794323--2/27/2009--LEVEL_3_COMMUNICATIONS

related topics

{product, market, service}

{system, service, information}

{debt, indebtedness, cash}

{competitive, industry, competition}

{capital, credit, financial}

{regulation, government, change}

{acquisition, growth, future}

{stock, price, share}

{stock, price, operating}

{customer, product, revenue}

{cost, regulation, environmental}

{financial, litigation, operation}

{operation, natural, condition}

{condition, economic, financial}

{property, intellectual, protect}

{operation, international, foreign}

{provision, law, control}

{personnel, key, retain}

{control, financial, internal}

{tax, income, asset}

Risks Related to our Business Current uncertainty in the global financial markets and the global economy may negatively affect our financial results. Recent disruptions in the financial markets could affect our ability to obtain debt or equity financing or to refinance our existing indebtedness on reasonable terms (or at all), and have other adverse effects on us. Our financial condition and growth depends upon the successful integration of our acquired businesses. We may not be able to efficiently and effectively integrate acquired operations, and thus may not fully realize the anticipated benefits from such acquisitions. We need to continue to increase the volume of traffic on our network to become and/or remain profitable. Intellectual property and proprietary rights of others could prevent us from using necessary technology to provide our services or subject us to expensive intellectual property litigation. Our business requires the continued development of effective business support systems to implement customer orders and to provide and bill for services. Our revenue is concentrated in a limited number of customers. We may lose customers if we experience system failures that significantly disrupt the availability and quality of the services that we provide. System failures may also cause interruptions to service delivery and the completion of other corporate functions. There is no guarantee that we will be successful in increasing sales of our content distribution service offering. Failure to develop and introduce new services could affect our ability to compete in the industry. Rapid technological changes can lead to further competition. During our communications business operating history we have generated substantial net operating losses, and we expect to continue to generate net operating losses. The market prices for certain of our communications services have decreased in the past and may decrease in the future, resulting in lower revenue than we anticipate. We may be liable for the information that content owners or distributors distribute over our network. The need to obtain additional capacity for our network from other providers increases our costs. We may be unable to hire and retain sufficient qualified personnel; the loss of any of our key executive officers could adversely affect our business. We must obtain and maintain permits and rights-of-way to operate our network. Termination of relationships with key suppliers could cause delay and additional costs. AT T and Verizon may not provide us local access services at prices which allow us to effectively compete. We are subject to significant regulation that could change in an adverse manner. The laws in certain countries currently do not permit us to offer services directly in those countries. Potential regulation of Internet service providers in the United States could adversely affect our operations. The communications industry is highly competitive with participants that have greater resources and a greater number of existing customers. We may be unable to successfully identify, manage and assimilate future acquisitions, investments and strategic alliances, which could adversely affect our results of operations. Environmental liabilities from our historical operations could be material. Potential liabilities and claims arising from coal operations could be significant. If we are unable to comply with the restrictions and covenants in our debt agreements, there would be a default under the terms of these agreements, and this could result in an acceleration of payment of funds that have been borrowed. We have substantial debt, which may hinder our growth and put us at a competitive disadvantage. We may not be able to repay our existing debt; failure to do so or refinance the debt could prevent us from implementing our strategy and realizing anticipated profits. Restrictions and covenants in our debt agreements limit our ability to conduct our business and could prevent us from obtaining needed funds in the future. The unpredictability of our quarterly results may adversely affect the trading price of our common stock. If certain transactions occur with respect to our capital stock, we may be unable to fully utilize our net operating loss carryforwards to reduce our income taxes. Increased scrutiny of financial disclosure, particularly in the telecommunications industry in which we operate, could adversely affect investor confidence, and any restatement of earnings could increase litigation risks and limit our ability to access the capital markets. Terrorist attacks and other acts of violence or war may adversely affect the financial markets and our business. Our international operations and investments expose us to risks that could materially adversely affect the business. Additional issuances of equity securities by us would dilute the ownership of our existing stockholders. Anti-takeover provisions in our charter and by-laws could limit the share price and delay a change of management. If a large number of shares of our common stock is sold in the public market, the sales could reduce the trading price of our common stock and impede our ability to raise future capital. The market price of our common stock has been volatile and, in the future, the market price of our common stock may fluctuate substantially due to a variety of factors.

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794323--2/27/2009--LEVEL_3_COMMUNICATIONS_INC