BROOMFIELD, COLORADO, March 1, 2001 - The following open letter to shareholders was released today by James Q. Crowe, CEO of Level 3 Communications, Inc. (Nasdaq:LVLT):
Dear Fellow Shareholder - During the past two years, I implemented a program of limited daily sales of Level 3 shares through an irrevocable trust. Each year I advised the company's shareholders in advance of those sales, stating that I was doing so to diversify my investments and to pay down personal debt. Today, I own approximately 9.8 million shares of Level 3 common stock, which still represents a substantial majority of all of my investments. During the next six months, I intend to continue this personal diversification program by arranging for the sale of 1 million Level 3 shares, again using an irrevocable trust. However, because of current volatility in the stock markets and the recent decline in Level 3's trading price, and because I believe that the market will ultimately reward Level 3's shareholders for their confidence in our business plan and prospects, this time the trustee will be instructed to choose appropriate financial institutions and enter into what are sometimes referred to as "pre-paid forward contracts."
A principal characteristic of this type of transaction is that the ultimate sale price that I will receive will be determined based upon Level 3's trading price at a predetermined future date. While this approach will provide me with less immediate cash than I would receive from outright sales, it will entitle me to a portion of any increase in Level 3's trading price as of the end of the contract term. The trustee will be instructed, subject to customary terms and conditions, to enter into a pre-paid forward contract each week that specifies the terms of the future sale of 40,000 Level 3 shares until contracts are executed with respect to all of the shares. While current SEC regulations generally require only that insiders disclose stock sales after the fact, I continue to believe that you, as owners of Level 3, are entitled to know in advance whether the person you have hired to run your business intends to sell any of his ownership interest and, if so, why he intends to do so.
As I have indicated each year, I believe that a program of limited, periodic and pre-arranged transactions is a fair way to achieve a reasonable balance between personal financial diversification and a clear and substantial continuing equity interest and commitment to the success of the company it is my privilege to lead, and that it helps to reduce any concerns that I might be selling at times when I have information that you don't have. I hope that by announcing my plans in advance, and by using a trustee with irrevocable instructions to execute this program, I am making it clear that my decision isn't based on my knowledge of some positive or negative current event or circumstance that you are unaware of. After this program has been completed, I expect that the value of my total Level 3 holdings will continue to represent a substantial majority of my personal holdings and reflects my continued confidence in the prospects of our company.
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.
