KIEWIT SHAREHOLDERS NOTIFIED THAT TAX-FREE SPIN-OFF OF LEVEL 3 EXPECTED TO BE COMPLETED ON OR ABOUT MARCH 31, 1998
OMAHA, NEBRASKA, March 2, 1998 – Level 3 Communications, Inc. today announced that its parent company, Peter Kiewit Sons', Inc. has sent the attached letter to its stockholders.
February 27, 1998
Dear Stockholder:
Last December, the Company's stockholders approved a series of proposals related to the proposed separation of the Company's construction and diversified businesses, to be accomplished through the exchange of the common stock ("New PKS Stock") of a new construction holding company, PKS Holdings, Inc., for the Company's Class C Stock (the Exchange). The Exchange was described in the Company's Proxy Statement/Joint Prospectus dated November 10, 1997. The Proxy Statement also described a proposed distribution of Class R Stock by the Company to Class C Stockholders, which was recorded on the Company's books on January 2, 1998.
Completion of the Exchange is subject to the receipt by the Company of an IRS ruling or an opinion of tax counsel to the effect that (i) the Exchange will be tax-free for United States federal income tax purposes, and (ii) the distribution of shares of Class R Stock will be tax-free (the "Tax Condition"). The Company expects to receive an IRS ruling that the Exchange will be tax-free, and an opinion of its tax counsel that the distribution of shares of Class R Stock will be tax-free in the next few weeks.
Accordingly, the Company shall complete the Exchange and the separation of the construction and diversified businesses on March 31, 1998, unless the Tax Condition is not satisfied on or before that date (the date of such exchange being the "Exchange Date"), in which case, the Company shall complete the Exchange and the separation of the construction and diversified businesses on such later date as shall be set forth in a subsequent notice given at least 30 days prior to such later date. Pursuant to the Exchange, each holder of Class C Stock will receive one share of New PKS Stock for each share of Class C Stock held as of the date of the Exchange.
Promptly after the Exchange, PKS Holdings, Inc. will be renamed "Peter Kiewit Sons', Inc.", and Peter Kiewit Sons', Inc. will be renamed "Level 3 Communications, Inc." After the Exchange Date, Class C Stockholders will not receive dividends on Class C Stock; dividends will be paid instead on New PKS Stock. Class C Stockholders will be entitled to receive certificates for the New PKS Stock only upon surrender of the stock certificates for the Class C Stock being exchanged for the New PKS Stock.
Instructions for surrender of Class C stock certificates to the Company's Stock Registrar will be mailed within the next two weeks. The Exchange will not affect outstanding Class D Stock. Each holder of Class D Stock will retain all Class D Stock held prior to the Exchange. After the Exchange, Class D Stock automatically will become the common stock of Level 3 Communications, Inc.; no new certificates will be issued for Level 3 Communications, Inc. common stock.
Please call Doug Obermier, the Company's stock registrar, at 402- 271-2977 if you have any questions about the Exchange.
Very truly yours,
(Signed) Walter Scott, Jr. Chairman and President
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. 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 press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
