BROOMFIELD, Colo., Feb. 8, 2017 /PRNewswire/ -- Level 3
Communications, Inc. (NYSE: LVLT) today reported results for the
quarter and full year ended December 31,
2016.
"Throughout 2016, with our focus on profitable growth, we
expanded margins and grew Adjusted EBITDA and Free Cash Flow," said
Jeff Storey, president and CEO of
Level 3. "With integration planning well underway, we continue to
gain excitement about the combination with CenturyLink.
Adding Level 3's global network, advanced solutions and proven
experience serving large, multinational customers to CenturyLink's
extensive capabilities will enhance value for all of
our customers, as well as our stockholders."
Total revenue was $2.032 billion
for the fourth quarter 2016, compared to $2.053 billion for the fourth quarter 2015. For
the full year 2016, total revenue was $8.172
billion compared to $8.229
billion on a reported basis and $8.157 billion on a modified basis for the full
year 2015. The full year 2015 modified results exclude nine months
of results from the company's Venezuelan subsidiary's operations
that was deconsolidated as of September 30,
2015.
In the fourth quarter 2016, the company generated net income of
$250 million and basic earnings per
share of $0.70.
Financial Results
Metric ($ in millions)
|
Fourth
Quarter
2016
|
Fourth
Quarter
2015(1)
|
Full Year
2016
|
Full Year
2015(1)
|
Full Year
2015
Modified(1)(2)
|
Core Network Services
Revenue
|
$1,934
|
$1,943
|
$7,767
|
$7,757
|
$7,685
|
Wholesale Voice
Services Revenue
|
$98
|
$110
|
$405
|
$472
|
$472
|
Total
Revenue
|
$2,032
|
$2,053
|
$8,172
|
$8,229
|
$8,157
|
Network Access
Costs
|
$680
|
$708
|
$2,725
|
$2,833
|
$2,823
|
Network Access
Margin
|
66.5%
|
65.5%
|
66.7%
|
65.6%
|
65.4%
|
Network Related
Expenses (NRE)(3)
|
$327
|
$338
|
$1,324
|
$1,412
|
$1,405
|
Selling, General and
Administrative Expenses (SG&A)(3)
|
$316
|
$326
|
$1,273
|
$1,346
|
$1,337
|
Non-cash Compensation
Expense
|
$35
|
$49
|
$156
|
$141
|
$141
|
Adjusted
EBITDA(4)(5)
|
$709
|
$681
|
$2,850
|
$2,638
|
$2,592
|
Adjusted EBITDA
Margin(4)(5)
|
34.9%
|
33.2%
|
34.9%
|
32.1%
|
31.8%
|
Cash Flows from
Operating Activities
|
$557
|
$556
|
$2,343
|
$1,855
|
$1,814
|
Capital
Expenditures
|
$306
|
$330
|
$1,334
|
$1,229
|
$1,219
|
Unlevered Cash
Flow(4)(5)
|
$386
|
$399
|
$1,513
|
$1,293
|
$1,262
|
Free Cash
Flow(4)(5)
|
$251
|
$226
|
$1,009
|
$626
|
$595
|
Net
Income
|
$250
|
$3,323
|
$677
|
$3,433
|
|
Net Income per Common
Share-Basic
|
$0.70
|
$9.33
|
$1.89
|
$9.71
|
|
Weighted Average
Shares Outstanding (in thousands)- Basic
|
359,937
|
356,274
|
358,559
|
353,385
|
|
|
|
(1)
|
The reported
fourth quarter and full year 2015 results have been adjusted to
reflect changes made to customer assignments between the wholesale
and enterprise channels as of the beginning of 2016.
|
(2)
|
References to
"modified" figures represent the adjustments made to exclude the
company's Venezuelan subsidiary's operations.
|
(3)
|
Excludes non-cash
compensation expense.
|
(4)
|
Includes
CenturyLink acquisition-related expenses of $15 million for both
the fourth quarter 2016 and the full year 2016 and tw telecom
acquisition-related expenses of $4 million for the fourth quarter
2015 and $32 million for the full year 2015.
|
(5)
|
See schedule of
non-GAAP metrics for definitions and reconciliation to GAAP
measures.
|
Fourth Quarter 2016 Revenue Results
Core Network
Services (CNS)
Revenue ($ in
millions)
|
Fourth
Quarter
2016
|
Third
Quarter
2016
|
4Q16/3Q16
Percent
Change
|
4Q16/3Q16
Percent
Change,
Constant
Currency
|
Fourth
Quarter
2015(1)
|
4Q16/4Q15
Percent
Change
|
4Q16/4Q15
Percent
Change,
Constant
Currency
|
North
America
|
$1,584
|
$1,572
|
1%
|
1%
|
$1,572
|
1%
|
1%
|
Wholesale
|
$405
|
$412
|
(2%)
|
(2%)
|
$430
|
(6%)
|
(6%)
|
Enterprise
|
$1,179
|
$1,160
|
2%
|
2%
|
$1,142
|
3%
|
3%
|
|
|
|
|
|
|
|
|
EMEA
|
$180
|
$182
|
(1%)
|
2%
|
$212
|
(15%)
|
(7%)
|
Wholesale
|
$58
|
$61
|
(5%)
|
(1%)
|
$68
|
(15%)
|
(9%)
|
Enterprise
|
$106
|
$104
|
2%
|
4%
|
$117
|
(9%)
|
(2%)
|
UK
Government
|
$16
|
$17
|
(6%)
|
1%
|
$27
|
(41%)
|
(25%)
|
|
|
|
|
|
|
|
|
Latin
America
|
$170
|
$176
|
(3%)
|
(3%)
|
$159
|
7%
|
4%
|
Wholesale
|
$34
|
$37
|
(8%)
|
(6%)
|
$40
|
(15%)
|
(16%)
|
Enterprise(2)
|
$136
|
$139
|
(2%)
|
(2%)
|
$119
|
14%
|
10%
|
|
|
|
|
|
|
|
|
Total CNS
Revenue
|
$1,934
|
$1,930
|
-
|
1%
|
$1,943
|
-
|
-
|
Wholesale
|
$497
|
$510
|
(3%)
|
(2%)
|
$538
|
(8%)
|
(7%)
|
Enterprise
|
$1,437
|
$1,420
|
1%
|
2%
|
$1,405
|
2%
|
3%
|
|
|
(1)
|
The reported
fourth quarter 2015 results have been adjusted to reflect changes
made to customer assignments between the wholesale and enterprise
channels as of the beginning of 2016.
|
(2)
|
Third quarter 2016
results include a $4 million benefit from the
Olympics.
|
Full Year 2016 Revenue Results
Core Network
Services
(CNS) Revenue ($ in
millions)
|
Full Year
2016
|
Full Year
2015(1)
|
Full Year
2015
Modified(1)(2)
|
Percent
Change(3)
|
Percent
Change,
Modified(4)
|
Percent
Change,
Modified
and
Constant
Currency
|
North
America
|
$6,362
|
$6,207
|
$6,207
|
2%
|
2%
|
2%
|
Wholesale
|
$1,694
|
$1,746
|
$1,746
|
(3%)
|
(3%)
|
(3%)
|
Enterprise
|
$4,668
|
$4,461
|
$4,461
|
5%
|
5%
|
5%
|
|
|
|
|
|
|
|
EMEA
|
$744
|
$835
|
$835
|
(11%)
|
(11%)
|
(6%)
|
Wholesale
|
$247
|
$278
|
$278
|
(11%)
|
(11%)
|
(8%)
|
Enterprise
|
$427
|
$453
|
$453
|
(6%)
|
(6%)
|
(1%)
|
UK
Government
|
$70
|
$104
|
$104
|
(33%)
|
(33%)
|
(24%)
|
|
|
|
|
|
|
|
Latin
America
|
$661
|
$715
|
$643
|
(8%)
|
3%
|
7%
|
Wholesale
|
$147
|
$182
|
$167
|
(19%)
|
(12%)
|
(8%)
|
Enterprise
|
$514
|
$533
|
$476
|
(4%)
|
8%
|
12%
|
|
|
|
|
|
|
|
Total CNS
Revenue
|
$7,767
|
$7,757
|
$7,685
|
-
|
1%
|
2%
|
Wholesale
|
$2,088
|
$2,206
|
$2,191
|
(5%)
|
(5%)
|
(4%)
|
Enterprise
|
$5,679
|
$5,551
|
$5,494
|
2%
|
3%
|
4%
|
|
|
(1)
|
The reported full
year 2015 results have been adjusted to reflect changes made to
customer assignments between the wholesale and enterprise channels
as of the beginning of 2016.
|
(2)
|
References to
"modified" figures represent the adjustments made to exclude the
company's Venezuelan subsidiary's operations.
|
(3)
|
Year-over-year
growth rates are calculated using the full year 2015 results which
have been adjusted to reflect changes made to customer assignments
and included nine months of the company's Venezuelan subsidiary's
operations. These growth rates are on a reported basis and not
adjusted for currency.
|
(4)
|
Modified
year-over-year growth rates are calculated using the full year 2015
results which have been adjusted to reflect changes made to
customer assignments as well as to exclude the company's
Venezuelan subsidiary's operations. These growth rates are on a
reported basis and not adjusted for currency.
|
CNS Revenue
CNS Revenue was $1.934 billion in the fourth quarter 2016,
decreasing 0.5 percent year-over-year on a reported basis, and
increasing 0.2 percent year-over-year on a constant currency basis.
For the full year 2016, CNS Revenue was $7.767 billion, which increased 0.1 percent on a
reported basis and 1.9 percent year-over-year on a constant
currency and modified basis.
Liquidity
As of December 31, 2016, the
company had cash and cash equivalents of $1.819 billion.
2017 Business Outlook
"In 2017, we expect to continue to grow Adjusted EBITDA and Free
Cash Flow," said Sunit Patel,
executive vice president and CFO of Level 3. "For the full year
2017, excluding CenturyLink acquisition-related expenses, we expect
Adjusted EBITDA of $2.94 to $3.00
billion and Free Cash Flow of $1.10
to $1.16 billion."
Metrics(1)
|
2017
Outlook
|
Adjusted
EBITDA
|
$2.94 to $3.00
billion
|
Free Cash
Flow
|
$1.10 to $1.16
billion
|
GAAP Interest
Expense
|
$570
million
|
Cash Interest
Expense
|
$520
million
|
Capital
Expenditures
|
16% of Total
Revenue
|
Depreciation and
Amortization
|
$1.35
billion
|
Cash Income
Tax
|
$40
million
|
Non-cash Compensation
Expense
|
$170
million
|
Full Year Income Tax
Rate
|
~38%
|
|
|
(1)
|
All outlook measures
exclude CenturyLink acquisition-related expenses.
|
Conference Call and Website Information
Level 3 will hold a conference call to discuss the company's
Fourth Quarter and Full Year 2016 Results today at 5:30 p.m. ET. The company will broadcast a live
conference call on its Investor Relations website
http://investors.level3.com at 3:30 p.m.
MT/5:30 p.m. ET.
Additional information regarding the Fourth Quarter and Full
Year 2016 results, including the presentation management will
review on the conference call, will be available on Level 3's
Investor Relations website. If you are unable to join the call via
the Web, the call can be accessed live at +1 800-684-9134 (U.S.
Domestic) or +1 303-223-4387 (International).
The call will be archived and available as an audio replay on
Level 3's Investor Relations website starting at 7 p.m. ET February
8 until 6 p.m. ET May 9, 2017. The replay can be accessed by
dialing +1 800-633-8284 (U.S. Domestic) or +1 402-977-9140
(International), reservation code 21842851.
For additional information, please call +1 720-888-2518.
About Level 3 Communications
Level 3 Communications,
Inc. (NYSE: LVLT) is a Fortune 500 company that provides local,
national and global communications services to enterprise,
government and carrier customers. Level 3's comprehensive portfolio
of secure, managed solutions includes fiber and infrastructure
solutions; IP-based voice and data communications; wide-area
Ethernet services; video and content distribution; data center and
cloud-based solutions. Level 3 serves customers in more than 500
markets in over 60 countries across a global services platform
anchored by owned fiber networks on three continents and connected
by extensive undersea facilities. For more information, please
visit www.level3.com or get to know us on Twitter, Facebook and
LinkedIn.
© Level 3 Communications, LLC. All Rights Reserved. Level 3,
Level 3 Communications, Level (3) and the Level 3 Logo are either
registered service marks or service marks of Level 3
Communications, LLC and/or one of its Affiliates in the United States and elsewhere. Any other
service names, product names, company names or logos included
herein are the trademarks or service marks of their respective
owners. Level 3 services are provided by subsidiaries of Level 3
Communications, Inc.
Forward-Looking Statements
Some statements made in this press release are
forward-looking in nature and are based on management's current
expectations or beliefs. These forward-looking statements are not a
guarantee of performance and are subject to a number of
uncertainties and other factors, many of which are outside Level
3's control, which could cause actual events to differ materially
from those expressed or implied by the statements. Important
factors that could prevent Level 3 from achieving its stated goals
include, but are not limited to, the company's ability to: increase
revenue from its services to realize its targets for financial and
operating performance; develop and maintain effective business
support systems; manage system and network failures or disruptions;
avert the breach of its network and computer system security
measures; develop new services that meet customer demands and
generate acceptable margins; manage the future expansion or
adaptation of its network to remain competitive; defend
intellectual property and proprietary rights; manage risks
associated with continued uncertainty in the global economy; manage
continued or accelerated decreases in market pricing for
communications services; obtain capacity for its network from other
providers and interconnect its network with other networks on
favorable terms; successfully integrate future acquisitions;
effectively manage political, legal, regulatory, foreign currency
and other risks it is exposed to due to its substantial
international operations; mitigate its exposure to contingent
liabilities; and meet all of the terms and conditions of its debt
obligations. Additional information concerning these and other
important factors can be found within Level 3's filings with the
Securities and Exchange Commission. Statements in this presentation
should be evaluated in light of these important factors. Level 3 is
under no obligation to, and expressly disclaims any such obligation
to, update or alter its forward-looking statements, whether as a
result of new information, future events, or otherwise.
Except for the historical and factual information contained
herein, the matters set forth in this communication, including
statements regarding the expected timing and benefits of the
proposed transaction, such as efficiencies, cost savings, enhanced
revenues, growth potential, market profile and financial strength,
and the competitive ability and position of the combined company,
and other statements identified by words such as "will,"
"estimates," "anticipates," "believes," "expects," "projects,"
"plans," "intends," "may," "should," "could," "seeks" and similar
expressions, are forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions, many
of which are beyond our control. These forward-looking
statements, and the assumptions upon which they are based,
(i) are not guarantees of future results, (ii) are
inherently speculative and (iii) are subject to a number of
risks and uncertainties. Actual events and results may differ
materially from those anticipated, estimated, projected or implied
in those statements if one or more of these risks or uncertainties
materialize, or if underlying assumptions prove incorrect. Factors
that could affect actual results include but are not limited
to: the ability of the parties to timely and successfully
receive the required approvals for the combination from regulatory
agencies free of conditions materially adverse to the parties and
from their respective shareholders; the possibility that the
anticipated benefits from the proposed transaction cannot be fully
realized or may take longer to realize than expected; the
possibility that costs, difficulties or disruptions related to the
integration of Level 3's operations with those of CenturyLink will
be greater than expected; the ability of the combined company to
retain and hire key personnel; the effects of competition from a
wide variety of competitive providers, including lower demand for
CenturyLink's legacy offerings; the effects of new, emerging or
competing technologies, including those that could make the
combined company's products less desirable or obsolete; 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, access charges, universal service, broadband
deployment, data protection and net neutrality; adverse changes in
CenturyLink's or the combined company's access to credit markets on
favorable terms, whether caused by changes in its financial
position, lower debt credit ratings, unstable markets or otherwise;
the combined company's ability to effectively adjust to changes in
the communications industry, and changes in the composition of its
markets and product mix; possible changes in the demand for, or
pricing of, the combined company's products and services, including
the combined company's ability to effectively respond to increased
demand for high-speed broadband service; changes in the operating
plans, capital allocation plans or corporate strategies of the
combined company, whether based on changes in market conditions,
changes in the cash flows or financial position of the combined
company, or otherwise; the combined company's ability to
successfully maintain the quality and profitability of its existing
product and service offerings and to introduce new offerings on a
timely and cost-effective basis; the adverse impact on the combined
company's business and network from possible equipment failures,
service outages, security breaches or similar events impacting its
network; the combined company's ability to maintain favorable
relations with key business partners, suppliers, vendors, landlords
and financial institutions; the ability of the combined company to
utilize net operating losses in amounts projected; changes in the
future cash requirements of the combined company; and other risk
factors and cautionary statements as detailed from time to time in
each of CenturyLink's and Level 3's reports filed with the U.S.
Securities and Exchange Commission (the "SEC"). Due to these risks
and uncertainties, there can be no assurance that the proposed
combination or any other transaction described above will in fact
be completed in the manner described or at all. You should be
aware that new factors may emerge from time to time and it is not
possible for us to identify all such factors nor can we predict the
impact of each such factor on the proposed combination or the
combined company. You should not place undue reliance on
these forward looking statements, which speak only as of the date
of this communication. Unless legally required, CenturyLink
and Level 3 undertake no obligation and each expressly disclaim any
such obligation, to update publicly any forward-looking statements,
whether as a result of new information, future events, changed
events or otherwise.
Additional Information
In connection with the proposed combination, on January 27,
2017, CenturyLink and Level 3 filed an amended registration
statement on Form S-4 with the SEC (Registration Statement
No. 333-215121) that includes a preliminary prospectus and
also constitutes a joint preliminary proxy statement. The amended
registration statement on Form S-4, which is not final and may
be further amended, has not been declared effective by the SEC and
the definitive joint proxy statement/prospectus is not currently
available. CenturyLink and Level 3 will deliver the definitive
joint proxy statement/prospectus to their respective shareholders
when it is available. INVESTORS ARE URGED TO READ THE
PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS AND THE DEFINITIVE
JOINT PROXY STATEMENT/PROSPECTUS, WHEN IT BECOMES AVAILABLE BECAUSE
IT CONTAINS OR WILL CONTAIN IMPORTANT INFORMATION. You may obtain
the preliminary joint proxy statement/prospectus (and the
definitive joint proxy statement/prospectus, when it becomes
available) and the filings that are incorporated by reference in
the preliminary joint proxy statement/prospectus, as well as other
filings containing information about CenturyLink and Level 3, free
of charge, at the website maintained by the SEC at
www.sec.gov. You may also obtain these documents free of
charge by directing a request to CenturyLink, 100 CenturyLink
Drive, Monroe, Louisiana 71203,
Attention: Corporate Secretary, or to Level 3, 1025 Eldorado
Boulevard, Broomfield, Colorado
80021, Attention: Investor Relations.
Participants in the Solicitation
The respective directors and executive officers of CenturyLink
and Level 3 and other persons may be deemed to be participants in
the solicitation of proxies in respect of the proposed transaction.
Information regarding CenturyLink's directors and executive
officers is available in its proxy statement filed with the SEC by
CenturyLink on April 5, 2016, and information regarding Level
3's directors and executive officers is available in its proxy
statement filed with the SEC by Level 3 on April 7,
2016. These documents can be obtained free of charge from the
sources indicated above. Other information regarding the
interests of the participants in the proxy solicitation will be
included in the joint proxy statement/prospectus and other relevant
materials to be filed with the SEC when they become
available. This communication is not intended to and does not
constitute an offer to sell or the solicitation of an offer to sell
or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Contact Information
Media:
|
Investors:
|
D. Nikki
Wheeler
|
Mark
Stoutenberg
|
+1
720-888-0560
|
+1
720-888-2518
|
Nikki.Wheeler@Level3.com
|
Mark.Stoutenberg@Level3.com
|
Level 3 Communications:
Non-GAAP Metrics
Pursuant to Regulation G, the company is hereby providing
definitions of non-GAAP financial metrics and reconciliations to
the most directly comparable GAAP measures.
The following describes and reconciles those financial measures
as reported under accounting principles generally accepted in
the United States (GAAP) with
those financial measures as adjusted by the items detailed below
and presented in the accompanying news release. These calculations
are not prepared in accordance with GAAP and should not be viewed
as alternatives to GAAP. In keeping with its historical financial
reporting practices, the company believes that the supplemental
presentation of these calculations provides meaningful non-GAAP
financial measures to help investors understand and compare
business trends among different reporting periods on a consistent
basis.
In addition, measures referred to in the accompanying news
release as being calculated "on a constant currency basis" or "in
constant currency terms" are non-GAAP metrics intended to present
the relevant information assuming a constant exchange rate between
the two periods being compared. Such metrics are calculated by
applying the currency exchange rates used in the preparation of the
prior period financial results to the subsequent period
results.
References to "modified" figures represent the adjustments made
to exclude the Company's Venezuelan subsidiary's operations that
was deconsolidated as of September 30,
2015.
Level 3
Communications, Inc. and Consolidated Subsidiaries
|
|
|
|
|
Quarterly Constant
Currency
|
|
|
|
|
|
|
4Q15
FX
|
3Q16
FX
|
|
|
|
4Q15
FX
|
|
3Q16
FX
|
CNS Revenue ($ in
millions)
|
4Q16
|
4Q16
Constant
Currency
|
4Q16
Constant
Currency
|
4Q15(2)
|
3Q16
|
4Q16/
4Q15
%Change
|
4Q16
Constant
Currency
/4Q15
%Change
(3)
|
4Q16/3Q
16
%Change
|
4Q16
Constant
Currency
/3Q16
%Change
(3)
|
North
America
|
$
|
1,584
|
|
$
|
1,584
|
|
$
|
1,584
|
|
$
|
1,572
|
|
$
|
1,572
|
|
0.8
|
%
|
0.8
|
%
|
0.8
|
%
|
0.8
|
%
|
Wholesale
|
$
|
405
|
|
$
|
405
|
|
$
|
405
|
|
$
|
430
|
|
$
|
412
|
|
(5.8)
|
%
|
(5.8)
|
%
|
(1.7)
|
%
|
(1.7)
|
%
|
Enterprise
|
$
|
1,179
|
|
$
|
1,179
|
|
$
|
1,179
|
|
$
|
1,142
|
|
$
|
1,160
|
|
3.2
|
%
|
3.2
|
%
|
1.6
|
%
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
$
|
180
|
|
$
|
197
|
|
$
|
186
|
|
$
|
212
|
|
$
|
182
|
|
(15.1)
|
%
|
(7.3)
|
%
|
(1.1)
|
%
|
2.2
|
%
|
Wholesale
|
$
|
58
|
|
$
|
62
|
|
$
|
60
|
|
$
|
68
|
|
$
|
61
|
|
(14.7)
|
%
|
(9.4)
|
%
|
(4.9)
|
%
|
(0.9)
|
%
|
Enterprise
|
$
|
106
|
|
$
|
115
|
|
$
|
109
|
|
$
|
117
|
|
$
|
104
|
|
(9.4)
|
%
|
(1.9)
|
%
|
1.9
|
%
|
4.2
|
%
|
UK Govt
|
$
|
16
|
|
$
|
20
|
|
$
|
17
|
|
$
|
27
|
|
$
|
17
|
|
(40.7)
|
%
|
(25.3)
|
%
|
(5.9)
|
%
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Latin
America
|
$
|
170
|
|
$
|
166
|
|
$
|
171
|
|
$
|
159
|
|
$
|
176
|
|
6.9
|
%
|
3.8
|
%
|
(3.4)
|
%
|
(2.6)
|
%
|
Wholesale
|
$
|
34
|
|
$
|
34
|
|
$
|
35
|
|
$
|
40
|
|
$
|
37
|
|
(15.0)
|
%
|
(15.5)
|
%
|
(8.1)
|
%
|
(6.4)
|
%
|
Enterprise
|
$
|
136
|
|
$
|
132
|
|
$
|
136
|
|
$
|
119
|
|
$
|
139
|
|
14.3
|
%
|
10.3
|
%
|
(2.2)
|
%
|
(1.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
Total CNS
Revenue
|
$
|
1,934
|
|
$
|
1,947
|
|
$
|
1,941
|
|
$
|
1,943
|
|
$
|
1,930
|
|
(0.5)
|
%
|
0.2
|
%
|
0.2
|
%
|
0.6
|
%
|
Wholesale
|
$
|
497
|
|
$
|
501
|
|
$
|
500
|
|
$
|
538
|
|
$
|
510
|
|
(7.6)
|
%
|
(6.9)
|
%
|
(2.5)
|
%
|
(1.8)
|
%
|
Enterprise(1)
|
$
|
1,437
|
|
$
|
1,446
|
|
$
|
1,441
|
|
$
|
1,405
|
|
$
|
1,420
|
|
2.3
|
%
|
2.9
|
%
|
1.2
|
%
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Total CNS
Revenue
|
$
|
1,934
|
|
$
|
1,947
|
|
$
|
1,941
|
|
$
|
1,943
|
|
$
|
1,930
|
|
(0.5)
|
%
|
0.2
|
%
|
0.2
|
%
|
0.6
|
%
|
Wholesale Voice
Services
|
98
|
|
98
|
|
98
|
|
110
|
|
103
|
|
(10.9)
|
%
|
(10.4)
|
%
|
(4.9)
|
%
|
(5.0)
|
%
|
Total
Revenue
|
$
|
2,032
|
|
$
|
2,045
|
|
$
|
2,039
|
|
$
|
2,053
|
|
$
|
2,033
|
|
(1.0)
|
%
|
(0.4)
|
%
|
—
|
%
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes UK
Government
|
(2)
|
The 2015 results have
been adjusted to reflect changes made to customer assignments
between the wholesale and enterprise channels as of the beginning
of 2016.
|
(3)
|
Percentages are
calculated using whole numbers. Minor differences may exist due to
rounding.
|
Level 3
Communications, Inc. and Consolidated Subsidiaries
|
Full Year Modified
and Constant Currency
|
|
|
FY 2015
FX
|
|
|
|
|
|
FY 2015
FX
|
CNS Revenue ($ in
millions)
|
FY
2016(2)
|
FY 2016 Constant
Currency
|
FY 2015
(2)
|
FY 2015
Venezuela
|
FY 2015
Modified
(2)(3)
|
FY 2016/
FY 2015
%Change
|
FY 2016/ FY
2015
Modified
%Change
|
FY 2016
Constant
Currency/FY
2015 Modified
%Change(6)
|
North
America
|
$
|
6,362
|
|
$
|
6,362
|
|
$
|
6,207
|
|
$
|
—
|
|
$
|
6,207
|
|
2.5
|
%
|
2.5
|
%
|
2.5
|
%
|
Wholesale
|
$
|
1,694
|
|
$
|
1,694
|
|
$
|
1,746
|
|
$
|
—
|
|
$
|
1,746
|
|
(3.0)
|
%
|
(3.0)
|
%
|
(3.0)
|
%
|
Enterprise
|
$
|
4,668
|
|
$
|
4,668
|
|
$
|
4,461
|
|
$
|
—
|
|
$
|
4,461
|
|
4.6
|
%
|
4.6
|
%
|
4.6
|
%
|
|
|
|
|
|
|
|
|
|
EMEA
|
$
|
744
|
|
$
|
784
|
|
$
|
835
|
|
$
|
—
|
|
$
|
835
|
|
(10.9)
|
%
|
(10.9)
|
%
|
(6.1)
|
%
|
Wholesale
|
$
|
247
|
|
$
|
257
|
|
$
|
278
|
|
$
|
—
|
|
$
|
278
|
|
(11.2)
|
%
|
(11.2)
|
%
|
(7.6)
|
%
|
Enterprise
|
$
|
427
|
|
$
|
448
|
|
$
|
453
|
|
$
|
—
|
|
$
|
453
|
|
(5.7)
|
%
|
(5.7)
|
%
|
(1.1)
|
%
|
UK Govt
|
$
|
70
|
|
$
|
79
|
|
$
|
104
|
|
$
|
—
|
|
$
|
104
|
|
(32.7)
|
%
|
(32.7)
|
%
|
(24.1)
|
%
|
|
|
|
|
|
|
|
|
|
Latin
America
|
$
|
661
|
|
$
|
685
|
|
$
|
715
|
|
$
|
72
|
|
$
|
643
|
|
(7.6)
|
%
|
2.8
|
%
|
6.6
|
%
|
Wholesale
|
$
|
147
|
|
$
|
153
|
|
$
|
182
|
|
$
|
15
|
|
$
|
167
|
|
(19.2)
|
%
|
(12.0)
|
%
|
(7.9)
|
%
|
Enterprise
|
$
|
514
|
|
$
|
532
|
|
$
|
533
|
|
$
|
57
|
|
$
|
476
|
|
(3.6)
|
%
|
8.0
|
%
|
11.7
|
%
|
|
|
|
|
|
|
|
|
|
Total CNS
Revenue
|
$
|
7,767
|
|
$
|
7,831
|
|
$
|
7,757
|
|
$
|
72
|
|
$
|
7,685
|
|
0.1
|
%
|
1.1
|
%
|
1.9
|
%
|
Wholesale
|
$
|
2,088
|
|
$
|
2,104
|
|
$
|
2,206
|
|
$
|
15
|
|
$
|
2,191
|
|
(5.3)
|
%
|
(4.7)
|
%
|
(3.9)
|
%
|
Enterprise(1)
|
$
|
5,679
|
|
$
|
5,727
|
|
$
|
5,551
|
|
$
|
57
|
|
$
|
5,494
|
|
2.3
|
%
|
3.4
|
%
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
Total CNS
Revenue
|
$
|
7,767
|
|
$
|
7,831
|
|
$
|
7,757
|
|
$
|
72
|
|
$
|
7,685
|
|
0.1
|
%
|
1.1
|
%
|
1.9
|
%
|
Wholesale Voice
Services
|
405
|
|
406
|
|
472
|
|
—
|
|
$
|
472
|
|
(14.2)
|
%
|
(14.2)
|
%
|
(14.0)
|
%
|
Total
Revenue
|
$
|
8,172
|
|
$
|
8,237
|
|
$
|
8,229
|
|
$
|
72
|
|
$
|
8,157
|
|
(0.7)
|
%
|
0.2
|
%
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA Total w/o UK
Govt
|
$
|
674
|
|
|
$
|
731
|
|
$
|
—
|
|
$
|
731
|
|
(7.8)
|
%
|
(7.8)
|
%
|
(3.6)
|
%
|
Total CNS w/o UK
Govt
|
$
|
7,697
|
|
|
$
|
7,653
|
|
$
|
72
|
|
$
|
7,581
|
|
0.6
|
%
|
1.5
|
%
|
2.3
|
%
|
Enterprise w/o UK
Govt
|
$
|
5,609
|
|
|
$
|
5,447
|
|
$
|
57
|
|
$
|
5,390
|
|
3.0
|
%
|
4.1
|
%
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
Network Access
Costs
|
$
|
2,725
|
|
|
$
|
2,833
|
|
$
|
10
|
|
$
|
2,823
|
|
|
|
|
Network Access
Margin
|
66.7
|
%
|
|
65.6
|
%
|
|
65.4
|
%
|
|
|
|
Network Related
Expenses(4)
|
|
|
$
|
1,412
|
|
$
|
7
|
|
$
|
1,405
|
|
|
|
|
Selling, General
and Admin Expenses (5)
|
|
|
$
|
1,346
|
|
$
|
9
|
|
$
|
1,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes UK
Government
|
(2)
|
The 2015 results have
been adjusted to reflect changes made to customer assignments
between the wholesale and enterprise channels as of the beginning
of 2016.
|
(3)
|
Represents the
consolidated results modified to exclude the Company's Venezuelan
subsidiary's operations that was deconsolidated as of September 30,
2015.
|
(4)
|
Excludes non-cash
compensation of $20 million and $22 million for the full year 2015
and 2016, respectively.
|
(5)
|
Excludes non-cash
compensation of $121 million and $134 million for the full year
2015 and 2016, respectively.
|
(6)
|
Percentages are
calculated using whole numbers. Minor differences may exist due to
rounding.
|
Consolidated Revenue is defined as total revenue from the
Consolidated Statements of Income.
Core Network Services Revenue includes revenue from
colocation and datacenter services, transport and fiber, IP and
data services, and voice services (local and enterprise).
Network Access Costs includes leased capacity,
right-of-way costs, access charges, satellite transponder lease
costs and other third party costs directly attributable to
providing access to customer locations from the Level 3 network,
but excludes Network Related Expenses, and depreciation and
amortization. Network Access Costs do not include any employee
expenses or impairment expenses; these expenses are allocated to
Network Related Expenses or Selling, General and Administrative
Expenses.
Network Related Expenses includes certain expenses
associated with the delivery of services to customers and the
operation and maintenance of the Level 3 network, such as facility
rent, utilities, maintenance and other costs, each related to the
operation of its communications network, as well as salaries, wages
and related benefits (including non-cash stock-based compensation
expenses) associated with personnel who are responsible for the
delivery of services, operation and maintenance of its
communications network, and accretion expense on asset retirement
obligations, but excludes depreciation and amortization.
Network Access Margin ($) is defined as total Revenue
less Network Access Costs from the Consolidated Statements of
Income, and excludes Network Related Expenses.
Network Access Margin (%) is defined as Network Access
Margin ($) divided by total Revenue. Management believes that
network access margin is a relevant metric to provide to investors,
as it is a metric that management uses to measure the margin
available to the company after it pays third party network services
costs; in essence, a measure of the efficiency of the company's
network.
Adjusted EBITDA is defined as net income (loss) from the
Consolidated Statements of Income before income tax (expense)
benefit, total other income (expense), non-cash impairment charges,
depreciation and amortization and non-cash stock compensation
expense.
Adjusted EBITDA Margin is defined as Adjusted EBITDA
divided by total revenue.
Adjusted EBITDA
Metric
|
($ in
millions)
|
4Q16(2)
|
FY
2016(2)
|
Net Income
|
$
|
250
|
|
$
|
677
|
|
Income Tax (Benefit)
Expense
|
(33)
|
|
165
|
|
Total Other
Expense
|
137
|
|
602
|
|
Depreciation and
Amortization
|
320
|
|
1,250
|
|
Non-Cash Stock
Compensation
|
35
|
|
156
|
|
Adjusted
EBITDA
|
$
|
709
|
|
$
|
2,850
|
|
|
|
|
Total
Revenue
|
$
|
2,032
|
|
$
|
8,172
|
|
Adjusted EBITDA
Margin
|
34.9
|
%
|
34.9
|
%
|
Adjusted EBITDA
Metric
|
($ in
millions)
|
4Q15(3)
|
FY
2015(3)
|
FY 2015
Venezuela
|
FY 2015
Modified(1)(3)
|
Net
Income
|
$
|
3,323
|
|
$
|
3,433
|
|
$
|
29
|
|
$
|
3,404
|
|
Income Tax
Benefit
|
(3,189)
|
|
(3,150)
|
|
—
|
|
(3,150)
|
|
Total Other
Expense
|
204
|
|
1,048
|
|
11
|
|
1,037
|
|
Depreciation and
Amortization
|
294
|
|
1,166
|
|
6
|
|
1,160
|
|
Non-Cash
Compensation
|
49
|
|
141
|
|
—
|
|
141
|
|
Adjusted
EBITDA
|
$
|
681
|
|
$
|
2,638
|
|
$
|
46
|
|
$
|
2,592
|
|
|
|
|
|
|
Total
Revenue
|
$
|
2,053
|
|
$
|
8,229
|
|
$
|
72
|
|
$
|
8,157
|
|
Adjusted EBITDA
Margin
|
33.2
|
%
|
32.1
|
%
|
63.9
|
%
|
31.8
|
%
|
|
|
(1)
|
Represents the
consolidated results modified to exclude the Company's Venezuelan
subsidiary's operations that was deconsolidated as of September 30,
2015.
|
(2)
|
Includes $15 million
of CenturyLink acquisition-related expenses.
|
(3)
|
Includes $4 million
and $32 million of tw telecom integration-related expenses for the
fourth quarter 2015 and full year 2015, respectively.
|
Management believes that Adjusted EBITDA and Adjusted EBITDA
Margin are relevant and useful metrics to provide to investors, as
they are an important part of the company's internal reporting and
are key measures used by Management to evaluate profitability and
operating performance of the company and to make resource
allocation decisions. Management believes such measures are
especially important in a capital-intensive industry such as
telecommunications. Management also uses Adjusted EBITDA and
Adjusted EBITDA Margin to compare the company's performance to that
of its competitors and to eliminate certain non-cash and
non-operating items in order to consistently measure from period to
period its ability to fund capital expenditures, fund growth,
service debt and determine bonuses. Adjusted EBITDA excludes
non-cash impairment charges and non-cash stock compensation expense
because of the non-cash nature of these items. Adjusted EBITDA also
excludes interest income, interest expense and income taxes because
these items are associated with the company's capitalization and
tax structures. Adjusted EBITDA also excludes depreciation and
amortization expense because these non-cash expenses primarily
reflect the impact of historical capital investments, as opposed to
the cash impacts of capital expenditures made in recent periods,
which may be evaluated through cash flow measures. Adjusted
EBITDA excludes the gain (or loss) on extinguishment and
modification of debt and other, net because these items are not
related to the primary operations of the company.
There are limitations to using Adjusted EBITDA as a financial
measure, including the difficulty associated with comparing
companies that use similar performance measures whose calculations
may differ from the company's calculations. Additionally, this
financial measure does not include certain significant items such
as interest income, interest expense, income taxes, depreciation
and amortization, non-cash impairment charges, non-cash stock
compensation expense, the gain (or loss) on extinguishment and
modification of debt and net other income (expense). Adjusted
EBITDA and Adjusted EBITDA Margin should not be considered a
substitute for other measures of financial performance reported in
accordance with GAAP.
Unlevered Cash Flow is defined as net cash provided by
(used in) operating activities less capital expenditures, plus cash
interest paid and less interest income all as disclosed in the
Consolidated Statements of Cash Flows or the Consolidated
Statements of Income. Management believes that Unlevered Cash Flow
is a relevant metric to provide to investors, as it is an indicator
of the operational strength and performance of the company and,
measured over time, provides management and investors with a sense
of the underlying business' growth pattern and ability to generate
cash. Unlevered Cash Flow excludes cash used for acquisitions
and debt service and the impact of exchange rate changes on cash
and cash equivalents balances.
There are material limitations to using Unlevered Cash Flow to
measure the company's cash performance as it excludes certain
material items such as payments on and repurchases of long-term
debt, interest income, cash interest expense and cash used to fund
acquisitions. Comparisons of Level 3's Unlevered Cash Flow to that
of some of its competitors may be of limited usefulness since Level
3 does not currently pay a significant amount of income taxes due
to net operating losses, and therefore, generates higher cash flow
than a comparable business that does pay income taxes.
Additionally, this financial measure is subject to variability
quarter over quarter as a result of the timing of payments related
to accounts receivable and accounts payable and capital
expenditures. Unlevered Cash Flow should not be used as a
substitute for net change in cash and cash equivalents in the
Consolidated Statements of Cash Flows.
Free Cash Flow is defined as net cash provided by (used
in) operating activities less capital expenditures as disclosed in
the Consolidated Statements of Cash Flows. Management believes that
Free Cash Flow is a relevant metric to provide to investors, as it
is an indicator of the company's ability to generate cash to
service its debt. Free Cash Flow excludes cash used for
acquisitions, principal repayments and the impact of exchange rate
changes on cash and cash equivalents balances.
There are material limitations to using Free Cash Flow to
measure the company's performance as it excludes certain material
items such as principal payments on and repurchases of long-term
debt and cash used to fund acquisitions. Comparisons of Level 3's
Free Cash Flow to that of some of its competitors may be of limited
usefulness since Level 3 does not currently pay a significant
amount of income taxes due to net operating losses, and therefore,
generates higher cash flow than a comparable business that does pay
income taxes. Additionally, this financial measure is subject to
variability quarter over quarter as a result of the timing of
payments related to interest expense, accounts receivable and
accounts payable and capital expenditures. Free Cash Flow should
not be used as a substitute for net change in cash and cash
equivalents on the Consolidated Statements of Cash Flows.
Unlevered Cash
Flow and Free Cash Flow
|
($ in
millions)
|
|
4Q15(3)
|
|
4Q16(2)
|
|
FY
2015(3)
|
|
FY 2015
Venezuela
|
|
FY 2015
Modified (1)(3)
|
FY
2016(2)
|
Net Cash Provided by
Operating Activities
|
|
$
|
556
|
|
|
$
|
557
|
|
|
$
|
1,855
|
|
|
$
|
41
|
|
|
$
|
1,814
|
|
$
|
2,343
|
|
Capital
Expenditures
|
|
(330)
|
|
|
(306)
|
|
|
(1,229)
|
|
|
(10)
|
|
|
(1,219)
|
|
(1,334)
|
|
Free Cash
Flow
|
|
$
|
226
|
|
|
$
|
251
|
|
|
$
|
626
|
|
|
$
|
31
|
|
|
$
|
595
|
|
$
|
1,009
|
|
Cash Interest
Paid
|
|
173
|
|
|
136
|
|
|
668
|
|
|
—
|
|
|
668
|
|
508
|
|
Interest
Income
|
|
—
|
|
|
(1)
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
(4)
|
|
Unlevered Cash
Flow
|
|
$
|
399
|
|
|
$
|
386
|
|
|
$
|
1,293
|
|
|
$
|
31
|
|
|
$
|
1,262
|
|
$
|
1,513
|
|
|
|
(1)
|
Represents the
consolidated results modified to exclude the Company's Venezuelan
subsidiary's operations that was deconsolidated as of September 30,
2015.
|
(2)
|
Includes $15 million
of CenturyLink acquisition-related expenses.
|
(3)
|
Includes $4 million
and $32 million of tw telecom integration-related expenses for the
fourth quarter 2015 and full year 2015, respectively.
|
Debt is defined as total gross debt, including capital
leases from the Footnotes to the Consolidated Financial
Statements.
Net Debt to Last Twelve Months (LTM) Adjusted EBITDA
Ratio is defined as Debt, reduced by cash and cash
equivalents and divided by LTM Adjusted EBITDA.
Level 3
Communications, Inc. and Consolidated Subsidiaries
|
LTM Adjusted
EBITDA
|
($ in
millions)
|
1Q16
|
2Q16
|
3Q16
|
4Q16(1)
|
Total:
LTM
|
Total
Revenue
|
$
|
2,051
|
|
$
|
2,056
|
|
$
|
2,033
|
|
$
|
2,032
|
|
$
|
8,172
|
|
Network Access
Costs
|
(694)
|
|
(676)
|
|
(675)
|
|
(680)
|
|
(2,725)
|
|
Network Related
Expenses
|
(338)
|
|
(339)
|
|
(337)
|
|
(332)
|
|
(1,346)
|
|
Selling, General and
Administrative Expenses
|
(356)
|
|
(357)
|
|
(348)
|
|
(346)
|
|
(1,407)
|
|
Add back: Non-Cash
Compensation Expenses
|
47
|
|
31
|
|
43
|
|
35
|
|
156
|
|
Adjusted
EBITDA
|
$
|
710
|
|
$
|
715
|
|
$
|
716
|
|
$
|
709
|
|
$
|
2,850
|
|
|
|
(1)
|
Includes $15 million
of CenturyLink acquisition-related expenses.
|
Level 3
Communications, Inc. and Consolidated Subsidiaries
|
Net Debt to LTM
Adjusted EBITDA ratio as of December 31, 2016
|
($ in
millions)
|
Debt
|
$
|
11,009
|
|
Cash and Cash
Equivalents
|
(1,819)
|
|
Net Debt
|
$
|
9,190
|
|
LTM Adjusted
EBITDA
|
$
|
2,850
|
|
Net Debt to LTM
Adjusted EBITDA Ratio
|
3.2
|
|
Outlook
In order to provide our outlook with respect to non-GAAP
metrics, we are required to indicate a range for GAAP measures that
are components of the reconciliation of the non-GAAP metric. The
provision of these ranges is in no way meant to indicate that the
company is explicitly or implicitly providing an outlook on those
GAAP components of the reconciliation. In order to reconcile the
non-GAAP financial metric to GAAP, the company has to use ranges
for the GAAP components that arithmetically add up to the non-GAAP
financial metric. While the company feels reasonably comfortable
about the outlook for its non-GAAP financial metrics, it fully
expects that the ranges used for the GAAP components will vary from
actual results. We will consider our outlook of non-GAAP financial
metrics to be accurate if the specific non-GAAP metric is met or
exceeded, even if the GAAP components of the reconciliation are
different from those provided in an earlier reconciliation.
Level 3
Communications, Inc. and Consolidated Subsidiaries
|
Outlook
|
|
|
|
Adjusted EBITDA
Outlook
|
|
Twelve Months Ended
December 31, 2017
|
|
|
Range
|
($ in
millions)
|
|
Low
|
|
High
|
Net
Income
|
|
500
|
|
|
590
|
|
Income Tax
Expense
|
|
330
|
|
|
360
|
|
Total Other
Expense
|
|
570
|
|
|
550
|
|
Depreciation and
Amortization Expense
|
|
1,360
|
|
|
1,340
|
|
Non-Cash Compensation
Expense
|
|
180
|
|
|
160
|
|
Adjusted
EBITDA
|
|
$
|
2,940
|
|
|
$
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Outlook
|
|
Twelve Months Ended
December 31, 2017
|
|
|
Range
|
($ in
millions)
|
|
Low
|
|
High
|
Net Cash Provided by
Operating Activities
|
|
$
|
2,420
|
|
|
$
|
2,520
|
|
Capital
Expenditures
|
|
(1,320)
|
|
|
(1,360)
|
|
Free Cash
Flow
|
|
$
|
1,100
|
|
|
$
|
1,160
|
|
Attachment
#1
|
LEVEL 3
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Income
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year Ended
|
(dollars in millions,
except per share data)
|
December 31,
2016
|
September 30,
2016
|
December 31,
2015
|
|
December 31,
2016
|
December 31,
2015
|
|
|
|
|
|
|
|
Revenue
|
$
2,032
|
$
2,033
|
$
2,053
|
|
$
8,172
|
$
8,229
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Network access
costs
|
680
|
675
|
708
|
|
2,725
|
2,833
|
Network related
expenses
|
332
|
337
|
344
|
|
1,346
|
1,432
|
Depreciation and
amortization
|
320
|
319
|
294
|
|
1,250
|
1,166
|
Selling, general and
administrative expenses
|
346
|
348
|
369
|
|
1,407
|
1,467
|
Total Costs
and Expenses
|
1,678
|
1,679
|
1,715
|
|
6,728
|
6,898
|
|
|
|
|
|
|
|
Operating
Income
|
354
|
354
|
338
|
|
1,444
|
1,331
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
Interest
income
|
1
|
1
|
—
|
|
4
|
1
|
Interest
expense
|
(132)
|
(139)
|
(152)
|
|
(546)
|
(642)
|
Loss on modification
and extinguishment of debt
|
—
|
—
|
(55)
|
|
(40)
|
(218)
|
Venezuela
deconsolidation charge
|
—
|
—
|
—
|
|
—
|
(171)
|
Other, net
|
(6)
|
1
|
3
|
|
(20)
|
(18)
|
Total Other
Expense
|
(137)
|
(137)
|
(204)
|
|
(602)
|
(1,048)
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
217
|
217
|
134
|
|
842
|
283
|
|
|
|
|
|
|
|
Income Tax Benefit
(Expense)
|
33
|
(74)
|
3,189
|
|
(165)
|
3,150
|
|
|
|
|
|
|
|
Net Income
|
$
250
|
$
143
|
$
3,323
|
|
$
677
|
$
3,433
|
|
|
|
|
|
|
|
Basic Earnings per
Common Share:
|
|
|
|
|
|
|
Net Income per
Share
|
$
0.70
|
$
0.40
|
$
9.33
|
|
$
1.89
|
$
9.71
|
Weighted-Average
Shares Outstanding (in thousands)
|
359,937
|
359,561
|
356,274
|
|
358,559
|
353,385
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share:
|
|
|
|
|
|
|
Net Income per
Share
|
$
0.69
|
$
0.39
|
$
9.24
|
|
$
1.87
|
$
9.58
|
Weighted-Average
Shares Outstanding (in thousands)
|
363,250
|
361,907
|
359,712
|
|
361,472
|
358,593
|
Attachment
#2
|
LEVEL 3
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(unaudited)
|
|
|
|
|
|
December
31,
|
September
30,
|
December
31,
|
(dollars in
millions)
|
2016
|
2016
|
2015
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,819
|
$
1,569
|
$
854
|
Restricted cash and
securities
|
7
|
8
|
8
|
Receivables, less
allowances for doubtful accounts
|
712
|
749
|
757
|
Other
|
115
|
131
|
111
|
Total Current
Assets
|
2,653
|
2,457
|
1,730
|
|
|
|
|
Property, Plant and
Equipment, net
|
10,139
|
10,167
|
9,878
|
Restricted Cash and
Securities
|
31
|
31
|
42
|
Goodwill
|
7,729
|
7,736
|
7,749
|
Other Intangibles,
net
|
915
|
967
|
1,127
|
Deferred Tax
Assets
|
3,370
|
3,339
|
3,441
|
Other
Assets
|
51
|
49
|
50
|
Total
Assets
|
$
24,888
|
$
24,746
|
$
24,017
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
706
|
$
728
|
$
629
|
Current portion of
long-term debt
|
7
|
7
|
15
|
Accrued payroll and
employee benefits
|
195
|
194
|
218
|
Accrued
interest
|
129
|
135
|
108
|
Current portion of
deferred revenue
|
266
|
263
|
267
|
Other
|
168
|
180
|
179
|
Total Current
Liabilities
|
1,471
|
1,507
|
1,416
|
|
|
|
|
Long-Term Debt, less
current portion
|
10,877
|
10,875
|
10,866
|
Deferred Revenue,
less current portion
|
1,001
|
1,010
|
977
|
Other
Liabilities
|
622
|
630
|
632
|
Total
Liabilities
|
13,971
|
14,022
|
13,891
|
|
|
|
|
Stockholders'
Equity
|
10,917
|
10,724
|
10,126
|
Total Liabilities and
Stockholders' Equity
|
$
24,888
|
$
24,746
|
$
24,017
|
Attachment
#3
|
LEVEL 3
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
December
31,
|
September
30,
|
December
31,
|
(dollars in
millions)
|
2016
|
2016
|
2015
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
|
$
250
|
$
143
|
$
3,323
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
and amortization
|
320
|
319
|
294
|
Non-cash
compensation expense attributable to stock awards
|
35
|
43
|
49
|
Loss on
modification and extinguishment of debt
|
—
|
—
|
55
|
Accretion of
debt discount and amortization of debt issuance costs
|
6
|
5
|
6
|
Accrued
interest on long-term debt, net
|
(6)
|
4
|
(29)
|
Deferred income
taxes
|
(40)
|
62
|
(3,207)
|
Gain on sale of
property, plant and equipment and other assets
|
(1)
|
—
|
—
|
Other,
net
|
(3)
|
(4)
|
3
|
Changes in
working capital items:
|
|
|
|
Receivables
|
15
|
85
|
43
|
Other current
assets
|
4
|
—
|
10
|
Payables
|
(16)
|
(33)
|
5
|
Deferred
revenue
|
(3)
|
(21)
|
29
|
Other current
liabilities
|
(4)
|
42
|
(25)
|
Net Cash Provided by
Operating Activities
|
557
|
645
|
556
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
expenditures
|
(306)
|
(364)
|
(330)
|
Change in restricted
cash and securities, net
|
1
|
—
|
2
|
Proceeds from sale of
property, plant and equipment and other assets
|
2
|
—
|
1
|
Net Cash Used in
Investing Activities
|
(303)
|
(364)
|
(327)
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Long-term debt
borrowings, net of issuance costs
|
—
|
—
|
885
|
Payments on and
repurchases of long-term debt and capital leases
|
(2)
|
(2)
|
(949)
|
Net Cash Used in
Financing Activities
|
(2)
|
(2)
|
(64)
|
|
|
|
|
Effect of Exchange
Rates on Cash and Cash Equivalents
|
(2)
|
(1)
|
(2)
|
|
|
|
|
Net Change in Cash
and Cash Equivalents
|
250
|
278
|
163
|
|
|
|
|
Cash and Cash
Equivalents at Beginning of Period
|
1,569
|
1,291
|
691
|
|
|
|
|
Cash and Cash
Equivalents at End of Period
|
$
1,819
|
$
1,569
|
$
854
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
Cash interest
paid
|
$
136
|
$
127
|
$
173
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/level-3-reports-fourth-quarter-and-full-year-2016-results-300404369.html
SOURCE Level 3 Communications, Inc.