LEVEL 3 PARENT LLC BROOMFIELD, Colo., July 29, 2015 /PRNewswire/ -- Level 3 Communications, Inc. (NYSE: LVLT) today reported results for the second quarter 2015.
"Level 3 continued to drive profitable growth, as evidenced by our expanding margins," said Jeff Storey, president and CEO of Level 3. "We executed on our integration plans, while maintaining our focus on the customer experience. Beyond integration, we are also making investments to position the company for long-term growth by advancing our product offerings, expanding our network footprint and simplifying our operating environment."
Total revenue was $2.061 billion for the second quarter 2015, compared to $2.030 billion on a pro forma basis, for the second quarter 2014, assuming the tw telecom acquisition took place on January 1, 2014.
In the second quarter 2015, the company generated net income of $150 million and basic earnings per share of $0.42, which excludes a loss on the extinguishment and modification of debt, related to refinancing transactions completed during the quarter. That loss was approximately $163 million or $0.46 per share. Including this loss, basic and diluted earnings per share were ($0.04). For the second quarter 2014, pro forma net income was $45 million and basic and diluted earnings per share were $0.13.
Financial Results
Second
Quarter
2014 Pro
Forma(1)
Metric Second
Quarter
($ in millions, except per share
data) 2015
-------------------------------- ----
Core Network Services Revenue(2) $1,941 $1,886
-------------------------------- ------ ------
Wholesale Voice Services and
Other Revenue(2) $120 $144
---------------------------- ---- ----
Total Revenue $2,061 $2,030
------------- ------ ------
Adjusted EBITDA, including
acquisition related
expenses(3)(4) $665 $597
-------------------------- ---- ----
Capital Expenditures $317 $332
-------------------- ---- ----
Unlevered Cash Flow(3) $321 $261
--------------------- ---- ----
Free Cash Flow(3) $102 $62
---------------- ---- ---
Network Access Margin 66.2% 64.3%
--------------------- ---- ----
Adjusted EBITDA Margin(3)(4) 32.3% 29.4%
--------------------------- ---- ----
Net Income (Loss) ($13) $45
---------------- ---- ---
Net Income (Loss) per Common
Share- Basic ($0.04) $0.13
---------------------------- ------ -----
Weighted Average Shares
Outstanding (in thousands)-
Basic 354,471 334,276
---------------------------- ------- -------
(1) References to "pro forma" figures
assume the tw telecom acquisition
took place on January 1, 2014.
(2) The reported second quarter 2014
results have been adjusted to
reflect changes made to customer
assignments between the wholesale
and enterprise channels as of the
beginning of 2015.
(3) See schedule of non-GAAP metrics
for definitions and reconciliation
to GAAP measures.
(4) Includes tw telecom acquisition-
related expenses of $5 million for
the second quarter 2015 and $8
million for the second quarter
2014.
Revenue
Second Percent
Quarter
2014 Pro Change,
Forma(1)(2)
Core Network Services (CNS)
Revenue Second Constant
Quarter 2015 Currency
($ in millions)
--------------
North America $1,551 $1,455 7%
------------- ------ ------ ---
Wholesale $450 $426 6%
--------- ---- ---- ---
Enterprise $1,101 $1,029 7%
---------- ------ ------ ---
EMEA $204 $231 (3%)
---- ---- ---- ---
Wholesale $68 $85 (10%)
--------- --- --- ----
Enterprise $111 $115 5%
---------- ---- ---- ---
UK Government $25 $31 (11%)
------------- --- --- ----
Latin America $186 $200 6%
------------- ---- ---- ---
Wholesale $40 $42 6%
--------- --- --- ---
Enterprise $146 $158 6%
---------- ---- ---- ---
Total CNS Revenue $1,941 $1,886 5%
----------------- ------ ------ ---
Wholesale $558 $553 3%
--------- ---- ---- ---
Enterprise $1,383 $1,333 6%
---------- ------ ------ ---
(1) References to "pro forma" figures
assume the tw telecom acquisition
took place on January 1, 2014.
(2) The reported second quarter 2014
results have been adjusted to
reflect changes made to customer
assignments between the wholesale
and enterprise channels as of the
beginning of 2015.
CNS Revenue
CNS Revenue was $1.941 billion in the second quarter 2015, increasing 5.4 percent year-over-year on a pro forma and constant currency basis.
"We continue to see growth in CNS revenue from our enterprise customers across all regions," said Sunit Patel, executive vice president and CFO of Level 3. "North America Wholesale CNS revenue benefited from larger dispute settlements during the quarter."
Deferred Revenue
The Deferred Revenue balance was $1.172 billion at the end of the second quarter 2015, compared to $1.195 billion at the end of the first quarter 2015.
Network Access Costs
Network Access Costs were $696 million in the second quarter 2015, compared to $724 million on a pro forma basis in the second quarter 2014.
Network Related Expenses
For the second quarter 2015, excluding non-cash compensation expense, Network Related Expenses were $359 million. This compared to $357 million on a pro forma basis for the second quarter 2014.
Selling, General and Administrative Expenses (SG&A)
Excluding non-cash compensation expense and integration-related expenses, SG&A expenses were $336 million in the second quarter 2015. This compared to $344 million on a pro forma basis for the second quarter 2014.
Non-cash Compensation Expense
Non-cash compensation expense was $27 million for the second quarter 2015. For the second quarter 2014, non-cash compensation expense was $24 million on a pro forma basis.
Adjusted EBITDA
For the second quarter 2015, Adjusted EBITDA was $665 million, including $5 million of integration-related expenses. For the second quarter 2014, Adjusted EBITDA on a pro forma basis was $597 million, which included $8 million of tw telecom acquisition-related expenses.
Cash Flow and Capital Market Transactions
Free Cash Flow was $102 million for the second quarter 2015, compared to $62 million on a pro forma basis for the second quarter 2014.
For the second quarter 2015, capital expenditures were $317 million.
During the quarter, all of the outstanding principal amount of the 9.375% Senior Notes due 2019 was redeemed. To fund the redemption of these notes, Level 3 Financing, Inc., used the net proceeds, along with cash on hand, from the issuance on January 29, 2015, of its 5.625% Senior Notes due 2023.
Additionally, Level 3 Financing, Inc., completed its previously announced offering of $700 million aggregate principal amount of its 5.125% Senior Notes due 2023 and $800 million aggregate principal amount of its 5.375% Senior Notes due 2025. The net proceeds from the offering of the notes, together with cash on hand, were used to redeem the $1.2 billion aggregate principal amount outstanding of Level 3 Financing, Inc.'s 8.125% Senior Notes due 2019 and $300 million aggregate principal amount outstanding of Level 3 Communications, Inc.'s 8.875% Senior Notes due 2019.
Level 3 Financing, Inc., also completed the refinancing of its $2 billion senior secured Tranche B Term Loan due 2022 with an aggregate $2 billion principal amount of a new senior secured Tranche B-II 2022 Term Loan during the quarter. The Tranche B-II 2022 Term Loan bears interest at LIBOR plus 2.75 percent, with a minimum LIBOR of 0.75 percent, and will mature on May 31, 2022.
The aggregate loss on extinguishment and modification of debt as a result of all capital markets transactions and related redemptions was $163 million.
As of June 30, 2015, the company had cash and cash equivalents of approximately $549 million.
2015 Business Outlook
"We remain confident in our performance for the remainder of the year and are reiterating the outlook we provided last quarter," Patel said. "We continue to expect 2015 Adjusted EBITDA growth of 14 to 17 percent and Free Cash Flow of $600 to $650 million for the full year 2015."
"Given the capital markets activity in the quarter, we are lowering our interest expense outlook for the full year 2015, and now expect GAAP interest expense of approximately $650 million and net cash interest expense of approximately $640 million, compared to our prior outlook of $660 million and $645 million, respectively."
Conference Call and Web Site Information
Level 3 will hold a conference call to discuss the company's second quarter 2015 results today at 10 a.m. ET. The call will be broadcast live on Level 3's Investor Relations website at http://investors.level3.com. Additional information regarding second quarter 2015 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 +1 877-283-5145 (U.S. Domestic) or +1 312-281-1200 (International). Questions should be sent to investor.relations@level3.com.
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 Statement
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: successfully integrate the tw telecom acquisition; manage risks associated with continued uncertainty in the global economy; increase revenue from its services to realize its targets for financial and operating performance; maintain and increase traffic on its network; 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 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; attract and retain qualified management and other personnel; 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 press release 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.
Contact Information
Media: Investors:
Ashley Pritchard +1 720-888-2518
+1 720-888-5950 investor.relations@level3.com
ashley.pritchard@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.
Consolidated Revenue is defined as total revenue from the Consolidated Statements of Operations.
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 Operations, 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 Operations before income taxes, 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
Q2 2015 (as reported)
--------------------
(in millions)
------------
Net Loss $(13)
Income Tax Expense 18
Total Other Expense 345
Depreciation and Amortization 288
Non-Cash Stock Compensation 27
---
Adjusted EBITDA $665
Total Revenue $2,061
======
Adjusted EBITDA Margin 32.3%
Adjusted EBITDA Metric
Q2 2014 (Pro Forma)
------------------
(in millions)
------------
Net Income $45
Income Tax Expense 15
Total Other Expense 233
Depreciation and Amortization 280
Non-Cash Stock Compensation 24
Adjusted EBITDA $597
Total Revenue $2,030
======
Adjusted EBITDA Margin 29.4%
Adjusted EBITDA Metric
Q2 2014 (as reported)
--------------------
(in millions)
------------
Net Income $51
Income Tax Expense 12
Total Other Expense 193
Depreciation and Amortization 187
Non-Cash Stock Compensation 16
Adjusted EBITDA $459
Total Revenue $1,625
======
Adjusted EBITDA Margin 28.2%
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 Operations. 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
Three Months Ended
June 30, 2015 (as
reported) Unlevered
($ in millions) Cash Flow Free Cash Flow
-------------- --------- --------------
Net Cash Provided by
Operating Activities $419 $419
Capital Expenditures (317) (317)
Cash Interest Paid 219 N/A
Interest Income - N/A
--- ---
Total $321 $102
==== ====
Unlevered Cash Flow and
Free Cash Flow
Three Months Ended June
30, 2014 (Pro Forma) Unlevered
($ in millions) Cash Flow Free Cash Flow
-------------- --------- --------------
Net Cash Provided by
Operating Activities $394 $394
Capital Expenditures (332) (332)
Cash Interest Paid 199 N/A
Interest Income - N/A
---
Total $261 $62
==== ===
Unlevered Cash Flow and
Free Cash Flow
Three Months Ended June
30, 2014 (as reported) Unlevered
($ in millions) Cash Flow Free Cash Flow
-------------- --------- --------------
Net Cash Provided by
Operating Activities $303 $303
Capital Expenditures (241) (241)
Cash Interest Paid 149 N/A
Interest Income - N/A
---
Total $211 $62
==== ===
2Q14 Pro Forma Combined Company Results
($ in millions) Historical Level Historical tw Intercompany Pro Forma
3 telecom as Eliminations Adjustments
adjusted * (1) Total
----------------
Core Network Services
(CNS) Revenue
North America $1,051 $420 $(15) $(1) $1,455
Wholesale $367 $90 $(15) $(16) $426
Enterprise $684 $330 $ - $15 $1,029
EMEA $229 $ - $ - $2 $231
Wholesale $86 $ - $ - $(1) $85
Enterprise $143 $ - $ - $3 $146
Latin America $199 $ - $ - $1 $200
Wholesale $42 $ - $ - $ - $42
Enterprise $157 $ - $ - $1 $158
---- --- --- --- --- --- ----
Total CNS Revenue $1,479 $420 $(15) $2 $1,886
Wholesale Voice
Services and Other 146 - - (2) 144
Total Revenue $1,625 $420 $(15) $ - $2,030
------ ---- ---- --- --- ------
Network Access Costs $(613) $(123) $12 $ - $(724)
Network Related
Expenses (302) (61) 2 - (361)
Selling, General and
Administrative
Expenses (267) (105) - - (372)
Add back: Non-Cash
Compensation Expenses 16 8 - - 24
Add back: Non-Cash
Impairment - - - - -
--- --- --- --- ---
Adjusted EBITDA
Including
Acquisition-Related
Expenses $459 $139 $(1) $ - $597
Transaction Costs $4 $4 $ - $ - $8
Integration Costs - - - - -
--- --- ---
Total Acquisition
Related Costs $4 $4 $ - $ - $8
Adjusted EBITDA
Excluding
Acquisition-Related
Expenses $463 $143 $(1) $ - $605
Capital Expenditures $241 $91 $ - $ - $332
$ -
Colocation and
Datacenter Services $146 $12 $(1) $ - $157
Transport and Fiber 508 76 (12) 2 574
IP and Data Services 588 263 (2) - 849
Voice Services (Local
and Enterprise) 237 69 - - 306
--- --- --- --- ---
Total Core Network
Services $1,479 $420 $(15) $2 $1,886
Wholesale Voice
Services and Other 146 - - (2) 144
Total Revenue $1,625 $420 $(15) $ - $2,030
====== ==== ==== === === ======
* Certain reclassifications have been
made to the historical presentation of
tw telecom's historical results to
conform to the presentation used by
Level 3, primarily related to network
access costs, network related
expenses, depreciation and
amortization and selling, general and
administrative expenses.
(1) The 2014 quarterly results have
been adjusted to reflect changes made
to customer assignments between the
wholesale and enterprise channels as
of the beginning of 2015.
Debt is defined as total gross debt, including capital leases from the Consolidated Balance Sheet.
Net Debt to Pro Forma Last Twelve Months (LTM) Adjusted EBITDA Ratio is defined as debt, reduced by cash and cash equivalents and divided by LTM Adjusted EBITDA Pro Forma to include tw telecom results excluding acquisition-related expenses.
Level 3 Communications, Inc. and Consolidated Subsidiaries
Pro Forma LTM Adjusted EBITDA
($ in millions)
--------------
3Q14 4Q14 1Q15 2Q15 Total:
(Pro Forma) (1) (Pro Forma) (1) (as reported) (as reported) LTM
(Pro Forma) (1)
--- ---------------
Total Revenue $2,038 $2,052 $2,053 $2,061 $8,204
Network Access Costs (717) (732) (723) (696) (2,868)
Network Related
Expenses (369) (378) (356) (363) (1,466)
Selling, General and
Administrative
Expenses (372) (567) (370) (364) (1,673)
Add back: Non-Cash
Compensation
Expenses 32 93 31 27 183
Add back: Non-Cash
Impairment - 1 - - 1
Acquisition-Related
Expenses 8 156 5 5 174
Adjusted EBITDA
Excluding
Acquisition-
Related Expenses $620 $625 $640 $670 $2,555
==== ==== ==== ==== ======
(1) Quarterly 2014 Pro
Forma Adjusted EBITDA
assumes the acquisition of
tw telecom took place on
January 1, 2014.
Level 3 Communications, Inc. and Consolidated Subsidiaries
Net Debt to Pro Forma LTM Adjusted EBITDA Ratio as of June 30, 2015
-------------------------------------------------------------------
($ in millions)
--------------
Debt $11,035
Cash and Cash Equivalents (549)
Net Debt $10,486
=======
Pro Forma LTM Adjusted EBITDA $2,555
======
Net Debt to Pro Forma LTM
Adjusted EBITDA Ratio 4.1
===
LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Three Months Ended
------------------
(dollars in millions,
except per share
data) June 30, 2015 March 31, 2015 June 30, 2014
--------------------- ------------- -------------- -------------
Revenue $2,061 $2,053 $1,625
Costs and Expenses
Network Access Costs 696 723 613
Network Related
Expenses 363 356 302
Depreciation and
Amortization 288 288 187
Selling, General and
Administrative
Expenses 364 370 267
Total Costs and
Expenses 1,711 1,737 1,369
----- ----- -----
Operating Income 350 316 256
Other Income (Expense):
Interest income - 1 -
Interest expense (165) (180) (149)
Loss on modification
and extinguishment of
debt (163) - -
Other, net (17) (10) (44)
Total Other Expense (345) (189) (193)
---- ---- ----
Income Before Income
Taxes 5 127 63
Income Tax Expense (18) (5) (12)
--- --- ---
Net Income (Loss) $(13) $122 $51
==== ==== ===
Basic Earnings per Common Share:
Net Income (Loss) per
Share $(0.04) $0.35 $0.21
Weighted-Average
Shares Outstanding
(in thousands) 354,471 346,874 237,376
Diluted Earnings per Common Share:
Net Income (Loss) per
Share $(0.04) $0.35 $0.21
Weighted-Average
Shares Outstanding
(in thousands) 354,471 350,832 241,406
LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited)
June 30, December 31, June 30,
(dollars in
millions) 2015 2014 2014
----------- ---- ---- ----
Assets
Current Assets:
Cash and cash
equivalents $549 $580 $637
Restricted cash and
securities 8 7 6
Receivables, less
allowances for
doubtful accounts 756 737 722
Other 190 165 174
--- --- ---
Total Current Assets 1,503 1,489 1,539
Property, Plant and
Equipment, net 9,900 9,860 8,355
Restricted Cash and
Securities 43 20 23
Goodwill 7,747 7,689 2,578
Other Intangibles,
net 1,240 1,414 169
Other Assets 451 475 364
Total Assets $20,884 $20,947 $13,028
======= ======= =======
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $637 $664 $613
Current portion of
long-term debt 17 349 503
Accrued payroll and
employee benefits 202 273 145
Accrued interest 125 174 166
Current portion of
deferred revenue 280 287 258
Other 179 167 139
--- --- ---
Total Current
Liabilities 1,440 1,914 1,824
Long-Term Debt,
less current
portion 11,001 10,984 7,855
Deferred Revenue,
less current
portion 892 921 885
Other Liabilities 734 765 785
--- --- ---
Total Liabilities 14,067 14,584 11,349
Stockholders' Equity 6,817 6,363 1,679
----- ----- -----
Total Liabilities
and Stockholders'
Equity $20,884 $20,947 $13,028
======= ======= =======
LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended
------------------
June 30, March 31, June 30,
(dollars in millions) 2015 2015 2014
-------------------- ---- ---- ----
Cash Flows from Operating Activities:
Net income (loss) $(13) $122 $51
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and
amortization 288 288 187
Non-cash compensation
expense attributable to
stock awards 27 31 16
Loss on modification and
extinguishment of debt 163 - -
Accretion of debt
discount and
amortization of debt
issuance costs 6 7 8
Accrued interest on long-
term debt (62) 22 (8)
Non-cash tax adjustments - - 1
Deferred income taxes - (10) 7
Gain on sale of property,
plant and equipment and
other assets 2 (1) -
Other, net 9 21 12
Changes in working capital items:
Receivables (9) (23) (23)
Other current assets (17) (19) (12)
Payables 2 (24) 51
Deferred revenue (12) 8 (23)
Other current liabilities 35 (117) 36
--- ---- ---
Net Cash Provided by
Operating Activities 419 305 303
Cash Flows from Investing Activities:
Capital expenditures (317) (254) (241)
Change in restricted cash
and securities, net (25) 1 1
Proceeds from sale of
property, plant and
equipment and other
assets 1 1 -
Net Cash Used in
Investing Activities (341) (252) (240)
Cash Flows from Financing Activities:
Long-term debt
borrowings, net of
issuance costs 3,456 492 -
Payments on and
repurchases of long-
term debt and capital
leases (4,096) (2) (3)
Net Cash Provided by
(Used in) Financing
Activities (640) 490 (3)
Effect of Exchange Rates
on Cash and Cash
Equivalents (3) (9) (30)
--- --- ---
Net Change in Cash and
Cash Equivalents (565) 534 30
Cash and Cash Equivalents
at Beginning of Period 1,114 580 607
----- --- ---
Cash and Cash Equivalents
at End of Period $549 $1,114 $637
==== ====== ====
Supplemental Disclosure of Cash Flow
Information:
Cash interest paid $219 $147 $149
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SOURCE Level 3 Communications, Inc.
