Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF LEVEL 3 COMMUNICATIONS, INC.

The following Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2011 and the Unaudited Pro Forma Condensed Combined Statements of Operations for the nine months ended September 30, 2011 and the fiscal year ended December 31, 2010 of Level 3 Communications, Inc. (‘‘Level 3’’) have been prepared as if Level 3’s amalgamation with Global Crossing Limited (‘‘Global Crossing’’), and the assumptions and adjustments described in the accompanying notes herein had occurred on the dates specified below.

On October 4, 2011, a subsidiary of Level 3 completed the amalgamation with Global Crossing and became a wholly owned subsidiary of the Level 3 through a tax free, stock for stock transaction (the “Acquisition”). As a result of the amalgamation, (i) each issued and outstanding common share of Global Crossing was exchanged for 16 shares of Level 3 common stock, including the associated rights under the Level 3’s Rights Agreement with Wells Fargo Bank, N.A., as rights agent, (the “Amalgamation Consideration”) and (ii) each issued and outstanding share of Global Crossing’s 2% cumulative senior convertible preferred stock was exchanged for the Amalgamation Consideration, plus an amount equal to the aggregate accrued and unpaid dividends thereon.  In addition, (i) the issued and outstanding options to purchase Global Crossing common shares were exchanged into options to purchase Level 3’s common stock and (ii) the issued and outstanding restricted stock units covering Global Crossing common shares, to the extent applicable in accordance with their terms, vested and settled for Level 3’s common stock.

On October 4, 2011, Global Crossing had approximately 79 million common and preferred shares outstanding. Including approximately 4 million shares reserved for outstanding share based compensation awards(1), Global Crossing had approximately 83 million common and preferred shares outstanding at October 4, 2011.  On the date of completion of the Acquisition, all outstanding employee stock option awards of Global Crossing, all of which were fully vested, were exchanged for Level 3 options and all restricted stock units of Global Crossing vested and were converted into Level 3 shares in accordance with the terms of the amalgamation agreement.  The unaudited pro forma financial information includes aggregate consideration of approximately $3.4 billion for the Global Crossing acquisition, calculated as follows (in millions excluding per share amounts):

(1)  The number of outstanding Global Crossing shares reserved for outstanding shares based awards has been reduced by approximately 3 million shares to reflect the value of withholding taxes paid on behalf of award holders.  Level 3 paid, using cash, $81 million of withholding taxes due to various jurisdictions as a result of the consummation of the Acquisition.  The share figures do not include shares reserved for certain non-qualified stock options as the value of such options is not material to the aggregate consideration.

(2) Level 3 completed a 1 for 15 reverse stock split on October 19, 2011.

(3) Based on the closing stock price of Level 3 common stock as of October 3, 2011 ($1.41, which adjusted for stock split is $21.15).

After consideration of all applicable factors pursuant to the business combination accounting rules, the parties consider Level 3 to be the ‘‘accounting acquirer’’ for purposes of the preparation of the unaudited pro forma financial information included below because Level 3 issued its common stock to acquire Global Crossing (at a premium), the board of directors of the combined company is composed principally of former Level 3 directors and the executive management team of the combined company is largely comprised of former Level 3 executives, among other factors.

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The following unaudited pro forma financial information related to the Acquisition was prepared using the acquisition method of accounting for business combinations, and is based on the assumption that the Acquisition took place as of September 30, 2011 for the purpose of the Unaudited Pro Forma Condensed Combined Balance Sheet.  The Unaudited Pro Forma Condensed Combined Statements of Operations for the nine months ended September 30, 2011 and for the year ended December 31, 2010 are presented as if the Acquisition occurred on January 1, 2010. Unaudited pro forma adjustments, and the assumptions on which they are based, are described in the accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements, which are referred to in this section as the notes. Certain reclassifications have been made relative to Global Crossing’s historical financial statements in order to present them on a basis consistent with those of Level 3.

In accordance with the acquisition method of accounting, the actual consolidated financial statements of Level 3 will reflect the Acquisition only from and after the completion date of the Acquisition.  Level 3 has not yet completed a detailed analysis of the fair value of Global Crossing’s assets and liabilities and will finalize the purchase price allocation related to the Global Crossing acquisition no later than October 4, 2012. Thus, the provisional measurements of fair value reflected are subject to change once the valuations are completed. The final valuation will change the allocation of the purchase price, which could significantly affect the fair value assigned to the assets acquired and liabilities assumed, with a corresponding adjustment to goodwill.

Acquisition-related costs include transaction costs such as legal, accounting, valuation and other professional services. Total acquisition-related transaction costs expected to be incurred by Level 3 and Global Crossing are approximately $62 million, of which approximately $19 million had been incurred through September 30, 2011. The costs associated with these non-recurring activities do not represent ongoing costs of the fully integrated combined organization and are therefore not included in the Unaudited Pro Forma Condensed Combined Statements of Operations, but are included in the Unaudited Pro Forma Condensed Combined Balance Sheet as a reduction of cash and stockholders’ equity. Acquisition-related costs recognized in the historical financial statements of Level 3 and Global Crossing were approximately $19 million in the nine months ended September 30, 2011 and less than $1 million for the year ended December 31, 2010. These charges were expensed in accordance with the acquisition method of accounting, and were reflected primarily in selling, general and administrative expenses. Level 3 expects to incur additional acquisition-related expenses associated with the Acquisition including additional integration activities. As of September 30, 2011, Level 3 had incurred approximately $10 million in expenses associated with integration activities.  Based on current plans and information, Level 3 expects to incur approximately $200 to $225 million of integration costs associated with the Acquisition; however the ultimate costs incurred may vary from these estimates. For the purpose of the pro forma information, the estimated integration costs have been excluded as the timing and effects of these actions are too uncertain to meet the criteria for unaudited pro forma adjustments.

The unaudited pro forma information presented below has been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission. The Unaudited Pro Forma Condensed Combined Financial Statements are not intended to represent or be indicative of the consolidated results of operations or financial position of Level 3 that would have been reported had the Acquisition been completed as of the dates presented, and should not be taken as representative of the future consolidated results of operations or financial position of Level 3. The Unaudited Pro Forma Condensed Combined Financial Statements do not reflect any operating efficiencies and cost savings that Level 3 may achieve with respect to combining the companies. Synergies have been excluded from consideration because they do not meet the criteria for unaudited pro forma adjustments.

Level 3 entered into certain transactions with Global Crossing prior to entering into the amalgamation agreement, whereby Level 3 received cash for communications services to be provided in the future which it accounted for as deferred revenue.  As a result of the Acquisition, Level 3 can no longer amortize this deferred revenue into earnings and accordingly, reduced the purchase price applied to the net assets acquired in the Acquisition by $75 million, the amount of the unamortized deferred revenue balance on September 30, 2011.

The Unaudited Pro Forma Condensed Combined Financial Statements should be read in conjunction with the historical consolidated financial statements and accompanying notes of Global Crossing incorporated by reference in this document, and of Level 3 included in its Annual Report on Form 10-K.

Level 3 sold all of the common stock of the holding company for its coal mining operations on November 14, 2011 and post-closing conditions were satisfied on November 23, 2011.  As a result of that sale transaction, the assets and liabilities associated with the coal mining business will be removed from Level 3’s balance sheet as of the closing of that sale.  The sale of its coal business was not a significant disposition, and has not been reflected in these pro forma financial statements as the impact to the condensed combined balance sheet and condensed combined statement of operations is not material.

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LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Balance Sheet at September 30, 2011

See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements.

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LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statement of Operations

For the twelve months ended December 31, 2010

See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements.

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LEVEL 3 COMMUNICATIONS, INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statement of Operations

For the nine months ended September 30, 2011

See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(1) Basis of Presentation

The accompanying Unaudited Pro Forma Condensed Combined Financial Statements are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Level 3 would have been had the Acquisition occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position.  The Unaudited Pro Forma Condensed Combined Financial Statements do not reflect cost savings, operating synergies or revenue enhancements anticipated to result from the Acquisition, the costs to integrate the operations of Level 3 and Global Crossing or the costs necessary to achieve these cost savings, operating synergies or revenue enhancements. The Unaudited Pro Forma Condensed Combined Financial Statements should be read in conjunction with the separate historical consolidated financial statements and accompanying notes of Global Crossing that are incorporated by reference in this Current Report on Form 8-K, and of Level 3 included in its Annual Report on Form 10-K. Certain reclassifications have been made to the historical presentation of Global Crossing’s financial statements to conform to the presentation used in the Unaudited Pro Forma Condensed Combined Balance Sheet and relate primarily to accrued payroll and employee benefits, accrued interest, other current liabilities, and capital lease obligations.  Certain reclassifications have been made to the historical presentation of Global Crossing’s financial statements to conform to the presentation used in the Unaudited Pro Forma Condensed Combined Statements of Operations primarily related to cost of revenue, selling, general and administrative expenses, loss on extinguishment of debt, and other income, net.

Level 3 sold all of the common stock of the holding company for its coal mining operations on November 14, 2011 and post-closing conditions were satisfied on November 23, 2011.  As a result of that sale transaction, the assets and liabilities associated with the coal mining business will be removed from Level 3’s balance sheet as of the closing of that sale.  The sale of its coal business was not a significant disposition, and has not been reflected in these pro forma financial statements as the impact to the condensed combined balance sheet and condensed combined statement of operations is not material.

The following unaudited pro forma adjustments have been reflected in the Unaudited Pro Forma Condensed Combined Financial Statements. These adjustments give effect to pro forma events that are (i) directly attributable to the Acquisition, (ii) factually supportable and (iii) with respect to the condensed combined statements of operations, expected to have a continuing impact on the combined company.  As of the date of this Current Report on Form 8-K, Level 3 has not completed the detailed valuation studies necessary to arrive at the required estimates of the fair market value of Global Crossing’s assets to be acquired and liabilities to be assumed and the related allocations of purchase price, nor has it identified to date, any material adjustments necessary to conform Global Crossing’s accounting policies to Level 3’s accounting policies. However, as indicated in Note 2 to the Unaudited Pro Forma Condensed Combined Financial Statements, Level 3 has made certain adjustments to the September 30, 2011 historical book values of Global Crossing’s assets and liabilities to reflect certain preliminary estimates of the fair values necessary to reflect adjustments required by the application of the acquisition method of accounting for business combinations.  Any excess purchase price over the historical book values of Global Crossing’s net assets, as adjusted to reflect estimated fair values, has been recorded as goodwill. Actual results will differ from these Unaudited Pro Forma Condensed Combined Financial Statements once Level 3 has completed the valuation studies necessary to finalize the required purchase price allocations based on the tangible and intangible assets and liabilities of Global Crossing at the completion of the Acquisition, and has finalized any necessary adjustments from conforming accounting policies and further classification changes.  The determination of the final purchase price allocations can be highly subjective and it is possible that other professionals applying reasonable judgment to the same facts and circumstances could develop and support a range of alternative estimated amounts.

Level 3 is still in the process of completing the detailed valuation studies and other analysis necessary to finalize the necessary purchase price allocation and identifying any related impact there may be on the Unaudited Pro Forma Condensed Combined Financial Statements.  There can be no assurance that the finalization of Level 3’s review will not result in material changes.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(2) Basis of Preliminary Purchase Price Allocation

The acquisition of Global Crossing has been accounted for in accordance with the acquisition method of accounting.  The following purchase price is based on the actual consideration paid by Level 3 and is allocated to Global Crossing’s tangible and intangible assets and liabilities based on their estimated fair value as of September 30, 2011. The final determination of the allocation of the purchase price will be based on the fair value of such assets and liabilities and will be determined no later than October 4, 2012. Such final determination of the purchase price allocation may be significantly different from the preliminary estimates used in these pro forma financial statements. Based on the closing price of Level 3’s common stock on October 3, 2011 and the cash consideration paid for withholding taxes, the total consideration distributed is approximately $2.0 billion.

Based upon a preliminary valuation, the total consideration (as calculated in the manner described above) was allocated as follows:

(1)           Includes $75 million adjustment for deferred revenue recorded on Level 3.

Upon completion of the final fair value assessment after the Acquisition, Level 3 anticipates that the ultimate purchase price allocation will differ from the preliminary assessment outlined above.  Any changes to the initial estimates of the fair value of the acquired assets and assumed liabilities will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill. The initial estimates of the fair value of deferred revenue of Level 3 are subject to change and it is possible that any subsequent adjustments may result in a gain or loss on the settlement of the associated agreements.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(2) Basis of Preliminary Purchase Price Allocation (Continued)

The guidance related to business combinations outlines the methodologies for calculating acquisition price and for determining fair values. It also requires that all transaction and restructuring costs related to business combinations be expensed as incurred, and it requires that changes in deferred tax asset valuation allowances and liabilities for tax uncertainties subsequent to the acquisition date that do not meet certain re-measurement criteria be recorded in the statement of operations.  Incremental acquisition-related transaction costs expected to be incurred by Level 3 and Global Crossing after September 30, 2011 are estimated to be approximately $43 million and as they are non-recurring, are reflected only in the Unaudited Pro Forma Condensed Combined Balance Sheet as a reduction of cash and stockholders’ equity.

The Unaudited Pro Forma Condensed Combined Financial Information does not reflect ongoing cost savings, operating synergies or revenue enhancements that Level 3 expects to achieve as a result of the Acquisition, the costs to integrate the operations of Level 3 and Global Crossing, or the costs necessary to achieve these cost savings operating synergies or revenue enhancements.  The Acquisition is expected to create annualized operating cost synergies and capital expenditure savings.  Level 3 expects to recognize the operating cost savings from network expense savings and operating expense savings, primarily from the reduction in back office areas, public company costs, supplier savings, management overlap and the combination of network platforms.  The synergy and cost savings estimates are forward-looking statements and are qualified by reference to the important disclosures set forth under “Cautionary Factors That May Affect Future Results” and “Risk Factors” in the Level 3 Annual Report Form 10-K for the year ended December 31, 2010, as those important disclosures have been updated in subsequent filings made by Level 3 with the Securities and Exchange Commission.  Level 3 cannot assure you that these estimated synergies or cost savings will be achieved.  Level 3 cannot assure you that these estimated synergies or cost savings will be achieved.

(3) Accounting Policies

Upon completion of the Acquisition, Level 3 will continue its review of Global Crossing’s accounting policies. As a result of that review, Level 3 may identify differences between the accounting policies of the two companies that, when conformed, could have a material impact on the combined financial statements. At this time, Level 3 is not aware of any differences that would have a material impact on the combined financial statements. The Unaudited Pro Forma Condensed Combined Financial Statements do not assume any differences in accounting policies.

(4) Pro Forma Adjustments

(a)                       Adjustment to record the cash received from acquisition-related financing discussed further below, net of payments,  which was approximately $1,644 million and were assumed to be made concurrent with or before completion of the Acquisition including $14 million of fees associated with the Tranche B II Term Loan, $32 million of fees associated with the 8.125% Senior Notes, $14 million of commitment fees attributable to the unused bridge facility, $43 million for additional estimated transaction costs incurred by Level 3 and Global Crossing, $1,517 million to retire Global Crossing’s short term and long term debt (including a $159 million prepayment fee associated with the change of control premium) excluding capital lease and vendor financing obligations, and $24 million of accrued interest.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(4)  Pro Forma Adjustments (Continued)

See note (i), below, regarding the cash effect of employee-related tax withholding obligations in connection with the vesting of Global Crossing restricted stock unit awards as a result of the Acquisition.

(b)                      Level 3, through its indirect wholly owned subsidiary, Level 3 Escrow, Inc., issued $600 million of 8.125% Senior Notes due 2019 (“Initially Issued 8.125% Senior Notes”) in June 2011 in a private offering.  Level 3 subsequently issued, through Level 3 Escrow, Inc., an additional $600 million of 8.125% Senior Notes (“Additional 8.125% Senior Notes”) in a separate private offering in July 2011. The gross proceeds from these offerings and $54 million of expected interest obligations were placed in a segregated escrow account as of September 30, 2011.  The restrictions on the proceeds from these offerings and the accrued interest obligations lapsed upon closing of the Acquisition.  In addition, Level 3 Financing increased the borrowings under its existing senior secured facility through the creation of a new $650 million Tranche B II Term Loan (“Tranche B II Term Loan”).

The net proceeds of Level 3 Financing’s Tranche B II Term Loan in an aggregate amount of $650 million were used to consummate the Acquisition, to refinance certain existing indebtedness of Global Crossing in connection with the consummation of the Acquisition and for general corporate purposes.  In addition, the $1.2 billion of proceeds from the initial and additional issuance of 8.125% Senior Notes due 2019 in June and July 2011 by Level 3, through an indirect wholly owned subsidiary, were deposited into an escrow account.  On October 4, 2011, following the consummation of the Acquisition and the satisfaction of certain escrow conditions, the 8.125% Senior Notes were assumed by Level 3 Financing (the “Notes Assumption”), and the funds were released from the escrow account.  The net proceeds from the 8.125% Senior Notes were used to refinance certain existing indebtedness of Global Crossing in connection with the closing of the Acquisition and for general corporate purposes.

As a result of the Acquisition, Level 3 issued approximately 88.53 million shares (as adjusted for the 1 for 15 reverse stock split completed on October 19, 2011) of Level 3 common stock to former holders of Global Crossing common shares and Global Crossing’s 2% cumulative senior convertible preferred stock, and Level 3 redeemed and discharged approximately $1.35 billion of Global Crossing’s outstanding consolidated debt. Approximately $430 million of Global Crossing (UK) Finance PLC Senior Secured notes due 2014 were redeemed on November 3, 2011 at the current redemption premiums outlined in its indenture dated December 23, 2004.  The entire aggregate principal amount of the $750 million of Global Crossing Limited’s

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(4)     Pro Forma Adjustments (Continued)

outstanding 12% senior notes due 2015 and all of the outstanding $150 million of 9% senior notes due 2019 were redeemed in early November 2011. Of the outstanding principal of each of the Global Crossing Limited senior notes, 35 percent were first redeemed on November 3, 2011 as a result of a qualified “Equity Offering” (as defined under the indentures relating to each issue of the Global Crossing Limited senior notes) to its new corporate parent. The remaining 65 percent of the outstanding principal of each issue of the Global Crossing senior notes were redeemed subsequently on November 4, 2011 at “make-whole” prices calculated using the rate of the comparable U.S. Treasury security plus 50 basis points.  The shares of Global Crossing Common Stock, which previously traded under the symbol “GLBC,” ceased trading on the NASDAQ Global Select Market (“NASDAQ”) before the open of trading on October 4, 2011 and were delisted from NASDAQ as of October 5, 2011.

The Tranche B II Term Loan, the Initially Issued 8.125% Senior Notes and the Additional 8.125% Senior Notes have been issued by Level 3 Financing or one of its subsidiaries.  The Tranche B II Term Loan is guaranteed and secured by the same entities that currently secure and guarantee its existing term loans and all the 8.125% Senior Notes will be guaranteed by the same entities that guarantee Level 3 Financing’s existing notes.

The adjustments to account for these financing activities are as follows:

For pro forma purposes, Level 3 assumes that all Global Crossing debt, except for capital lease and vendor financing obligations, has been replaced with the $1,200 million of 8.125% Senior Notes and $650 million of the Tranche B II Term Loan.  Level 3 estimates a decrease in interest expense of approximately $23 million in 2010 and a decrease of approximately $14 million in the first nine months of 2011 associated with the incremental debt Level 3 issued in connection with the Acquisition after retiring Global Crossing’s existing debt.  The change in interest expense for such periods is based on the $650 million Tranche B II Term Loan, which will accrue interest at LIBOR + 4.25% (with a LIBOR floor of 1.5%) and was priced to investors at 99% of its principal amount with a 7 year maturity,  $600 million in Initially Issued 8.125% Senior Notes which will bear interest at 8.125% and were priced to investors at 99.264% of their principal amount and mature in 8 years, and the additional $600 million

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(4)      Pro Forma Adjustments (Continued)

of 8.125% Senior Notes which were priced at 98.545% of their principal amount.  For the purpose of the Unaudited Pro Forma Condensed Combined Statement of Operations, Level 3 used a rate of 5.75% based on a LIBOR floor of 1.5% included in the terms of the Tranche B II Term Loan.  For the purposes of the Unaudited Pro Forma Condensed Combined Statements of Operations, it has been assumed that Level 3 borrowed the $650 million under the Tranche B II Term Loan and issued all the 8.125% Senior Notes and therefore incurred interest expense of approximately $144 million in 2010 and $108 million in the first nine months of 2011. This interest expense was offset by the elimination of Global Crossing’s interest expense due to the retirement of Global Crossings’ average outstanding debt of $1,336 million for the year ended December 31, 2010 and $1,343 million for the nine months ended September 30, 2011, which corresponds to $167 million in interest expense in 2010 and $122 million in the first nine months of 2011.

Based on the LIBO Rate of 0.38% on October 3, 2011, an increase or decrease of 1% from the rate assumed on the Tranche B II Term Loan would not change the pro forma interest expense reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations for the twelve months ended December 31, 2010 or the first nine months of 2011 given the LIBOR floor of 1.5%.

Included in interest expense is additional interest expense of approximately $9 million for the twelve months ended December 31, 2010 and $7 million for the first nine months of 2011 for the amortization of debt issuance costs and issuance discounts associated with the Tranche B II Term Loan, the Initially Issued 8.125% Senior Notes and the $600 million of Additional 8.125% Senior Notes that Level 3 has assumed for purposes of these Unaudited Pro Forma Condensed Combined Financial Statements will be issued to finance the total consideration used to replace all of Global Crossing’s debt, excluding capital lease and vendor financing obligations.  Debt issuance costs associated with the three aforementioned debt and loan facilities were assumed to be approximately $46 million ($14 million of costs associated with the Tranche B II Term Loan amortized over 7 years and $32 million associated with the 8.125% Senior Notes amortized over 8 years).  The Unaudited Pro Forma Condensed Combined Balance Sheet also includes an adjustment to reduce other assets by $33 million for the elimination of net deferred financing fees upon retirement of Global Crossing’s existing debt.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(4)      Pro Forma Adjustments (Continued)

(c)                 Adjustment to remove the Level 3 deferred revenue attributable to Global Crossing contracts existing prior to the Acquisition.

Any subsequent adjustments of the fair value of deferred revenue may result in a gain or loss on the settlement of the associated agreements.

(d)                 Adjustments to reflect the components of the preliminary estimates of the fair value and useful lives of assets acquired by Level 3 at the completion of the Acquisition.

The preliminary estimates of the fair value assigned to property, plant and equipment reflects appreciation from Global Crossing’s discounted historical cost basis resulting from fresh start accounting adjustments it recorded during 2004 and 2005. Adjustments to reflect fair values were estimated by Level 3 management based on a market approach, considering factors such as network capacity utilization, dark fiber, and estimated useful lives, amongst others.

As of the effective date of the Acquisition, identifiable intangible assets are required to be measured at fair value and these acquired identifiable intangible assets could include assets that are not intended to be used or sold or that are intended to be used in a manner other than their highest and best use. For purposes of these Unaudited Pro Forma Condensed Combined Financial Statements, it is assumed that all identifiable intangible assets will be used and that all assets will be used in a manner that represents the highest and best use of those assets, but it is not assumed that any synergies will be achieved.  The consideration of synergies has been excluded because they do not meet the criteria for these pro forma adjustments. For purposes of the preliminary allocation, Level 3 has estimated a fair value for Global Crossing’s intangible assets related to trademark and trade names and customer relationships based on the net present value of the projected income stream of those intangible assets. Goodwill, trademark and trade names are not amortized.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(4)        Pro Forma Adjustments (Continued)

The Unaudited Pro Forma Condensed Combined Statements of Operations have been adjusted to reflect the corresponding adjustments to Global Crossing’s acquired tangible and intangible assets.

A 10% change in the allocation between these acquired assets and goodwill would result in a change in annual depreciation and amortization expense of approximately $42 million in the first full year and would result in a split adjusted $0.21 per common share change in Level 3’s pro forma basic and diluted loss from continuing operations.

(e)                   Adjustment to record the differences between the estimated fair values and the historical carrying amounts of Global Crossing’s deferred revenues including the elimination of deferred revenue balances where no future performance obligation exists and deferred revenue attributable to Global Crossing contracts with Level 3 existing prior to the Acquisition.  Global Crossing had certain deferred revenues on its balance sheet associated with sales of capacity leases, prepaid services and installation activities as well as deferred installation costs included in other assets on its balance sheet.  These deferred balances arise from Global Crossing receiving up-front payments and incurring up-front costs while recognizing the related revenue and expense over the estimated life of the associated contract.  The estimated fair value of deferred revenue represents amounts equivalent to the estimated costs to complete plus an appropriate profit margin to fulfill the obligations assumed in the transaction. The estimated amounts presented for purposes of the Unaudited Pro Forma Condensed Combined Balance Sheet are based upon the deferred revenue and other asset balances of Global Crossing as of September 30, 2011.  Pro forma revenue reported for the periods ended December 31, 2010 and September 30, 2011 have not been reduced for the fair value adjustment of deferred revenue as the adjustment is non-recurring in nature.  Level 3 expects to reflect a fair value adjustment to reduce Global Crossing’s deferred revenue which it expects will cause revenue to be lowered by approximately $13 million in the three months ended December 31, 2011 and approximately $32 million for the year ended December 31, 2012.

(f)                     As of the completion date of the Acquisition, Level 3 will provide deferred taxes adjustments as part of the accounting for the Acquisition, primarily related to the estimated fair value adjustments for acquired intangibles due to Level 3’s net operating loss position.  Level 3 is still evaluating the deferred tax assets and deferred tax liabilities resulting from the Acquisition.  The final value of these assets and liabilities may vary significantly from the current estimates reflected in these pro forma financial statements.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(4)        Pro Forma Adjustments (Continued)

The pro forma adjustment to record the effect of deferred taxes and other adjustments was computed based on an estimated post-Acquisition effective tax rate of 39% as follows:

(g)                  Adjustment to eliminate the historical transactions between Level 3 and Global Crossing.  The elimination of intercompany revenue is higher than the cost of revenue elimination as Global Crossing accounted for certain transactions as capital transactions and no adjustment was included in depreciation due to the fair value adjustment on the related property, plant and equipment.

(h)                  Adjustment to eliminate the historical acquisition-related transaction costs incurred by Level 3 and Global Crossing, of which approximately $10 million had been incurred by Level 3 and approximately $9 million had been incurred by Global Crossing through September 30, 2011.

(i)                  Adjustment to reflect the elimination of Global Crossing’s common and preferred shares outstanding, net of the assumed issuance of common shares as a result of the Acquisition calculated by multiplying Global Crossing’s common and preferred shares outstanding by the pre-split exchange ratio of 16 Level 3 common shares per Global Crossing common and preferred share. Preferred stock dividends have been eliminated on the Unaudited Pro Forma Condensed Combined Statements of Operations.

The related adjustment to additional paid-in capital for the aforementioned changes in common and preferred stock is as follows:

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(4)        Pro Forma Adjustments (Continued)

Holders of Global Crossing’s outstanding restricted stock units and other stock-based awards, to the extent applicable in accordance with their terms, vested and settled for Level 3 common shares upon consummation of the Acquisition.  In lieu of issuing all the vested shares, Level 3 reduced the number of shares issued to the holders, and using cash on hand, remitted the withholding taxes directly to the applicable authorities.  In total, Level 3 paid approximately $81 million in payroll taxes for vested units and reduced the number of shares distributed to holders by 3.3 million shares (split adjusted), which represented the equivalent value of the taxes paid.

(j)                    Adjustment to eliminate Global Crossing’s accumulated other comprehensive loss.

(k)                   Adjustment to eliminate Global Crossing’s accumulated deficit, and to record estimated non-recurring acquisition costs of Level 3 and Global Crossing, as follows:

(l)                      As of December 31, 2010, Level 3 had net operating loss carry forwards of approximately $5.9 billion for U.S. federal income tax purposes.  Given the Level 3’s net loss position, income tax expense is primarily related to state and foreign income taxes and no adjustment for income taxes has been provided in the Unaudited Pro Forma Condensed Combined Statements of Operations.

Level 3 is still in the process of completing the detailed valuation studies and other analysis necessary to finalize the necessary adjustments related to income taxes, and related deferred tax assets and liabilities. There can be no assurance that the finalization of Level 3’s review will not result in material changes.

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