Level 3 Reports First Quarter 2013 Results

                  Level 3 Reports First Quarter 2013 Results

  PR Newswire

  BROOMFIELD, Colorado, April 25, 2013

First Quarter 2013 Highlights

- Core Network Services revenue for the first quarter 2013 increased by 2.2
percent year-over-year, on a constant currency basis

- Enterprise Core Network Services revenue grew 6.8 percent year-over-year,
excluding UK Government revenue and on a constant currency basis

- Gross margin expanded to 60.1 percent in the first quarter 2013, up from
58.6 percent in the first quarter 2012

- Adjusted EBITDA grew to $386 million, up 18 percent year-over-year

BROOMFIELD, Colorado, April 25, 2013 /PRNewswire/ -- Level 3 Communications,
Inc. (NYSE: LVLT) reported total revenue of $1.577 billion for the first
quarter 2013, compared to $1.586 billion for the first quarter 2012. Total
revenue was $1.614 billion for the fourth quarter 2012.

(Logo: http://photos.prnewswire.com/prnh/20111004/LA77008LOGO )

For the first quarter 2013, the net loss was $0.36 per share, including $0.11
in foreign exchange losses in EMEA and Latin America, a $0.10 loss for the
devaluation of the Venezuelan Bolivar, and $0.02 in legal charges. Excluding
these items, the net loss for the first quarter 2013 was $0.13 per share. The
net loss for the first quarter 2012 was $0.37 per share excluding the effects
of the loss on extinguishment of debt. In total, the net loss for the first
quarter 2013 was $78 million, compared to a net loss of $138 million in the
first quarter 2012.

Adjusted EBITDA was $386 million in the first quarter 2013, compared to $327
million in the first quarter 2012. For the fourth quarter 2012, Adjusted
EBITDA was $407 million, which included a $27 million net benefit resulting
from a non-cash reduction in asset retirement obligations (ARO) partially
offset by severance and related charges.

"I am excited to be leading Level 3 at a time when we have a great opportunity
to expand our market position in the enterprise business," said Jeff Storey,
president and CEO of Level 3. "We intend to continue our focus on providing
outstanding service to our customers, and believe that will help us deliver
profitable revenue growth, margin expansion and free cash flow generation."

Financial Results

                               First Quarter   First Quarter   Fourth Quarter
Metric ($ in millions)                  2013            2012             2012
Core Network Services
Revenue                               $1,372          $1,350           $1,391
Wholesale Voice Services and
Other Revenue                           $205            $236             $223
Total Revenue                         $1,577          $1,586           $1,614
Adjusted EBITDA(1)                      $386            $327             $407
Capital Expenditures                    $169            $138             $198
Unlevered Cash Flow(1)                   $28             $14             $325
Free Cash Flow(1)                     ($162)          ($213)             $202
Gross Margin(1)                        60.1%           58.6%            59.4%
Adjusted EBITDA Margin(1)(2)           24.5%           20.6%            25.2%
Net Loss                                 $78            $138              $56
Net Loss Per Share                     $0.36           $0.66            $0.26
(1) See schedule of non-GAAP metrics for definition and reconciliation to
GAAP measures
(2) In the fourth quarter 2012, Adjusted EBITDA margin was 23.5% excluding
the $27 million net benefit resulting from the ARO adjustment, partially
offset by severance and related charges.

Revenue

                                                     Percent          Percent
                                      First   First  Change,  Fourth  Change,
Core Network Services (CNS) Revenue Quarter Quarter Constant Quarter Constant
                    ($ in millions)    2013    2012 Currency    2012 Currency
North America                          $967    $942       3%    $979     (1%)
Wholesale                              $372    $381     (2%)    $392     (5%)
Enterprise                             $595    $561       6%    $587       2%
EMEA                                   $223    $232     (4%)    $228     (1%)
Wholesale                               $89     $96     (8%)     $87       3%
Enterprise                              $97     $88      10%     $99     (2%)
UK Government                           $37     $48    (22%)     $42     (9%)
Latin America                          $182    $176       8%    $184     (2%)
Wholesale                               $40     $38       9%     $41     (4%)
Enterprise                             $142    $138       8%    $143     (1%)
Total CNS Revenue                    $1,372  $1,350       2%  $1,391     (1%)
Wholesale                              $501    $515     (3%)    $520     (4%)
Enterprise(1)                          $871    $835       5%    $871        -
(1) Includes EMEA UK Government

Core Network Services (CNS) CNS revenue was $1.372 billion in the first
quarter 2013, increasing approximately 2.2 percent year-over-year and
declining 1.3 percent quarter-over-quarter, both on a constant currency basis.

"In the first quarter, we saw the effects of the near-term revenue pressures
we cited last quarter, due to the typical reversal in seasonally strong fourth
quarter revenue and some known contract disconnects in North America and UK
Government," said Sunit Patel, CFO of Level 3. "Year-over-year, excluding UK
government revenue, total Enterprise CNS revenue grew 6.8 percent and total
CNS revenue grew 3.1 percent, both on a constant currency basis. Additionally,
our gross margin is now back above 60 percent for the first time since
acquiring Global Crossing."

Deferred Revenue The deferred revenue balance was $1.129 billion at the end of
the first quarter 2013, compared to $1.143 billion at the end of the first
quarter 2012. The deferred revenue balance was $1.138 billion at the end of
the fourth quarter 2012. Of the $9 million decline in the deferred revenue
balance between the first quarter 2013 and the fourth quarter 2012, $5 million
was a result of foreign exchange.

Cost of Revenue Cost of revenue was $629 million in the first quarter 2013,
compared to $657 million in the first quarter 2012. For the fourth quarter
2012, cost of revenue was $655 million.

Gross margin increased to 60.1 percent for the first quarter 2013, compared to
58.6 percent in the first quarter 2012. Gross margin was 59.4 percent for the
fourth quarter 2012.

Selling, General and Administrative Expenses (SG&A ) Excluding non-cash
compensation expense, SG&A expenses declined to $562 million in the first
quarter 2013, compared to $602 million in the first quarter 2012 and $579
million for the fourth quarter 2012, which excludes the $27 million net
benefit resulting from the ARO adjustment, partially offset by severance and
related charges. The reduction in expenses is primarily a result of headcount
synergies related to the actions we announced in the fourth quarter 2012.

Including non-cash compensation expense, SG&A expenses were $599 million for
the first quarter 2013, compared to $626 million for the first quarter 2012
and $612 million for the fourth quarter 2012 excluding the $27 million net
benefit resulting from the ARO adjustment, partially offset by severance and
related charges. Non-cash compensation expense was $37 million, $24 million
and $33 million for the first quarter 2013, first quarter 2012, and fourth
quarter 2012, respectively.

As part of the action taken appointing Jeff Storey CEO of Level 3 in April
2013, certain provisions in the employment agreement with James Crowe, the
company's outgoing CEO, were triggered. As a result, in the second quarter
2013 the company expects to incur $6 million in additional cash compensation
expenses and $17 million in non-cash compensation expenses related to the
vesting of certain long term incentive awards.

Adjusted EBITDA Adjusted EBITDA grew to $386 million for the first quarter
2013, compared to $327 million for the first quarter 2012. For the fourth
quarter 2012, Adjusted EBITDA was $380 million, excluding the $27 million net
benefit recognized in the fourth quarter.

Adjusted EBITDA margin increased to 24.5 percent for the first quarter 2013,
compared to 20.6 percent for the first quarter 2012. For the fourth quarter
2012, Adjusted EBITDA margin was 23.5 percent, excluding the $27 million net
benefit recognized in the fourth quarter.

Cash Flow and Liquidity During the first quarter 2013, Unlevered Cash Flow was
$28 million, compared to $14 million in the first quarter 2012 and $325
million for the fourth quarter 2012.

Free Cash Flow was negative $162 million for the first quarter 2013, compared
to negative $213 million in the first quarter 2012 and positive $202 million
for the fourth quarter 2012.

In January 2013, the company repaid the remaining $172 million of the 15%
Convertible Senior Notes, in full, at maturity.

Capital expenditures were $169 million for the first quarter 2013, compared to
$138 million for the first quarter 2012 and $198 million for the fourth
quarter 2012.

As of March 31, 2013, the company had cash and cash equivalents of
approximately $610 million.

Business Outlook "In the first quarter, CNS revenue declined as expected, due
to the loss of a few known contracts," said Patel. "As a result, churn was 1.6
percent this quarter, higher than our average from 2012 of 1.3 percent. We
expect churn to return to historical levels for the rest of the year.
Additionally, our sales teams had a strong start to the year, with 10 percent
year-over-year growth in signed CNS sales orders in the first quarter 2013.
Furthermore, our reported first quarter 2013 Adjusted EBITDA of $386 million
exceeded our outlook by $6 million.

"We are reiterating the guidance we provided on our fourth quarter 2012
earnings call. For the remainder of 2013, we generally expect sequential CNS
revenue growth to be stronger compared to 2012. We continue to expect low
double digit Adjusted EBITDA percentage growth for the full year 2013 compared
to the full year 2012. We expect to be Free Cash Flow positive for the full
year 2013, excluding payments related to our interest rate swap agreements.

"GAAP interest expense is expected to be approximately $665 million and net
cash interest is expected to be approximately $645 million for the full year
2013. Capital expenditures are expected to be approximately 12 percent of
total revenue for the full year 2013."

Conference Call and Web Site Information Level 3 will hold a conference call
to discuss the company's first quarter 2013 results today at 10 a.m. ET. The
conference call will be broadcast live on Level 3's Investor Relations website
at
http://investors.level3.com/investor-relations/presentations-and-events/default.aspx
. Additional information regarding the first quarter 2013 results, including
the presentation that management will review on the conference call, will be
available on Level 3's Investor Relations website. If you are unable to join
the call via the Web, the call can be accessed live at 1 877-283-5145 (U.S.
Domestic) or 1 312-281-1200 (International). Questions can also be sent to
Investor.Relations@Level3.com .

The call will be archived and available on Level 3's Investor Relations
website or can be accessed as an audio replay starting at 2 p.m. ET on Apr. 25
until midnight ET on July 24. The replay can be accessed by dialing 1
800-633-8284 (U.S. Domestic) or 1 402-977-9140 (International), conference
code 21653228.

For additional information, please call 720-888-2518.

About Level 3 Communications Level 3 Communications, Inc. (NYSE: LVLT)
provides local, national and global communications services to enterprise,
government and carrier customers. Level 3's comprehensive portfolio of secure,
managed solutions includes fiber and infrastructure solutions; IP-based voice
and data communications; wide-area Ethernet services; video and content
distribution; data center and cloud-based solutions. Level 3 serves customers
in more than 500 markets in 55 countries over a global services platform
anchored by owned fiber networks on three continents and connected by
extensive undersea facilities. For more information, please visit
www.level3.com

© Level 3 Communications, LLC. All Rights Reserved. Level 3, Level 3
Communications, Level (3) and the Level 3 Logo either registered service marks
or service marks of Level 3 Communications, LLC and/or one of its Affiliates
in the United States and/or other countries. Any other service names, product
names, company names or logos included herein are the trademarks or service
marks of their respective owners. Level 3 services are provided by
subsidiaries of Level 3 Communications, Inc.

Website Access to Company Information Level 3 maintains a corporate website at
www.level3.com , and you can find additional information about the company
through the Investors pages on that website at
http://investors.level3.com/investor-relations/default.aspx . Level 3 uses its
website as a channel of distribution of important information about the
company. Level 3 routinely posts financial and other important information
regarding the company and its business, financial condition and operations on
the Investor Relations web pages.

Visitors to the Investors Relations web pages can view and print copies of
Level 3's SEC filings, including periodic and current reports on Forms 10-K,
10-Q, 8-K, as soon as reasonably practicable after those filings are made with
the SEC.

Copies of the charters for each of the Audit, Compensation and Nominating and
Governance committees of Level 3's Board of Directors, its Corporate
Governance Guidelines, Code of Ethics, press releases and analysts and
investor conference presentations are all available through the Investor
Relations web pages.

Please note that the information contained on any of Level 3's web sites is
not incorporated by reference in, or considered to be a part of, any document
unless expressly incorporated by reference in that document.

Forward-Looking Statement

Some statements made in this press release are forward-looking in nature and
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
Level 3's control, which could cause actual events to differ materially from
those expressed or implied by the statements. Important factors that could
prevent Level 3 from achieving its stated goals include, but are not limited
to, the company's ability to: successfully integrate the Global Crossing
acquisition or otherwise realize the anticipated benefits thereof; manage
risks associated with continued uncertainty in the global economy; maintain
and increase traffic on its network; develop and maintain effective business
support systems; manage system and network failures or disruptions; avert the
breach of its network and computer system security measures; develop new
services that meet customer demands and generate acceptable margins; defend
intellectual property and proprietary rights; manage the future expansion or
adaptation of its network to remain competitive; manage continued or
accelerated decreases in market pricing for communications services; obtain
capacity for its network from other providers and interconnect its network
with other networks on favorable terms; attract and retain qualified
management and other personnel; successfully integrate future acquisitions;
effectively manage political, legal, regulatory, foreign currency and other
risks it is exposed to due to its substantial international operations;
mitigate its exposure to contingent liabilities; and meet all of the terms and
conditions of its 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.

Level 3 Communications:

Contact Information
Media:                      Investors:
Monica Martinez              Mark Stoutenberg
+1 720-888-3991              +1 720-888-2518
Monica.Martinez@Level3.com  Mark.Stoutenberg@Level3.com

Non-GAAP Metrics

Pursuant to Regulation G, the company is hereby providing definitions of
non-GAAP financial metrics and reconciliations to the most directly comparable
GAAP measures.

The following describes and reconciles those financial measures as reported
under accounting principles generally accepted in the United States (GAAP)
with those financial measures as adjusted by the items detailed below and
presented in the accompanying news release. These calculations are not
prepared in accordance with GAAP and should not be viewed as alternatives to
GAAP. In keeping with its historical financial reporting practices, the
company believes that the supplemental presentation of these calculations
provides meaningful non-GAAP financial measures to help investors understand
and compare business trends among different reporting periods on a consistent
basis.

In addition, measures referred to in the accompanying news release as being
calculated "on a constant currency basis" or "in constant currency terms" are
non-GAAP metrics intended to present the relevant information assuming a
constant exchange rate between the two periods being compared. Such metrics
are calculated by applying the currency exchange rates used in the preparation
of the prior period financial results to the subsequent period results.

Consolidated Revenue is defined as total revenue from the Consolidated
Statements of Operations.

Core Network Services Revenue includes revenue from colocation and datacenter
services, transport and fiber, IP and data services, and voice services (local
and enterprise).

Gross Margin ($) is defined as total revenue less cost of revenue from the
Consolidated Statements of Operations.

Gross Margin (%) is defined as gross margin ($) divided by total revenue.
Management believes that gross margin is a relevant metric to provide to
investors, as it is a metric that management uses to measure the margin
available to the company after it pays third party network services costs; in
essence, a measure of the efficiency of the company's network.

Adjusted EBITDA is defined as net income (loss) from the Consolidated
Statements of Operations before income taxes, total other income (expense),
non-cash impairment charges, depreciation and amortization and non-cash stock
compensation expense.

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by total revenue.

       Adjusted EBITDA Metric

              Q1 2013
           (in millions)
Net Loss                       ($78)
Income Tax Expense                14
Total Other Expense              219
Depreciation and Amortization    194
Non-Cash Stock Compensation       37
Adjusted EBITDA                 $386
Adjusted EBITDA Margin         24.5%
       Adjusted EBITDA Metric

              Q4 2012
           (in millions)
Net Loss                       ($56)
Income Tax Expense                13
Total Other Expense              231
Depreciation and Amortization    186
Non-Cash Stock Compensation       33
Adjusted EBITDA                 $407
Adjusted EBITDA Margin         25.2%
       Adjusted EBITDA Metric

              Q1 2012
           (in millions)
Net Loss                      ($138)
Income Tax Expense                14
Total Other Expense              240
Depreciation and Amortization    187
Non-Cash Stock Compensation       24
Adjusted EBITDA                 $327
Adjusted EBITDA Margin         20.6%

Management believes that Adjusted EBITDA and Adjusted EBITDA Margin are
relevant and useful metrics to provide to investors, as they are an important
part of the company's internal reporting and are key measures used by
Management to evaluate profitability and operating performance of the company
and to make resource allocation decisions. Management believes such measures
are especially important in a capital-intensive industry such as
telecommunications. Management also uses Adjusted EBITDA and Adjusted EBITDA
Margin to compare the company's performance to that of its competitors and to
eliminate certain non-cash and non-operating items in order to consistently
measure from period to period its ability to fund capital expenditures, fund
growth, service debt and determine bonuses. Adjusted EBITDA excludes non-cash
impairment charges and non-cash stock compensation expense because of the
non-cash nature of these items. Adjusted EBITDA also excludes interest income,
interest expense and income taxes because these items are associated with the
company's capitalization and tax structures. Adjusted EBITDA also excludes
depreciation and amortization expense because these non-cash expenses
primarily reflect the impact of historical capital investments, as opposed to
the cash impacts of capital expenditures made in recent periods, which may be
evaluated through cash flow measures. Adjusted EBITDA excludes the gain (or
loss) on extinguishment of debt and other, net because these items are not
related to the primary operations of the company.

There are limitations to using Adjusted EBITDA as a financial measure,
including the difficulty associated with comparing companies that use similar
performance measures whose calculations may differ from the company's
calculations. Additionally, this financial measure does not include certain
significant items such as interest income, interest expense, income taxes,
depreciation and amortization, non-cash impairment charges, non-cash stock
compensation expense, the gain (or loss) on extinguishment of debt and net
other income (expense). Adjusted EBITDA and Adjusted EBITDA Margin should not
be considered a substitute for other measures of financial performance
reported in accordance with GAAP.

Unlevered Cash Flow is defined as net cash provided by (used in) operating
activities less capital expenditures, plus cash interest paid and less
interest income all as disclosed in the Consolidated Statements of Cash Flows
or the Consolidated Statements of Operations. Management believes that
Unlevered Cash Flow is a relevant metric to provide to investors, as it is an
indicator of the operational strength and performance of the company and,
measured over time, provides management and investors with a sense of the
underlying business's growth pattern and ability to generate cash. Unlevered
Cash Flow excludes cash used for acquisitions and debt service and the impact
of exchange rate changes on cash and cash equivalents balances.

There are material limitations to using Unlevered Cash Flow to measure the
company's cash performance as it excludes certain material items such as
payments on and repurchases of long-term debt, interest income, cash interest
expense and cash used to fund acquisitions. Comparisons of Level 3's Unlevered
Cash Flow to that of some of its competitors may be of limited usefulness
since Level 3 does not currently pay a significant amount of income taxes due
to net operating losses, and therefore, generates higher cash flow than a
comparable business that does pay income taxes. Additionally, this financial
measure is subject to variability quarter over quarter as a result of the
timing of payments related to accounts receivable and accounts payable and
capital expenditures. Unlevered Cash Flow should not be used as a substitute
for net change in cash and cash equivalents in the Consolidated Statements of
Cash Flows.

Free Cash Flow is defined as net cash provided by (used in) operating
activities less capital expenditures as disclosed in the Consolidated
Statements of Cash Flows. Management believes that Free Cash Flow is a
relevant metric to provide to investors, as it is an indicator of the
company's ability to generate cash to service its debt. Free Cash Flow
excludes cash used for acquisitions, principal repayments and the impact of
exchange rate changes on cash and cash equivalents balances.

There are material limitations to using Free Cash Flow to measure the
company's performance as it excludes certain material items such as principal
payments on and repurchases of long-term debt and cash used to fund
acquisitions. Comparisons of Level 3's Free Cash Flow to that of some of its
competitors may be of limited usefulness since Level 3 does not currently pay
a significant amount of income taxes due to net operating losses, and
therefore, generates higher cash flow than a comparable business that does pay
income taxes. Additionally, this financial measure is subject to variability
quarter over quarter as a result of the timing of payments related to interest
expense, accounts receivable and accounts payable and capital expenditures.
Free Cash Flow should not be used as a substitute for net change in cash and
cash equivalents on the Consolidated Statements of Cash Flows.

Unlevered Cash Flow and Free Cash Flow
Three Months Ended March 31, 2013          Unlevered
($ in millions)                            Cash Flow  Free Cash Flow
Net Cash Provided by Operating Activities         $7              $7
Capital Expenditures                          ($169)          ($169)
Cash Interest Paid                              $190             N/A
Interest Income                                    -             N/A
Total                                            $28          ($162)

Unlevered Cash Flow and Free Cash Flow
Three Months Ended December 31, 2012       Unlevered
($ in millions)                            Cash Flow  Free Cash Flow
Net Cash Provided by Operating Activities       $400            $400
Capital Expenditures                          ($198)          ($198)
Cash Interest Paid                              $123             N/A
Interest Income                                    -             N/A
Total                                           $325          ($202)

Unlevered Cash Flow and Free Cash Flow
Three Months Ended March 31, 2012       Unlevered
($ in millions)                         Cash Flow  Free Cash Flow
Net CashUsed inOperating Activities       ($75)           ($75)
Capital Expenditures                       ($138)          ($138)
Cash Interest Paid                           $228             N/A
Interest Income                               (1)             N/A
Total                                         $14          ($213)

            Regional Revenue Distribution by
                        Channel
                                                       1Q13/            1Q13/
                                                       1Q12 %           4Q12 %
                                               1Q13/   Change   1Q13/   Change  1Q13
                                              1Q12 %  Constant 4Q12 %  Constant  %
            1Q12   2Q12   3Q12   4Q12   1Q13  Change  Currency Change  Currency CNS
Core
Network
Services
Revenue ($
in
millions)
North
America      $942   $956   $963   $979   $967    2.7%     2.7%  (1.2%)   (1.2%)  71%

Wholesale    $381   $382   $386   $392   $372  (2.4%)   (2.3%)  (5.1%)   (5.2%)  28%

Enterprise   $561   $574   $577   $587   $595    6.1%     6.0%    1.4%     1.5%  43%
EMEA         $232   $228   $223   $228   $223  (3.9%)   (3.8%)  (2.2%)   (1.4%)  16%

Wholesale     $96    $94    $87    $87    $89  (7.3%)   (7.7%)    2.3%     2.5%   6%

Enterprise    $88    $91    $94    $99    $97   10.2%    10.4%  (2.0%)   (1.7%)   7%
 UK
Government    $48    $43    $42    $42    $37 (22.9%)  (21.8%) (11.9%)   (8.8%)   3%
Latin
America      $176   $173   $179   $184   $182    3.4%     7.9%  (1.1%)   (1.9%)  13%

Wholesale     $38    $37    $40    $41    $40    5.3%     9.4%  (2.4%)   (4.4%)   3%

Enterprise   $138   $136   $139   $143   $142    2.9%     7.5%  (0.7%)   (1.2%)  10%
Total      $1,350 $1,357 $1,365 $1,391 $1,372    1.6%     2.2%  (1.4%)   (1.3%) 100%

Wholesale    $515   $513   $513   $520   $501  (2.7%)   (2.5%)  (3.7%)   (3.8%)  37%

Enterprise
(1)          $835   $844   $852   $871   $871    4.3%     5.1%      -%     0.2%  63%
Total CNS  $1,350 $1,357 $1,365 $1,391 $1,372    1.6%     2.2%  (1.4%)   (1.3%)
Wholesale
Voice
Services
and Other
Revenue      $236   $229   $225   $223   $205 (13.1%)  (13.4%)  (8.1%)   (8.1%)
Total
Revenue    $1,586 $1,586 $1,590 $1,614 $1,577  (0.6%)   (0.1%)  (2.3%)   (2.2%)
           (1) Includes EMEA UK Government Revenue.

                         Level 3 Communications Summary
                               Financial Results
                                                          1Q13/  1Q13/
                                                          1Q12 % 4Q12 % 1Q13
                       1Q12   2Q12   3Q12   4Q12   1Q13   Change Change % CNS
Core Network Services
Revenue ($ in
millions)
Colocation and
Datacenter Services      $138   $139   $139   $145   $142     3%   (2%)   11%
Transport and Fiber      $480   $485   $491   $494   $484     1%   (2%)   35%
IP and Data Services     $491   $497   $502   $512   $510     4%     -%   37%
Voice Services (local
and enterprise)          $241   $236   $233   $240   $236   (2%)   (2%)   17%
Total Core Network
Services               $1,350 $1,357 $1,365 $1,391 $1,372     2%   (1%)
Wholesale Voice
Services and Other       $236   $229   $225   $223   $205  (13%)   (8%)
Total Revenue          $1,586 $1,586 $1,590 $1,614 $1,577   (1%)   (2%)

Debt is defined as total gross debt, including capital leases from the
Consolidated Balance Sheet.

Net Debt to Last Twelve Months (LTM) Adjusted EBITDA Ratio is defined as debt,
reduced by cash and cash equivalents and divided by LTM Adjusted EBITDA.

  Level 3 Communications, Inc. and Consolidated Subsidiaries
  Net Debt to LTM Adjusted EBITDA ratio as of March 31, 2013
  (dollars in millions)
  Debt                                           $     8,591
  Cash and Cash Equivalents                            (610)
  Net Debt                                       $     7,981
  LTM Adjusted EBITDA                            $     1,518
  Net Debt to LTM Adjusted EBITDA Ratio                 5.3

                LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
                    Consolidated Statements of Operations
                                 (unaudited)
                                                 Three Months Ended
                                       March 31,  December 31,    March 31,
(dollars in millions, except per
share data)                                 2013          2012           2012
Revenue                                 $ 1,577   $   1,614   $   1,586
Costs and Expenses (exclusive of
depreciation andamortization shown
separately below):
 Cost of Revenue                           629           655            657
 Depreciation and Amortization             194           186            187
 Selling, General and
Administrative                               599           585            626
   Total Costs and Expenses            1,422         1,426          1,470
Operating Income                             155           188            116
Other Income (Expense):
 Interest income                             -             -              1
 Interest expense                        (169)         (175)          (189)
 Loss on extinguishment of debt,
net                                            -          (50)           (61)
 Other, net                               (50)           (6)              9
   Total Other Expense                 (219)         (231)          (240)
Loss Before Income Taxes                    (64)          (43)          (124)
Income Tax Expense                          (14)          (13)           (14)
Net Loss                                $  (78)   $   (56)  $    (138)
Basic and Diluted Net Loss per Share  $ (0.36)  $   (0.26)  $   (0.66)
Shares Used to Compute Basic and
Diluted Net Loss per Share (in
thousands)                               219,268       217,924        209,759

                LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
                         Consolidated Balance Sheets
                                 (unaudited)
                                   March 31,   December 31,      March 31,
(dollars in millions)                 2013         2012            2012
Assets
Current Assets:
                                                              $       
 Cash and cash equivalents         $   610 $      979             748
 Restricted cash and securities             7               8               8
 Receivables, less allowances for
 doubtful accounts                       731             714             683
 Other                                    167             141             164
Total Current Assets                    1,515           1,842           1,603
Property, Plant and Equipment, net      8,144           8,199           8,164
Restricted Cash and Securities             33              35              52
Goodwill                                2,557           2,565           2,497
Other Intangibles, net                    249             268             333
Other Assets                              384             398             425
                                                                    $    
Total Assets                         $ 12,882  $    13,307         13,074
Liabilities and Stockholders'
Equity
Current Liabilities:
                                                              $       
 Accounts payable                  $   730 $      779             724
 Current portion of long-term debt         38             216             227
 Accrued payroll and employee
 benefits                                 129             211             115
 Accrued interest                         179             209             165
 Current portion of deferred
 revenue                                  236             251             259
 Other                                    176             136             145
Total Current Liabilities               1,488           1,802           1,635
Long-Term Debt, less current
portion                                 8,508           8,516           8,199
Deferred Revenue, less current
portion                                   893             887             884
Other Liabilities                         885             931           1,047
Total Liabilities                    11,774          12,136          11,765
Stockholders' Equity                    1,108           1,171           1,309
Total Liabilities and                                               $    
Stockholders' Equity                 $ 12,882  $    13,307         13,074

                LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                                 (unaudited)
                                                 Three Months Ended
                                        March 31,  December 31,   March 31,
(dollars in millions)                        2013          2012          2012
Cash Flows from Operating Activities:
 Net loss                                $  (78)   $   (56)        ($138)
 Adjustments to reconcile net loss to
 net cash provided by (used in)
 operating activities:
  Depreciation and amortization           194           186           187
  Asset retirement obligation
 adjustment                                    -          (47)             -
  Non-cash compensation expense
 attributable to stock awards                 37            33            24
  Loss on extinguishment of debt,
 net                                           -            50            61
  Accretion of debt discount and
 amortization of debt issuance costs           9            10            10
  Accrued interest on long-term
 debt                                       (30)            42          (49)
  Deferred income taxes                     9           (8)             7
  Gain on sale of property, plant
 and equipment and other assets                -           (1)             -
  Other, net                               17           (7)             -
  Changes in working capital
 items:
  Receivables                     (29)            34          (26)
  Other current assets            (25)            23          (27)
  Payables                        (45)            60          (33)
  Deferred revenue                 (3)            35          (13)
  Other current liabilities       (49)            46          (78)
Net Cash Provided by (Used in)
Operating Activities                           7           400          (75)
Cash Flows from Investing
Activities:
 Capital expenditures                      (169)         (198)         (138)
 Decrease in restricted cash and
 securities, net                                3             5             1
 Proceeds from sale of property,
 plant and equipment and other assets           -             6             5
Net Cash Used in Investing Activities      (166)         (187)         (132)
Cash Flows from Financing
Activities:
 Long term debt borrowings, net of
 issuance costs                                -         1,187           880
 Payments on and repurchases of
 long-term debt                            (186)       (1,214)         (847)
 Proceeds from stock options
 exercised                                     -             -             1
Net Cash Provided by (Used in)
Financing Activities                        (186)          (27)            34
Effect of Exchange Rates on Cash and
Cash Equivalents                            (24)             -             3
Net Change in Cash and Cash
Equivalents                                (369)           186         (170)
Cash and Cash Equivalents at
Beginning of Period                          979           793           918
Cash and Cash Equivalents at End of
Period                                   $  610    $   979  $    748
Supplemental Disclosure of Cash Flow
Information:
 Cash interest paid                          $190          $123          $228

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