Level 3 Communications: A Long Idea Still Priced At An Attractive Discount To Fair Value


Level 3 Communications (NYSE:LVLT) is a global communications provider headquartered in Broomfield, Colorado, that provides communications services to enterprise, government and carrier customers in more than 60 countries around the world. Level 3 operates one of the world’s largest Internet backbones. LVLT and tw telecom (NASDAQ:TWTC) stockholders approved the acquisition of TWTC by LVLT on October 28, 2014. Level 3 reported fourth quarter 2014 results on Wednesday, Feb 4, 2015. This article is an update to our last article, “Level 3 Communications: A Long Idea At An Attractive Value” which is an in depth look at the company. We discussed the following topics in the last article and this article will update the topics as indicated below and not repeat ourselves for the topics we haven’t changed our view on:

  • Management Change – UNCHANGED
  • TWTC Acquisition – UNCHANGED
  • Financials (Pro-Forma) -UPDATED
  • Growth outlook (Pro-Forma) -UPDATED
  • Valuation (Pro-Forma) -UPDATED
  • Debt (Pro-Forma) -UPDATED
  • NOL’s ) -UPDATED
  • Competition – UNCHANGED
  • Open tax issues – UNCHANGED
  • Final thoughts -UPDATED


These numbers will differ from what LVLT reported in the earnings release. Why? These are complete pro-forma numbers. LVLT reported consolidated results which only included two months of TWTC results not the full quarter and the earnings release focused more on LVLT stand-alone results.

Top line growth is critical for the combined company and the core Enterprise business continues to show traction:
…Click here to continue to the full article…


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