Value To You

Customers

With this combination, we expect to be positioned as a stronger competitor in the marketplace, enhance value for customers and drive growth. This combination will:

 

  • Enhance our ability to deliver industry-leading capabilities and services over a global, world-class platform.
  • Enable enterprises to solve the growing demand for bandwidth, manage increasing complexity in communications and control the escalating threat environment.
  • Allow us to meet customers’ needs more effectively, through an enhanced network footprint and broader, more complementary range of services and solutions.
  • Provide an opportunity to further invest in broadband access for customers across platforms, enhancing broadband speed, enabling OTT video and changing the way customers interact with technology.
  • Build an enhanced customer experience, bringing technologies and capabilities to our customers more efficiently.

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Communities

Together, we will remain committed to strengthening and improving our communities:

 

  • The companies expect to leverage the charitable legacies of both companies to have an even greater impact on our communities.
  • Both companies have charitable histories.
    • CenturyLink provides financial, technological and volunteer resources to support its communities. The CenturyLink Clarke M. Williams Foundation funds several programs that support these efforts. CenturyLink’s Teachers and Technology Grants provide more than $1 million annually in classroom grants to help teachers in our local operating markets implement technology in their classrooms. CenturyLink offers Matching Time Grants and a match on its annual Employee Giving Campaign. In addition, CenturyLink’s annual Backpack Buddies Food Drive helps raise funds and awareness to fight hunger in communities. Since its start in 2009, CenturyLink’s employees, community members and $1 million annual Foundation match have provided the equivalent of more than 50 million pounds of food to food banks across the country.
    • Level 3 has provided more than $1 million of support to the communities where its employees live and work. Furthermore, Level 3 has engaged thousands of employees globally in volunteer activities, logging more than 13,000 volunteer hours in 2015. To supplement Level 3 Volunteers, the Level 3 Gives program provides funding to assist local community programs. Level 3 encourages employees to give in times of need through its matching program with the Red Cross for disaster relief initiatives. Additionally, Level 3 established the Level 3 Foundation in June 2015. The Foundation, a 501(c)(3) public charity, provides employees and community members the opportunity to share in Level 3’s commitment to giving back through financial contributions that support the philanthropic needs of their communities.

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Employees

This transaction is a natural fit for our two companies. Both CenturyLink and Level 3 have strong track records of integrating companies. Our experience positions us well to:

 

  • Combine two customer-focused organizations.
  • Unify our organization under a set of principles that serve as the foundation of how we conduct our business and support each other.
  • Drive workforce training for the future and potentially create jobs in the technology sector.
  • Provide additional growth and advancement opportunities for our employees.
  • Take advantage of our geographic diversity to engage a range of talented employees, and better serve our customers, by maintaining our corporate headquarters in Monroe, Louisana while keeping a significant presence in Colorado and the Denver metropolitan area.

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Shareholders

Clear benefits to CenturyLink and Level 3 shareholders:

 

  • Strong Financial Profile: The combined company is expected to have improved adjusted EBITDA margins, revenue growth and pro forma net leverage of less than 3.7x at close, including run-rate synergies. The combined company will benefit from Level 3’s nearly $10 billion of net operating losses (“NOLs”). These NOLs will substantially reduce the combined company’s net cash tax expense over the next several years, positioning it to generate substantial free cash flow.
  • Improved Dividend Coverage: The improved free cash flow will enhance the combined company’s financial flexibility and significantly lower its payout ratio. CenturyLink expects to maintain its annual dividend of $2.16 per share.
  • Significantly Accretive to Free Cash Flow with Multiple Opportunities for Growth: CenturyLink expects the transaction to be accretive to free cash flow in the first full year following the close of the transaction and significantly accretive on an annual run-rate basis thereafter.
  • Substantial Run-Rate Synergies: Both companies have proven ability to integrate and meet or exceed synergy targets. The increased scale afforded by the combined company is expected to generate $975 million of annual run-rate cash synergies, primarily from systems consolidation, increased operational and capital efficiencies and the elimination of duplicative functions.

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