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Share Name | Share Symbol | Market | Type |
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Level 3 Communications, Inc. (delisted) | NYSE:LVLT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 53.63 | 0 | 01:00:00 |
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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47-0210602
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(State of Incorporation)
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(I.R.S. Employer
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Identification No.)
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1025 Eldorado Blvd.,
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Broomfield,
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CO
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80021-8869
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(Address of principal executive offices)
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(Zip Code)
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•
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forecasts of our anticipated future results of operations, cash flows or financial position;
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•
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statements concerning the anticipated impact of our transactions, investments, product development, transformation projects and other initiatives;
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statements about our liquidity, profitability, profit margins, tax position, tax assets, tax rates, asset values, contingent liabilities, growth opportunities and growth rates, business prospects, regulatory and competitive outlook, market share, product capabilities, investment and expenditure plans, business strategies, debt leverage, capital allocation plans, financing alternatives and sources, and pricing plans; and
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other similar statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts, many of which are highlighted by words such as “may,” “will,” “would,” “could,” “should,” “plan,” “believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “likely,” “seeks,” “hopes,” or variations or similar expressions with respect to the future.
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the effects of competition from a wide variety of competitive providers, including decreased demand for our more mature service offerings and increased pricing pressures;
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the effects of new, emerging or competing technologies, including those that could make our products and services less desirable or obsolete;
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our ability to attain our key operating imperatives, including simplifying and consolidating our network, simplifying and automating our service support systems and strengthening our relationships with customers and attaining projected cost savings;
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our ability to safeguard our network, and to avoid the adverse impact on our business from possible security breaches, service outages, system failures, equipment breakage, or similar events impacting our network or the availability and quality of our services;
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the effects of ongoing changes in the regulation of the communications industry, including the outcome of regulatory or judicial proceedings relating to intercarrier compensation, interconnection obligations, special access, universal service, broadband deployment, data protection, privacy and net neutrality;
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our ability to effectively adjust to changes in the communications industry, and changes in the composition of our markets and product mix;
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possible changes in the demand for our products and services, including our ability to effectively respond to increased demand for high-speed data transmission services;
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our ability to successfully maintain the quality and profitability of our existing product and service offerings and to introduce profitable new offerings on a timely and cost-effective basis;
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our ability to generate cash flows sufficient to fund our financial commitments and objectives, including our capital expenditures, operating costs, debt payments and distributions;
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our ability to implement our operating plans, corporate strategies and capital allocation plans, or changes to such plans, whether based upon changes in our cash flows, cash requirements, financial performance, financial position, market conditions or otherwise;
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our ability to effectively retain and hire key personnel and maintain satisfactory relations with our workforce;
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the negative impact of increases in the costs of CenturyLink’s pension, health, post-employment or other benefits, including those caused by changes in markets, interest rates, mortality rates, demographics or regulations, which could affect our business and liquidity;
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the potential negative impact of customer complaints, governmental investigations or service outages impacting us or our industry;
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adverse changes in our access to credit markets on favorable terms, whether caused by changes in our financial position, lower debt credit ratings, unstable markets or otherwise;
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our ability to meet the terms and conditions of our debt obligations and covenants, including our ability to make transfers of cash in compliance therewith;
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our ability to maintain favorable relations with our key business partners, suppliers, vendors, landlords and financial institutions;
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our ability to collect our receivables from financially troubled customers;
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CenturyLink's ability to use its net operating loss carryforwards in the amounts projected;
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any adverse developments in legal or regulatory proceedings involving us or our affiliates, including CenturyLink;
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changes in tax, communications, healthcare or other laws or regulations or in general government funding levels;
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the effects of changes in accounting policies, practices or assumptions including changes that could potentially require additional future impairment charges;
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the effects of adverse weather, terrorism or other natural or man-made disasters;
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the potential adverse effects if our internal controls over financial reporting have weaknesses or deficiencies, or otherwise fail to operate as intended;
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the effects of more general factors such as changes in interest rates, in exchange rates, in operating costs, in public policy, in the views of financial analysts, or in general market, labor, economic or geo-political conditions; and
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other risks referenced in "Risk Factors" in Item 1A or elsewhere in this report or other of our filings with the SEC.
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Successor
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Predecessor
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Combined
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Year Ended December 31, 2019(1)(2)
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Year Ended December 31, 2018(1)(3)
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Period Ended December 31, 2017(1)(3)
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Period Ended
October 31, 2017(1)
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Year Ended December 31, 2017
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(Dollars in millions)
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Operating revenue
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$
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8,185
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8,220
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1,407
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6,870
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8,277
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Operating expenses
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10,712
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7,252
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1,249
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5,719
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6,968
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Operating (loss) income
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$
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(2,527
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)
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968
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158
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1,151
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1,309
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Net income (loss)
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$
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(3,201
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)
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341
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(141
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)
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425
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284
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(1)
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During the years ended December 31, 2019 and 2018, the successor period ended December 31, 2017 and the predecessor period ended October 31, 2017, we incurred CenturyLink acquisition-related expenses of $82 million, $121 million, $28 million and $85 million, respectively. For additional information, see "Acquisition of Level 3 by CenturyLink" above and Note 2 - CenturyLink Merger to our consolidated financial statements in Item 8 of Part II of this report.
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(2)
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During 2019, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $3.7 billion. For additional information, see Note 3—Goodwill, Customer Relationships and Other Intangible Assets to our consolidated financial statements in Item 8 of Part II of this report.
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(3)
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The enactment of the Tax Cuts and Jobs Act in December 2017 resulted in a re-measurement of our deferred tax assets and liabilities at the new federal corporate tax rate of 21%. The re-measurement resulted in a tax expense of $92 million and $195 million for 2018 and 2017, respectively.
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As of December 31,
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2019
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2018
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(Dollars in millions)
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Total assets
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$
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29,098
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32,291
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Total long-term debt(1)
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10,367
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10,844
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Total member's equity
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13,545
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17,877
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(1)
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For additional information on our long-term debt, see Note 6 - Long-Term Debt to our consolidated financial statements in Item 8 of Part II of this report. For information on our total obligations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital resources - Future Contractual Obligations" in Item 7 of Part II of this report.
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VPN Data Network. Built on our extensive optical transport network, we create private networks tailored to our customers’ needs. These technologies enable service providers, enterprises and government entities to streamline multiple networks into a single, cost-effective solution that simplifies the transmission of voice, video, and data over a single secure network;
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Ethernet. We deliver a robust array of networking services built on Ethernet technology. Ethernet services include point-to-point and multi-point equipment configurations that facilitate data transmissions across metropolitan areas and larger enterprise-class wide area networks. Our Ethernet technology is also used by wireless service providers for data transmission via our fiber-optic cables connected to their towers; and
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Internet Protocol ("IP"). Our Internet Services provide global internet access over a high performance, diverse network with connectivity in more than 60 countries with approximately 129 Tbps of global throughput.
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Content Delivery Network ("CDN"). Our CDN is supported by a global Point of Presence ("PoP") footprint across approximately 93 markets in six continents and directly connected to our IP backbone. CDN service supports in-network acquisition of broadcast channels for Over the Top-Video and Internet TV platforms, and a multi-regional Origin Storage Platform delivers high performance egress and rapid time to first byte. Our CDN is directly connected to major cloud storage platforms. Our Digital Download service provides software download, system update, gaming patch, antivirus files or other digital asset delivery with storage, security, scale, and global reach.
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Wavelength. We deliver high bandwidth optical networks to firms requiring an end-to-end transport solution with Ethernet technology by contracting for a scalable amount of bandwidth connecting sites or providing high-speed access to cloud computing resources;
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Colocation and Data Center Services. We provide different options for organizations’ data center needs. Our data center services range from dedicated hosting and cloud services to more complex managed solutions, including disaster recovery, business continuity, applications management support and security services to manage mission critical applications;
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Dark Fiber. We possess an extensive array of unlit optical fiber, known as “dark fiber.” Many large enterprises are interested in building their networks with this high-bandwidth, highly secure optical technology and the dark fiber option gives them exclusive access to the technology. We provide professional services to engineer these networks and manage them for many customers;
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Private Line. We deliver a private line (including business data services), a direct circuit or channel specifically dedicated for connecting two or more organizational sites. Private line service offers a high-speed, secure solution for frequent transmission of large amounts of data between sites, including wireless backhaul transmissions;
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Professional Services. Our experts deliver a robust array of consulting services to organizations either as part of a larger engagement or as stand-alone services. This category includes network management, installation and maintenance of data equipment and the building of proprietary fiber-optic networks for government and business customers.
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Voice. We offer a complete portfolio of traditional Time Division Multiplexing (TDM) voice services to businesses and enterprises including Primary Rate Interface (“PRI”) service, local inbound service, switched one-plus, toll free, long distance and international services;
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Voice Over IP (VoIP). We deliver a broad range of local and enterprise voice and data services built on VoIP (Voice over Internet Protocol) technology. Our local and enterprise voice services include VoIP enhanced local service, national and multinational SIP Trunking, Hosted VoIP, support of Primary Rate Interface (“PRI”) service, long distance service, and toll-free service; and
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Collaboration. We deliver collaboration capabilities partnered with leading technology providers including Cisco, Microsoft, and Amazon. Collaboration elements (audio, video, web) are seamlessly integrated providing a simple solution that is easy to manage as businesses grow and change. Our expertise and ongoing partnership with technology leaders like Cisco, Microsoft and AWS provides enterprises with the flexibility to select and adopt the right solution and latest innovation. Audio, web and video conferencing services are also available.
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Other. Other revenue includes sublease rental income and information technology services and managed services, which may be purchased in conjunction with our other network services.
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Affiliate Services. We provide our affiliates with telecommunication services that we also provide to external customers. Please see our products and services listed above for further description of these services.
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capacity or system configuration limitations, including those resulting from changes in our customer's usage patterns, the introduction of new technologies or products, or incompatibilities between our newer and older systems;
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theft or failure of our equipment;
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software or hardware obsolescence, defects or malfunctions;
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power losses or power surges;
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physical damage, whether caused by fire, flood, adverse weather conditions, terrorism, sabotage, vandalism or otherwise;
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deficiencies in our processes or controls;
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our inability to hire and retain personnel with the requisite skills to adequately maintain or improve our systems;
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programming, processing and other human error; and
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inadequate building maintenance by third-party landlords or other service failures of our third-party vendors.
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disrupt the proper functioning of these networks and systems, which could in turn disrupt (i) our operational, billing or other administrative functions or (ii) the operations of certain of our customers who rely upon us to provide services critical to their operations;
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result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive, classified or otherwise valuable information of ours, our customers or our customers’ end users, including trade secrets, which others could use for competitive, disruptive, destructive or otherwise harmful purposes and outcomes;
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require us to notify customers, regulatory agencies or the public of data breaches;
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require us to provide credits for future service under certain service level commitments we have provided contractually to our customers or to offer expensive incentives to retain customers;
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subject us to claims for damages, fines, penalties, termination or other remedies under our customer contracts or service standards set by regulators, which in certain cases could exceed our insurance coverage;
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result in a loss of business, damage our reputation among our customers and the public generally, subject us to additional regulatory scrutiny or expose us to prolonged litigation; or
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require significant management attention or financial resources to remedy the resulting damages or to change our systems, including expenses to repair systems, add new personnel or develop additional protective systems.
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tax, licensing, political or other business restrictions or requirements, which may render it more difficult to obtain licenses or interconnection agreements on acceptable terms, if at all;
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uncertainty concerning import and export restrictions, including the risk of fines or penalties assessed for violations;
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longer payment cycles and problems collecting accounts receivable;
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U.S. and non-U.S. regulation of overseas operations, including regulation under the U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act of 2010, the Brazilian Anti-corruption Law and other applicable anti-corruption laws (collectively with the FCPA, the "Anti-Corruption Laws");
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economic, social and political instability, with the attendant risks of terrorism, kidnapping, extortion, civic unrest and potential seizure or nationalization of assets;
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currency and exchange controls, repatriation restrictions and fluctuations in currency exchange rates;
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challenges in securing and maintaining the necessary physical and telecommunications infrastructure;
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the inability in certain jurisdictions to enforce contract rights either due to underdeveloped legal systems or government actions that result in a deprivation of contract rights;
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increased risk of cyber-attacks or similar events to our network as we expand our network or interconnect our network with other networks internationally;
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the inability in certain jurisdictions to adequately protect intellectual property rights;
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laws, policies or practices that restrict with whom we can contract or otherwise limit the scope of operations that can legally or practicably be conducted within any particular country;
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potential submission of disputes to the jurisdiction of a non-U.S. court or arbitration panel;
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reliance on third parties, including those with which we have limited experience;
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limitations in the availability, amount or terms of insurance coverage;
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the imposition of unanticipated or increased taxes, increased communications or privacy regulations or other forms of public or governmental regulation that increase our operating expenses; and
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•
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challenges in staffing and managing overseas operations.
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the complexities of combining two companies with different histories, cultures, regulatory restrictions, operating structures, lending arrangements and markets;
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the complexities associated with managing the combined businesses out of several different locations and integrating personnel from the two companies, while at the same time attempting to provide consistent, high-quality products and services under a unified culture; and
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•
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impediments to fully and timely integrating systems, technologies, procedures, policies, standards and controls.
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limiting our ability to obtain additional financing for working capital, capital expenditures, acquisitions, refinancings or other general corporate purposes, particularly if, as discussed further in the risk factor disclosure below, (i) the ratings assigned to our debt securities by nationally recognized credit rating organizations are revised downward or (ii) we seek capital during periods of turbulent or unsettled market conditions;
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•
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requiring us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal on our debt, thereby reducing the funds available to us for other purposes, including acquisitions, capital expenditures, strategic initiatives, distributions, stock repurchases, marketing and other potential growth initiatives;
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•
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hindering our ability to capitalize on business opportunities and to plan for or react to changing market, industry, competitive or economic conditions;
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increasing our future borrowing costs;
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limiting or precluding us from entering into commercial, hedging or other financial arrangements with vendors, customers or other business partners;
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making us more vulnerable to economic or industry downturns, including interest rate increases;
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placing us at a competitive disadvantage compared to less leveraged competitors;
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increasing the risk that we will need to sell securities or assets, possibly on unfavorable terms, or take other unfavorable actions to meet payment obligations; or
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increasing the risk that we may not meet the financial covenants contained in our debt agreements or timely make all required debt payments, either of which could result in the acceleration of some or all of our outstanding indebtedness.
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we engage in additional acquisitions or undertake substantial capital projects or other initiatives that increase our cash requirements;
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we become subject to significant judgments or settlements, including in connection with one or more of the matters discussed elsewhere herein; or
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we otherwise require additional cash to fund our cash requirements described elsewhere herein.
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borrow additional money or issue guarantees;
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pay dividends or other distributions to shareholders;
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make loans, advances or other investments;
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create liens on assets;
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sell assets;
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enter into sale-leaseback transactions;
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enter into transactions with affiliates; and
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engage in mergers or consolidations.
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adversely affect the market price of some or all of our outstanding debt or equity securities;
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limit our access to the capital markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all;
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trigger the application of restrictive covenants or adverse conditions in our current or future debt agreements;
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increase our cost of borrowing; and
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•
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impair our business, financial condition and results of operations.
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•
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changes in customers' service requirements, including increased demands by customers to transmit larger amounts of data at faster speeds;
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our above-described need to (i) consolidate and simplify our various legacy systems, (ii) strengthen and transform our customer support systems and (iii) support our development and launch of new products and services; and
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technological advances of our competitors.
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Successor
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December 31, 2019
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December 31, 2018
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Land
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3
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%
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4
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%
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Fiber, conduit and other outside plant (1)
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44
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%
|
|
50
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%
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Central office and other network electronics (2)
|
23
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%
|
|
19
|
%
|
Support assets (3)
|
21
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%
|
|
22
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%
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Construction in progress (4)
|
9
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%
|
|
5
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%
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Gross property, plant and equipment
|
100
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%
|
|
100
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%
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(1)
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Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures.
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(2)
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Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers.
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(3)
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Support assets consist of buildings, cable landing stations, data centers, computers and other administrative and support equipment.
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(4)
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Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction.
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•
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Customers' demand for automated products and services and competitive pressures will require that we continue to invest in new technologies and automated processes to improve the customer experience and reduce our operating expenses.
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•
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The increasingly digital environment and the growth in online video require robust, scalable network services. We are continuing to enhance our product capabilities and simplify our product portfolio based on demand and profitability to enable customers to have access to greater bandwidth.
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•
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Businesses continue to adopt distributed, global operating models. We are expanding and densifying our fiber network, connecting more buildings to our network to generate revenue opportunities and reduce our costs associated with leasing networks from other carriers.
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•
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Industry consolidation, coupled with changes in regulation, technology and customer preferences, are significantly reducing demand for some of our products and services, while other advances, such as the need for lower latency provided by Edge computing or the implementation of 5G networks, are expected to create opportunities.
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•
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The operating margins of several of our newer, more technologically advanced services, some of which may connect to customers through other carriers, are lower than the operating margins on our traditional, on-net wireline services.
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Year Ended December 31, 2019
|
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Year Ended December 31, 2018
|
|||
|
(Dollars in millions)
|
|||||
Operating revenue
|
$
|
8,185
|
|
|
8,220
|
|
Operating expenses
|
10,712
|
|
|
7,252
|
|
|
Operating (loss) income
|
(2,527
|
)
|
|
968
|
|
|
Other expense
|
(419
|
)
|
|
(431
|
)
|
|
Income tax expense
|
(255
|
)
|
|
(196
|
)
|
|
Net (loss) income
|
$
|
(3,201
|
)
|
|
341
|
|
•
|
IP and Data Services, which include primarily VPN data networks, Ethernet, IP, video (including our facilities-based video services, CDN services and Vyvx broadcast services) and other ancillary services;
|
•
|
Transport and Infrastructure, which includes private line (including business data services), wavelength, colocation and data center facilities and services, including cloud, hosting and application management solutions, professional services, dark fiber services and other ancillary services;
|
•
|
Voice and Collaboration, which includes primarily TDM voice services, VoIP and other ancillary services;
|
•
|
Other, which includes sublease rental income and information technology services and managed services, which may be purchased in conjunction with our other network services; and
|
•
|
Affiliate Services, which includes telecommunication services that we also provide to our external customers.
|
|
Years Ended December 31,
|
|
% Change
|
||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in millions)
|
|
|||||||
IP and Data Services
|
$
|
3,888
|
|
|
3,945
|
|
|
(1
|
)%
|
Transport and Infrastructure
|
2,662
|
|
|
2,701
|
|
|
(1
|
)%
|
|
Voice and Collaboration
|
1,443
|
|
|
1,464
|
|
|
(1
|
)%
|
|
Other revenue
|
12
|
|
|
3
|
|
|
nm
|
|
|
Affiliate revenue
|
180
|
|
|
107
|
|
|
68
|
%
|
|
Total operating revenue
|
$
|
8,185
|
|
|
8,220
|
|
|
—
|
%
|
nm
|
Percentages greater than 200% and comparison between positive and negative values or to/from zero values are considered not meaningful.
|
•
|
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 include third-party telecommunications expenses we incur for using other carriers' networks to provide services to our customers); rents and utilities expenses; equipment sales expenses; costs incurred for universal service funds (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); and other expenses directly related to our operations; and
|
•
|
Selling, general and administrative expenses are 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; property and other operating taxes and fees; external commissions; legal expenses associated with general matters; bad debt expense; and other selling, general and administrative expenses.
|
|
Years Ended December 31,
|
|
% Change
|
||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in millions)
|
|
|||||||
Cost of services and products (exclusive of depreciation and amortization)
|
$
|
3,799
|
|
|
3,937
|
|
|
(4
|
)%
|
Selling, general and administrative
|
1,258
|
|
|
1,354
|
|
|
(7
|
)%
|
|
Operating expenses - affiliates
|
334
|
|
|
257
|
|
|
30
|
%
|
|
Depreciation and amortization
|
1,613
|
|
|
1,704
|
|
|
(5
|
)%
|
|
Goodwill impairment
|
3,708
|
|
|
—
|
|
|
nm
|
|
|
Total operating expenses
|
$
|
10,712
|
|
|
7,252
|
|
|
48
|
%
|
nm
|
Percentages greater than 200% and comparisons between positive and negative values or to/from zero values are considered not meaningful.
|
|
Years Ended December 31,
|
|
% Change
|
||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in millions)
|
|
|||||||
Depreciation
|
804
|
|
|
906
|
|
|
(11
|
)%
|
|
Amortization
|
809
|
|
|
798
|
|
|
1
|
%
|
|
Total depreciation and amortization
|
$
|
1,613
|
|
|
1,704
|
|
|
(5
|
)%
|
|
Years Ended December 31,
|
|
% Change
|
||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in millions)
|
|
|||||||
Interest income
|
$
|
9
|
|
|
4
|
|
|
125
|
%
|
Interest income - affiliate
|
61
|
|
|
63
|
|
|
(3
|
)%
|
|
Interest expense
|
(502
|
)
|
|
(509
|
)
|
|
(1
|
)%
|
|
Gain on modification and extinguishment of debt
|
5
|
|
|
—
|
|
|
nm
|
|
|
Other income, net
|
8
|
|
|
11
|
|
|
(27
|
)%
|
|
Total other expense, net
|
$
|
(419
|
)
|
|
(431
|
)
|
|
(3
|
)%
|
Income tax expense
|
$
|
(255
|
)
|
|
(196
|
)
|
|
30
|
%
|
nm
|
Percentages greater than 200% and comparisons between positive and negative values or to/from zero values are considered not meaningful.
|
Borrower
|
|
Moody's Investors Service, Inc.
|
|
Standard & Poor's
|
|
Fitch Ratings
|
Level 3 Financing, Inc.
|
|
|
|
|
|
|
Unsecured
|
|
Ba3
|
|
BB
|
|
BB
|
Secured
|
|
Ba1
|
|
BBB-
|
|
BBB-
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and thereafter
|
|
Total
|
||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
Long-term debt (1)(2)
|
$
|
11
|
|
|
8
|
|
|
850
|
|
|
1,210
|
|
|
911
|
|
|
7,307
|
|
|
10,297
|
|
Interest on long-term debt and finance leases (2)
|
453
|
|
|
462
|
|
|
449
|
|
|
379
|
|
|
326
|
|
|
707
|
|
|
2,776
|
|
|
Purchase commitments (3)
|
119
|
|
|
87
|
|
|
44
|
|
|
24
|
|
|
18
|
|
|
41
|
|
|
333
|
|
|
Operating leases
|
276
|
|
|
231
|
|
|
199
|
|
|
166
|
|
|
113
|
|
|
437
|
|
|
1,422
|
|
|
Right-of-way agreements
|
83
|
|
|
58
|
|
|
55
|
|
|
53
|
|
|
44
|
|
|
276
|
|
|
569
|
|
|
Asset retirement obligations
|
16
|
|
|
16
|
|
|
12
|
|
|
8
|
|
|
11
|
|
|
51
|
|
|
114
|
|
|
Total future contractual obligations (4)
|
$
|
958
|
|
|
862
|
|
|
1,609
|
|
|
1,840
|
|
|
1,423
|
|
|
8,819
|
|
|
15,511
|
|
(1)
|
Includes current maturities and finance lease obligations, but excludes unamortized premium, net, unamortized debt issuance costs and intercompany debt.
|
(2)
|
Actual principal and interest paid in all years may differ due to future refinancing of outstanding debt or issuance of new debt.
|
(3)
|
Represent purchase commitments with third-party vendors for operating, installation and maintenance services for facilities. In addition, we have service-related commitments with various vendors for data processing, technical and software support services. Future payments under certain service contracts will vary depending on our actual usage. In the table above, we estimated payments for these service contracts based on estimates of the level of services we expect to receive.
|
(4)
|
The table is limited solely to contractual payment obligations and does not include:
|
•
|
contingent liabilities;
|
•
|
our open purchase orders as of December 31, 2019. These purchase orders are generally issued at fair value, and are generally cancelable without penalty;
|
•
|
other long-term liabilities, such as accruals for legal matters and other taxes that are not contractual obligations by nature. We cannot determine with any degree of reliability the years in which these liabilities might ultimately settle;
|
•
|
contract termination fees. These fees are non-recurring payments, the timing and payment of which, if any, is uncertain. In the ordinary course of business and to optimize our cost structure, we enter into contracts with terms greater than one year to purchase other goods and services;
|
•
|
service level commitments to our customers, the violation of which typically results in service credits rather than cash payments; and
|
•
|
potential indemnification obligations to counterparties in certain agreements entered into in the normal course of business. The nature and terms of these arrangements vary.
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in millions)
|
||||||||
Net cash provided by operating activities
|
$
|
2,683
|
|
|
2,397
|
|
|
286
|
|
Net cash used in investing activities
|
(1,078
|
)
|
|
(904
|
)
|
|
174
|
|
|
Net cash used in financing activities
|
(1,539
|
)
|
|
(1,552
|
)
|
|
(13
|
)
|
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
OPERATING REVENUE
|
|
|
|
|
|
|
|
|
|||||
Operating revenue
|
$
|
8,005
|
|
|
8,113
|
|
|
1,391
|
|
|
|
6,870
|
|
Operating revenue - affiliates
|
180
|
|
|
107
|
|
|
16
|
|
|
|
—
|
|
|
Total operating revenue
|
8,185
|
|
|
8,220
|
|
|
1,407
|
|
|
|
6,870
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|||||
Cost of services and products (exclusive of depreciation and amortization)
|
3,799
|
|
|
3,937
|
|
|
690
|
|
|
|
3,493
|
|
|
Selling, general and administrative
|
1,258
|
|
|
1,354
|
|
|
253
|
|
|
|
1,208
|
|
|
Operating expenses - affiliates
|
334
|
|
|
257
|
|
|
24
|
|
|
|
—
|
|
|
Depreciation and amortization
|
1,613
|
|
|
1,704
|
|
|
282
|
|
|
|
1,018
|
|
|
Goodwill impairment
|
3,708
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
Total operating expenses
|
10,712
|
|
|
7,252
|
|
|
1,249
|
|
|
|
5,719
|
|
|
OPERATING (LOSS) INCOME
|
(2,527
|
)
|
|
968
|
|
|
158
|
|
|
|
1,151
|
|
|
OTHER (EXPENSE) INCOME
|
|
|
|
|
|
|
|
|
|||||
Interest income
|
9
|
|
|
4
|
|
|
1
|
|
|
|
13
|
|
|
Interest income - affiliate
|
61
|
|
|
63
|
|
|
11
|
|
|
|
—
|
|
|
Interest expense
|
(502
|
)
|
|
(509
|
)
|
|
(80
|
)
|
|
|
(441
|
)
|
|
Gain (loss) on modification and extinguishment of debt
|
5
|
|
|
—
|
|
|
—
|
|
|
|
(44
|
)
|
|
Other income, net
|
8
|
|
|
11
|
|
|
3
|
|
|
|
14
|
|
|
Total other expense, net
|
(419
|
)
|
|
(431
|
)
|
|
(65
|
)
|
|
|
(458
|
)
|
|
(LOSS) INCOME BEFORE INCOME TAXES
|
(2,946
|
)
|
|
537
|
|
|
93
|
|
|
|
693
|
|
|
Income tax expense
|
(255
|
)
|
|
(196
|
)
|
|
(234
|
)
|
|
|
(268
|
)
|
|
NET (LOSS) INCOME
|
$
|
(3,201
|
)
|
|
341
|
|
|
(141
|
)
|
|
|
425
|
|
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
NET (LOSS) INCOME
|
$
|
(3,201
|
)
|
|
341
|
|
|
(141
|
)
|
|
|
425
|
|
OTHER COMPREHENSIVE (LOSS) INCOME:
|
|
|
|
|
|
|
|
|
|||||
Defined benefit pension plan adjustment, net of $1, ($1), $— and ($3) tax
|
(3
|
)
|
|
5
|
|
|
—
|
|
|
|
(1
|
)
|
|
Foreign currency translation adjustment, net of ($6), $50, ($17) and ($46) tax
|
(5
|
)
|
|
(200
|
)
|
|
18
|
|
|
|
81
|
|
|
Other comprehensive (loss) income
|
(8
|
)
|
|
(195
|
)
|
|
18
|
|
|
|
80
|
|
|
COMPREHENSIVE (LOSS) INCOME
|
$
|
(3,209
|
)
|
|
146
|
|
|
(123
|
)
|
|
|
505
|
|
|
As of December 31,
|
|||||
|
2019
|
|
2018
|
|||
|
(Dollars in millions)
|
|||||
ASSETS
|
|
|
|
|||
CURRENT ASSETS
|
|
|
|
|||
Cash and cash equivalents
|
$
|
316
|
|
|
243
|
|
Restricted cash - current
|
3
|
|
|
4
|
|
|
Accounts receivable, less allowance of $13 and $11
|
667
|
|
|
712
|
|
|
Note receivable - affiliate
|
1,590
|
|
|
1,825
|
|
|
Other
|
266
|
|
|
234
|
|
|
Total current assets
|
2,842
|
|
|
3,018
|
|
|
Property, plant and equipment, net of accumulated depreciation of $1,825 and $1,021
|
9,936
|
|
|
9,453
|
|
|
GOODWILL AND OTHER ASSETS
|
|
|
|
|||
Goodwill
|
7,415
|
|
|
11,119
|
|
|
Operating lease assets
|
1,060
|
|
|
—
|
|
|
Restricted cash
|
19
|
|
|
25
|
|
|
Customer relationships, net
|
6,865
|
|
|
7,567
|
|
|
Other intangible assets, net
|
469
|
|
|
410
|
|
|
Other, net
|
492
|
|
|
699
|
|
|
Total goodwill and other assets
|
16,320
|
|
|
19,820
|
|
|
TOTAL ASSETS
|
$
|
29,098
|
|
|
32,291
|
|
LIABILITIES AND MEMBER'S EQUITY
|
|
|
|
|||
CURRENT LIABILITIES
|
|
|
|
|||
Current maturities of long-term debt
|
$
|
11
|
|
|
6
|
|
Accounts payable
|
654
|
|
|
726
|
|
|
Accounts payable - affiliates
|
669
|
|
|
246
|
|
|
Accrued expenses and other liabilities
|
|
|
|
|||
Salaries and benefits
|
240
|
|
|
233
|
|
|
Income and other taxes
|
152
|
|
|
130
|
|
|
Current operating lease liabilities
|
249
|
|
|
—
|
|
|
Interest
|
85
|
|
|
95
|
|
|
Other
|
77
|
|
|
78
|
|
|
Current portion of deferred revenue
|
309
|
|
|
310
|
|
|
Total current liabilities
|
2,446
|
|
|
1,824
|
|
|
LONG-TERM DEBT
|
10,356
|
|
|
10,838
|
|
|
DEFERRED REVENUE AND OTHER LIABILITIES
|
|
|
|
|||
Deferred revenue
|
1,343
|
|
|
1,181
|
|
|
Deferred income taxes, net
|
241
|
|
|
202
|
|
|
Noncurrent operating lease liabilities
|
854
|
|
|
—
|
|
|
Other
|
313
|
|
|
369
|
|
|
Total deferred revenue and other liabilities
|
2,751
|
|
|
1,752
|
|
|
COMMITMENTS AND CONTINGENCIES (Note 17)
|
|
|
|
|
|
|
MEMBER'S EQUITY
|
|
|
|
|||
Member's equity
|
13,724
|
|
|
18,048
|
|
|
Accumulated other comprehensive loss
|
(179
|
)
|
|
(171
|
)
|
|
Total member's equity
|
13,545
|
|
|
17,877
|
|
|
TOTAL LIABILITIES AND MEMBER'S EQUITY
|
$
|
29,098
|
|
|
32,291
|
|
|
Successor
|
|
Predecessor
|
|||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
||||||
|
(Dollars in millions)
|
|||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(3,201
|
)
|
|
341
|
|
|
(141
|
)
|
|
|
425
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
1,613
|
|
|
1,704
|
|
|
282
|
|
|
|
1,018
|
|
||
Goodwill impairment
|
3,708
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||
Deferred income taxes
|
219
|
|
|
175
|
|
|
270
|
|
|
|
217
|
|
||
Changes in current assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||
Accounts receivable
|
21
|
|
|
46
|
|
|
(1
|
)
|
|
|
(16
|
)
|
||
Accounts payable
|
(134
|
)
|
|
(37
|
)
|
|
35
|
|
|
|
(102
|
)
|
||
Other current assets and liabilities
|
(6
|
)
|
|
4
|
|
|
(100
|
)
|
|
|
70
|
|
||
Other current assets and liabilities, affiliates
|
423
|
|
|
216
|
|
|
(17
|
)
|
|
|
—
|
|
||
Changes in other noncurrent assets and liabilities, net
|
120
|
|
|
(22
|
)
|
|
(53
|
)
|
|
|
154
|
|
||
Other, net
|
(80
|
)
|
|
(30
|
)
|
|
33
|
|
|
|
148
|
|
||
Net cash provided by operating activities
|
2,683
|
|
|
2,397
|
|
|
308
|
|
|
|
1,914
|
|
||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures
|
(1,341
|
)
|
|
(1,038
|
)
|
|
(207
|
)
|
|
|
(1,119
|
)
|
||
Purchase of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(1,127
|
)
|
||
Maturity of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,127
|
|
||
Proceeds from sale of property, plant and equipment and other assets
|
28
|
|
|
134
|
|
|
—
|
|
|
|
1
|
|
||
Note receivable - affiliate
|
235
|
|
|
—
|
|
|
(1,825
|
)
|
|
|
—
|
|
||
Net cash used in investing activities
|
(1,078
|
)
|
|
(904
|
)
|
|
(2,032
|
)
|
|
|
(1,118
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||
Net proceeds from issuance of long-term debt
|
2,479
|
|
|
—
|
|
|
—
|
|
|
|
4,569
|
|
||
Payments of long-term debt
|
(2,906
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
|
(4,917
|
)
|
||
Distributions
|
(1,084
|
)
|
|
(1,545
|
)
|
|
(250
|
)
|
|
|
—
|
|
||
Other
|
(28
|
)
|
|
—
|
|
|
(2
|
)
|
|
|
3
|
|
||
Net cash used in financing activities
|
(1,539
|
)
|
|
(1,552
|
)
|
|
(253
|
)
|
|
|
(345
|
)
|
||
Net increase (decrease) in cash, cash equivalents, restricted cash and securities
|
66
|
|
|
(59
|
)
|
|
(1,977
|
)
|
|
|
451
|
|
||
Cash, cash equivalents, restricted cash and securities at beginning of period
|
272
|
|
|
331
|
|
|
2,308
|
|
|
|
1,857
|
|
||
Cash, cash equivalents, restricted cash and securities at end of period
|
$
|
338
|
|
|
$
|
272
|
|
|
331
|
|
|
|
2,308
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|||||
Income taxes paid, net
|
$
|
(23
|
)
|
|
(33
|
)
|
|
(10
|
)
|
|
|
(49
|
)
|
Interest paid (net of capitalized interest of $15, $1, — and —)
|
$
|
531
|
|
|
542
|
|
|
56
|
|
|
|
468
|
|
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
MEMBER'S EQUITY
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
$
|
18,048
|
|
|
19,254
|
|
|
19,617
|
|
|
|
—
|
|
Net (loss) income
|
(3,201
|
)
|
|
341
|
|
|
(141
|
)
|
|
|
—
|
|
|
Cumulative effect of adoption of ASU 2016-02, Leases
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
Cumulative net effect of adoption of ASU 2014-09, Revenue from Contracts with Customers, net of $—, $3, $—, $— tax
|
—
|
|
|
9
|
|
|
—
|
|
|
|
—
|
|
|
Cumulative effect of adoption of ASU 2018-02, Income Statement-Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
|
—
|
|
|
Contributions
|
—
|
|
|
—
|
|
|
28
|
|
|
|
—
|
|
|
Purchase price accounting adjustments
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
|
—
|
|
|
Distributions
|
(1,084
|
)
|
|
(1,545
|
)
|
|
(250
|
)
|
|
|
—
|
|
|
Balance at end of period
|
13,724
|
|
|
18,048
|
|
|
19,254
|
|
|
|
—
|
|
|
COMMON STOCK
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
—
|
|
|
—
|
|
|
—
|
|
|
|
4
|
|
|
Balance at end of period
|
—
|
|
|
—
|
|
|
—
|
|
|
|
4
|
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
—
|
|
|
—
|
|
|
—
|
|
|
|
19,800
|
|
|
Common stock issued under employee stock benefit plans and other
|
—
|
|
|
—
|
|
|
—
|
|
|
|
30
|
|
|
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
|
102
|
|
|
Balance at end of period
|
—
|
|
|
—
|
|
|
—
|
|
|
|
19,932
|
|
|
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
(171
|
)
|
|
18
|
|
|
—
|
|
|
|
(387
|
)
|
|
Other comprehensive (loss) income
|
(8
|
)
|
|
(195
|
)
|
|
18
|
|
|
|
80
|
|
|
Cumulative effect of adoption of ASU 2018-02, Income Statement-Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
—
|
|
|
6
|
|
|
—
|
|
|
|
—
|
|
|
Balance at end of period
|
(179
|
)
|
|
(171
|
)
|
|
18
|
|
|
|
(307
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
ACCUMULATED DEFICIT
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(8,500
|
)
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
|
425
|
|
|
Balance at end of period
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(8,075
|
)
|
|
TOTAL MEMBER'S/STOCKHOLDERS' EQUITY
|
$
|
13,545
|
|
|
17,877
|
|
|
19,272
|
|
|
|
11,554
|
|
•
|
Identification of the contract with a customer;
|
•
|
Identification of the performance obligations in the contract;
|
•
|
Determination of the transaction price;
|
•
|
Allocation of the transaction price to the performance obligations in the contract; and
|
•
|
Recognition of revenue when, or as, we satisfy a performance obligation.
|
|
Adjusted November 1, 2017
Balance as of December 31, 2017
|
|
Purchase Price Adjustments
|
|
Adjusted November 1, 2017
Balance as of October 31, 2018
|
||||
|
(Dollars in millions)
|
||||||||
Cash, accounts receivable and other current assets (1)
|
$
|
3,317
|
|
|
(26
|
)
|
|
3,291
|
|
Property, plant and equipment
|
9,311
|
|
|
157
|
|
|
9,468
|
|
|
Identifiable intangible assets (2)
|
|
|
|
|
|
||||
Customer relationships
|
8,964
|
|
|
(533
|
)
|
|
8,431
|
|
|
Other
|
391
|
|
|
(13
|
)
|
|
378
|
|
|
Other noncurrent assets
|
782
|
|
|
216
|
|
|
998
|
|
|
Current liabilities, excluding current maturities of long-term debt
|
(1,461
|
)
|
|
(32
|
)
|
|
(1,493
|
)
|
|
Current maturities of long-term debt
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
Long-term debt
|
(10,888
|
)
|
|
—
|
|
|
(10,888
|
)
|
|
Deferred revenue and other liabilities
|
(1,613
|
)
|
|
(114
|
)
|
|
(1,727
|
)
|
|
Goodwill
|
10,837
|
|
|
340
|
|
|
11,177
|
|
|
Total estimated aggregate consideration
|
$
|
19,633
|
|
|
(5
|
)
|
|
19,628
|
|
(1)
|
Includes accounts receivable, which had a gross contractual value of $884 million on November 1, 2017.
|
(2)
|
The weighted-average amortization period for the acquired intangible assets is approximately 12.0 years.
|
|
|
|
Successor
|
|
|
Predecessor
|
|||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
|
|
(Dollars in millions)
|
||||||||||
Transaction-related expenses
|
—
|
|
|
1
|
|
|
—
|
|
|
|
18
|
|
|
Integration and transformation-related expenses
|
82
|
|
|
120
|
|
|
28
|
|
|
|
67
|
|
|
Total acquisition-related expenses
|
$
|
82
|
|
|
121
|
|
|
28
|
|
|
|
85
|
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||
|
(Dollars in millions)
|
||||
Goodwill
|
7,415
|
|
|
11,119
|
|
Customer relationships, less accumulated amortization of $1,538 and $833
|
6,865
|
|
|
7,567
|
|
Other intangible assets subject to amortization:
|
|
|
|
||
Trade names, less accumulated amortization of $57 and $30
|
74
|
|
|
100
|
|
Capitalized software, less accumulated amortization of $146 and $67
|
395
|
|
|
310
|
|
Total other intangible assets, net
|
469
|
|
|
410
|
|
|
Year Ended December 31, 2019
|
|||||||||
|
Total Revenue
|
|
Adjustments for Non-ASC 606 Revenue(6)
|
|
Total Revenue from Contracts with Customers
|
|||||
|
(Dollars in millions)
|
|||||||||
IP and Data Services (1)
|
$
|
3,888
|
|
|
—
|
|
|
3,888
|
|
|
Transport and Infrastructure (2)
|
2,662
|
|
|
(704
|
)
|
|
1,958
|
|
||
Voice and Collaboration (3)
|
1,443
|
|
|
—
|
|
|
1,443
|
|
||
Other Revenue (4)
|
12
|
|
|
(9
|
)
|
|
3
|
|
||
Affiliate Revenue (5)
|
180
|
|
|
(180
|
)
|
|
—
|
|
||
Total Revenue
|
$
|
8,185
|
|
|
(893
|
)
|
|
7,292
|
|
|
|
|
|
|
|
|
|||||
Timing of revenue
|
|
|
|
|
|
|||||
Goods transferred at a point in time
|
|
|
|
|
$
|
—
|
|
|||
Services performed over time
|
|
|
|
|
7,292
|
|
||||
Total revenue from contracts with customers
|
|
|
|
|
$
|
7,292
|
|
|
Year Ended December 31, 2018
|
|||||||||
|
(Dollars in millions)
|
|||||||||
|
Total Revenue
|
|
Adjustments for Non-ASC 606 Revenue(6)
|
|
Total Revenue from Contracts with Customers
|
|||||
IP and Data Services (1)
|
$
|
3,945
|
|
|
—
|
|
|
3,945
|
|
|
Transport and Infrastructure (2)
|
2,701
|
|
|
(189
|
)
|
|
2,512
|
|
||
Voice and Collaboration (3)
|
1,464
|
|
|
—
|
|
|
1,464
|
|
||
Other Revenue (4)
|
3
|
|
|
(3
|
)
|
|
—
|
|
||
Affiliate Revenue (5)
|
107
|
|
|
(107
|
)
|
|
—
|
|
||
Total Revenue
|
$
|
8,220
|
|
|
(299
|
)
|
|
7,921
|
|
|
|
|
|
|
|
|
|||||
Timing of revenue
|
|
|
|
|
|
|||||
Goods transferred at a point in time
|
|
|
|
|
$
|
—
|
|
|||
Services performed over time
|
|
|
|
|
7,921
|
|
||||
Total revenue from contracts with customers
|
|
|
|
|
$
|
7,921
|
|
(1)
|
Includes primarily VPN data network, IP, Ethernet, video and ancillary revenue.
|
(2)
|
Includes primarily wavelength, colocation and data center services, dark fiber, private line and professional services revenue.
|
(3)
|
Includes voice, Voice Over IP ("VoIP"), Collaboration.
|
(4)
|
Includes sublease rental income and IT services and managed services revenue.
|
(5)
|
Includes telecommunications and data services we bill to our affiliates.
|
(6)
|
Includes sublease rental income and revenue from fiber capacity lease arrangements which are not within the scope of ASC 606.
|
|
December 31, 2019
|
|
December 31, 2018
|
|||
|
(Dollars in millions)
|
|||||
Customer receivables (1)
|
$
|
678
|
|
|
712
|
|
Contract assets
|
32
|
|
|
19
|
|
|
Contract liabilities
|
423
|
|
|
393
|
|
(1)
|
Gross customer receivables of $691 million and $723 million, net of allowance for doubtful accounts of $13 million and $11 million, at December 31, 2019 and December 31, 2018, respectively.
|
|
Year Ended December 31, 2019
|
|||||
|
Acquisition Costs
|
|
Fulfillment Costs
|
|||
|
(Dollars in millions)
|
|||||
Beginning of period balance
|
$
|
64
|
|
|
84
|
|
Costs incurred
|
60
|
|
|
103
|
|
|
Amortization
|
(45
|
)
|
|
(66
|
)
|
|
End of period balance
|
$
|
79
|
|
|
121
|
|
|
Year Ended December 31, 2018
|
|||||
|
Acquisition Costs
|
|
Fulfillment Costs
|
|||
|
(Dollars in millions)
|
|||||
Beginning of period balance
|
$
|
13
|
|
|
14
|
|
Costs incurred
|
68
|
|
|
99
|
|
|
Amortization
|
(17
|
)
|
|
(29
|
)
|
|
End of period balance
|
$
|
64
|
|
|
84
|
|
|
Year Ended December 31, 2019
|
|
|
(Dollars in millions)
|
|
Operating and short-term lease cost
|
388
|
|
Finance lease cost:
|
|
|
Amortization of right-of-use assets
|
14
|
|
Interest on lease liability
|
10
|
|
Total finance lease cost
|
24
|
|
Total lease cost
|
412
|
|
|
|
December 31
|
||
Leases (millions)
|
Classification on the Balance Sheet
|
2019
|
||
Assets
|
|
|
||
Operating lease assets
|
Operating lease assets
|
$
|
1,060
|
|
Finance lease assets
|
Property, plant and equipment, net of accumulated depreciation
|
154
|
|
|
Total leased assets
|
|
$
|
1,214
|
|
|
|
|
||
Liabilities
|
|
|
||
Current
|
|
|
||
Operating
|
Current operating lease liabilities
|
$
|
249
|
|
Finance
|
Current portion of long-term debt
|
11
|
|
|
Noncurrent
|
|
|
||
Operating
|
Noncurrent operating lease liabilities
|
854
|
|
|
Finance
|
Long-term debt
|
160
|
|
|
Total lease liabilities
|
|
$
|
1,274
|
|
|
|
|
||
Weighted-average remaining lease term (years)
|
|
|||
Operating leases
|
|
7.5
|
|
|
Finance leases
|
|
13.1
|
|
|
Weighted-average discount rate
|
|
|
||
Operating leases
|
|
6.19
|
%
|
|
Finance leases
|
|
5.60
|
%
|
|
Year Ended December 31, 2019
|
|
|
(Dollars in millions)
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
Operating cash flows from operating leases
|
387
|
|
Operating cash flows from finance leases
|
11
|
|
Financing cash flows from finance leases
|
5
|
|
Supplemental lease cash flow disclosures
|
|
|
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities
|
206
|
|
Right-of-use assets obtained in exchange for new finance lease liabilities
|
12
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
(Dollars in millions)
|
||||||
2020
|
$
|
276
|
|
|
21
|
|
|
2021
|
231
|
|
|
17
|
|
||
2022
|
199
|
|
|
18
|
|
||
2023
|
166
|
|
|
18
|
|
||
2024
|
113
|
|
|
18
|
|
||
Thereafter
|
437
|
|
|
154
|
|
||
Total lease payments
|
1,422
|
|
|
246
|
|
||
Less: interest
|
(319
|
)
|
|
(75
|
)
|
||
Total
|
1,103
|
|
|
$
|
171
|
|
|
Less: current portion
|
(249
|
)
|
|
(11
|
)
|
||
Long-term portion
|
$
|
854
|
|
|
$
|
160
|
|
|
Future Minimum Payments
|
||
|
(Dollars in millions)
|
||
Capital lease obligations:
|
|
||
2019
|
$
|
16
|
|
2020
|
15
|
|
|
2021
|
16
|
|
|
2022
|
16
|
|
|
2023
|
17
|
|
|
2024 and thereafter
|
164
|
|
|
Total minimum payments
|
244
|
|
|
Less: amount representing interest and executory costs
|
(81
|
)
|
|
Present value of minimum payments
|
163
|
|
|
Less: current portion
|
(6
|
)
|
|
Long-term portion
|
$
|
157
|
|
|
Operating Leases
|
||
|
(Dollars in millions)
|
||
2019
|
$
|
396
|
|
2020
|
259
|
|
|
2021
|
219
|
|
|
2022
|
164
|
|
|
2023
|
137
|
|
|
2024 and thereafter
|
613
|
|
|
Total future minimum payments (1)
|
$
|
1,788
|
|
(1)
|
Minimum payments have not been reduced by minimum sublease rentals of $29 million due in the future under non-cancelable subleases.
|
|
Interest Rates
|
|
Maturities
|
|
December 31,
2019 |
|
December 31,
2018 |
|||
|
|
|
|
|
(Dollars in millions)
|
|||||
Level 3 Parent, LLC
|
|
|
|
|
|
|
|
|||
Senior Notes
|
5.750%
|
|
2022
|
|
$
|
—
|
|
|
600
|
|
Subsidiaries
|
|
|
|
|
|
|
|
|||
Level 3 Financing, Inc.
|
|
|
|
|
|
|
|
|||
Senior Secured Debt:(1)
|
|
|
|
|
|
|
|
|||
Senior Notes (2)
|
3.400% - 3.875%
|
|
2027 - 2029
|
|
1,500
|
|
|
—
|
|
|
Tranche B 2024 Term Loan (3)
|
LIBOR + 2.25%
|
|
2024
|
|
—
|
|
|
4,611
|
|
|
Tranche B 2027 Term Loan (4)
|
LIBOR + 1.75%
|
|
2027
|
|
3,111
|
|
|
—
|
|
|
Senior Notes and other debt:
|
|
|
|
|
|
|
|
|||
Senior Notes (2)
|
4.625% - 6.125%
|
|
2021 - 2027
|
|
5,515
|
|
|
5,315
|
|
|
Finance Leases
|
Various
|
|
Various
|
|
171
|
|
|
163
|
|
|
Unamortized premiums, net
|
|
|
|
|
104
|
|
|
155
|
|
|
Unamortized debt issuance costs
|
|
|
|
|
(34
|
)
|
|
—
|
|
|
Total long-term debt
|
|
|
|
|
10,367
|
|
|
10,844
|
|
|
Less current maturities
|
|
|
|
|
(11
|
)
|
|
(6
|
)
|
|
Long-term debt, excluding current maturities
|
|
|
|
|
$
|
10,356
|
|
|
10,838
|
|
(1)
|
See the remainder of this Note for a description of certain parent and subsidiary guarantees and liens securing this debt.
|
(2)
|
As described further below, the notes are fully and unconditionally guaranteed by certain affiliates of Level 3 Financing, Inc., including Level 3 Parent, LLC and Level 3 Communications, LLC. (subject in certain cases to pending regulatory approvals).
|
(3)
|
The Tranche B 2024 Term Loan had an interest rate of 4.754% as of December 31, 2018.
|
(4)
|
The Tranche B 2027 Term Loan had an interest rate of 3.549% as of December 31, 2019.
|
|
(Dollars in millions)(1)
|
||
2020
|
$
|
11
|
|
2021
|
8
|
|
|
2022
|
850
|
|
|
2023
|
1,210
|
|
|
2024
|
911
|
|
|
2024 and thereafter
|
7,307
|
|
|
Total long-term debt
|
$
|
10,297
|
|
(1)
|
Actual principal paid in any year may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||
|
(Dollars in millions)
|
||||
Trade receivables
|
529
|
|
|
533
|
|
Earned and unbilled receivables
|
151
|
|
|
177
|
|
Other
|
—
|
|
|
13
|
|
Total accounts receivable
|
680
|
|
|
723
|
|
Less: allowance for doubtful accounts (1)
|
(13
|
)
|
|
(11
|
)
|
Accounts receivable, less allowance
|
667
|
|
|
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.
|
|
Beginning Balance
|
Additions
|
Deductions
|
Ending Balance
|
||||
|
(Dollars in millions)
|
|||||||
2019
|
11
|
|
24
|
|
(22
|
)
|
13
|
|
2018
|
3
|
|
18
|
|
(10
|
)
|
11
|
|
December 31, 2017 (Successor)
|
—
|
|
3
|
|
—
|
|
3
|
|
October 31, 2017 (Predecessor)
|
29
|
|
16
|
|
(12
|
)
|
33
|
|
|
Depreciable Lives
|
|
As of December 31,
|
||||
|
|
2019
|
|
2018
|
|||
|
|
|
(Dollars in millions)
|
||||
Land
|
N/A
|
|
336
|
|
|
339
|
|
Fiber conduit and other outside plant(1)
|
15-45 years
|
|
5,226
|
|
|
5,262
|
|
Central office and other network electronics(2)
|
7-10 years
|
|
2,687
|
|
|
1,986
|
|
Support assets(3)
|
3-30 years
|
|
2,419
|
|
|
2,327
|
|
Construction-in-progress(4)
|
N/A
|
|
1,093
|
|
|
560
|
|
Gross property, plant and equipment
|
|
|
11,761
|
|
|
10,474
|
|
Accumulated depreciation(5)
|
|
|
(1,825
|
)
|
|
(1,021
|
)
|
Net property, plant and equipment
|
|
|
9,936
|
|
|
9,453
|
|
(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.
|
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
Balance at beginning of period
|
$
|
105
|
|
|
45
|
|
|
45
|
|
|
|
89
|
|
Accretion expense
|
5
|
|
|
5
|
|
|
1
|
|
|
|
12
|
|
|
Purchase price adjustments (1)
|
—
|
|
|
58
|
|
|
—
|
|
|
|
—
|
|
|
Liabilities settled
|
(12
|
)
|
|
(13
|
)
|
|
(1
|
)
|
|
|
(7
|
)
|
|
Revision in estimated cash flows
|
15
|
|
|
10
|
|
|
—
|
|
|
|
—
|
|
|
Balance at end of period
|
$
|
113
|
|
|
105
|
|
|
45
|
|
|
|
94
|
|
(1)
|
These liabilities relate to purchase price adjustments that occurred during 2018 from CenturyLink's acquisition of us.
|
|
Severance
|
||
|
(Dollars in millions)
|
||
Balance at December 31, 2017 (Successor)
|
$
|
5
|
|
Accrued to expense
|
33
|
|
|
Payments, net
|
(19
|
)
|
|
Balance at December 31, 2018
|
$
|
19
|
|
Accrued to expense
|
6
|
|
|
Payments, net
|
(16
|
)
|
|
Balance at December 31, 2019
|
$
|
9
|
|
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.
|
|
|
|
As of December 31,
|
||||||||
|
|
|
2019
|
|
2018
|
||||||
|
Input Level
|
|
Carrying Amount
|
Fair Value
|
|
Carrying Amount
|
Fair Value
|
||||
|
|
|
(Dollars in million)
|
||||||||
Liabilities-Long-term debt, excluding finance leases
|
2
|
|
10,196
|
|
10,244
|
|
|
10,681
|
|
10,089
|
|
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
Income tax expense was as follows:
|
|
|
|
|
|
|
|
|
|||||
Federal
|
|
|
|
|
|
|
|
|
|||||
Current
|
$
|
12
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Deferred
|
186
|
|
|
199
|
|
|
231
|
|
|
|
193
|
|
|
State
|
|
|
|
|
|
|
|
|
|||||
Current
|
4
|
|
|
(9
|
)
|
|
2
|
|
|
|
7
|
|
|
Deferred
|
41
|
|
|
28
|
|
|
6
|
|
|
|
16
|
|
|
Foreign
|
|
|
|
|
|
|
|
|
|||||
Current
|
17
|
|
|
30
|
|
|
4
|
|
|
|
39
|
|
|
Deferred
|
(5
|
)
|
|
(52
|
)
|
|
(9
|
)
|
|
|
13
|
|
|
Total income tax expense
|
$
|
255
|
|
|
196
|
|
|
234
|
|
|
|
268
|
|
|
Successor
|
|
Predecessor
|
|||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
||||
|
(Dollars in millions)
|
|||||||||||
Income tax expense was allocated as follows:
|
|
|
|
|
|
|
|
|
||||
Income tax expense in the consolidated statements of operations:
|
|
|
|
|
|
|
|
|
||||
Attributable to income
|
255
|
|
|
196
|
|
|
234
|
|
|
|
268
|
|
Member's/Stockholders' equity:
|
|
|
|
|
|
|
|
|
||||
Tax effect of the change in accumulated other comprehensive loss
|
5
|
|
|
(49
|
)
|
|
17
|
|
|
|
49
|
|
|
Successor
|
|
Predecessor
|
|||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
||||
|
(Percentage of pre-tax income)
|
|||||||||||
Statutory federal income tax rate
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
|
|
35.0
|
%
|
State income taxes, net of federal income tax benefit
|
(1.2
|
)%
|
|
2.8
|
%
|
|
3.6
|
%
|
|
|
2.9
|
%
|
Goodwill impairment
|
(26.4
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
|
—
|
%
|
Tax Reform
|
(0.2
|
)%
|
|
17.2
|
%
|
|
210.6
|
%
|
|
|
—
|
%
|
Global intangible low-taxed income
|
(0.4
|
)%
|
|
1.8
|
%
|
|
—
|
%
|
|
|
—
|
%
|
CenturyLink acquisition transaction costs
|
—
|
%
|
|
—
|
%
|
|
11.3
|
%
|
|
|
—
|
%
|
Uncertain tax positions
|
—
|
%
|
|
0.5
|
%
|
|
1.2
|
%
|
|
|
0.1
|
%
|
Base erosion and anti-abuse tax
|
(0.4
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
|
—
|
%
|
Net foreign income tax
|
(0.8
|
)%
|
|
(4.8
|
)%
|
|
(19.3
|
)%
|
|
|
0.9
|
%
|
Executive compensation limitation
|
(0.2
|
)%
|
|
1.2
|
%
|
|
5.4
|
%
|
|
|
0.9
|
%
|
Research and development credits
|
0.1
|
%
|
|
(1.3
|
)%
|
|
(0.9
|
)%
|
|
|
(1.2
|
)%
|
Other, net
|
(0.1
|
)%
|
|
(1.9
|
)%
|
|
4.7
|
%
|
|
|
0.1
|
%
|
Effective income tax rate
|
(8.6
|
)%
|
|
36.5
|
%
|
|
251.6
|
%
|
|
|
38.7
|
%
|
|
December 31,
|
|||||
|
2019
|
|
2018
|
|||
|
(Dollars in millions)
|
|||||
Deferred tax assets
|
|
|
|
|||
Deferred revenue
|
$
|
306
|
|
|
298
|
|
Net operating loss carry forwards
|
3,233
|
|
|
3,494
|
|
|
Property, plant and equipment
|
58
|
|
|
57
|
|
|
Other
|
326
|
|
|
309
|
|
|
Gross deferred tax assets
|
3,923
|
|
|
4,158
|
|
|
Less valuation allowance
|
(892
|
)
|
|
(931
|
)
|
|
Net deferred tax assets
|
3,031
|
|
|
3,227
|
|
|
Deferred tax liabilities
|
|
|
|
|||
Deferred revenue
|
(41
|
)
|
|
(45
|
)
|
|
Property, plant and equipment
|
(974
|
)
|
|
(853
|
)
|
|
Intangible assets
|
(1,898
|
)
|
|
(1,998
|
)
|
|
Other
|
(29
|
)
|
|
(25
|
)
|
|
Gross deferred tax liabilities
|
(2,942
|
)
|
|
(2,921
|
)
|
|
Net deferred tax assets
|
89
|
|
|
306
|
|
|
2019
|
|
2018
|
|||
|
(Dollars in millions)
|
|||||
Unrecognized tax benefits at beginning of period
|
$
|
970
|
|
|
21
|
|
Tax positions of prior periods netted against deferred tax assets
|
(24
|
)
|
|
950
|
|
|
(Decrease) increase in tax positions taken in the prior period
|
1
|
|
|
(1
|
)
|
|
Increase in tax positions taken in the current period
|
5
|
|
|
3
|
|
|
Decrease due to settlement/payments
|
—
|
|
|
(1
|
)
|
|
Decrease from the lapse of statute of limitations
|
—
|
|
|
(2
|
)
|
|
Unrecognized tax benefits at end of period
|
952
|
|
|
970
|
|
•
|
IP and Data Services, which include primarily VPN data networks, Ethernet, IP, video (including our facilities-based video services, CDN services and Vyvx broadcast services) and other ancillary services;
|
•
|
Transport and Infrastructure, which includes private line (including business data services), wavelength, colocation and data center services, including cloud, hosting and application management solutions, professional services, network security services, dark fiber services and other ancillary services;
|
•
|
Voice and Collaboration, which includes primarily TDM voice services, VoIP and other ancillary services;
|
•
|
Other, which includes sublease rental income and information technology services and managed services, which may be purchased in conjunction with our other network services; and
|
•
|
Affiliate services, which includes telecommunication services that we also provide to our external customers.
|
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
IP and Data Services
|
$
|
3,888
|
|
|
3,945
|
|
|
668
|
|
|
|
3,284
|
|
Transport and Infrastructure
|
2,662
|
|
|
2,701
|
|
|
464
|
|
|
|
2,272
|
|
|
Voice and Collaboration
|
1,443
|
|
|
1,464
|
|
|
258
|
|
|
|
1,308
|
|
|
Other revenue
|
12
|
|
|
3
|
|
|
1
|
|
|
|
6
|
|
|
Affiliate revenue
|
180
|
|
|
107
|
|
|
16
|
|
|
|
—
|
|
|
Total revenue
|
$
|
8,185
|
|
|
8,220
|
|
|
1,407
|
|
|
|
6,870
|
|
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
USF surcharges and transaction taxes
|
$
|
428
|
|
|
415
|
|
|
71
|
|
|
|
331
|
|
|
Total Assets
|
|||||
|
December 31,
|
|||||
|
2019
|
|
2018
|
|||
|
(Dollars in millions)
|
|||||
North America
|
$
|
24,144
|
|
|
27,520
|
|
Europe, Middle East and Africa
|
2,842
|
|
|
2,765
|
|
|
Latin America
|
2,112
|
|
|
2,006
|
|
|
Total
|
$
|
29,098
|
|
|
32,291
|
|
|
Revenue
|
||||||||||||
|
Successor
|
|
Predecessor
|
||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Period Ended December 31, 2017
|
|
|
Period Ended October 31, 2017
|
|||||
|
(Dollars in millions)
|
||||||||||||
North America
|
$
|
6,719
|
|
|
6,739
|
|
|
1,155
|
|
|
|
5,651
|
|
Europe, Middle East and Africa
|
719
|
|
|
744
|
|
|
128
|
|
|
|
607
|
|
|
Latin America
|
747
|
|
|
737
|
|
|
124
|
|
|
|
612
|
|
|
Total
|
$
|
8,185
|
|
|
8,220
|
|
|
1,407
|
|
|
|
6,870
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||
Operating revenue
|
$
|
2,046
|
|
|
2,014
|
|
|
2,064
|
|
|
2,061
|
|
|
8,185
|
|
Operating (loss) income
|
(3,393
|
)
|
|
272
|
|
|
309
|
|
|
285
|
|
|
(2,527
|
)
|
|
Net (loss) income
|
(3,585
|
)
|
|
110
|
|
|
114
|
|
|
160
|
|
|
(3,201
|
)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||
Operating revenue
|
$
|
2,087
|
|
|
2,052
|
|
|
2,010
|
|
|
2,071
|
|
|
8,220
|
|
Operating income
|
261
|
|
|
196
|
|
|
227
|
|
|
284
|
|
|
968
|
|
|
Net income
|
62
|
|
|
40
|
|
|
88
|
|
|
151
|
|
|
341
|
|
|
|
Right-of-Way
Agreements
|
||
|
|
(Dollars in millions)
|
||
2020
|
|
$
|
83
|
|
2021
|
|
58
|
|
|
2022
|
|
55
|
|
|
2023
|
|
53
|
|
|
2024
|
|
44
|
|
|
2025 and thereafter
|
|
276
|
|
|
Total future minimum payments(1)
|
|
$
|
569
|
|
|
Pension Plans
|
|
Foreign Currency Translation Adjustments and Other
|
|
Total
|
||||
|
(Dollars in millions)
|
||||||||
Balance at December 31, 2017 (successor)
|
$
|
—
|
|
|
18
|
|
|
18
|
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(200
|
)
|
|
(200
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
5
|
|
|
—
|
|
|
5
|
|
|
Net current-period other comprehensive income (loss)
|
5
|
|
|
(200
|
)
|
|
(195
|
)
|
|
Cumulative effect of adoption of ASU 2018-02, Income Statement-Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated other Comprehensive Income
|
—
|
|
|
6
|
|
|
6
|
|
|
Balance at December 31, 2018
|
$
|
5
|
|
|
(176
|
)
|
|
(171
|
)
|
|
|
|
|
|
|
||||
Balance at December 31, 2018
|
$
|
5
|
|
|
(176
|
)
|
|
(171
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
Net current-period other comprehensive loss
|
(3
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
Balance at December 31, 2019
|
$
|
2
|
|
|
(181
|
)
|
|
(179
|
)
|
|
Level 3 Parent, LLC
|
|
Level 3 Financing, Inc.
|
|
Level 3 Communications, LLC
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
|
|||||||
|
(Dollars in millions)
|
|||||||||||||||||
OPERATING REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating revenue
|
$
|
—
|
|
|
—
|
|
|
3,884
|
|
|
4,229
|
|
|
—
|
|
|
8,113
|
|
Operating revenue - affiliates
|
—
|
|
|
—
|
|
|
130
|
|
|
285
|
|
|
(308
|
)
|
|
107
|
|
|
Total operating revenue
|
—
|
|
|
—
|
|
|
4,014
|
|
|
4,514
|
|
|
(308
|
)
|
|
8,220
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of services and products (exclusive of depreciation and amortization)
|
—
|
|
|
—
|
|
|
2,209
|
|
|
1,728
|
|
|
—
|
|
|
3,937
|
|
|
Selling, general and administrative
|
12
|
|
|
3
|
|
|
392
|
|
|
1,255
|
|
|
(308
|
)
|
|
1,354
|
|
|
Operating expenses - affiliates
|
—
|
|
|
—
|
|
|
176
|
|
|
81
|
|
|
—
|
|
|
257
|
|
|
Depreciation and amortization
|
—
|
|
|
—
|
|
|
688
|
|
|
1,016
|
|
|
—
|
|
|
1,704
|
|
|
Total operating expenses
|
12
|
|
|
3
|
|
|
3,465
|
|
|
4,080
|
|
|
(308
|
)
|
|
7,252
|
|
|
OPERATING (LOSS) INCOME
|
(12
|
)
|
|
(3
|
)
|
|
549
|
|
|
434
|
|
|
—
|
|
|
968
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest income
|
—
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
Interest income (expense) - affiliates, net
|
2,430
|
|
|
1,562
|
|
|
(3,803
|
)
|
|
(126
|
)
|
|
—
|
|
|
63
|
|
|
Interest expense
|
(33
|
)
|
|
(457
|
)
|
|
(3
|
)
|
|
(16
|
)
|
|
—
|
|
|
(509
|
)
|
|
Equity in net (losses) earnings of subsidiaries
|
(2,044
|
)
|
|
(3,257
|
)
|
|
254
|
|
|
—
|
|
|
5,047
|
|
|
—
|
|
|
Other (expense) income, net
|
(9
|
)
|
|
—
|
|
|
1
|
|
|
19
|
|
|
—
|
|
|
11
|
|
|
Total other income (expense), net
|
344
|
|
|
(2,152
|
)
|
|
(3,548
|
)
|
|
(122
|
)
|
|
5,047
|
|
|
(431
|
)
|
|
INCOME (LOSS) BEFORE INCOME TAX BENEFIT (EXPENSE)
|
332
|
|
|
(2,155
|
)
|
|
(2,999
|
)
|
|
312
|
|
|
5,047
|
|
|
537
|
|
|
Income tax benefit (expense)
|
10
|
|
|
111
|
|
|
(232
|
)
|
|
(85
|
)
|
|
—
|
|
|
(196
|
)
|
|
NET INCOME (LOSS)
|
342
|
|
|
(2,044
|
)
|
|
(3,231
|
)
|
|
227
|
|
|
5,047
|
|
|
341
|
|
|
Other comprehensive loss, net of income taxes
|
(195
|
)
|
|
—
|
|
|
—
|
|
|
(195
|
)
|
|
195
|
|
|
(195
|
)
|
|
COMPREHENSIVE INCOME (LOSS)
|
$
|
147
|
|
|
(2,044
|
)
|
|
(3,231
|
)
|
|
32
|
|
|
5,242
|
|
|
146
|
|
|
Level 3 Parent, LLC
|
|
Level 3 Financing, Inc.
|
|
Level 3 Communications, LLC
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
|
|||||||
|
(Dollars in millions)
|
|||||||||||||||||
OPERATING REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating revenue
|
$
|
—
|
|
|
—
|
|
|
748
|
|
|
671
|
|
|
(28
|
)
|
|
1,391
|
|
Operating revenue - affiliates
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
Total operating revenue
|
—
|
|
|
—
|
|
|
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 - affiliates
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
Depreciation and amortization
|
—
|
|
|
—
|
|
|
117
|
|
|
165
|
|
|
—
|
|
|
282
|
|
|
Total operating expenses
|
1
|
|
|
3
|
|
|
738
|
|
|
535
|
|
|
(28
|
)
|
|
1,249
|
|
|
OPERATING (LOSS) INCOME
|
(1
|
)
|
|
(3
|
)
|
|
26
|
|
|
136
|
|
|
—
|
|
|
158
|
|
|
OTHER (EXPENSE) INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest income
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Interest income (expense) affiliates, net
|
262
|
|
|
368
|
|
|
(578
|
)
|
|
(41
|
)
|
|
—
|
|
|
11
|
|
|
Interest expense
|
(5
|
)
|
|
(72
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(80
|
)
|
|
Equity in net (losses) earnings of subsidiaries
|
(827
|
)
|
|
(15
|
)
|
|
71
|
|
|
—
|
|
|
771
|
|
|
—
|
|
|
Other income
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
Total other (expense) income, net
|
(569
|
)
|
|
281
|
|
|
(504
|
)
|
|
(44
|
)
|
|
771
|
|
|
(65
|
)
|
|
(LOSS) INCOME BEFORE INCOME TAX (EXPENSE) BENEFIT
|
(570
|
)
|
|
278
|
|
|
(478
|
)
|
|
92
|
|
|
771
|
|
|
93
|
|
|
Income tax benefit (expense)
|
429
|
|
|
(1,105
|
)
|
|
433
|
|
|
9
|
|
|
—
|
|
|
(234
|
)
|
|
NET (LOSS) INCOME
|
(141
|
)
|
|
(827
|
)
|
|
(45
|
)
|
|
101
|
|
|
771
|
|
|
(141
|
)
|
|
Other comprehensive income, net of income taxes
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
(18
|
)
|
|
18
|
|
|
COMPREHENSIVE (LOSS) INCOME
|
$
|
(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 REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating revenue
|
$
|
—
|
|
|
—
|
|
|
3,108
|
|
|
3,891
|
|
|
(129
|
)
|
|
6,870
|
|
Total operating revenue
|
—
|
|
|
—
|
|
|
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 operating 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) - affiliates, 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 (expense) income, net
|
3
|
|
|
—
|
|
|
15
|
|
|
(4
|
)
|
|
—
|
|
|
14
|
|
|
Total other income (expense), net
|
418
|
|
|
(689
|
)
|
|
(2,179
|
)
|
|
(269
|
)
|
|
2,261
|
|
|
(458
|
)
|
|
INCOME (LOSS) BEFORE INCOME TAX BENEFIT (EXPENSE)
|
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)
|
|||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
$
|
2
|
|
|
—
|
|
|
164
|
|
|
77
|
|
|
—
|
|
|
243
|
|
Restricted cash - current
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
70
|
|
|
642
|
|
|
—
|
|
|
712
|
|
|
Advances to affiliates
|
16,852
|
|
|
23,957
|
|
|
7,744
|
|
|
2,707
|
|
|
(51,260
|
)
|
|
—
|
|
|
Note receivable - affiliate
|
1,825
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,825
|
|
|
Other
|
1
|
|
|
3
|
|
|
97
|
|
|
133
|
|
|
—
|
|
|
234
|
|
|
Total current assets
|
18,680
|
|
|
23,960
|
|
|
8,075
|
|
|
3,563
|
|
|
(51,260
|
)
|
|
3,018
|
|
|
NET PROPERTY, PLANT AND EQUIPMENT
|
—
|
|
|
—
|
|
|
3,136
|
|
|
6,317
|
|
|
—
|
|
|
9,453
|
|
|
GOODWILL AND OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,665
|
|
|
9,454
|
|
|
—
|
|
|
11,119
|
|
|
Restricted cash
|
15
|
|
|
—
|
|
|
9
|
|
|
1
|
|
|
—
|
|
|
25
|
|
|
Customer relationships, net
|
—
|
|
|
—
|
|
|
3,823
|
|
|
3,744
|
|
|
—
|
|
|
7,567
|
|
|
Other intangible assets, net
|
—
|
|
|
—
|
|
|
409
|
|
|
1
|
|
|
—
|
|
|
410
|
|
|
Investment in subsidiaries
|
15,541
|
|
|
17,915
|
|
|
3,861
|
|
|
—
|
|
|
(37,317
|
)
|
|
—
|
|
|
Other, net
|
275
|
|
|
1,421
|
|
|
110
|
|
|
225
|
|
|
(1,332
|
)
|
|
699
|
|
|
Total goodwill and other assets
|
15,831
|
|
|
19,336
|
|
|
9,877
|
|
|
13,425
|
|
|
(38,649
|
)
|
|
19,820
|
|
|
TOTAL ASSETS
|
$
|
34,511
|
|
|
43,296
|
|
|
21,088
|
|
|
23,305
|
|
|
(89,909
|
)
|
|
32,291
|
|
|
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
|
$
|
313
|
|
|
(151
|
)
|
|
1,952
|
|
|
569
|
|
|
—
|
|
|
2,683
|
|
||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(782
|
)
|
|
(559
|
)
|
|
—
|
|
|
(1,341
|
)
|
|||
Proceeds from the sale of property, plant and equipment and other assets
|
50
|
|
|
—
|
|
|
(23
|
)
|
|
1
|
|
|
—
|
|
|
28
|
|
|||
Note receivable - affiliate
|
235
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235
|
|
|||
Net cash provided by (used in) investing activities
|
285
|
|
|
—
|
|
|
(805
|
)
|
|
(558
|
)
|
|
—
|
|
|
(1,078
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net proceeds from issuance of long-term debt
|
—
|
|
|
2,479
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,479
|
|
|||
Payments of long-term debt
|
(600
|
)
|
|
(2,300
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(2,906
|
)
|
|||
Distributions
|
(1,084
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,084
|
)
|
|||
Increase (decrease) due to from affiliates, net
|
1,084
|
|
|
—
|
|
|
(1,084
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|||
Net cash used in financing activities
|
(600
|
)
|
|
151
|
|
|
(1,084
|
)
|
|
(6
|
)
|
|
—
|
|
|
(1,539
|
)
|
|||
Net decrease in cash, cash equivalents and restricted cash and securities
|
(2
|
)
|
|
—
|
|
|
63
|
|
|
5
|
|
|
—
|
|
|
66
|
|
|||
Cash, cash equivalents and restricted cash and securities at beginning of period
|
17
|
|
|
—
|
|
|
173
|
|
|
82
|
|
|
—
|
|
|
272
|
|
|||
Cash, cash equivalents and restricted cash and securities at end of period
|
$
|
15
|
|
|
$
|
—
|
|
|
236
|
|
|
87
|
|
|
$
|
—
|
|
|
338
|
|
|
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
|
$
|
(98
|
)
|
|
—
|
|
|
2,059
|
|
|
436
|
|
|
—
|
|
|
2,397
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(527
|
)
|
|
(511
|
)
|
|
—
|
|
|
(1,038
|
)
|
|
Proceeds from the sale of property, plant and equipment and other assets
|
83
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
134
|
|
|
Net cash provided by (used in) investing activities
|
83
|
|
|
—
|
|
|
(527
|
)
|
|
(460
|
)
|
|
—
|
|
|
(904
|
)
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Payments of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
Distributions
|
(1,545
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,545
|
)
|
|
Increase (decrease) due to from affiliates, net
|
1,545
|
|
|
—
|
|
|
(1,545
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net cash used in financing activities
|
—
|
|
|
—
|
|
|
(1,545
|
)
|
|
(7
|
)
|
|
—
|
|
|
(1,552
|
)
|
|
Net decrease in cash, cash equivalents and restricted cash and securities
|
(15
|
)
|
|
—
|
|
|
(13
|
)
|
|
(31
|
)
|
|
—
|
|
|
(59
|
)
|
|
Cash, cash equivalents and restricted cash and securities at beginning of period
|
32
|
|
|
—
|
|
|
186
|
|
|
113
|
|
|
—
|
|
|
331
|
|
|
Cash, cash equivalents and restricted cash and securities at end of period
|
$
|
17
|
|
|
—
|
|
|
173
|
|
|
82
|
|
|
—
|
|
|
272
|
|
|
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 from/to affiliates, net
|
250
|
|
|
—
|
|
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
Net cash used in financing activities
|
—
|
|
|
—
|
|
|
(250
|
)
|
|
(3
|
)
|
|
—
|
|
|
(253
|
)
|
|
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
|
)
|
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
Net cash provided by (used in) financing activities
|
57
|
|
|
401
|
|
|
(459
|
)
|
|
(344
|
)
|
|
—
|
|
|
(345
|
)
|
|
Net (decrease) increase 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
|
|
•
|
We conducted a risk assessment to identify and assess changes needed to our financial reporting and process level controls related to the existence and accuracy of revenue transactions. Based on the results of that assessment, we designed, documented and implemented new process level internal controls and strengthened existing process level internal controls over the existence and accuracy of revenue transactions for areas in which we deemed there was a reasonable possibility of material misstatement of financial statement items related to revenue transactions.
|
•
|
We expanded the scope of our existing internal controls over revenue transactions to include “upstream” controls in the areas of contract quoting, order entry, provisioning, mediation, rating, and pricing, as well as the underlying applications that support these processes and internal controls.
|
•
|
We strengthened existing internal controls in our billing and revenue reporting processes to reduce the risk of failure in the effectiveness of upstream controls.
|
•
|
We completed an evaluation of the operating effectiveness of our newly-designed or strengthened internal controls over the existence and accuracy of revenue transactions, including an assessment of potential financial and reporting impacts, and concluded the deficiencies of such controls would not result in a reasonable possibility of material misstatement of financial statement items related to revenue transactions.
|
3.1
|
|
3.2
|
|
4.1.1
|
|
4.1.2
|
|
4.1.3
|
|
4.1.4
|
4.1.5
|
|
4.2.1
|
|
4.2.2
|
|
4.2.3
|
|
4.2.4
|
|
4.2.5
|
|
4.3.1
|
|
4.3.2
|
|
4.3.3
|
|
4.3.4
|
4.3.5
|
|
4.4.1
|
|
4.4.2
|
|
4.4.3
|
|
4.4.4
|
|
4.4.5
|
|
4.5.1
|
|
4.5.2
|
|
4.5.3
|
|
4.5.4
|
4.5.5
|
|
4.6.1
|
|
4.6.2
|
|
4.6.3
|
|
4.6.4
|
|
4.6.5
|
|
4.7
|
|
4.8
|
|
4.9
|
|
10.1
|
|
10.2
|
|
10.3
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
10.18
|
|
10.19
|
|
10.20
|
|
10.21
|
|
10.22
|
|
31.1*
|
|
31.2*
|
|
32.1*
|
|
32.2*
|
|
101*
|
The following materials from the Annual Report on Form 10-K of Level 3 Parent, LLC for the year ended December 31, 2019, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Changes in Member's/Stockholders' Equity and (vi) Notes to Consolidated Financial Statements.
|
104*
|
Cover page formatted as Inline XBRL and contained in Exhibit 101.
|
*
|
Exhibit filed herewith.
|
|
|
|
|
|
|
|
LEVEL 3 PARENT, LLC
|
||
|
|
By:
|
/s/ Eric J. Mortensen
|
|
|
|
|
Eric J. Mortensen
|
|
|
|
|
Senior Vice President - Controller (Principal Accounting Officer) and Director
|
Signature
|
|
Title
|
|
Date
|
/s/ Jeff K. Storey
|
|
Chief Executive Officer and President (Principal Executive Officer)
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March 5, 2020
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Jeff K. Storey
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/s/ Indraneel Dev
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Executive Vice President and Chief Financial Officer (Principal Financial Officer)
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March 5, 2020
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Indraneel Dev
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/s/ Stacey W. Goff
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Executive Vice President, General Counsel and Director
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March 5, 2020
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Stacey W. Goff
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/s/ Eric J. Mortensen
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Senior Vice President - Controller (Principal Accounting Officer) and Director
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March 5, 2020
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Eric J. Mortensen
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1 Year Level 3 Communications, Inc. (delisted) Chart |
1 Month Level 3 Communications, Inc. (delisted) Chart |
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