Level 3 Communications, Inc. (LVLT) January 05, 2012 2:10 pm ET Executives Sunit S. Patel - Chief Financial Officer and Executive Vice President Analysts Unknown Analyst Michael Rollins - Citigroup Inc, Research Division Presentation Michael Rollins - Citigroup Inc, Research Division
Michael Rollins - Citigroup Inc, Research DivisionAs we think about putting the 2 companies together, the companies operated differently in some respect, the ways in which Global Crossing may have sold capacity for cash up front, sometimes it's different than you, the way you may have done compensation, the way that they recognize some revenue versus you. Are there some things that investors just should be thinking through because we haven't really seen the third quarter pro forma by segment in all the details. So are there certain things that you would want to throw out there just to educate folks on what to expect? Sunit S. Patel Sure. Yes, I mean, I think that the good news is for both companies, any kind of upfront cash, revenues as a percent of the overall review base was small, probably a little smaller for Level 3, but you're talking a few percentage points. And I think that Global Crossing had more every quarter, onetime type of revenue that came through early contract terminations, those sorts of things, and Level 3 really didn't operate that way. So there was some difference there. In the scheme of a company of our size, $6.5 billion of revenues, roughly 30,000 customers, it's not really much. It's noise in the scheme of things, I would say. I don't think the accounting policies were that different in the -- to make any difference in the ways the number's going forward. Having said that, obviously, whenever you put the 2 companies together, you have an initial intercompany eliminations because everyone does business with each other in telecom. There's some purchase price, accounting adjustments. People have a flavor for that in terms of the second quarter pro forma that we published. But again, in the scheme of a $6.5 billion company, the adjustments are pretty small.
Michael Rollins - Citigroup Inc, Research DivisionHow should we think about the pace of integration from here? So as you've laid out your synergy target, some have wondered if that's certain, some have wondered how quickly you could accomplish it. What are your current thoughts on the confidence in the number and the timing over which you could recognize it? Read the rest of this transcript for free on seekingalpha.com