-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SePqb47aJf1j/qIIWdTmXtu+Ruo+O1+k+GaJqtWY2m4h1gyCt9RcxxNpmJK96skZ umcwgEQfQEH+zbWWD+Vh5Q== 0000794323-01-500037.txt : 20020413 0000794323-01-500037.hdr.sgml : 20020413 ACCESSION NUMBER: 0000794323-01-500037 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011219 ITEM INFORMATION: Other events FILED AS OF DATE: 20011219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEVEL 3 COMMUNICATIONS INC CENTRAL INDEX KEY: 0000794323 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 470210602 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15658 FILM NUMBER: 1817174 BUSINESS ADDRESS: STREET 1: 1025 ELDORADO BOULEVARD STREET 2: 14TH FLOOR CITY: BROOMFIELD STATE: CO ZIP: 80021 BUSINESS PHONE: 3039263000 MAIL ADDRESS: STREET 1: 1000 KIEWIT PLAZA STREET 2: 14TH FL CITY: OMAHA STATE: NE ZIP: 68131 FORMER COMPANY: FORMER CONFORMED NAME: KIEWIT PETER SONS INC DATE OF NAME CHANGE: 19920703 8-K 1 f8k1_12192001.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): December 19, 2001 Level 3 Communications, Inc. (Exact name of Registrant as specified in its charter) Delaware 47-0210602 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1025 Eldorado Blvd., Broomfield, Colorado 80021 (Address of principal executive offices) (Zip code) 720-888-1000 (Registrant's telephone number including area code) Not applicable (Former name and former address, if changed since last report) Item 5. Other Events and Regulation FD Disclosure On December 19, 2001, Level 3 Communications, Inc. ("Level 3") issued a press release announcing the execution of an agreement with Reach Ltd. relating to the disposition of Level 3's operations in Asia. This press release is filed as Exhibit 99.1 to this Current Report and incorporated by reference as if set forth in full. Item 7. Financial Statements and Exhibits (a) Financial Statements of business acquired None (b) Pro forma financial information None (c) Exhibits 99.1 Press Release dated December 19, 2001, relating to agreement with Reach Ltd. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Level 3 Communications, Inc. December 19, 2001 By: /s/ Neil J. Eckstein Date Neil J. Eckstein, Vice President EX-99 3 f8k2_12192001.txt EXHIBIT 99.1 PRESS RELEASE DATED 12/19/2001 Exhibit 99.1 [Logo] 1025 Eldorado Boulevard Broomfield, Colorado 80021 www.Level3.com NEWS RELEASE Level 3 Contacts: U.S. media: Josh Howell Investors: Robin Grey 720-888-2517 720-888-2518 Arthur Hodges Sandra Doyle 720-888-6184 720-888-2501 Asia media: Samantha English Europe media: Mark Broughton +852-2201-8026 +44-20-7954-5077 Cannis Wong +852-2201-8016 Reach Acquires Level 3's Asian Business Level 3 To Reduce Costs by Approximately $300 Million, Focus On North American and European Markets HONG KONG, December 19, 2001 - Level 3 Communications, Inc. (Nasdaq:LVLT) today announced that Reach will acquire Level 3's Asian business. The agreement covers Level 3's Asian network operations, assets, liabilities and future financial obligations. This includes its North Asian cable system (Tiger); capacity on the Japan-US Cable System (JUS); capital and operational expenses related to the Tiger and JUS systems; data centers in Hong Kong and Tokyo; and existing customers on Level 3's Asian network. "This transaction makes both sound fiscal and strategic sense for Level 3," said James Q. Crowe, Level 3 CEO. "Our business in Asia would require significant additional capital investment to get to the point of free cash flow breakeven. With this transaction, we will save approximately $300 million. Given current economic conditions, we believe it is beneficial to focus our efforts in North America and Europe. "Strategically, Asia represents attractive longer term investment opportunities. In this volatile market and economy, however, we must take steps to focus on the immediate opportunities and to leverage our network and management time where the returns on capital are highest - which is in our North American and European markets." As part of the agreement, the two companies have agreed Level 3 will provide capacity and services to Reach over Level 3's North American backbone network, and Level 3 will buy capacity and services from Reach in Asia. This will allow Level 3 to continue to service its customer base with capacity needs in Asia and give Reach access to a state-of-the-art, high capacity network in North America and Europe. Additionally, Level 3 will maintain a sales group in Asia to serve its global customers and Asian-based carriers with capacity needs in North America and Europe. "The agreement enables Level 3 to focus on its strategy of serving the 300 largest consumers of bandwidth," said Steve Liddell, president of Level 3's Asian operations. "We have found in the current economic climate that the needs of this core group of customers are significantly greater in North America and Europe. We've significantly improved our overall cash flow, ensured our continued ability to provide capacity in Asia to our global customers, and gained a customer on our North American network." This transaction will further strengthen Level 3's overall financial position. The company estimates that by virtue of the transaction it will reduce its future funding requirements by approximately $300 million through a combination of reductions in capital expenditures, network and operating expenses, taxes and working capital. These savings are expected to be realized through the point in time when the company reaches free cash flow breakeven. As a result of this transaction, Level 3 expects to recognize a one-time charge of approximately $500 million during the fourth quarter of 2001. Under the terms of the agreement Reach will acquire Level 3's existing Asian business in Japan, Hong Kong, Korea, and Taiwan. This includes: * Three fiber pairs on Level 3's Tiger submarine cable system - which will connect Japan, Hong Kong, Taiwan and Korea - along with associated cable landing stations and backhaul network facilities connected to the Tiger system; * Level 3's ownership stake in the Japan-US submarine cable system and associated backhaul systems; * Data center and colocation facilities in Tokyo and Hong Kong; and * Certain existing customers on Level 3's Asian network. Level 3 was advised by Goldman Sachs in this transaction, which is expected to close in the first quarter of 2002. About Level 3 Communications Level 3 (Nasdaq:LVLT) is a global communications and information services company offering a wide selection of services including IP services, broadband transport services, colocation services, and the industry's first Softswitch based services. Its Web address is www.Level3.com. 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: changes in the overall economy relating to, among other things, the September 11 attacks and subsequent events, substantial capital requirements; development of effective internal processes and systems; the ability to attract and retain high quality employees; technology; the number and size of competitors in its markets; law and regulatory policy; and the mix of products and services offered in the company's target markets. 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. -30- -----END PRIVACY-ENHANCED MESSAGE-----