Citing a modest improvement in new communications sales and revenue, Level 3 Communications reported communications Q4 2002 GAAP revenue of $273 million, versus $269 million for the fourth quarter 2001, and versus $274 million for the third quarter of 2002. Included in total communications GAAP revenue was $243 million of communications services revenue and $30 million attributable to reciprocal compensation revenue. Level 3 noted strength in its softswitch and IP services segments, as well as modest growth in new sales of transport services. Overall, Level 3 reported a net loss for the quarter of $313 million, or $0.73 per share.
Level 3 has completed its acquisition of substantially all of Genuity’s assets and operations. Level 3 paid $60 million in net cash consideration to Genuity and assumed certain long-term operating agreements. As part of the transaction, the company also paid $77 million in cash for prepaid network vendor services to be used by Level 3 during 2003. The company also expects to incur one-time integration costs of approximately $75 to $100 million during 2003. As a result of the Genuity acquisition, the company now expects to turn free cash flow positive during the second quarter of 2004.
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