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
Jennifer Daumler Sandra Curlander
720-888-3356 720-888-2501
Level 3 Completes Progress Acquisition
Level 3 Pays Total Consideration of 19,695,793 Shares of Level 3 Common Stock
and $68.5 Million in Cash
BROOMFIELD, Colo., March 20, 2006 -- Level 3 Communications, Inc. (Nasdaq:LVLT)
today announced that it has completed its acquisition of all of the membership
interests of Progress Telecom, LLC, a regional wholesale network services
company based in St. Petersburg, Florida. Progress Telecom, LLC was jointly
owned by Progress Energy, Inc. (NYSE: PGN) and Odyssey Telecorp, Inc.
Pursuant to the purchase agreement signed on January 25, 2006, Level 3 paid
total consideration of 19,695,793 unregistered shares of Level 3 Common
Stock and $68.5 million in cash. The purchase price remains subject to
adjustment for the working capital balance assumed by Level 3 as of the closing
date.
"We are pleased to have completed this transaction, which expands Level 3's
footprint in the southeastern region of the United States, where we have seen
strong demand for our services," said Kevin O'Hara, president and chief
operating officer of Level 3. "Progress Telecom's reputation for operational
excellence is consistent with the focus and reputation of Level 3. Because we
will be able to offer a broader set of services in more markets, we believe that
the completion of this transaction will enable us to expand our relationships
with certain large, key customers, particularly certain wireless and
international customers."
Progress Telecom's network spans 9,000 miles, includes 29 metro networks and
connects to international cable landings in South Florida and 31 mobile
switching centers in the southeast. Progress Telecom serves approximately 200
customers with a significant concentration of international and wireless carrier
customers.
"We are looking forward to working together as part of the Level 3 team," said
Ronald J. Mudry, president and chief executive officer of Progress Telecom. "We
believe our customers will benefit greatly from expanded access to Level 3's
international network and its broad suite of transport, IP and VoIP service
offerings."
"We believe there are a number of significant benefits to this transaction,
including lower access costs in the region and unique cross selling
opportunities that arise from the companies' similar service offerings and
customer bases, and complementary infrastructure," said O'Hara. "In addition,
while we expect to retain a significant local presence in the region, we believe
we will be able to realize cost savings by integrating certain operational and
corporate activities. We expect to begin most network related integration
efforts, once we have realized additional scale and efficiency through the
integration of WilTel, which we acquired in late 2005."
Pursuant to the agreement, Level 3 did not acquire certain assets and
liabilities related to Progress Telecom's wireless tower attachment business and
its interests in affiliates focused on providing distributed antennae systems
and tower backhaul services to wireless providers. Level 3 has commercial
services agreements in place to provide transport services and operation support
to these former Progress Telecom businesses, now operating as PT Access
Networks, and to cooperate with them on the development of complementary service
offerings to better serve the wireless carrier segment. Progress Telecom will
become a wholly owned subsidiary of Level 3; it will do business going forward
as Level 3 Communications.
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, through its cable and DSL partners. 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. Level 3 is an industry
leader in IP and VoIP services, which it provides to cable operators, ISPs,
carriers and others. Level 3's E-911 service offering includes both fixed
location and nomadic VoIP E-911 capabilities, supporting an FCC-compliant E-911
solution for interconnected VoIP providers. Its Web address is www.Level3.com.
The company offers information services through its subsidiary, Software
Spectrum, and fiber-optic and satellite video delivery solutions through its
subsidiary, Vyvx. For additional information, visit their respective Web sites
at www.softwarespectrum.com and www.vyvx.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 provided by a
wholly owned subsidiary 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: increasing the volume of traffic on Level 3's
network; developing new products and services that meet customer demands and
generate acceptable margins; successfully completing commercial testing of new
technology and information systems to support new products and services,
including voice transmission services; stabilizing or reducing the rate of price
compression on certain of our communications services; integrating strategic
acquisitions; attracting and retaining qualified management and other personnel;
ability to meet all of the terms and conditions of our debt obligations;
overcoming Software Spectrum's reliance on financial incentives, volume
discounts and marketing funds from software publishers; and reducing downward
pressure of Software Spectrum's margins as a result of the use of volume
licensing and maintenance agreements. 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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