EX-99.1
3
a05-22473_1ex99d1.htm
EXHIBIT 99
Exhibit 99.1
1025 Eldorado Boulevard
Broomfield, Colorado 80021
www.Level3.com
NEWS RELEASE
Level
3 contacts:
Media:
Josh Howell
Investors:
Robin Grey
720-888-2517
720-888-2518
Jennifer Daumler
Sandra Curlander
720-888-3356
720-888-2501
Level
3 Completes WilTel Acquisition
Level 3 Pays Total Consideration of 115 Million
Shares of Level 3 Common Stock and $386 Million in Cash
BROOMFIELD
, Colo., December 23, 2005
¾
Level 3 Communications, Inc.
(Nasdaq:LVLT) today announced that it has completed its acquisition of WilTel
Communications Group, LLC. As consideration, Level 3 has paid Leucadia National
Corporation (NYSE: LUK) 115 million shares of Level 3 common stock and $386 million
in cash.
Pursuant to the purchase
agreement signed by Level 3 and Leucadia on October 30, 2005, Level 3's
cash consideration at closing was increased from the previously announced
amount of $370 million, to reflect an improvement in WilTel's working capital
and is subject to adjustment based on the subsequent calculation of actual
closing date working capital. Level 3 paid an additional $100 million in
consideration for $100 million in cash held by WilTel at the time of closing.
"There
is a unique and compelling fit between WilTel and Level 3", said James Q.
Crowe, chief executive officer of Level 3. "Because of this and hard work by
all involved, we have been able to close this transaction ahead of schedule.
Through this process, we have continued our analysis of the WilTel business and
are confident in the overall financial projections we provided at the time we
announced the definitive agreement. We have also continued our integration
planning and we are extremely pleased with the progress we have made leading up
to today's announcement".
Financial projections
"We are reiterating our
previously announced overall revenue and cash flow projections for the
acquisition", said Sunit S. Patel, chief financial officer of Level 3. "This
transaction adds substantial new revenue from high quality customers and
creates value from significant synergies resulting from elimination of
duplicative common resources and network infrastructure. We continue to expect
the acquisition to add $1.5-1.6 billion in revenue to our 2006 communications
revenue which approximately doubles the size of our existing communications
business.
"While
we recognize that the contribution from the AT&T (formerly SBC) contract
will diminish over time in accordance with their contract with WilTel, we continue
to expect that this transaction will contribute approximately $50-90 million of
incremental cash flow in 2006 and $125-150 million of incremental cash flow annually
from 2007 onward. We expect to provide
more detail when we announce our 2005 fourth quarter results in February 2006." Integration costs are expected to be $100-150
million.
Integration planning and execution
"
The combination of Level 3 and WilTel unites
two leading providers of communications
backbone services to create what we believe is the premier wholesale communications services provider
in the industry,"
said Kevin O'Hara, president and chief operating officer of Level 3.
"Due to the unique
strategic fit between the two companies and Level 3's past integration
experience, we remain confident in our ability to successfully combine the
businesses and conclude a smooth transition for customers", continued O'Hara. "We
commenced integration planning immediately after signing the definitive
agreement in October, and we believe we are well positioned for a smooth integration
process in keeping with our projected schedule.
"The transaction will
significantly increase the size of Level 3's communications business by
increasing the scale of the company's transport, IP and voice business. In
addition, broadening our network capabilities will facilitate increased network
reach by adding 3000 additional route miles, access to 50 new markets and
improved responsiveness on high demand routes".
Vyvx
As a part of the transaction, Level 3 acquired the
WilTel subsidiary, Vyvx, LLC, the industry leader in gathering and distributing
broadcast quality live and non-live video for the media and entertainment
industry.
"
We recognize the importance of Vyvx's
customers and are committed to ensuring they receive the highest quality service
without disruption,
" said O'Hara.
"We believe that Vyvx's expertise in transporting
video combined with its strong brand and customer relationships may create some
additional opportunities for Level 3 as the video transport market evolves".
About Level 3
Communications
Level 3 (Nasdaq:LVLT) is an
international communications and information services company. The company
operates one of the largest Internet backbones in the world, is one of the
largest providers of wholesale dial-up service to ISPs in North America and is
the primary provider of Internet connectivity for millions of broadband
subscribers, through its cable and DSL partners. The company offers a wide
range of communications services over its 23,000-mile broadband fiber optic
network including Internet Protocol (IP) services, broadband transport and
infrastructure services, colocation services, and patented softswitch managed
modem and voice services. Level 3 is an industry leader in IP and VoIP
services, which it provides to cable operators, ISPs, carriers and others.
Level 3's E-911 service offering includes both fixed location and nomadic VoIP
E-911 capabilities, supporting an FCC-compliant E-911 solution for
interconnected VoIP providers.
The company offers information services through its
subsidiary, Software Spectrum, and fiber-optic and satellite video delivery
solutions through its subsidiary, Vyvx. For additional information, visit their
respective Web sites at www.softwarespectrum.com and www.vyvx.com.
The Level 3 logo is a registered
service mark of Level 3 Communications, Inc. in the United States and/or
other countries. Level 3 services are provided by a wholly owned subsidiary of
Level 3 Communications, Inc.
Forward-Looking Statement
Some of the statements made by Level 3 in this press
release are forward-looking in nature. Actual results may differ materially
from those projected in forward-looking statements. Level 3 believes that its
primary risk factors include, but are not limited to: developing new products
and services that meet customer demands and generate acceptable margins;
increasing the volume of traffic on Level 3's network; overcoming the softness
in the economy given its disproportionate effect on the telecommunications
industry; integrating strategic acquisitions; attracting and retaining
qualified management and other personnel; successfully completing commercial
testing of new technology and information systems to support new products and
services, including voice transmission services; ability to meet all of the
terms and conditions of our debt obligations; overcoming Software Spectrum's
reliance on financial incentives, volume discounts and marketing funds from
software publishers; reducing downward pressure of Software Spectrum's margins
as a result of the use of volume licensing and maintenance agreements; and
reducing rate of price compression on certain of the Company's existing
transport and IP services. 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 release should be evaluated in light of
these important factors.

EX - 99 . 1 3 a05 - 22473 _ 1ex99d1 . htm EXHIBIT 99 Exhibit 99 . 1 1025 Eldorado Boulevard Broomfield , Colorado 80021 www.Level3.com NEWS RELEASE Level 3 contacts : Media : Josh Howell Investors : Robin Grey 720 - 888 - 2517 720 - 888 - 2518 Jennifer Daumler Sandra Curlander 720 - 888 - 3356 720 - 888 - 2501 Level 3 Completes WilTel Acquisition Level 3 Pays Total Consideration of 115 Million Shares of Level 3 Common Stock and $ 386 Million in Cash BROOMFIELD , Colo . , December 23 , 2005 ¾ Level 3 Communications , Inc . ( Nasdaq : LVLT ) today announced that it has completed its acquisition of WilTel Communications Group , LLC . As consideration , Level 3 has paid Leucadia National Corporation ( NYSE : LUK ) 115 million shares of Level 3 common stock and $ 386 million in cash . Pursuant to the purchase agreement signed by Level 3 and Leucadia on October 30 , 2005 , Level 3 's cash consideration at closing was increased from the previously announced amount of $ 370 million , to reflect an improvement in WilTel 's working capital and is subject to adjustment based on the subsequent calculation of actual closing date working capital . Level 3 paid an additional $ 100 million in consideration for $ 100 million in cash held by WilTel at the time of closing . " There is a unique and compelling fit between WilTel and Level 3 " , said James Q . Crowe , chief executive officer of Level 3 . " Because of this and hard work by all involved , we have been able to close this transaction ahead of schedule . Through this process , we have continued our analysis of the WilTel business and are confident in the overall financial projections we provided at the time we announced the definitive agreement . We have also continued our integration planning and we are extremely pleased with the progress we have made leading up to today 's announcement " . Financial projections " We are reiterating our previously announced overall revenue and cash flow projections for the acquisition " , said Sunit S . Patel , chief financial officer of Level 3 . " This transaction adds substantial new revenue from high quality customers and creates value from significant synergies resulting from elimination of duplicative common resources and network infrastructure . We continue to expect the acquisition to add $ 1.5 - 1.6 billion in revenue to our 2006 communications revenue which approximately doubles the size of our existing communications business . " While we recognize that the contribution from the AT & T ( formerly SBC ) contract will diminish over time in accordance with their contract with WilTel , we continue to expect that this transaction will contribute approximately $ 50 - 90 million of incremental cash flow in 2006 and $ 125 - 150 million of incremental cash flow annually from 2007 onward . We expect to provide more detail when we announce our 2005 fourth quarter results in February 2006 . " Integration costs are expected to be $ 100 - 150 million . Integration planning and execution " The combination of Level 3 and WilTel unites two leading providers of communications backbone services to create what we believe is the premier wholesale communications services provider in the industry , " said Kevin O'Hara , president and chief operating officer of Level 3 . " Due to the unique strategic fit between the two companies and Level 3 's past integration experience , we remain confident in our ability to successfully combine the businesses and conclude a smooth transition for customers " , continued O'Hara . " We commenced integration planning immediately after signing the definitive agreement in October , and we believe we are well positioned for a smooth integration process in keeping with our projected schedule . " The transaction will significantly increase the size of Level 3 's communications business by increasing the scale of the company 's transport , IP and voice business . In addition , broadening our network capabilities will facilitate increased network reach by adding 3000 additional route miles , access to 50 new markets and improved responsiveness on high demand routes " . Vyvx As a part of the transaction , Level 3 acquired the WilTel subsidiary , Vyvx , LLC , the industry leader in gathering and distributing broadcast quality live and non - live video for the media and entertainment industry . " We recognize the importance of Vyvx 's customers and are committed to ensuring they receive the highest quality service without disruption , " said O'Hara . " We believe that Vyvx 's expertise in transporting video combined with its strong brand and customer relationships may create some additional opportunities for Level 3 as the video transport market evolves " . About Level 3 Communications Level 3 ( Nasdaq : LVLT ) is an international communications and information services company . The company operates one of the largest Internet backbones in the world , is one of the largest providers of wholesale dial - up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers , through its cable and DSL partners . The company offers a wide range of communications services over its 23,000 - mile broadband fiber optic network including Internet Protocol ( IP ) services , broadband transport and infrastructure services , colocation services , and patented softswitch managed modem and voice services . Level 3 is an industry leader in IP and VoIP services , which it provides to cable operators , ISPs , carriers and others . Level 3 's E - 911 service offering includes both fixed location and nomadic VoIP E - 911 capabilities , supporting an FCC - compliant E - 911 solution for interconnected VoIP providers . The company offers information services through its subsidiary , Software Spectrum , and fiber - optic and satellite video delivery solutions through its subsidiary , Vyvx . For additional information , visit their respective Web sites at www.softwarespectrum.com and www.vyvx.com . The Level 3 logo is a registered service mark of Level 3 Communications , Inc . in the United States and / or other countries . Level 3 services are provided by a wholly owned subsidiary of Level 3 Communications , Inc . Forward - Looking Statement Some of the statements made by Level 3 in this press release are forward - looking in nature . Actual results may differ materially from those projected in forward - looking statements . Level 3 believes that its primary risk factors include , but are not limited to : developing new products and services that meet customer demands and generate acceptable margins ; increasing the volume of traffic on Level 3 's network ; overcoming the softness in the economy given its disproportionate effect on the telecommunications industry ; integrating strategic acquisitions ; attracting and retaining qualified management and other personnel ; successfully completing commercial testing of new technology and information systems to support new products and services , including voice transmission services ; ability to meet all of the terms and conditions of our debt obligations ; overcoming Software Spectrum 's reliance on financial incentives , volume discounts and marketing funds from software publishers ; reducing downward pressure of Software Spectrum 's margins as a result of the use of volume licensing and maintenance agreements ; and reducing rate of price compression on certain of the Company ' s existing transport and IP services . 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 release should be evaluated in light of these important factors .
O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O B-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY O O O O O O O O O O O O O O O O O O O O O O O O O O B-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY O O O O O O O O O O O O O O B-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O B-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O