Level 3 Reaffirms 2004 Business Outlook

Level 3 reported Q1 revenue of $899 million, compared to $988 million for Q4 2003. Communications revenue was $389 million versus $399 million for the previous quarter, and information services revenue was $494 million compared to the seasonally strong fourth quarter revenue of $565 million. The net loss for Q1 2004 increased to $147 million or $0.22 per share compared to a net loss for the previous quarter of $121 million or $0.18 per share. Included in the net loss for Q1 2004 was a $23 million gain on the sale of the company's remaining investment in Commonwealth Telephone Enterprises, Inc., or $0.03 per share. Included in the net loss for the previous quarter was a $37 million gain on extinguishment of debt and a $38 million tax benefit.



"Despite a challenging market environment, we are pleased with our market share gains and customer wins, including the government sector, as well as our improved operating margins in the first quarter," said James Q. Crowe, CEO of Level 3. "Consistent with the past few quarters, Level 3 continues to focus on launching new services and is gaining momentum in our addressable markets. We are encouraged by the initial response from our distribution partners and their customers, and expect to benefit from the continued migration of voice from traditional circuit-switched services to softswitch-based VoIP services."http://www.level3.comIn April 2004, Level 3 Communications acquired the wholesale dial access business of ICG Communications for approximately $35 million in cash. The business unit provides dial-up Internet access to America Online, EarthLink, MSN, United Online and other leading ISPs.