Level 3 Parent (LVLT) 8-K/A Completion of Acquisition or Disposition of Assets

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Exhibit 99.5

LEVEL 3 COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

        The following unaudited pro forma condensed combined balance sheet as of September 30, 2005 and the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2005 and the fiscal year ended December 31, 2004 of Level 3 Communications, Inc. ("Level 3") and WilTel Communications Group, LLC ("WilTel") have been prepared after giving effect to Level 3's acquisition of WilTel ("Acquisition") and the assumptions and adjustments described in the accompanying notes herein. The Acquisition excludes certain specified WilTel assets and liabilities in accordance with terms of the purchase agreement. Level 3 acquired WilTel on December 23, 2005

        The unaudited pro forma financial statements account for the Acquisition under the purchase method of accounting. The unaudited pro forma condensed combined balance sheet is presented as if the Acquisition occurred on September 30, 2005. The unaudited pro forma condensed combined statement of operations of Level 3 and WilTel for the nine months ended September 30, 2005 is presented as if the Acquisition occurred on January 1, 2004. The unaudited pro forma condensed combined statement of operations of Level 3 and WilTel for the year ended December 31, 2004 is presented as if the Acquisition had taken place on January 1, 2004. The historical consolidated financial statements of Level 3 have been restated to reflect the results of operations and financial position of (i)Structure, LLC as discontinued operations for all periods presented due to its sale to Infocrossing, Inc. on November 30, 2005. Certain reclassifications have been made relative to WilTel's historical financial statements in order to present them on a basis consistent with Level 3.

        The preliminary allocation of the purchase price used in the unaudited pro forma condensed combined financial statements is based upon a preliminary valuation. Our estimates and assumptions are subject to change upon the finalization of the valuation. The primary areas of the purchase price allocation which are not yet finalized relate to identifiable long-lived tangible and intangible assets, the fair value of deferred revenue, the fair value of contractual obligations assumed and restructuring costs.

        The unaudited pro forma condensed combined financial statements are not intended to represent or be indicative of the consolidated results of operations or financial position of Level 3 that would have been reported had the Acquisition been completed as of the dates presented, and should not be taken as representative of the future consolidated results of operations or financial position of Level 3. The unaudited pro forma financial statements do not reflect any operating efficiencies and cost savings that we may achieve with respect to combining the companies.

        Under the terms of the purchase agreement for the Acquisition, the purchase price paid consisted of approximately $390 million in cash, plus $100 million in cash to reflect Leucadia's having complied with its obligation to leave that amount of cash in WilTel and 115 million shares of Level 3's common stock valued at $313 million, using a stock value of $2.72 per share. The value of the common stock was determined using the average closing stock price for the two days prior and two days after the date the transaction was announced. The Company also incurred costs of approximately $7 million related to the transaction. The cash purchase price is subject to post-closing adjustments based primarily on actual working capital as of the closing date. Level 3 entered into certain transactions with WilTel prior to the acquisition of WilTel by Level 3, whereby it received cash for communications services to be provided in the future which Level 3 accounted for as deferred revenue. As a result of the acquisition, Level 3 can no longer amortize this deferred revenue into earnings and accordingly, reduced the purchase price applied to the net assets acquired in the WilTel transaction by $2 million, the amount of the unamortized deferred revenue balance on December 23, 2005.

        The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and accompanying notes of Level 3 incorporated by reference to this filing, and the historical consolidated financial statements and accompanying notes for WilTel included herein.

LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Balance Sheet at September 30, 2005

(dollars in millions)		Historical Level 3(a)			Historical WilTel(a)			Remove Excluded Assets and Liabilities(b)			Pro Forma Adjustments			Pro Forma Level 3
Assets
Current Assets:
	Cash and cash equivalents	$	490		$	248		$	(148	)	$	(497	) d1	$	93
	Marketable securities		403			39			(39	)					403
	Restricted cash and securities		38			—									38
	Receivables, net		401			323			(37	)					687
	Other		168			24			(1	)					191
Total Current Assets			1,500			634			(225	)		(497	)		1,412
Property, Plant and Equipment, net			5,071			1,008			(103	)		(272	) c1		5,704
Marketable Securities			408			11			(11	)					408
Restricted Cash and Securities			71			—									71
Goodwill and Other Intangibles, net			401			38						113	c2		552
Other Assets, net			129			31			(9	)					151
Total Assets		$	7,580		$	1,722		$	(348	)	$	(656	)	$	8,298
Liabilities and Stockholders' Deficit
Current Liabilities:
	Accounts payable	$	488		$	177		$	(20	)	$	—		$	645
	Current portion of long-term debt		—			71			(71	)					—
	Accrued payroll and employee benefits		62			56			(27	)					91
	Accrued interest		130			—									130
	Deferred revenue		207			57						(20	) c3		244
	Other		111			68			(9	)		26	c4		196
Total Current Liabilities			998			429			(127	)		6			1,306
Long-Term Debt, less current portion			6,020			353			(353	)					6,020
												(2	) d3
Deferred Revenue			733			190						(190	) c3		731
Other Liabilities			461			146			(38	)		(9	) c5		560
Stockholders' Deficit:
	Common Stock		7			—						1	d2		8
												(783	) d4
	Additional paid-in capital		7,429			627			156			312	d2		7,741
	Accumulated other comprehensive loss		(45	)		(14	)		14						(45	)
	Accumulated deficit		(8,023	)		(9	)					9	d4		(8,023	)
Total Stockholders' Deficit			(632	)		604			170			(461	)		(319	)
Total Liabilities and Stockholders' Deficit		$	7,580		$	1,722		$	(348	)	$	(656	)	$	8,298

        The acquisition of WilTel has been accounted for as a purchase combination. Assets acquired and liabilities assumed were recorded at their fair values as of December 23, 2005. The total preliminary

purchase price is $808 million, including transaction costs and deferred revenue of Level 3 attributable to WilTel and is comprised of the following:

(dollars in millions)
Equity Consideration (115 million shares at $2.72)		$	313
Cash Consideration			490
Transaction Costs			7
	Purchase Consideration		810
Deferred Revenue of Level 3 attributable to WilTel			(2	)
	Total Preliminary Purchase Price	$	808

        Under business combination accounting, the total preliminary purchase price will be allocated to WilTel's net tangible and intangible assets based on their estimated fair value as of December 23, 2005. Based upon a preliminary valuation, the total preliminary purchase price was allocated as follows:

(dollars in millions)		December 23, 2005
Assets:
	Cash and cash equivalents	$	128
	Accounts receivable		257
	Other current assets		18
	Property, plant and equipment, net		660
	Identifiable intangibles		152
	Other assets		26
Total Assets			1,241
Liabilities:
	Accounts payable		204
	Accrued payroll		29
	Other current liabilities		69
	Deferred revenue—WilTel		41
	Deferred revenue—Level 3		(2	)
	Other liabilities		90
Total Liabilities			431
	Purchase Price	$	810

        The preliminary allocation of the purchase price was based upon a preliminary valuation, and the estimates and assumptions are subject to change upon the finalization of the valuation.

        Balance Sheet Adjustments:

(a)

These columns reflect the historical balance sheets of the respective companies. Certain reclassifications have been made relative to WilTel's historical financial statements in order to present them on a basis consistent with Level 3.



(b)

Removes the assets and liabilities not included in the purchase agreement, including:



•

Cash, cash equivalents and marketable securities (current and noncurrent) in excess of $100 million as of September 30, 2005. The preliminary purchase allocation provided above includes $128 million of cash and cash equivalents offset by $28 million of an overdraft balance included in accounts payable.



•

Accounts Receivable due under the Termination, Mutual Release and Settlement Agreement among Leucadia, WilTel and SBC.



•

WilTel's corporate headquarters in Tulsa, OK and leased aircraft.

•

Debt obligations, and related debt issuance costs, primarily attributable to the mortgage on WilTel's corporate headquarters and its credit facility.



•

Obligations under the defined benefit pension plan and other employee benefit plans.



(c1)

Adjustment to reflect the value of WilTel property plant and equipment received in the acquisition which has estimated useful lives of 2 to 20 years.



(c2)

Adjustment to reflect value of intangible assets associated with customer relationships acquired in the transaction which will be amortized on a straight line basis over their estimated useful lives of 6 to 11 years. Certain trademarks have been assigned indefinite lives.



(c3)

Adjustment to reflect fair value of deferred revenue assumed in the transaction.



(c4)

Adjustment to reflect estimated severance and employee related costs.



(c5)

Adjustment to reflect decrease in fair value of asset retirement obligations assumed in the transaction due to a higher discount rate used by Level 3.



(d1)

Cash consideration paid for acquisition. Includes $7 million of transaction costs.



(d2)

Stock consideration paid for acquisition which is comprised of 115 million shares of Level 3 common stock valued at $2.72 per share.



(d3)

Remove Level 3 deferred revenue attributable to WilTel contracts which existed prior to the transaction.



(d4)

Adjustment to remove historical equity of WilTel.

LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statement of Operations

For the twelve months ended December 31, 2004

(dollars in millions, except per share data)			Historical Level 3(a)			Historical WilTel(a)			Intercompany Adjustments(b)			Pro Forma Adjustments			Pro Forma Level 3
Revenue			$	3,637		$	1,583		$	(6	)				$	5,214
Cost of revenue				2,208			1,129			(6	)					3,331
													(208	) c
Depreciation and amortization				682			208						110	d		792
													(14	) e
Selling, general and administrative				947			282						4	f		1,219
Restructuring and impairment charges				16			—									16
	Total costs and expenses			3,853			1,619			(6	)		(108	)		5,358
Operating Income (Loss)				(216	)		(36	)		—			108			(144	)
Other Income (Expense):
	Interest income			13			6						(5	) g		14
	Interest expense			(485	)		(35	)					34	h		(486	)
	Gains on early extinguishment of debt			197			—									197
	Other, net			39			7									46
		Total other income (expense)		(236	)		(22	)		—			29			(229	)
Loss from Continuing operations Before Income Tax				(452	)		(58	)					137			(373	)
Income Tax Expense				(6	)		—									(6	)
Net Income (Loss) from Continuing Operations			$	(458	)	$	(58	)		—		$	137		$	(379	)
Weighted Average Shares Outstanding (in 000's)				683,846									115,000			798,846
EPS: Net Loss from Continuing Operations			$	(0.67	)										$	(0.47	)

LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statement of Operations

For the nine months ended September 30, 2005

(dollars in millions, except per share data)			Historical Level 3(a)			Historical WilTel(a)			Intercompany Adjustments(b)			Pro Forma Adjustments			Pro Forma Level 3
Revenue			$	2,669		$	1,340		$	(4	)		(33	) i	$	3,972
Cost of revenue				1,617			921			(4	)					2,534
													(123	) c
Depreciation and amortization				494			123						82	d		576
													(10	) e
Selling, general and administrative				656			209						3	f		858
Restructuring and impairment charges				24			—									24
	Total costs and expenses			2,791			1,253			(4	)		(48	)		3,992
Operating Income (Loss)				(122	)		87			—			15			(20	)
Other Income (Expense):
	Interest income			25			8						(7	) g		26
	Interest expense			(391	)		(25	)					24	h		(392	)
	Other, net			23			3									26
		Total other income (expense)		(343	)		(14	)		—			17			(340	)
Loss from Continuing operations Before Income Tax				(465	)		73						32			(360	)
Income Tax Expense				(4	)		—									(4	)
Net Income (Loss) from Continuing Operations			$	(469	)	$	73			—		$	32		$	(364	)
Weighted Average Shares Outstanding (in 000's)				695,060									115,000			810,060
EPS: Net Loss from Continuing Operations			$	(0.67	)										$	(0.45	)

Statement of Operations Adjustments:

(a)

These columns reflect the historical statements of operations of the respective companies. Certain reclassifications have been made relative to WilTel's historical financial statements in order to present them on a basis consistent with Level 3.



(b)

Eliminate the historical intercompany transactions between Level 3 and WilTel.



(c)

Remove historical depreciation and amortization expense attributable to WilTel.



(d)

Record depreciation and amortization expense for the tangible and intangible assets obtained in the Acquisition based on preliminary purchase price allocation.



(e)

Remove historical selling, general and administrative expenses attributable to the excluded assets and liabilities not included in the Acquisition.



(f)

Record rent expense attributable to the leased Tulsa corporate facility. Level 3 is leasing space in the Tulsa corporate facility from Leucadia subsequent to the closing of the transaction.



(g)

Remove interest income attributable to the cash, cash equivalents and marketable securities retained by Leucadia. The increase in interest income for the nine months ended September 30, 2005 is attributable to a higher interest rate being earned on the $100 million of cash and cash equivalents retained in the transaction during this period in 2005 when compared to the year ended December 31, 2004.

(h)

Remove interest expense on the historical debt of WilTel not assumed in the Acquisition.



(i)

Remove income attributable to the June 2005 Termination, Mutual Release and Settlement Agreement among Leucadia, WilTel and SBC. This income was retained by Leucadia in the transaction.

        The statement of operations adjustments described above have not been tax effected due to Level 3's net operating loss position for income tax purposes.

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LEVEL 3 COMMUNICATIONS, INC. UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Combined Balance Sheet at September 30, 2005
LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Combined Statement of Operations For the twelve months ended December 31, 2004
LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Combined Statement of Operations For the nine months ended September 30, 2005