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): September 10, 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
On September 10, 2001, Level 3 Communications, Inc. ("Level 3") announced
that Level 3 Finance, LLC ("Level 3 Finance"), its first tier, wholly owned
subsidiary, has commenced "Modified Dutch Auction" tender offers for a portion
of Level 3's debt and convertible debt securities. Level 3 Finance is offering
to purchase these debt and convertible debt securities for cash, at prices
determined by a "Modified Dutch Auction" procedure. The tender offer for each
series of Notes will expire at 11:59 p.m., New York City time, on October 5,
2001, unless that offer is extended.
On September 10, 2001, Level 3 issued a press release relating to the
commencement of the tender offers. This press release, which summarizes the
terms and conditions of each tender offer, 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 September 10, 2001 Press Release relating to the tender offers.
Item 9. Regulation FD Disclosure
On September 10, 2001, Level 3 Communications, Inc. ("Level 3") posted to
its web site at www.Level3.com the following Questions and Answers relating to
the tender offers commenced by Level 3 Finance, LLC. The furnishing of this
information shall not be deemed an admission as to the materiality of the
information included in this Current Report. This information is not filed but
is furnished pursuant to Regulation FD.
Q: What action did Level 3 Communications announce on September 10, 2001?
A: Level 3 Communications announced, in accordance with applicable securities
regulations, that its subsidiary, Level 3 Finance, LLC, is offering to purchase
a portion of Level 3 Communications' outstanding senior notes and convertible
subordinated notes utilizing a "modified Dutch auction" process.
Q: What is Level 3 Finance, LLC?
A: Level 3 Finance, LLC is a wholly owned subsidiary of Level 3 Communications,
Inc. that has offered to purchase a portion of Level 3
Communications' outstanding senior notes and convertible subordinated notes
utilizing a "modified Dutch auction" process.
Q: How does a "modified Dutch auction" process work?
A: During the20-business-day tender period (assuming no extension), which
started on Monday,September 10, 2001, and is expected to end on Friday,
October 5, 2001,noteholders have the ability to offer to sell to Level 3
Finance all or aportion of their notes within the price range specified by
Level 3 Finance. Atthe expiration of the tender offers, Level 3 Finance
will accept tenders as follows:
1) Level 3 Finance will accept tenders of notes starting at the lowest
prices within a specified pricing range for each series of notes and will
continue to accept tenders in order of increasing offer price until Level 3
Finance has purchased up to the specified maximum face value amount per series
of notes.
2) Level 3 Finance will then pay to all noteholders whose tenders are
accepted the highest price specified for a series of notes that is accepted for
purchase by Level 3 Finance (the "Purchase Price") even if that price is higher
than the price indicated by the noteholder.
3) If the aggregate principal amount of notes tendered at the highest
Purchase Price exceeds the maximum face value amount of notes that is specified
by Level 3 Finance at the Purchase Price, all securities tendered at prices
below the applicable Purchase Price will be accepted, and acceptances of tenders
at the Purchase Price will be allocated among tendering noteholders of the
series of notes on a pro rata basis according to the principal amount tendered.
Q: How much cash will Level 3 Finance spend in the tender offers? A: Level3
Finance will spend anywhere between $0 and approximately $814 million in cash,
excluding accrued interest. The actual amount spent will depend on the amount of
notes Level 3 Finance agrees to purchase in the tender offers. Level 3 Finance
has the option to revise the tender offers, which may increase or decrease the
range of possible amounts expended. Since the completion of the tender offers is
subject to the satisfaction of certain customary conditions, Level 3 Finance
will be obligated to spend this cash only if those conditions are satisfied.
Q: Is there a minimum amount of debt Level 3 Finance is obligated to
purchase regardless of price?
A: No. If there are no offers within the pricingranges specified, Level 3
Finance is not obligated to purchase any notes.
Q: In order for Level 3 Finance to complete one tender offer for a
particular series of notes, does any other tender offer have to be completed as
well?
A: No, each series of notes is treated separately and therefore is not
dependent on the successful tender of any other series.
Q: Why is Level 3 Finance offering to purchase Level 3 Communications'
outstanding senior notes and convertible subordinated notes?
A: Given the current trading levels of the debt securities, which
represent significant discounts to face value, Level 3 Communications
believes purchasing debt securities at prices specified in the tender offer
is a prudent use of cash.
Q: What is the maximum amount of debt Level 3 Finance is offering to
purchase?
A: Assuming a sufficient amount of notes are offered within the price
range specified in the Offer to Purchase document, Level 3 Finance will purchase
up to an aggregate of $1.8 billion face amount of debt at maturity.
Q: If Level 3 Finance purchases debt in accordance with the terms of the
tender offers, is Level 3 Communications' business plan fully funded?
A: Level 3 Communications believes that, given the expected cash flow
effects of its previously disclosed initiatives and the proposed tender
offers announced by Level 3 Finance, Level 3 Communications' business plan
remains prefunded to free cash flow breakeven.
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.
September 10, 2001 By: /s/ Neil J. Eckstein
Date Neil J. Eckstein, Vice President