Level 3 Communications – The Bad And The Good


This article lays out revenue growth (The Bad) and its effect on FCF, EBITDA and earnings (The Good). The article can be read without the notes at the end of the article. The notes are provided if the reader wants to delve into detail for a more in depth account.

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.

Top Line Growth (The Bad):

Is Level 3 Communication revenue falling short? The answer is partially in a 2014 article examining the acquisition of tw telecom. Data from a 2014 S-4 provided long-term financials prepared by Level 3 and tw Telecom as part of the due diligence in connection with the merger.

Projecting the future with precision is impossible so various outcomes should be examined. Two projections were given in the S-4:

  • Management Case; non-public historical financial and operating data prepared by management of Level 3 and tw telecom.
  • Sensitivity Case defined as unforeseen events, changes in technology or any number of events that may prove to be financial bumps in the road.

The following is a summary. This table is not in the filing but a compilation of data found in the filing then combined to produce pro-forma numbers along with our projections labeled “Model”: Click Here To Read The Full Article

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