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Level 3 Reports Second Quarter 2011 Results

BROOMFIELD, Colo. July 27, 2011 $932 million $929 million $908 million

http://photos.prnewswire.com/prnh/20110523/LA06722LOGO

$181 million $0.11 $0.02 $23 million $14 million $8 million $6 million $600 million $205 million $0.12 $27 million $0.02 $20 million $0.01 $169 million $0.10

$226 million $8 million $225 million $209 million

James Q. Crowe

Financial Results

Metric

($ in millions)

Second

Quarter

2011

First

Quarter

2011

Second

Quarter

2010

Total Communications Revenue

$913

$914

$892

Other Revenue

$19

$15

$16

Total Consolidated Revenue

$932

$929

$908

Consolidated Adjusted EBITDA(1)

$226

$225

$209

Capital Expenditures

$125

$115

$104

Unlevered Cash Flow(1)

$117

$41

$102

Free Cash Flow(1)

$6

($115)

($19)

Communications Gross Margin(1)

62.0%

60.9%

59.9%

Communications Adjusted EBITDA Margin(1)

24.8%

24.6%

23.4%

(1) See schedule of non-GAAP metrics for definition and reconciliation to GAAP measures.

Communications Business

Revenue
$913 million $914 million $892 million

Communications Revenue

($ in millions)

Second

Quarter

2011

First

Quarter

2011

Percent

Change

Second

Quarter

2010

Percent

Change

Wholesale

$358

$351

2%

$342

5%

Large Enterprise and Federal

$148

$144

3%

$142

4%

Mid-Market

$158

$155

2%

$146

8%

Europe

$80

$79

1%

$69

16%

Core Network Services

$744

$729

2%

$699

6%

Wholesale Voice Services

$151

$164

(8%)

$163

(7%)

Other Communications Services

$18

$21

(14%)

$30

(40%)

Total Communications Services

$913

$914

$892

2%

Core Network Services
$744 million $729 million $699 million

Sunit Patel $557 million $566 million

Deferred Revenue
$889 million $888 million $865 million

Cost of Revenue
$347 million $357 million $358 million

Communications gross margin was 62.0 percent for the second quarter 2011, compared to 60.9 percent in the first quarter 2011. Communications gross margin was 59.9 percent in the second quarter 2010.

Selling, General and Administrative Expenses (SG&A
$340 million $8 million $332 million $324 million

$357 million $357 million $338 million $17 million $25 million $14 million

Adjusted EBITDA
$226 million $234 million $8 million $225 million $209 million

Communications Adjusted EBITDA margin increased to 24.8 percent, or 25.6 percent excluding the costs associated with the Global Crossing transaction, for the second quarter 2011, compared to 24.6 percent for the first quarter 2011, and 23.4 percent in the second quarter 2010.

$1 million $1 million

Consolidated Cash Flow and Liquidity

$117 million $41 million $102 million

$6 million $115 million $19 million

June 30, 2011 $584 million

Corporate Transactions

Global Crossing
June 9, 2011 $600 million July 14, 2011 $600 million $1.2 billion $1.2 billion

Financings
July 15, 2011 $128 million $29 million July 15, 2011 $272 million

Business Outlook

“We continue to expect sequential revenue growth in Core Network Services revenue for the rest of 2011 and low double-digit Consolidated Adjusted EBITDA growth in 2011 compared to 2010,” said Patel. “Capital expenditures are expected to be approximately 12 percent of Communications revenue for the full year 2011, and Free Cash Flow is expected to be roughly breakeven for the last three quarters of 2011 in aggregate. These expectations exclude any effect from the pending Global Crossing acquisition, which we continue to expect to close before the end of the year.”

Conference Call and Web Site Information

10 a.m. ET http://lvlt.client.shareholder.com http://lvlt.client.shareholder.com/results.cfm

1 p.m. ET July 27 1 p.m. ET Aug. 6

For additional information, please call 720-888-2502.

About Level 3 Communications
www.level3.com

the United States

Important Information For Investors And Stockholders
http://www.sec.gov Broomfield, Colorado [email protected] Hamilton Bermuda http://www.globalcrossing.com

April 4, 2011 May 19, 2010

Forward Looking Statements About Global Crossing
This press release contains statements about expected future events and financial results that are forward looking and subject to risks and uncertainties that could cause the actual results to differ materially, including: the failure to occur of any condition to the closing of the acquisition of Global Crossing by Level 3, including the failure to obtain a required approval or the experiencing of a material adverse effect by either company; the failure to achieve expected synergies from the acquisition; Global Crossing’s history of substantial operating losses and the fact that, in the near term, funds from operations will not satisfy cash requirements; the availability of future borrowings in an amount sufficient to pay Global Crossing’s indebtedness and to fund its other liquidity needs; legal and contractual restrictions on the inter-company transfer of funds by Global Crossing’s subsidiaries; Global Crossing’s ability to continue to connect its network to incumbent carriers’ networks or maintain Internet peering arrangements on favorable terms; the consequences of any inadvertent violation of Global Crossing’s Network Security Agreement with the U.S. Government; increased competition and pricing pressures resulting from technology advances and regulatory changes; competitive disadvantages relative to competitors with superior resources; political, legal and other risks due to Global Crossing’s substantial international operations; risks associated with movements in foreign currency exchange rates; risks related to restrictions on the conversion of the Venezuelan bolivar into U.S. dollars and to the resultant buildup of a material excess bolivar cash balance, which is carried on Global Crossing’s books at the official exchange rate, attributing to the bolivar a value that is significantly greater than the value that would prevail on an open market; potential weaknesses in internal controls of acquired businesses, and difficulties in integrating internal controls of those businesses with Global Crossing’s own internal controls; exposure to contingent liabilities; and other risks referenced from time to time in Global Crossing’s filings with the Securities and Exchange Commission. Global Crossing undertakes no duty to update information contained in this press release or in other public disclosures at any time.

Cautionary Notice Regarding Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, (i) statements about the benefits of the acquisition of Global Crossing by Level 3, including financial and operating results and synergy benefits that may be realized from the acquisition and the timeframe for realizing those benefits; Level 3’s and Global Crossing’s plans, objectives, expectations and intentions and other statements contained in this communication that are not historical facts; and (ii) other statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning.

These forward-looking statements are based upon management’s current beliefs or expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies and third-party approvals, many of which are beyond our control. The following factors, among others, could cause actual results to differ materially from those expressed or implied in the forward-looking statements: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Agreement and Plan of Amalgamation among Level 3, Global Crossing and Global Crossing Amalgamation Sub, Ltd. (the “Amalgamation Agreement”); (2) the inability to complete the transactions contemplated by the Amalgamation Agreement due to the failure to obtain the required stockholder approvals, (3) the inability to satisfy the other conditions specified in the Amalgamation Agreement, including without limitation the receipt of necessary governmental or regulatory approvals required to complete the transactions contemplated by the Amalgamation Agreement; (4) the inability to successfully integrate the businesses of Level 3 and Global Crossing or to integrate the businesses within the anticipated timeframe; (5) the risk that the proposed transactions disrupt current plans and operations, increase operating costs and the potential difficulties in customer loss and employee retention as a result of the announcement and consummation of such transactions; (6) the ability to recognize the anticipated benefits of the combination of Level 3 and Global Crossing, including the realization of revenue and cost synergy benefits; and to recognize such benefits within the anticipated timeframe; (7) the outcome of any legal proceedings that may be instituted against Level 3, Global Crossing or others following announcement of the Amalgamation Agreement and transactions contemplated therein; and (8) the possibility that Level 3 or Global Crossing may be adversely affected by other economic, business, and/or competitive factors.

Other important factors that may affect Level 3’s and the combined business’ results of operations and financial condition include, but are not limited to: the current uncertainty in the global financial markets and the global economy; a discontinuation of the development and expansion of the Internet as a communications medium and marketplace for the distribution and consumption of data and video; disruptions in the financial markets that could affect Level 3’s ability to obtain additional financing, and the company’s ability to: increase and maintain the volume of traffic on its network; develop effective business support systems; manage system and network failures or disruptions; develop new services that meet customer demands and generate acceptable margins; defend intellectual property and proprietary rights; adapt to rapid technological changes that lead to further competition; attract and retain qualified management and other personnel; successfully integrate acquisitions; and meet all of the terms and conditions of debt obligations.

Additional information concerning these and other important factors can be found within Level 3’s and Global Crossing’s respective  filings with the SEC, which discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. Statements in this communication should be evaluated in light of these important factors.  The forward-looking statements in this communication speak only as of the date they are made. Except for the ongoing obligations of Level 3 and Global Crossing to disclose material information under the federal securities laws, neither Level 3 nor Global Crossing undertakes any obligation to, and expressly disclaim any such obligation to, update or alter any forward-looking statement to reflect new information, circumstances or events that occur after the date such forward-looking statement is made unless required by law.

Contact Information

Media:

Investor:

Monica Martinez

Valerie Finberg

720-888-3991

720-888-2501

[email protected]

[email protected]

Non-GAAP Metrics

the United States

Consolidated Revenue

Communications Revenue

Core Network Services Revenue

Communications Gross Margin ($)

Communications Gross Margin (%)

Adjusted EBITDA

Adjusted EBITDA Margin

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