<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 23, 1998
REGISTRATION NO. 333-34627
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
------------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
PETER KIEWIT SONS', INC.
(FORMERLY KNOWN AS PKS HOLDINGS, INC.)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------------
<TABLE>
<S> <C> <C>
STATE OF DELAWARE 91-1842817 161,162
(State Or Other Jurisdiction Of (I.R.S. Employer Identification No.) (Primary Standard Industrial
Incorporation Or Organization) Classification Code Number)
</TABLE>
------------------------------
LEVEL 3 COMMUNICATIONS, INC.
(FORMERLY KNOWN AS PETER KIEWIT SONS', INC.)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
STATE OF DELAWARE 47-0210602 1221, 161, 4813, 7374
(State Or Other Jurisdiction Of (I.R.S. Employer Identification No.) (Primary Standard Industrial
Incorporation Or Organization) Classification Code Number)
</TABLE>
<TABLE>
<S> <C>
PETER KIEWIT SONS', INC. LEVEL 3 COMMUNICATIONS, INC.
1000 KIEWIT PLAZA 3555 Farnam Street
OMAHA, NEBRASKA 68131 OMAHA, NEBRASKA 68131
(402) 342-2052 (402) 536-3677
</TABLE>
(Address, Including Zip Code, And Telephone Number,
Including Area Code, Of Each Registrant's Principal Executive Offices)
------------------------------
<TABLE>
<S> <C>
TOBIN A. SCHROPP, ESQ. MATTHEW J. JOHNSON, ESQ.
PETER KIEWIT SONS', INC. LEVEL 3 COMMUNICATIONS, INC.
1000 KIEWIT PLAZA 1000 KIEWIT PLAZA
OMAHA, NEBRASKA 68131 OMAHA, NEBRASKA 68131
(402) 342-2052 (402) 536-3677
</TABLE>
(Name, Address, Including Zip Code, And Telephone Number, Including Area Code,
Of Each Registrant's Agent For Service)
COPIES TO:
JOHN S. D'ALIMONTE, ESQ.
WILLKIE FARR & GALLAGHER
787 SEVENTH AVENUE
153 EAST 53RD STREET
NEW YORK, NEW YORK 10019
(212) 821-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: Not applicable.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibits
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------------- ------------------------------------------------------------------------------- -----------------
<S> <C> <C>
2.1* Form of Separation Agreement between PKS Holdings and PKS
3.1* Restated Certificate of Incorporation of PKS (incorporated by reference to
Exhibit 3.1 to the PKS Annual Report on Form 10-K for the fiscal year ended
December 28, 1996 which incorporates by reference Exhibit 3.1 to the PKS Annual
Report on Form 10-K for the fiscal year ended December 28, 1991)
3.2* Amended and Restated By-laws of PKS (incorporated by reference to Exhibit 3.4
to the PKS Annual Report on Form 10-K for the fiscal year ended December 28,
1996 which incorporates by reference Exhibit 3.4 to the PKS Annual Report on
Form 10-K for the fiscal year ended December 26, 1992)
3.3* Form of Proposed Restated Certificate of Incorporation of PKS (included as
Appendix E-II to the Proxy Statement/Joint Prospectus contained herein)
3.4* Form of Proposed Amended and Restated By-laws of PKS
3.5* Certificate of Incorporation of PKS Holdings
3.6* By-laws of PKS Holdings
3.7* Form of Proposed Restated Certificate of Incorporation of PKS Holdings
(included as Appendix D to the Proxy Statement/Joint Prospectus contained
herein)
3.8* Form of Proposed Restated By-laws of PKS Holdings
4.1** Rights Agreement, dated as of May 29, 1998, between Level 3 Communications,
Inc. and Norwest Bank Minnesota, N.A., as Rights Agent
5* Opinion of Willkie Farr & Gallagher relating to legality of the PKS Holdings
Stock, the Class R Stock and the Diversified Holdings Stock issuable upon
conversion of the Class R Stock
8.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP relating to certain U.S.
income tax matters
8.2* Opinion of Blake, Cassels & Graydon relating to certain Canadian federal income
tax matters
8.3 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, dated March 31, 1998,
relating to certain U.S. income tax matters
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------------- ------------------------------------------------------------------------------- -----------------
<S> <C> <C>
8.4 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, dated June 12, 1998,
relating to certain U.S. income tax matters
15* Letter of Coopers & Lybrand L.L.P. relating to unaudited pro forma financial
information of PKS and Kiewit Construction and Mining Group
23.1* Consent of Coopers & Lybrand L.L.P. relating to PKS and PKS Holdings financial
statements
23.2* Consent of Willkie Farr & Gallagher (included in its opinion filed as Exhibit
5)
23.3* Consent of Gleacher NatWest, Inc.
23.4* Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in its opinions
filed as Exhibits 8.1, 8.3 and 8.4)
23.5* Consent of Blake, Cassels & Graydon (included in its opinion filed as Exhibit
8.2)
24* Powers of Attorney (included on the signature pages of the Registration
Statement as filed with the Commission on August 29, 1997)
99.2* Executive Engagement Agreement among James Q. Crowe, PKS and KDG
99.3* Consent of R. Douglas Bradbury
99.4* Consent of Robert E. Julian
99.5* Consent of David C. McCourt
99.6* Consent of Michael B. Yanney
</TABLE>
- ------------------------
* Previously Filed
** Incorporated by reference to Amendment No. 1 to Form 8-A of Level 3
Communications, Inc., dated June 10, 1998
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
Registrants has duly caused Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Omaha, Nebraska on September 1, 1998.
<TABLE>
<S> <C> <C> <C>
LEVEL 3 COMMUNICATIONS, INC. PETER KIEWIT SONS', INC.
(formerly known as Peter Kiewit Sons', Inc.) (formerly known as PKS Holdings, Inc.)
/s/ MATTHEW J. JOHNSON /s/ THOMAS C. STORTZ
By: By:
---------------------------------------- ----------------------------------------
Matthew J. Johnson Thomas C. Stortz
Vice President--Corporate Legal Director
</TABLE>
II-3
<PAGE>
LEVEL 3 COMMUNICATIONS, INC. DIRECTORS AND OFFICERS
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
* Chairman September 20, 1998
- ------------------------------
Walter Scott, Jr.
* Director, President and September 20, 1998
- ------------------------------ Chief Executive Officer
James Q. Crowe (principal executive
officer)
* Director September 20, 1998
- ------------------------------
William L. Grewcock
* Director September 20, 1998
- ------------------------------
Kenneth E. Stinson
/s/ R. DOUGLAS BRADBURY Director, Executive Vice September 20, 1998
- ------------------------------ President and Chief
R. Douglas Bradbury Financial Officer
(principal financial and
accounting officer)
* Director September 20, 1998
- ------------------------------
Richard R. Jaros
* Director September 20, 1998
- ------------------------------
Robert B. Daugherty
* Director September 20, 1998
- ------------------------------
Charles M. Harper
/s/ DAVID C. MCCOURT Director September 20, 1998
- ------------------------------
David C. McCourt
/s/ MICHAEL B. YANNEY Director September 20, 1998
- ------------------------------
Michael B. Yanney
/s/ ROBERT E. JULIAN Director September 20, 1998
- ------------------------------
Robert E. Julian
</TABLE>
Matthew J. Johnson, by signing his name below, signs this document on behalf
of each of the above-named persons specified by an asterisk (*), pursuant to a
power of attorney duly executed by such persons, filed with the Securities and
Exchange Commission in Registrants' Registration Statement on August 29, 1997.
<TABLE>
<C> <S> <C>
/s/ MATTHEW J. JOHNSON Attorney-in-fact
- ------------------------------
Matthew J. Johnson
</TABLE>
II-4
<PAGE>
PETER KIEWIT SONS', INC. DIRECTORS AND OFFICERS
Pursuant to the requirements of Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
* Director September 20, 1998
- ------------------------------
Walter Scott, Jr.
* Chairman, President, Chief September 20, 1998
- ------------------------------ Executive Officer and
Kenneth E. Stinson Director
* Executive Vice President September 20, 1998
- ------------------------------ and Director
Richard Geary
* Executive Vice President September 20, 1998
- ------------------------------ and Director
George B. Toll, Jr.
* Executive Vice President September 20, 1998
- ------------------------------ and Director
Bruce E. Grewcock
/s/ THOMAS C. STORTZ Vice President and September 20, 1998
- ------------------------------ Director
Thomas C. Stortz
* Director September 20, 1998
- ------------------------------
Richard W. Colf
* Director September 20, 1998
- ------------------------------
Tait P. Johnson
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
* Director September 20, 1998
- ------------------------------
Allan K. Kirkwood
* Director September 20, 1998
- ------------------------------
William L. Grewcock
* Director September 20, 1998
- ------------------------------
James Q. Crowe
* Director September 20, 1998
- ------------------------------
Peter Kiewit, Jr.
* Vice President and September 20, 1998
- ------------------------------ Treasurer (Principal
Kenneth Jantz Accounting Officer)
* Vice President (Principal September 20, 1998
- ------------------------------ Financial Officer)
Stephen A. Sharpe
</TABLE>
Thomas C. Stortz, by signing his name below, signs this document on behalf
of each of the above-named persons specified by an asterisk (*), pursuant to a
power of attorney duly executed by such persons, filed with the Securities and
Exchange Commission in Registrants' Registration Statement on August 29, 1997.
<TABLE>
<C> <S>
/s/ THOMAS C. STORTZ Attorney-in-fact
- --------------------------------------------
Thomas C. Stortz
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------------- ------------------------------------------------------------------------------- -----------------
<S> <C> <C>
2.1* Form of Separation Agreement between PKS Holdings and PKS
3.1* Restated Certificate of Incorporation of PKS (incorporated by reference to
Exhibit 3.1 to the PKS Annual Report on Form 10-K for the fiscal year ended
December 28, 1996 which incorporates by reference to Exhibit 3.1 to the PKS
Annual Report on Form 10-K for the fiscal year ended December 28, 1991)
3.2* Amended and Restated By-laws of PKS (incorporated by reference to Exhibit 3.4
to the PKS Annual Report on Form 10-K for the fiscal year ended December 28,
1996 which incorporates by reference to Exhibit 3.4 to the PKS Annual Report
on Form 10-K for the fiscal year ended December 26, 1992)
3.3* Form of Proposed Restated Certificate of Incorporation of PKS (included as
Appendix E-II to the Proxy Statement/Joint Prospectus contained herein)
3.4* Form of Proposed Amended and Restated By-laws of PKS
3.5* Certificate of Incorporation of PKS Holdings
3.6* By-laws of PKS Holdings
3.7* Form of Proposed Restated Certificate of Incorporation of PKS Holdings
(included as Appendix D to the Proxy Statement/Joint Prospectus contained
herein)
3.8* Form of Proposed Restated By-laws of PKS Holdings
4.1** Rights Agreement, dated as of May 29, 1998, between Level 3 Communications,
Inc. and Norwest Bank Minnesota, N.A., as Rights Agent
5* Opinion of Willkie Farr & Gallagher relating to legality of the PKS Holdings
Stock, the Class R Stock and the Diversified Holdings Stock issuable upon
conversion of the Class R Stock
8.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP relating to certain U.S.
income tax matters
8.2* Opinion of Blake, Cassels & Graydon relating to certain Canadian federal income
tax matters
8.3 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, dated March 31, 1998,
relating to certain U.S. income tax matters
8.4 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. dated June 12, 1998,
relating to certain U.S. income tax matters
15* Letter of Coopers & Lybrand L.L.P. relating to unaudited pro forma financial
information of PKS and Kiewit Construction and Mining Group
23.1* Consent of Coopers & Lybrand L.L.P. relating to PKS and PKS Holdings financial
statements
23.2* Consent of Willkie Farr & Gallagher (included in its opinion filed as Exhibit
5)
23.3* Consent of Gleacher NatWest, Inc.
23.4* Consents of Skadden, Arps, Slate, Meagher & Flom LLP (included in its opinions
filed as Exhibits 8.1, 8.3 and 8.4)
23.5* Consent of Blake, Cassels & Graydon (included in its opinion filed as Exhibit
8.2)
24* Powers of Attorney (included on the signature pages of the Registration
Statement as filed with the Commission on August 29, 1997)
99.2* Executive Engagement Agreement among James Q. Crowe, PKS and KDG
99.3* Consent of R. Douglas Bradbury
99.4* Consent of Robert E. Julian
99.5* Consent of David C. McCourt
99.6* Consent of Michael B. Yanney
</TABLE>
- ------------------------
* Previously Filed
** Incorporated by Reference to Amendment No. 1 to Form 8-A of Level 3
Communications, Inc., dated June 10, 1998
<PAGE>
ATTORNEY WORK PRODUCT
PRIVILEGED AND CONFIDENTIAL
March 31, 1998
Level 3 Communications, Inc.
3555 Farnam Street
Omaha, Nebraska 68131
Peter Kiewit Sons', Inc.
1000 Kiewit Plaza
Omaha, Nebraska 68131
Re: Certain United States Federal Income Tax
Consequences of the Separation of the Construction
Business from the Diversified Businesses
--------------------------------------------------
Gentlemen:
We have acted as tax counsel to Level 3 Communications, Inc. (formerly
Peter Kiewit Sons', Inc.), a Delaware corporation ("Distributing"), in
connection with the contemplated separation of its construction business (the
"Construction Business") from its information services and other diverse
businesses (the "Diversified Businesses") as described in the Proxy
Statement/Joint Prospectus dated November 10, 1997 (the "Proxy Statement"). In
order to effectuate the separation, (i) Distributing has declared a dividend of
0.8 of one share of newly created Class R Convertible Common Stock, par value
$.01 per share (the "Class R Common Stock"), with respect to each outstanding
share of Class C Construction & Mining Group Restricted Redeemable Convertible
Exchangeable Common Stock, par value $.0625 per share (the "Class C Stock"), and
(ii) Distributing will cause each outstanding share of Class C Stock to be
mandatorily exchanged for one outstanding share of Common Stock, par value $.01
per share, of Peter Kiewit Sons', Inc. (formerly PKS Holdings, Inc.) a newly
formed, direct, wholly owned subsidiary of Distributing
<PAGE>
Level 3 Communications, Inc.
Peter Kiewit Sons', Inc.
March 31, 1998
Page 2
("Controlled"), to which such 0.8 of one share of Class R Stock will attach (the
"Split-Off").
Distributing has received a private letter ruling dated February 27, 1998,
as amended on March 9, 1998, from the Internal Revenue Service pursuant to its
request, submitted October 29, 1997 (such request, as thereafter supplemented,
the "Ruling Request"), with respect to certain United States federal income tax
consequences of the Split-Off and related transactions.(1) Delivery of this
opinion with respect to certain United States federal income tax consequences of
the distribution by Distributing of shares of Class R Common Stock (the
"Recapitalization") to holders of the Class C Stock (the "Class C Stockholders")
is a condition to the consummation of the Split-Off.
In rendering our opinion, we have examined and relied upon the accuracy and
completeness of the facts, information, representations, and covenants contained
in originals or copies, certified or otherwise identified to our satisfaction,
of the Ruling Request, the Proxy Statement, the Ruling, the certificates from
officers of Distributing and Controlled dated as of the date hereof, and such
other documents as we have deemed necessary or appropriate as a basis for the
opinion set forth below. Our opinion is conditioned upon, among other things,
the initial and continuing accuracy and completeness of such facts, information,
representations, and covenants.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, and the authenticity of the
originals of such documents. We have assumed that all of the transactions
related to the Split-Off will be consummated in the manner described in the
Ruling Request and the Proxy Statement.
- -----------------
(1) Unless otherwise indicated, all capitalized terms used herein have the
meaning assigned to them in the Ruling Request.
<PAGE>
Level 3 Communications, Inc.
Peter Kiewit Sons', Inc.
March 31, 1998
Page 3
In rendering our opinion, we have considered the applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
promulgated thereunder, pertinent judicial authorities, interpretive rulings of
the Internal Revenue Service (the "Service"), and such other authorities as we
have considered relevant, all of which are subject to change at any time,
possibly with retroactive effect. In particular, Congress could enact
legislation affecting the treatment of stock with characteristics similar to the
Class C Stock or the Class R Common Stock, or the Treasury Department could
change current law under future regulations, including regulations issued
pursuant to its authority under Section 337(d) of the Code. A change in any of
the authorities upon which our opinion is based could affect our conclusions.
No authority directly addresses the federal income tax treatment of stock
with characteristics substantially similar to the Class C Stock or the Class R
Common Stock. Accordingly, our conclusions are based, in part, upon reasoning
by way of analogy. We note that the Service will not issue advance rulings on
the classification of stock with characteristics similar to the Class C
Stock.(2)
Based solely on the foregoing, we are of the opinion that, under current
law, for United States federal income tax purposes:
(1) Distributing will not recognize gain or loss upon the distribution of
the Class R Common Stock pursuant to the Recapitalization;
(2) The Class C Stockholders will not recognize gain or loss upon their
receipt of the Class R Common Stock pursuant to the Recapitalization;
- -------------------
(2) Rev. Proc. 87-59, 1987-2 C.B. 764, see also Rev. Proc. 98-3, Section
3.01(45), I.R.B. 1998-1, 100.
<PAGE>
Level 3 Communications, Inc.
Peter Kiewit Sons', Inc.
March 31, 1998
Page 4
(3) Each Class C Stockholder will allocate a portion of his basis in his
Class C Stock to the Class R Common Stock in proportion to the relative
fair market values of the Class R Common Stock and the Class C Stock; and
(4) The holding period of the Class R Common Stock received by each Class
C Stockholder will include the holding period of the Class C Stock with
respect to which the Class R Common Stock is received, provided such Class
C Stock is held as a capital asset.
Our opinion does not address the applicability or effect of any state,
local, or foreign tax laws to which Distributing or any Class C Stockholder may
be subject. In addition, our opinion as set forth in clauses (2) through (4)
above applies only to Class C Stockholders who hold their Class C Stock as
capital assets and does not apply to any Class C Stockholder who may be subject
to special treatment under the federal income tax laws.
Except as set forth above, we express no opinion to any party as to any tax
consequences, whether federal, state, local or foreign, of any transactions or
events related to the Split-Off or the Recapitalization or contemplated by or
referred to in the Ruling Request or the Proxy Statement. Our opinion is not
binding upon the Internal Revenue Service or any court, and, accordingly, it is
possible that the Internal Revenue Service or a court may disagree with our
conclusions. This opinion is expressed as of the date hereof, unless otherwise
expressly stated, and we disclaim any undertaking to advise you of any
subsequent changes of the facts stated, referenced, or assumed herein or any
subsequent changes in applicable law. This opinion is solely for your benefit
and may not be used, circulated, quoted, or otherwise referred to for any
purpose without our express written permission. We consent to the use of our
name in the Proxy Statement and to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement
by post-effective amendment. In giving this consent, we do not thereby admit
that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Sincerely yours,
/s/ Skadden, Arps, Slate, Meagher & Flom
<PAGE>
June 12, 1998
Level 3 Communications, Inc.
3555 Farnam Street
Omaha, Nebraska 68131
Re: Certain U.S. Federal Income Tax Consequences of the
Split-Off
---------------------------------------------------
Gentlemen:
We have acted as special tax counsel to Level 3 Communications, Inc.
(formerly Peter Kiewit Sons', Inc.) ("PKS"), in connection with the distribution
of Class R Convertible Common Stock (the "Class R Common Stock") and the
exchange of each outstanding share of Class C Construction & Mining Group
Restricted Redeemable Convertible Exchangeable Common Stock (the "Class C
Stock") for one share of Common Stock (the "PKS Holdings Stock") of Peter Kiewit
Sons', Inc. (formerly PKS Holdings, Inc.) (the "Split-Off"), as described in the
Registration Statement on Form S-4 filed with the United States Securities and
Exchange Commission (the "Commission") on November 10, 1997 (the "Registration
Statement"). PKS has received a private letter ruling, dated February 27, 1998,
from the Internal Revenue Service (the "Private Letter Ruling") pursuant to its
request, submitted October 29, 1997 (such request, as thereafter supplemented,
the "Ruling Request"). You have requested our opinion concerning certain United
States federal income tax consequences of the Split-Off as set forth in the
Private Letter Ruling. Capitalized terms not defined herein shall have the
meanings ascribed to them in the Registration Statement.
In rendering our opinion, we have examined and relied upon the accuracy and
completeness of the facts, information, representations, and covenants contained
in
<PAGE>
Level 3 Communications, Inc.
June 12, 1998
Page 2
originals or copies, certified or otherwise identified to our satisfaction, of
the Ruling Request, the Private Letter Ruling, the Registration Statement and
such other documents as we have deemed necessary or appropriate as a basis for
the opinion set forth below. Our opinion is conditioned upon, among other
things, the initial and continuing accuracy and completeness of such facts,
information, representations, and covenants.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, and the authenticity of the
originals of such documents. We have assumed that all of the transactions
related to the Split-Off were consummated in the manner described in the Private
Letter Ruling, the Ruling Request and the Registration Statement.
In rendering our opinion, we have considered the Private Letter Ruling and
the applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations promulgated thereunder, pertinent judicial
authorities, interpretive rulings of the Internal Revenue Service, and such
other authorities as we have considered relevant, all of which are potentially
subject to change, possibly with retroactive effect. A change in any of the
authorities upon which our opinion is based could affect our conclusions.
Based solely on the foregoing, and subject to the discussion set forth
under the caption "Material U.S. Federal Income Tax Considerations" in the Proxy
Statement/Joint Prospectus included within the Registration Statement (the
"Proxy Statement/Prospectus"), we are of the opinion that, under current law,
for United States federal income tax purposes:
(1) Except as described below, no gain or loss was recognized by PKS or
PKS Holdings upon the exchange of the Class C Stock for PKS Holdings Stock
pursuant to the Split-Off;
<PAGE>
Level 3 Communications, Inc.
June 12, 1998
Page 3
(2) A holder of Class C Stock did not recognize any gain or loss as a
result of the exchange of Class C Stock for PKS Holdings Stock pursuant to
the Split-Off;
(3) A holder of Class C Stock had, immediately after the Split-Off, a tax
basis for the shares of PKS Holdings Stock received in the Split-Off equal
to a portion of his tax basis in the Class C Stock immediately before the
Transaction, allocated in proportion to the relative fair market values of
the Class R Common Stock and the Class C Stock at the time of the Class R
Stock Distribution, the portion allocated to the Class C Stock after the
Class R Stock Distribution being the basis of the PKS Holdings Stock; and
(4) The holding period to a holder of Class C Stock for the shares of PKS
Holdings Stock received in the Split-Off includes the period during which
the holder held the Class C Stock exchanged therefor, provided that such
Class C Stock was held as a capital asset at that time.
Notwithstanding the foregoing, PKS recognized gain on the exchange of Class
C Stock for PKS Holdings Stock pursuant to the Split-Off to the extent that
shares of PKS Holdings Stock were treated as received by holders of Class C
Stock who were not United States persons, as defined in the Code.
Except as set forth above, we express no opinion to any party as to any tax
consequences, whether federal, state, local or foreign, of any transactions or
events contemplated by or referred to in the Private Letter Ruling, the Ruling
Request or the Registration Statement. This opinion is expressed as of the date
hereof, unless otherwise expressly stated, and we disclaim any undertaking to
advise you of any subsequent changes of the facts stated, referenced, or assumed
herein or any subsequent changes in applicable law. This opinion is solely for
your benefit and may not be used, circulated, quoted, or otherwise referred to
for any purpose without our express written permission. We consent to the use
of our name in the Proxy Statement/Prospectus and to the filing of this opinion
with the Commission as an exhibit to the Registration Statement by
post-effective amendment. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is re-
<PAGE>
Level 3 Communications, Inc.
June 12, 1998
Page 4
quired under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Commission promulgated thereunder.
Sincerely yours,
/s/ Skadden, Arps, Slate, Meagher & Flom
