Exhibit 99.1
[Logo]
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
Arthur Hodges Sandra Curlander
720-888-6184 720-888-2501
Level 3 Announces Work Force Reduction
Action Expected To Result In Operational Savings Of
Approximately $60 Million To $70 Million Per Year
BROOMFIELD, Colo., January 12, 2005 - Level 3 Communications, Inc. (Nasdaq:LVLT)
announced today that its operating subsidiaries will initiate a work force
reduction of approximately 500 to 600 employees. The reduction, which is
expected to result in operational savings of approximately $60 million to $70
million per year, will take place before the end of January 2005.
"We remain pleased with the volume of sales we've seen in recent quarters
related to IP, transport, voice and other strategic services, and we continue to
invest in areas where we see growing opportunities," said James Q. Crowe, Level
3's chief executive officer. "We expect to meet or exceed our previously issued
guidance for communications revenue for the fourth quarter of 2004, and we are
focused on converting new sales to revenue and on maximizing our ability to
scale in response to market demand.
"In particular, contract activity for consumer-oriented Voice-over-IP services
has been strong. However, as previously discussed, it is difficult to predict
revenue growth in that area with certainty because it depends on sales to end
users by our service provider customers.
"As such, we need to ensure our financial and organizational resources are
properly allocated and aligned to take advantage of demand as it develops in
consumer-oriented voice and other growth areas. In addition, we are committed to
accelerating Level 3's achievement of positive free cash flow. We believe this
action is appropriate in view of these important objectives."
Level 3 will provide additional information on its fourth quarter earnings
conference call. As a result of the planned reduction, Level 3 expects to incur
severance charges of approximately $20 million to $25 million in the fourth
quarter of 2004 or the first quarter of 2005.
Level 3's fourth-quarter earnings call will take place on Tuesday, February 8,
2005, at 10 a.m. Eastern time. The call will be broadcast live on Level 3's Web
site at www.Level3.com. Those unable to join the call via the Web can access the
call at 651-291-0900 and can also e-mail questions to
Investor.Relations@Level3.com
The call will be archived and available on the Level 3 Web site at
www.Level3.com; an audio replay will also be available until 11:59 p.m. Eastern
time on February 10, 2005, by dialing 320-365-3844 access code 765003. For
additional information, please call 720-888-2502.
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. 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. Its Web address is www.Level3.com.
The company offers information services through its subsidiaries, Software
Spectrum and (i)Structure. For additional information, visit their respective
Web sites at www.softwarespectrum.com and www.i-structure.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 offered by wholly
owned subsidiaries 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: 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.
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