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Tuesday, December 27, 2005

Level 3 Communications (LVLT)

yahoo, sec, website

Ah yes, Level 3. The disappointment of many investors who wait patiently quarter after quarter for the eventual end of the fiber glut and hopefully the final death of the zombie telecoms before that. I see they've been trying to replace debt due in 2008 with notes due in 2010 to buy two more years of time. They got $690 million in early participation.

Other big news is that they bought WilTel for $370 million in cash, but a $100 million cash obligation, plus 115 million newly minted shares of Level 3, with some wiggle room to change the cash/stock ratio.

But the problem can be seen in their latest Q3 report. Communications revenue is still dropping. They lost $204 million in the quarter. They still have $893 million in cash and securities plus $408 million in long term securities (no idea what that is at this time). Cash flow from operations lost $30 million in 9 months and capex is another $241 million (9 months). Net borrowing produced $813 million.

They have about $1.3 billion in debt due in 2008. They've already pushed over half of that forward to 2010 (these guys have always been good at tap dancing to stay alive).
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