 | 30 | 33 | ||
Operating Leased Assets [Line Items] | |||||
Payments under these right-of-way agreements | 35 | ||||
Rent expense, including common area maintenance, under non-cancelable lease agreements | 60 | ||||
Right-of-Way Agreements | |||||
Right-of-Way Agreements, 2018 | 173 | 173 | |||
Right-of-Way Agreements, 2019 | 90 | 90 | |||
Right-of-Way Agreements, 2020 | 77 | 77 | |||
Right-of-Way Agreements, 2021 | 60 | 60 | |||
Right-of-Way Agreements, 2022 | 56 | 56 | |||
Right-of-Way Agreements, Thereafter | 464 | 464 | |||
Right-of-Way Agreements, Total | 920 | 920 | |||
Operating Leases | |||||
Operating Leases, 2018 | 288 | 288 | |||
Operating Leases, 2019 | 251 | 251 | |||
Operating Leases, 2020 | 217 | 217 | |||
Operating Leases, 2021 | 151 | 151 | |||
Operating Leases, 2022 | 128 | 128 | |||
Operating Leases, Thereafter | 507 | 507 | |||
Operating Leases, Total | 1,542 | 1,542 | |||
Total | |||||
Right-of-Way Agreements and Facilities, 2018 | 461 | 461 | |||
Right-of-Way Agreements and Facilities, 2019 | 341 | 341 | |||
Right-of-Way Agreements and Facilities, 2020 | 294 | 294 | |||
Right-of-Way Agreements and Facilities, 2021 | 211 | 211 | |||
Right-of-Way Agreements and Facilities, 2022 | 184 | 184 | |||
Right-of-Way Agreements and Facilities, Thereafter | 971 | 971 | |||
Right-of-Way Agreements and Facilities, Total | 2,462 | 2,462 | |||
Future Minimum Sublease Receipts | |||||
2,018 | 3 | 3 | |||
2,019 | 2 | 2 | |||
2,020 | 1 | 1 | |||
2,021 | 1 | 1 | |||
2,022 | 1 | 1 | |||
Thereafter | 1 | 1 | |||
Total | $ 9 | $ 9 | |||
Period of Right-of-Way Agreements with cancelable agreements (in years) | 1 year | ||||
Predecessor | |||||
Operating Leased Assets [Line Items] | |||||
Payments under these right-of-way agreements | $ 164 | 205 | $ 211 | ||
Rent expense, including common area maintenance, under non-cancelable lease agreements | $ 283 | $ 347 | $ 357 |
Commitments, Contingencies an67
Commitments, Contingencies and Other Items - Purchase Commitments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Long-term Purchase Commitment | |
2,018 | $ 175 |
2,019 | 93 |
2,020 | 67 |
2,021 | 34 |
2,022 | 25 |
Thereafter | 70 |
Total | 464 |
Cost of Access Services | |
Long-term Purchase Commitment | |
2,018 | 115 |
2,019 | 52 |
2,020 | 35 |
2,021 | 15 |
2,022 | 7 |
Thereafter | 2 |
Total | 226 |
Third-Party Maintenance Services | |
Long-term Purchase Commitment | |
2,018 | 60 |
2,019 | 41 |
2,020 | 32 |
2,021 | 19 |
2,022 | 18 |
Thereafter | 68 |
Total | $ 238 |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 0 | |||
Other comprehensive (loss) income before reclassifications | 18 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Net other comprehensive (loss) income | 18 | |||
Ending balance | 18 | $ 0 | ||
Pension Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 0 | |||
Other comprehensive (loss) income before reclassifications | 0 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Net other comprehensive (loss) income | 0 | |||
Ending balance | 0 | 0 | ||
Foreign Currency Translation Adjustments and Other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 0 | |||
Other comprehensive (loss) income before reclassifications | 18 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Net other comprehensive (loss) income | 18 | |||
Ending balance | 18 | 0 | ||
Predecessor | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (307) | (387) | ||
Other comprehensive (loss) income before reclassifications | 78 | |||
Amounts reclassified from accumulated other comprehensive loss | 2 | |||
Net other comprehensive (loss) income | 80 | $ (86) | $ (154) | |
Ending balance | (307) | (387) | ||
Predecessor | Pension Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (35) | (34) | ||
Other comprehensive (loss) income before reclassifications | (3) | |||
Amounts reclassified from accumulated other comprehensive loss | 2 | |||
Net other comprehensive (loss) income | (1) | |||
Ending balance | (35) | (34) | ||
Predecessor | Foreign Currency Translation Adjustments and Other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ (272) | (353) | ||
Other comprehensive (loss) income before reclassifications | 81 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Net other comprehensive (loss) income | 81 | |||
Ending balance | $ (272) | $ (353) |
Other Financial Information - O
Other Financial Information - Other Current Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other Current Assets [Line Items] | ||
Prepaid expenses | $ 68 | |
Material, supplies and inventory | 3 | |
Deferred activation and installation charges | 17 | |
Other | 29 | |
Total other current assets | $ 117 | |
Predecessor | ||
Other Current Assets [Line Items] | ||
Prepaid expenses | $ 82 | |
Material, supplies and inventory | 3 | |
Deferred activation and installation charges | 5 | |
Other | 25 | |
Total other current assets | $ 115 |
Other Financial Information -70
Other Financial Information - Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other Current Liabilities [Line Items] | ||
Self insurance | $ 11 | |
Legal and tax reserves | 31 | |
Other | 15 | |
Total other current liabilities | $ 57 | |
Predecessor | ||
Other Current Liabilities [Line Items] | ||
Self insurance | $ 12 | |
Legal and tax reserves | 18 | |
Other | 22 | |
Total other current liabilities | $ 52 |
Condensed Consolidating Finan71
Condensed Consolidating Financial Information - Statements of Operations (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||
Oct. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING REVENUES | |||||||||||||
Operating revenues | $ 1,391 | ||||||||||||
Operating revenues - affiliate | 16 | ||||||||||||
Total operating revenues | 1,407 | $ 8,277 | |||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 690 | ||||||||||||
Selling, general and administrative | 253 | ||||||||||||
Operating expenses - affiliate | 24 | ||||||||||||
Depreciation and amortization | 282 | ||||||||||||
Total operating expenses | 1,249 | ||||||||||||
OPERATING INCOME | 158 | 1,309 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 1 | ||||||||||||
Interest income - affiliate | 11 | ||||||||||||
Interest expense | (80) | ||||||||||||
Interest income (expense) - affiliates, net | 0 | ||||||||||||
Loss on modification and extinguishment of debt | 0 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | 0 | ||||||||||||
Other income, net | 3 | ||||||||||||
Total other expense, net | (65) | ||||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 93 | ||||||||||||
Income tax (expense) benefit | (234) | $ (16) | $ 40 | ||||||||||
NET (LOSS) INCOME | (141) | $ 284 | |||||||||||
Other comprehensive income, net of income taxes | 18 | ||||||||||||
COMPREHENSIVE (LOSS) INCOME | (123) | ||||||||||||
Predecessor | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | $ 6,870 | $ 8,173 | $ 8,230 | ||||||||||
Operating revenues - affiliate | 0 | 0 | 0 | ||||||||||
Total operating revenues | $ 701 | $ 2,059 | $ 2,062 | $ 2,048 | 2,032 | $ 2,033 | 2,057 | $ 2,051 | 6,870 | 8,173 | 8,230 | ||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 3,493 | 4,162 | 4,349 | ||||||||||
Selling, general and administrative | 1,208 | 1,407 | 1,469 | ||||||||||
Operating expenses - affiliate | 0 | 0 | 0 | ||||||||||
Depreciation and amortization | 1,018 | 1,159 | 1,082 | ||||||||||
Total operating expenses | 5,719 | 6,728 | 6,900 | ||||||||||
OPERATING INCOME | 112 | 349 | 353 | 337 | 354 | 354 | 375 | 362 | 1,151 | 1,445 | 1,330 | ||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 13 | 4 | 1 | ||||||||||
Interest income - affiliate | 0 | 0 | 0 | ||||||||||
Interest expense | (441) | (544) | (640) | ||||||||||
Loss on modification and extinguishment of debt | (44) | (40) | (218) | ||||||||||
Equity in net (losses) earnings of subsidiaries | 0 | 0 | 0 | ||||||||||
Other income, net | 14 | (63) | (408) | ||||||||||
Total other expense, net | (458) | (603) | (1,047) | ||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 693 | 842 | 283 | ||||||||||
Income tax (expense) benefit | (268) | (165) | 3,150 | ||||||||||
NET (LOSS) INCOME | $ 19 | $ 157 | $ 154 | $ 95 | $ 250 | $ 143 | $ 156 | $ 128 | 425 | 677 | 3,433 | ||
Other comprehensive income, net of income taxes | 80 | (86) | (154) | ||||||||||
COMPREHENSIVE (LOSS) INCOME | 505 | 591 | 3,279 | ||||||||||
Eliminations | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | (28) | ||||||||||||
Operating revenues - affiliate | 0 | ||||||||||||
Total operating revenues | (28) | ||||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | (28) | ||||||||||||
Selling, general and administrative | 0 | ||||||||||||
Operating expenses - affiliate | 0 | ||||||||||||
Depreciation and amortization | 0 | ||||||||||||
Total operating expenses | (28) | ||||||||||||
OPERATING INCOME | 0 | ||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 0 | ||||||||||||
Interest income - affiliate | 0 | ||||||||||||
Interest expense | 0 | ||||||||||||
Interest income (expense) - affiliates, net | 0 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | 771 | ||||||||||||
Other income, net | 0 | ||||||||||||
Total other expense, net | 771 | ||||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 771 | ||||||||||||
Income tax (expense) benefit | 0 | ||||||||||||
NET (LOSS) INCOME | 771 | ||||||||||||
Other comprehensive income, net of income taxes | (18) | ||||||||||||
COMPREHENSIVE (LOSS) INCOME | 753 | ||||||||||||
Eliminations | Predecessor | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | (129) | (132) | (173) | ||||||||||
Total operating revenues | (129) | (132) | (173) | ||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | (129) | (132) | (173) | ||||||||||
Selling, general and administrative | 0 | 0 | 0 | ||||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||||
Total operating expenses | (129) | (132) | (173) | ||||||||||
OPERATING INCOME | 0 | 0 | 0 | ||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||
Interest income - affiliate | 0 | 0 | 0 | ||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||
Loss on modification and extinguishment of debt | 0 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | 2,261 | 1,945 | (646) | ||||||||||
Other income, net | 0 | 0 | 0 | ||||||||||
Total other expense, net | 2,261 | 1,945 | (646) | ||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 2,261 | 1,945 | (646) | ||||||||||
Income tax (expense) benefit | 0 | 0 | 0 | ||||||||||
NET (LOSS) INCOME | 2,261 | 1,945 | (646) | ||||||||||
Other comprehensive income, net of income taxes | 0 | 86 | 154 | ||||||||||
COMPREHENSIVE (LOSS) INCOME | 2,261 | 2,031 | (492) | ||||||||||
Level 3 Parent, LLC | Reportable Legal Entities | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 0 | ||||||||||||
Operating revenues - affiliate | 0 | ||||||||||||
Total operating revenues | 0 | ||||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 0 | ||||||||||||
Selling, general and administrative | 1 | ||||||||||||
Operating expenses - affiliate | 0 | ||||||||||||
Depreciation and amortization | 0 | ||||||||||||
Total operating expenses | 1 | ||||||||||||
OPERATING INCOME | (1) | ||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 0 | ||||||||||||
Interest income - affiliate | 11 | ||||||||||||
Interest expense | (5) | ||||||||||||
Interest income (expense) - affiliates, net | 251 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | (827) | ||||||||||||
Other income, net | 1 | ||||||||||||
Total other expense, net | (569) | ||||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | (570) | ||||||||||||
Income tax (expense) benefit | 429 | ||||||||||||
NET (LOSS) INCOME | (141) | ||||||||||||
Other comprehensive income, net of income taxes | 18 | ||||||||||||
COMPREHENSIVE (LOSS) INCOME | (123) | ||||||||||||
Level 3 Parent, LLC | Reportable Legal Entities | Predecessor | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 0 | 0 | 0 | ||||||||||
Total operating revenues | 0 | 0 | 0 | ||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 0 | 0 | 0 | ||||||||||
Selling, general and administrative | 4 | 16 | 4 | ||||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||||
Total operating expenses | 4 | 16 | 4 | ||||||||||
OPERATING INCOME | (4) | (16) | (4) | ||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||
Interest income - affiliate | 1,260 | 1,385 | 1,310 | ||||||||||
Interest expense | (30) | (36) | (51) | ||||||||||
Loss on modification and extinguishment of debt | 0 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | (815) | (669) | 2,162 | ||||||||||
Other income, net | 3 | (1) | (18) | ||||||||||
Total other expense, net | 418 | 679 | 3,403 | ||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 414 | 663 | 3,399 | ||||||||||
Income tax (expense) benefit | 11 | 14 | 34 | ||||||||||
NET (LOSS) INCOME | 425 | 677 | 3,433 | ||||||||||
Other comprehensive income, net of income taxes | 80 | (86) | (154) | ||||||||||
COMPREHENSIVE (LOSS) INCOME | 505 | 591 | 3,279 | ||||||||||
Level 3 Financing, Inc. | Reportable Legal Entities | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 0 | ||||||||||||
Operating revenues - affiliate | 0 | ||||||||||||
Total operating revenues | 0 | ||||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 0 | ||||||||||||
Selling, general and administrative | 3 | ||||||||||||
Operating expenses - affiliate | 0 | ||||||||||||
Depreciation and amortization | 0 | ||||||||||||
Total operating expenses | 3 | ||||||||||||
OPERATING INCOME | (3) | ||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 0 | ||||||||||||
Interest income - affiliate | 0 | ||||||||||||
Interest expense | (72) | ||||||||||||
Interest income (expense) - affiliates, net | 368 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | (15) | ||||||||||||
Other income, net | 0 | ||||||||||||
Total other expense, net | 281 | ||||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 278 | ||||||||||||
Income tax (expense) benefit | (1,105) | ||||||||||||
NET (LOSS) INCOME | (827) | ||||||||||||
Other comprehensive income, net of income taxes | 0 | ||||||||||||
COMPREHENSIVE (LOSS) INCOME | (827) | ||||||||||||
Level 3 Financing, Inc. | Reportable Legal Entities | Predecessor | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 0 | 0 | 0 | ||||||||||
Total operating revenues | 0 | 0 | 0 | ||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 0 | 0 | 0 | ||||||||||
Selling, general and administrative | 3 | 5 | 0 | ||||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||||
Total operating expenses | 3 | 5 | 0 | ||||||||||
OPERATING INCOME | (3) | (5) | 0 | ||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||
Interest income - affiliate | 1,890 | 2,113 | 1,984 | ||||||||||
Interest expense | (397) | (505) | (574) | ||||||||||
Loss on modification and extinguishment of debt | (44) | ||||||||||||
Equity in net (losses) earnings of subsidiaries | (2,138) | (2,033) | (1,693) | ||||||||||
Other income, net | 0 | (39) | (200) | ||||||||||
Total other expense, net | (689) | (464) | (483) | ||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | (692) | (469) | (483) | ||||||||||
Income tax (expense) benefit | (123) | (200) | 2,645 | ||||||||||
NET (LOSS) INCOME | (815) | (669) | 2,162 | ||||||||||
Other comprehensive income, net of income taxes | 0 | 0 | 0 | ||||||||||
COMPREHENSIVE (LOSS) INCOME | (815) | (669) | 2,162 | ||||||||||
Level 3 Communications, LLC | Reportable Legal Entities | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 748 | ||||||||||||
Operating revenues - affiliate | 16 | ||||||||||||
Total operating revenues | 764 | ||||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 418 | ||||||||||||
Selling, general and administrative | 179 | ||||||||||||
Operating expenses - affiliate | 24 | ||||||||||||
Depreciation and amortization | 117 | ||||||||||||
Total operating expenses | 738 | ||||||||||||
OPERATING INCOME | 26 | ||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 1 | ||||||||||||
Interest income - affiliate | 0 | ||||||||||||
Interest expense | 0 | ||||||||||||
Interest income (expense) - affiliates, net | (578) | ||||||||||||
Equity in net (losses) earnings of subsidiaries | 71 | ||||||||||||
Other income, net | 2 | ||||||||||||
Total other expense, net | (504) | ||||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | (478) | ||||||||||||
Income tax (expense) benefit | 433 | ||||||||||||
NET (LOSS) INCOME | (45) | ||||||||||||
Other comprehensive income, net of income taxes | 0 | ||||||||||||
COMPREHENSIVE (LOSS) INCOME | (45) | ||||||||||||
Level 3 Communications, LLC | Reportable Legal Entities | Predecessor | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 3,108 | 3,558 | 3,326 | ||||||||||
Total operating revenues | 3,108 | 3,558 | 3,326 | ||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 1,942 | 2,249 | 2,201 | ||||||||||
Selling, general and administrative | 942 | 1,025 | 1,064 | ||||||||||
Depreciation and amortization | 356 | 372 | 298 | ||||||||||
Total operating expenses | 3,240 | 3,646 | 3,563 | ||||||||||
OPERATING INCOME | (132) | (88) | (237) | ||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 12 | 3 | 0 | ||||||||||
Interest income - affiliate | (2,896) | (3,215) | (3,041) | ||||||||||
Interest expense | (2) | (2) | (3) | ||||||||||
Loss on modification and extinguishment of debt | 0 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | 692 | 757 | 177 | ||||||||||
Other income, net | 15 | 2 | 2 | ||||||||||
Total other expense, net | (2,179) | (2,455) | (2,865) | ||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | (2,311) | (2,543) | (3,102) | ||||||||||
Income tax (expense) benefit | (2) | (2) | (1) | ||||||||||
NET (LOSS) INCOME | (2,313) | (2,545) | (3,103) | ||||||||||
Other comprehensive income, net of income taxes | 0 | 0 | 0 | ||||||||||
COMPREHENSIVE (LOSS) INCOME | (2,313) | (2,545) | (3,103) | ||||||||||
Other Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 671 | ||||||||||||
Operating revenues - affiliate | 0 | ||||||||||||
Total operating revenues | 671 | ||||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 300 | ||||||||||||
Selling, general and administrative | 70 | ||||||||||||
Operating expenses - affiliate | 0 | ||||||||||||
Depreciation and amortization | 165 | ||||||||||||
Total operating expenses | 535 | ||||||||||||
OPERATING INCOME | 136 | ||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 0 | ||||||||||||
Interest income - affiliate | 0 | ||||||||||||
Interest expense | (3) | ||||||||||||
Interest income (expense) - affiliates, net | (41) | ||||||||||||
Equity in net (losses) earnings of subsidiaries | 0 | ||||||||||||
Other income, net | 0 | ||||||||||||
Total other expense, net | (44) | ||||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 92 | ||||||||||||
Income tax (expense) benefit | 9 | ||||||||||||
NET (LOSS) INCOME | 101 | ||||||||||||
Other comprehensive income, net of income taxes | 18 | ||||||||||||
COMPREHENSIVE (LOSS) INCOME | $ 119 | ||||||||||||
Other Non-Guarantor Subsidiaries | Reportable Legal Entities | Predecessor | |||||||||||||
OPERATING REVENUES | |||||||||||||
Operating revenues | 3,891 | 4,747 | 5,077 | ||||||||||
Total operating revenues | 3,891 | 4,747 | 5,077 | ||||||||||
OPERATING EXPENSES | |||||||||||||
Cost of services and products (exclusive of depreciation and amortization) | 1,680 | 2,045 | 2,321 | ||||||||||
Selling, general and administrative | 259 | 361 | 401 | ||||||||||
Depreciation and amortization | 662 | 787 | 784 | ||||||||||
Total operating expenses | 2,601 | 3,193 | 3,506 | ||||||||||
OPERATING INCOME | 1,290 | 1,554 | 1,571 | ||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | 1 | 1 | 1 | ||||||||||
Interest income - affiliate | (254) | (283) | (253) | ||||||||||
Interest expense | (12) | (1) | (12) | ||||||||||
Loss on modification and extinguishment of debt | 0 | ||||||||||||
Equity in net (losses) earnings of subsidiaries | 0 | 0 | 0 | ||||||||||
Other income, net | (4) | (25) | (192) | ||||||||||
Total other expense, net | (269) | (308) | (456) | ||||||||||
INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT | 1,021 | 1,246 | 1,115 | ||||||||||
Income tax (expense) benefit | (154) | 23 | 472 | ||||||||||
NET (LOSS) INCOME | 867 | 1,269 | 1,587 | ||||||||||
Other comprehensive income, net of income taxes | 0 | (86) | (154) | ||||||||||
COMPREHENSIVE (LOSS) INCOME | $ 867 | $ 1,183 | $ 1,433 |
Condensed Consolidating Finan72
Condensed Consolidating Financial Information - Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 297 | |||
Restricted cash and securities | 5 | |||
Assets held for sale | 140 | |||
Accounts receivable | 748 | |||
Accounts receivable - affiliate | 13 | |||
Advances to affiliates | 0 | |||
Note receivable - affiliate | 1,825 | |||
Other | 117 | |||
Total current assets | 3,145 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 9,555 | |||
Accumulated depreciation | (143) | |||
Net property, plant and equipment | 9,412 | |||
Restricted cash and securities | 29 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 10,837 | |||
Customer relationships, net | 8,845 | |||
Other intangible assets, net | 378 | |||
Investment in subsidiaries | 0 | |||
Deferred tax assets | 426 | |||
Other, net | 63 | |||
Total goodwill and other assets | 20,549 | |||
TOTAL ASSETS | 33,135 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 8 | |||
Accounts payable | 695 | |||
Accounts payable - affiliate | 41 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 100 | |||
Salaries and benefits | 136 | |||
Interest | 109 | |||
Current portion of deferred revenue | 258 | |||
Current portion of deferred revenue - affiliate | 2 | |||
Other | 57 | |||
Due to affiliates | 0 | |||
Total current liabilities | 1,406 | |||
LONG-TERM DEBT | 10,882 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 1,093 | |||
Deferred credits - affiliate | 6 | |||
Deferred tax liability | 212 | |||
Other | 264 | |||
Total deferred credits and other liabilities | 1,575 | |||
COMMITMENTS AND CONTINGENCIES | ||||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | 19,272 | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 33,135 | |||
Predecessor | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 1,819 | |||
Restricted cash and securities | 7 | |||
Assets held for sale | 0 | |||
Accounts receivable | 712 | |||
Accounts receivable - affiliate | 0 | |||
Advances to affiliates | 0 | |||
Note receivable - affiliate | 0 | |||
Other | 115 | |||
Total current assets | 2,653 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 21,388 | |||
Accumulated depreciation | (11,249) | |||
Net property, plant and equipment | 10,139 | |||
Restricted cash and securities | 31 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 7,729 | |||
Customer relationships, net | 860 | |||
Other intangible assets, net | 55 | |||
Investment in subsidiaries | 0 | |||
Deferred tax assets | 3,370 | |||
Other, net | 51 | |||
Total goodwill and other assets | 12,065 | |||
TOTAL ASSETS | 24,888 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 7 | |||
Accounts payable | 706 | |||
Accounts payable - affiliate | 0 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 116 | |||
Salaries and benefits | 195 | |||
Interest | 129 | |||
Current portion of deferred revenue | 266 | |||
Current portion of deferred revenue - affiliate | 0 | |||
Other | 52 | |||
Due to affiliates | 0 | |||
Total current liabilities | 1,471 | |||
LONG-TERM DEBT | 10,877 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 1,001 | |||
Deferred credits - affiliate | 0 | |||
Deferred tax liability | 248 | |||
Other | 374 | |||
Total deferred credits and other liabilities | 1,623 | |||
COMMITMENTS AND CONTINGENCIES | ||||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | $ 11,554 | 10,917 | $ 10,126 | |
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 24,888 | |||
Eliminations | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 0 | |||
Restricted cash and securities | 0 | |||
Assets held for sale | 0 | |||
Accounts receivable | 0 | |||
Accounts receivable - affiliate | (51) | |||
Advances to affiliates | (42,483) | |||
Note receivable - affiliate | 0 | |||
Other | 0 | |||
Total current assets | (42,534) | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 0 | |||
Accumulated depreciation | 0 | |||
Net property, plant and equipment | 0 | |||
Restricted cash and securities | 0 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 0 | |||
Customer relationships, net | 0 | |||
Other intangible assets, net | 0 | |||
Investment in subsidiaries | (38,973) | |||
Deferred tax assets | (1,771) | |||
Other, net | 0 | |||
Total goodwill and other assets | (40,744) | |||
TOTAL ASSETS | (83,278) | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 0 | |||
Accounts payable | 0 | |||
Accounts payable - affiliate | (51) | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 0 | |||
Salaries and benefits | 0 | |||
Interest | 0 | |||
Current portion of deferred revenue | 0 | |||
Current portion of deferred revenue - affiliate | 0 | |||
Other | 0 | |||
Due to affiliates | (42,483) | |||
Total current liabilities | (42,534) | |||
LONG-TERM DEBT | 0 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 0 | |||
Deferred credits - affiliate | 0 | |||
Deferred tax liability | (1,771) | |||
Other | 0 | |||
Total deferred credits and other liabilities | (1,771) | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | (38,973) | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | (83,278) | |||
Eliminations | Predecessor | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 0 | |||
Restricted cash and securities | 0 | |||
Accounts receivable | 0 | |||
Advances to affiliates | (40,927) | |||
Other | 0 | |||
Total current assets | (40,927) | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 0 | |||
Accumulated depreciation | 0 | |||
Net property, plant and equipment | 0 | |||
Restricted cash and securities | 0 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 0 | |||
Customer relationships, net | 0 | |||
Investment in subsidiaries | (38,142) | |||
Deferred tax assets | 0 | |||
Other, net | 0 | |||
Total goodwill and other assets | (38,142) | |||
TOTAL ASSETS | (79,069) | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 0 | |||
Accounts payable | 0 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 0 | |||
Salaries and benefits | 0 | |||
Interest | 0 | |||
Current portion of deferred revenue | 0 | |||
Other | 0 | |||
Due to affiliates | (40,927) | |||
Total current liabilities | (40,927) | |||
LONG-TERM DEBT | 0 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 0 | |||
Deferred tax liability | 0 | |||
Other | 0 | |||
Total deferred credits and other liabilities | 0 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | (38,142) | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | (79,069) | |||
Level 3 Parent, LLC | Reportable Legal Entities | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 13 | |||
Restricted cash and securities | 0 | |||
Assets held for sale | 68 | |||
Accounts receivable | 0 | |||
Accounts receivable - affiliate | 0 | |||
Advances to affiliates | 16,251 | |||
Note receivable - affiliate | 1,825 | |||
Other | 0 | |||
Total current assets | 18,157 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 0 | |||
Accumulated depreciation | 0 | |||
Net property, plant and equipment | 0 | |||
Restricted cash and securities | 19 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 0 | |||
Customer relationships, net | 0 | |||
Other intangible assets, net | 0 | |||
Investment in subsidiaries | 16,954 | |||
Deferred tax assets | 280 | |||
Other, net | 0 | |||
Total goodwill and other assets | 17,234 | |||
TOTAL ASSETS | 35,410 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 0 | |||
Accounts payable | 0 | |||
Accounts payable - affiliate | 11 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 0 | |||
Salaries and benefits | 0 | |||
Interest | 11 | |||
Current portion of deferred revenue | 0 | |||
Current portion of deferred revenue - affiliate | 0 | |||
Other | 16 | |||
Due to affiliates | 0 | |||
Total current liabilities | 38 | |||
LONG-TERM DEBT | 616 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 0 | |||
Deferred credits - affiliate | 0 | |||
Deferred tax liability | 648 | |||
Other | 1 | |||
Total deferred credits and other liabilities | 649 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | 34,107 | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 35,410 | |||
Level 3 Parent, LLC | Reportable Legal Entities | Predecessor | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 15 | |||
Restricted cash and securities | 0 | |||
Accounts receivable | 0 | |||
Advances to affiliates | 17,032 | |||
Other | 0 | |||
Total current assets | 17,047 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 0 | |||
Accumulated depreciation | 0 | |||
Net property, plant and equipment | 0 | |||
Restricted cash and securities | 22 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 0 | |||
Customer relationships, net | 0 | |||
Other intangible assets, net | 0 | |||
Investment in subsidiaries | 16,869 | |||
Deferred tax assets | 51 | |||
Other, net | 0 | |||
Total goodwill and other assets | 16,920 | |||
TOTAL ASSETS | 33,989 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 0 | |||
Accounts payable | 0 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 0 | |||
Salaries and benefits | 0 | |||
Interest | 11 | |||
Current portion of deferred revenue | 0 | |||
Other | 0 | |||
Due to affiliates | 0 | |||
Total current liabilities | 11 | |||
LONG-TERM DEBT | 592 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 0 | |||
Deferred tax liability | 0 | |||
Other | 16 | |||
Total deferred credits and other liabilities | 16 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | 33,370 | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 33,989 | |||
Level 3 Financing, Inc. | Reportable Legal Entities | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 0 | |||
Restricted cash and securities | 0 | |||
Assets held for sale | 0 | |||
Accounts receivable | 0 | |||
Accounts receivable - affiliate | 0 | |||
Advances to affiliates | 21,032 | |||
Note receivable - affiliate | 0 | |||
Other | 0 | |||
Total current assets | 21,032 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 0 | |||
Accumulated depreciation | 0 | |||
Net property, plant and equipment | 0 | |||
Restricted cash and securities | 0 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 0 | |||
Customer relationships, net | 0 | |||
Other intangible assets, net | 0 | |||
Investment in subsidiaries | 18,403 | |||
Deferred tax assets | 1,795 | |||
Other, net | 0 | |||
Total goodwill and other assets | 20,198 | |||
TOTAL ASSETS | 41,230 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 0 | |||
Accounts payable | 1 | |||
Accounts payable - affiliate | 0 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 0 | |||
Salaries and benefits | 0 | |||
Interest | 91 | |||
Current portion of deferred revenue | 0 | |||
Current portion of deferred revenue - affiliate | 0 | |||
Other | 0 | |||
Due to affiliates | 0 | |||
Total current liabilities | 92 | |||
LONG-TERM DEBT | 10,096 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 0 | |||
Deferred credits - affiliate | 0 | |||
Deferred tax liability | 0 | |||
Other | 1 | |||
Total deferred credits and other liabilities | 1 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | 31,041 | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 41,230 | |||
Level 3 Financing, Inc. | Reportable Legal Entities | Predecessor | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 0 | |||
Restricted cash and securities | 0 | |||
Accounts receivable | 0 | |||
Advances to affiliates | 21,715 | |||
Other | 0 | |||
Total current assets | 21,715 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 0 | |||
Accumulated depreciation | 0 | |||
Net property, plant and equipment | 0 | |||
Restricted cash and securities | 0 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 0 | |||
Customer relationships, net | 0 | |||
Other intangible assets, net | 0 | |||
Investment in subsidiaries | 17,599 | |||
Deferred tax assets | 2,687 | |||
Other, net | 0 | |||
Total goodwill and other assets | 20,286 | |||
TOTAL ASSETS | 42,001 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 0 | |||
Accounts payable | 0 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 0 | |||
Salaries and benefits | 0 | |||
Interest | 110 | |||
Current portion of deferred revenue | 0 | |||
Other | 0 | |||
Due to affiliates | 0 | |||
Total current liabilities | 110 | |||
LONG-TERM DEBT | 10,108 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 0 | |||
Deferred tax liability | 0 | |||
Other | 0 | |||
Total deferred credits and other liabilities | 0 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | 31,783 | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 42,001 | |||
Level 3 Communications, LLC | Reportable Legal Entities | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 175 | |||
Restricted cash and securities | 1 | |||
Assets held for sale | 5 | |||
Accounts receivable | 26 | |||
Accounts receivable - affiliate | 60 | |||
Advances to affiliates | 0 | |||
Note receivable - affiliate | 0 | |||
Other | 54 | |||
Total current assets | 321 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 3,285 | |||
Accumulated depreciation | (48) | |||
Net property, plant and equipment | 3,237 | |||
Restricted cash and securities | 10 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 1,200 | |||
Customer relationships, net | 4,324 | |||
Other intangible assets, net | 378 | |||
Investment in subsidiaries | 3,616 | |||
Deferred tax assets | 0 | |||
Other, net | 32 | |||
Total goodwill and other assets | 9,550 | |||
TOTAL ASSETS | 13,118 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 2 | |||
Accounts payable | 323 | |||
Accounts payable - affiliate | 0 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 55 | |||
Salaries and benefits | 109 | |||
Interest | 0 | |||
Current portion of deferred revenue | 127 | |||
Current portion of deferred revenue - affiliate | 2 | |||
Other | 23 | |||
Due to affiliates | 42,483 | |||
Total current liabilities | 43,124 | |||
LONG-TERM DEBT | 13 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 841 | |||
Deferred credits - affiliate | 5 | |||
Deferred tax liability | 870 | |||
Other | 98 | |||
Total deferred credits and other liabilities | 1,814 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | (31,833) | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 13,118 | |||
Level 3 Communications, LLC | Reportable Legal Entities | Predecessor | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 1,700 | |||
Restricted cash and securities | 1 | |||
Accounts receivable | 26 | |||
Advances to affiliates | 0 | |||
Other | 87 | |||
Total current assets | 1,814 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 10,424 | |||
Accumulated depreciation | (6,555) | |||
Net property, plant and equipment | 3,869 | |||
Restricted cash and securities | 9 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 352 | |||
Customer relationships, net | 0 | |||
Other intangible assets, net | 1 | |||
Investment in subsidiaries | 3,674 | |||
Deferred tax assets | 0 | |||
Other, net | 16 | |||
Total goodwill and other assets | 4,043 | |||
TOTAL ASSETS | 9,735 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 2 | |||
Accounts payable | 307 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 103 | |||
Salaries and benefits | 160 | |||
Interest | 0 | |||
Current portion of deferred revenue | 116 | |||
Other | 24 | |||
Due to affiliates | 40,927 | |||
Total current liabilities | 41,639 | |||
LONG-TERM DEBT | 13 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 719 | |||
Deferred tax liability | 0 | |||
Other | 155 | |||
Total deferred credits and other liabilities | 874 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | (32,791) | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | 9,735 | |||
Other Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 109 | |||
Restricted cash and securities | 4 | |||
Assets held for sale | 67 | |||
Accounts receivable | 722 | |||
Accounts receivable - affiliate | 4 | |||
Advances to affiliates | 5,200 | |||
Note receivable - affiliate | 0 | |||
Other | 63 | |||
Total current assets | 6,169 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 6,270 | |||
Accumulated depreciation | (95) | |||
Net property, plant and equipment | 6,175 | |||
Restricted cash and securities | 0 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 9,637 | |||
Customer relationships, net | 4,521 | |||
Other intangible assets, net | 0 | |||
Investment in subsidiaries | 0 | |||
Deferred tax assets | 122 | |||
Other, net | 31 | |||
Total goodwill and other assets | 14,311 | |||
TOTAL ASSETS | 26,655 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 6 | |||
Accounts payable | 371 | |||
Accounts payable - affiliate | 81 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 45 | |||
Salaries and benefits | 27 | |||
Interest | 7 | |||
Current portion of deferred revenue | 131 | |||
Current portion of deferred revenue - affiliate | 0 | |||
Other | 18 | |||
Due to affiliates | 0 | |||
Total current liabilities | 686 | |||
LONG-TERM DEBT | 157 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 252 | |||
Deferred credits - affiliate | 1 | |||
Deferred tax liability | 465 | |||
Other | 164 | |||
Total deferred credits and other liabilities | 882 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | 24,930 | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | $ 26,655 | |||
Other Non-Guarantor Subsidiaries | Reportable Legal Entities | Predecessor | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 104 | |||
Restricted cash and securities | 6 | |||
Accounts receivable | 686 | |||
Advances to affiliates | 2,180 | |||
Other | 28 | |||
Total current assets | 3,004 | |||
NET PROPERTY, PLANT AND EQUIPMENT | ||||
Property, plant and equipment | 10,964 | |||
Accumulated depreciation | (4,694) | |||
Net property, plant and equipment | 6,270 | |||
Restricted cash and securities | 0 | |||
GOODWILL AND OTHER ASSETS | ||||
Goodwill | 7,377 | |||
Customer relationships, net | 860 | |||
Other intangible assets, net | 54 | |||
Investment in subsidiaries | 0 | |||
Deferred tax assets | 632 | |||
Other, net | 35 | |||
Total goodwill and other assets | 8,958 | |||
TOTAL ASSETS | 18,232 | |||
CURRENT LIABILITIES | ||||
Current maturities of long-term debt | 5 | |||
Accounts payable | 399 | |||
Accrued expenses and other liabilities | ||||
Income and other taxes | 13 | |||
Salaries and benefits | 35 | |||
Interest | 8 | |||
Current portion of deferred revenue | 150 | |||
Other | 28 | |||
Due to affiliates | 0 | |||
Total current liabilities | 638 | |||
LONG-TERM DEBT | 164 | |||
DEFERRED CREDITS AND OTHER LIABILITES | ||||
Deferred credits | 282 | |||
Deferred tax liability | 248 | |||
Other | 203 | |||
Total deferred credits and other liabilities | 733 | |||
MEMBER'S/STOCKHOLDERS' EQUITY (DEFICIT) | 16,697 | |||
TOTAL LIABILITIES AND MEMBER'S/STOCKHOLDERS' EQUITY | $ 18,232 |
Condensed Consolidating Finan73
Condensed Consolidating Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | $ 308 | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | (207) | |||
Note receivable - affiliate | (1,825) | |||
Cash related to deconsolidated Venezuela operations | 0 | |||
Purchase of marketable securities | 0 | |||
Maturity of marketable securities | 0 | |||
Proceeds from sale of property, plant and equipment and other assets | 0 | |||
Other, net | 0 | |||
Net cash used in investing activities | (2,032) | |||
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 0 | |||
Payments of long-term debt | (1) | |||
Distributions | (250) | |||
Increase (decrease) due from/to affiliates, net | 0 | |||
Net cash used in financing activities | (251) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | (2) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | (1,977) | |||
Cash, cash equivalents and restricted cash and securities at beginning of period | 2,308 | |||
Cash, cash equivalents and restricted cash and securities at end of period | 331 | $ 2,308 | ||
Predecessor | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 1,914 | $ 2,343 | $ 1,855 | |
INVESTING ACTIVITIES | ||||
Capital expenditures | (1,119) | (1,334) | (1,229) | |
Note receivable - affiliate | 0 | 0 | 0 | |
Cash related to deconsolidated Venezuela operations | 0 | 0 | (83) | |
Purchase of marketable securities | (1,127) | 0 | 0 | |
Maturity of marketable securities | 1,127 | 0 | 0 | |
Proceeds from sale of property, plant and equipment and other assets | 1 | 3 | 4 | |
Other, net | 0 | 0 | (14) | |
Net cash used in investing activities | (1,118) | (1,331) | (1,322) | |
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 4,569 | 764 | 4,832 | |
Payments of long-term debt | (4,917) | (820) | (5,051) | |
Distributions | 0 | 0 | 0 | |
Increase (decrease) due from/to affiliates, net | 0 | 0 | 0 | |
Net cash used in financing activities | (348) | (56) | (219) | |
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 3 | (3) | (18) | |
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 451 | 953 | 296 | |
Cash, cash equivalents and restricted cash and securities at beginning of period | 2,308 | 1,857 | 904 | 608 |
Cash, cash equivalents and restricted cash and securities at end of period | 2,308 | 1,857 | 904 | |
Eliminations | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 0 | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | |||
Note receivable - affiliate | 0 | |||
Net cash used in investing activities | 0 | |||
FINANCING ACTIVITIES | ||||
Payments of long-term debt | 0 | |||
Distributions | 0 | |||
Increase (decrease) due from/to affiliates, net | 0 | |||
Net cash used in financing activities | 0 | |||
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | |||
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 0 | |||
Cash, cash equivalents and restricted cash and securities at beginning of period | 0 | |||
Cash, cash equivalents and restricted cash and securities at end of period | 0 | 0 | ||
Eliminations | Predecessor | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 0 | 0 | 0 | |
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | 0 | 0 | |
Cash related to deconsolidated Venezuela operations | 0 | |||
Purchase of marketable securities | 0 | |||
Maturity of marketable securities | 0 | |||
Proceeds from sale of property, plant and equipment and other assets | 0 | 0 | 0 | |
Other, net | 0 | |||
Net cash used in investing activities | 0 | 0 | 0 | |
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 0 | 0 | 0 | |
Payments of long-term debt | 0 | 0 | 0 | |
Increase (decrease) due from/to affiliates, net | 0 | 0 | 0 | |
Net cash used in financing activities | 0 | 0 | 0 | |
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | 0 | 0 | |
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 0 | 0 | 0 | |
Cash, cash equivalents and restricted cash and securities at beginning of period | 0 | 0 | 0 | 0 |
Cash, cash equivalents and restricted cash and securities at end of period | 0 | 0 | 0 | |
Level 3 Parent, LLC | Reportable Legal Entities | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | (1) | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | |||
Note receivable - affiliate | 0 | |||
Net cash used in investing activities | 0 | |||
FINANCING ACTIVITIES | ||||
Payments of long-term debt | 0 | |||
Distributions | (250) | |||
Increase (decrease) due from/to affiliates, net | 250 | |||
Net cash used in financing activities | 0 | |||
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | |||
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | (1) | |||
Cash, cash equivalents and restricted cash and securities at beginning of period | 33 | |||
Cash, cash equivalents and restricted cash and securities at end of period | 32 | 33 | ||
Level 3 Parent, LLC | Reportable Legal Entities | Predecessor | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | (61) | (49) | (41) | |
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | 0 | 0 | |
Cash related to deconsolidated Venezuela operations | 0 | |||
Purchase of marketable securities | 0 | |||
Maturity of marketable securities | 0 | |||
Proceeds from sale of property, plant and equipment and other assets | 0 | 0 | 0 | |
Other, net | 0 | |||
Net cash used in investing activities | 0 | 0 | 0 | |
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 0 | 0 | 0 | |
Payments of long-term debt | 0 | 0 | (313) | |
Increase (decrease) due from/to affiliates, net | 57 | 47 | 383 | |
Net cash used in financing activities | 57 | 47 | 70 | |
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | 0 | 0 | |
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | (4) | (2) | 29 | |
Cash, cash equivalents and restricted cash and securities at beginning of period | 33 | 37 | 39 | 10 |
Cash, cash equivalents and restricted cash and securities at end of period | 33 | 37 | 39 | |
Level 3 Financing, Inc. | Reportable Legal Entities | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 0 | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | |||
Note receivable - affiliate | 0 | |||
Net cash used in investing activities | 0 | |||
FINANCING ACTIVITIES | ||||
Payments of long-term debt | 0 | |||
Distributions | 0 | |||
Increase (decrease) due from/to affiliates, net | 0 | |||
Net cash used in financing activities | 0 | |||
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | |||
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 0 | |||
Cash, cash equivalents and restricted cash and securities at beginning of period | 0 | |||
Cash, cash equivalents and restricted cash and securities at end of period | 0 | 0 | ||
Level 3 Financing, Inc. | Reportable Legal Entities | Predecessor | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | (401) | (468) | (617) | |
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | 0 | 0 | |
Cash related to deconsolidated Venezuela operations | 0 | |||
Purchase of marketable securities | 0 | |||
Maturity of marketable securities | 0 | |||
Proceeds from sale of property, plant and equipment and other assets | 0 | 0 | 0 | |
Other, net | 0 | |||
Net cash used in investing activities | 0 | 0 | 0 | |
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 4,569 | 764 | 4,832 | |
Payments of long-term debt | (4,911) | (806) | (4,725) | |
Increase (decrease) due from/to affiliates, net | 743 | 504 | 511 | |
Net cash used in financing activities | 401 | 462 | 618 | |
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | 0 | 0 | |
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 0 | (6) | 1 | |
Cash, cash equivalents and restricted cash and securities at beginning of period | 0 | 0 | 6 | 5 |
Cash, cash equivalents and restricted cash and securities at end of period | 0 | 0 | 6 | |
Level 3 Communications, LLC | Reportable Legal Entities | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 172 | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | (110) | |||
Note receivable - affiliate | (1,825) | |||
Net cash used in investing activities | (1,935) | |||
FINANCING ACTIVITIES | ||||
Payments of long-term debt | 0 | |||
Distributions | 0 | |||
Increase (decrease) due from/to affiliates, net | (250) | |||
Net cash used in financing activities | (250) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | |||
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | (2,013) | |||
Cash, cash equivalents and restricted cash and securities at beginning of period | 2,199 | |||
Cash, cash equivalents and restricted cash and securities at end of period | 186 | 2,199 | ||
Level 3 Communications, LLC | Reportable Legal Entities | Predecessor | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 1,615 | 565 | 193 | |
INVESTING ACTIVITIES | ||||
Capital expenditures | (667) | (704) | (453) | |
Cash related to deconsolidated Venezuela operations | 0 | |||
Purchase of marketable securities | (1,127) | |||
Maturity of marketable securities | 1,127 | |||
Proceeds from sale of property, plant and equipment and other assets | 1 | 1 | 0 | |
Other, net | (14) | |||
Net cash used in investing activities | (666) | (703) | (467) | |
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 0 | 0 | 0 | |
Payments of long-term debt | 1 | (1) | (2) | |
Increase (decrease) due from/to affiliates, net | (460) | 1,107 | 693 | |
Net cash used in financing activities | (459) | 1,106 | 691 | |
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 0 | 0 | 0 | |
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 490 | 968 | 417 | |
Cash, cash equivalents and restricted cash and securities at beginning of period | 2,200 | 1,710 | 742 | 325 |
Cash, cash equivalents and restricted cash and securities at end of period | 2,200 | 1,710 | 742 | |
Other Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 137 | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | (97) | |||
Note receivable - affiliate | 0 | |||
Net cash used in investing activities | (97) | |||
FINANCING ACTIVITIES | ||||
Payments of long-term debt | (1) | |||
Distributions | 0 | |||
Increase (decrease) due from/to affiliates, net | 0 | |||
Net cash used in financing activities | (1) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | (2) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | 37 | |||
Cash, cash equivalents and restricted cash and securities at beginning of period | 76 | |||
Cash, cash equivalents and restricted cash and securities at end of period | 113 | 76 | ||
Other Non-Guarantor Subsidiaries | Reportable Legal Entities | Predecessor | ||||
Condensed Consolidating Financial Information | ||||
Net cash (used in) provided by operating activities | 761 | 2,295 | 2,320 | |
INVESTING ACTIVITIES | ||||
Capital expenditures | (452) | (630) | (776) | |
Cash related to deconsolidated Venezuela operations | (83) | |||
Purchase of marketable securities | 0 | |||
Maturity of marketable securities | 0 | |||
Proceeds from sale of property, plant and equipment and other assets | 0 | 2 | 4 | |
Other, net | 0 | |||
Net cash used in investing activities | (452) | (628) | (855) | |
FINANCING ACTIVITIES | ||||
Net proceeds from issuance of long-term debt | 0 | 0 | 0 | |
Payments of long-term debt | (7) | (13) | (11) | |
Increase (decrease) due from/to affiliates, net | (340) | (1,658) | (1,587) | |
Net cash used in financing activities | (347) | (1,671) | (1,598) | |
Effect of exchange rates on cash, cash equivalents and restricted cash and securities | 3 | (3) | (18) | |
Net increase (decrease) in cash, cash equivalents and restricted cash and securities | (35) | (7) | (151) | |
Cash, cash equivalents and restricted cash and securities at beginning of period | $ 75 | 110 | 117 | 268 |
Cash, cash equivalents and restricted cash and securities at end of period | $ 75 | $ 110 | $ 117 |