Level 3 Communications to Become Independent Corporation Kiewit Construction Group Changes Name to Peter Kiewit Sons', Inc.
Omaha, Nebraska, March 31, 1998 – Peter Kiewit Sons', Inc. (PKS) today announced the completion of the separation of its information services and communications company – Level 3 Communications, Inc. (formerly known as Kiewit Diversified Group Inc.) – and its core construction company – Kiewit Construction Group Inc. In connection with the separation, the construction group will assume the corporate name "Peter Kiewit Sons', Inc."
Board Approves Separation
The separation of the construction and communications companies follows a final vote by the PKS Board of Directors yesterday. Walter Scott, Jr., PKS's Chairman since 1979, will remain on the boards of directors of both companies and will serve as Chairman of Level 3 Communications, Inc., and Chairman Emeritus of Peter Kiewit Sons', Inc. James Q. Crowe will serve as President and CEO of Level 3. Kenneth E. Stinson will continue to serve as Chairman and CEO of the renamed construction company.
"This is an important day for our construction and communications companies," said Walter Scott. "It marks a new beginning for both as independent corporations, each with its own management, its own mission and its own clear focus."
Kiewit to Continue 114-Year Tradition of Excellence
"It's been an extraordinary year for our construction business," said Scott. "Thanks in large part to Ken Stinson's energy, enthusiasm and leadership, the group has just completed the most successful year in its history and it's poised for even greater accomplishments in the years ahead. I can think of no more qualified executive to lead our construction company into the next century and continue the traditions of safety, quality and customer service associated with the Kiewit name."
A 29-year Kiewit veteran, Stinson began his career as an engineer and worked his way up through a variety of on-site, district-level and management positions. "Peter Kiewit Sons', Inc. will retain its historical philosophy of broad-based employee ownership," said Stinson. "Today, over 1100 active employees are stockholders, and their equity has a book value in excess of $650 million. We have no long-term debt, virtually unlimited bonding capacity and an "A+" rating from Standard and Poor's. The separation will not affect our relationships with our customers, joint venture partners, subcontractors, suppliers or employees."
Level 3 Set To Lead Way For Fundamental Change In Communications
Commenting on the success of Level 3, Walter Scott said, "I'm extremely pleased with the rapid progress made by Level 3 in pursuit of its plan to be a significant force in the information services and communications industry. Jim Crowe and his management team have again demonstrated the leadership that built MFS Communications Company into one of the great success stories in American business. MFS was founded as part of the Kiewit Diversified Group and later grew into an independent corporation and an industry leader." Level 3 is designing and building an advanced fiber optic network across the U.S. – the first national communications network to use Internet technology end-to-end for both local and long distance service. This week the company announced that it would be leasing 8,300 miles of long distance network capacity from Frontier Corporation.
Level 3 will use Internet technology on this leased national network, which will enable the company to begin providing service and building a customer base while the company builds its own network. "Level 3 has shaped its strategy to build an Internet Protocol (IP) based network from the ground up because of a what we see as a fundamental technological shift that is occurring in the communications industry," said Jim Crowe, President and CEO of Level 3. "We believe this shift is as important as that from the telegraph to telephone or from mainframe to the personal computer. It is the shift from aging circuit switching to Internet packet switching. Along with a growing number of industry experts, we believe that networks based on Internet technology will, over time, become the preferred technology. The cost advantages are dramatic today, and will only increase as IP-based networks continue to rapidly improve."
O'Hara Named COO of Level 3 Separately, Crowe announced that Executive Vice President Kevin J. O'Hara was named Chief Operating Officer (COO) of Level 3 Communications. Additionally, O'Hara will assume the responsibilities of President and COO of Level 3's network subsidiary that is designing, building and managing the company's IP-based network.
About the New Peter Kiewit Sons', Inc.
Peter Kiewit Sons', Inc. is one of North America's largest and most respected construction organizations. Founded in Omaha in 1884, the employee-owned firm operates through a highly decentralized network of offices across North America. Kiewit's worldwide workforce includes approximately 3,000 salaried personnel and 11,000 craft workers. Kiewit people are currently working in 33 states in the U.S., five Canadian provinces and territories, the District of Columbia, Puerto Rico, the Philippines, Indonesia and Venezuela. Revenues for 1997 were $2.8 billion, and current backlog is $4.1 billion. Kiewit's Mining and Materials Group is expected to produce 17 million tons of coal and 25 million tons of construction materials during the current year. More information about Peter Kiewit Sons', Inc. can be found at their World Wide Web address, www.kiewit.com.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. Additional information concerning these and other important factors can be found within Level 3’s filings with the Securities and Exchange Commission. Statements in this press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
