Global Crossing Reports Second Quarter Pro Forma Recurring Adjusted EBITDA up 33% and Pro Forma Cash Revenue up 26% from Second Quarter of 2000.Business Editors HAMILTON Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda--(BUSINESS WIRE)--Aug. 1, 2001 Global Crossing Ltd. (NYSE NYSE See: New York Stock Exchange :GX): -- Telecommunications Services Recurring Adjusted EBITDA up 38% and Cash Revenue up 25% from second quarter of 2000. -- Cash Revenue from Data Products up 40% from second quarter 2000, representing more than 60% of Telecommunications Services Cash Revenue, up from 55% one year ago. -- Telecommunications Services Service Revenue increased 5% sequentially, with growth in Commercial Data Product Service Revenue (excluding IPC equipment sales) accelerating to 11% sequentially. -- Sale of incumbent local exchange carrier (ILEC) business to Citizens Communications completed for estimated after tax proceeds in excess of $3 billion, which completes funding of announced business plan. -- Global Crossing Core Network now completed, linking 27 countries and over 200 major cities in Europe, North America, South America and Asia. -- Value of commercial service contracts signed this year exceeds $1 billion, including an agreement with the U.S. Department of Defense to design, develop and manage a secure VPN linking 6,000 scientists and engineers worldwide. -- Operational streamlining continues following sale of ILEC business. -- Company updates guidance for 2001. Global Crossing Ltd. (NYSE:GX), which provides telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. solutions over the world's first integrated global IP-based fiber optic network, today reported results for the second quarter ended June June: see month. 30, 2001. For its continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , the Company reported second quarter Cash Revenue of $1,620 million, Recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $472 million, and a Recurring Net Loss of $607 million, or $0.69 per share. Tom Casey Casey is an Irish surname, and may refer to
1. Any service provided by a telecommunication provider. 2. Service Revenue grew 5% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , led by the highest-ever level of Commercial Service Revenue with growth of 5% sequentially and, in particular, sequential One after the other in some consecutive order such as by name or number. Commercial Data Service revenue growth of 11%, excluding equipment sales. We believe our commercial and data services are the drivers of our future growth and we did well in the second quarter in these critical areas. In addition, our carrier IRU Iru (ī`r  ), in the Bible, Caleb's eldest son. revenue remains very strong
and we have already reported over $1.1 billion of such sales in the
first two quarters, representing over 50% of our full year targets.
These are accomplishments that take on a special meaning in the current
difficult environment."We have not been immune to the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the industry and the slowing of the economy. Revenue from our Marine Systems Division declined sequentially because of the worldwide drop in undersea installation, but a crimping of that growth makes Global Crossing's in-place undersea assets ever more valuable as capacity fills up worldwide. Business failures in the telecommunications industry have reduced our current and expected future revenue, particularly in the carrier markets, but these very failures are likely to result in new capacity and network outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. deals as their customers migrate to Global Crossing. "In an environment in which the capital markets are constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. , Global Crossing is fully funded and a stand-out by that measure in the telecommunications industry. We have emphasized in the past the unparalleled geographic reach of our global network. That asset -- unique in all the world -- takes on added competitive advantage as we now rapidly deploy our global network operating system An operating system that is designed for network use. Normally, it is a complete operating system with file, task and job management; however, with some earlier products, it was a separate component that ran under the OS; for example, LAN Server required OS/2, and LANtastic required DOS. . We believe we will be the first company in the world capable of offering a managed global converged IP services portfolio and, as the world moves to IP, we will be the most important enabler of those users. High performance customers like the Department of Defense, the British Foreign Office, the banking industry's SWIFT consortium, national telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. carriers, and blue-chip blue chip also blue-chip·per n. 1. A stock that sells at a high price because of public confidence in its long record of steady earnings. 2. An extremely valuable asset or property. 3. clients in the new digital entertainment industry, among others, will quickly make Global Crossing's network the world-wide standard for all companies participating in the global economy." Operational Streamlining Global Crossing has continued to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. and streamline its operations in line with the Company's vision of becoming the premier provider of broadband services See broadband and broadband service provider. to global enterprises. Integrated global functions, including network operations, customer care, information systems, finance and sales and marketing have replaced the largely regional organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. that resulted from the Company's acquisitions. The realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. and integration of global functions will result in the elimination of more than 2,000 positions, as well as a significant consolidation of offices and other real estate facilities. These actions are expected to reduce annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by approximately $160-170 million and to save approximately $70 million through year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001. To provide for the costs of implementing these changes, the Company expects to reflect in its third quarter results of operations a non-recurring charge of approximately $250-325 million. Of this amount, $50-75 million relates to staff reduction costs and $200-250 million relates to closing of facilities. Upon completion, Global Crossing will employ approximately 11,400 people in 27 countries around the world. In connection with the operational streamlining, the Company is in the process of evaluating the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of certain assets related to real estate facilities and its strategic investments, such as Exodus Communications Exodus Communications was a high-flying internet hosting and service provider to dot-com businesses that went broke along with their customers. Exodus inception Exodus was founded in 1992 as Fouress, Inc., and reincorporated in 1994 to Exodus Communications. . Any revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of these assets is expected to be reflected in the Company's third quarter statement of operations See Income statement. . Casey commented, "The completion of the ILEC (Incumbent Local Exchange Carrier) A traditional local telephone company such as one of the Regional Bell companies (RBOCs). Contrast with CLEC. See ELEC and TELRIC. sale to Citizens Communications Citizens Communications is the parent company of Frontier Telephone, providing telephone and internet access in 24 states. The company headquarters are located at 3 High Ridge Park in Stamford, Connecticut. not only strengthened our cash position, but also enables us to move forward with our plan to realign and integrate our business on a global basis. The realignment of management by global function rather than geography and the completion of the integration of our acquisitions position us to be more responsive to our customers at the same time that we reduce expenses." SUMMARY OF QUARTERLY PRO FORMA As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma RESULTS Results for Continuing Operations exclude Global Crossing's ILEC business, which the Company sold to Citizens Communications on June 29, 2001 for estimated after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. proceeds in excess of $3 billion. Unless otherwise noted, period-to-period comparisons for Continuing Operations throughout this press release are discussed giving Pro Forma effect to all acquisitions and dispositions as if each had occurred on January January: see month. 1, 2000. Detailed Pro Forma comparisons are shown in the attached schedules.
Summary of Quarterly Pro Forma Operations:
Three Months Ended Change
June 30, June 30, Amount Percent
2001 2000
(Unaudited) (Unaudited)
(in millions)
Pro Forma Continuing
Operations (1)
Cash Revenue $1,620 $ 1,287 $ 333 26%
Recurring Adjusted EBITDA $ 472 $ 356 $ 116 33%
(1) The Pro Forma amounts in the table above reflect, for both periods
presented, the Company's acquisition of IPC/IXnet and the
dispositions of both its ILEC business and GlobalCenter, as if
each had occurred on January 1, 2000.
Telecommunications Services Segment The Telecommunications Services segment, which is comprised of commercial, consumer and carrier businesses for bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz , data, voice, audio/video conferencing See teleconferencing. and other value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. , recorded Cash Revenue growth of 25% and Recurring Adjusted EBITDA growth of 38%, over the second quarter 2000. Service Revenue for the segment, which excludes the effects of the sale of capacity as IRU's, increased 18% from the second quarter of 2000 to $890 million, and increased 5% over the first quarter of this year. The consistent growth in Telecommunications Services Service Revenue highlights the continued success experienced by the Company in providing value-added services to global enterprise customers. Since January 1, 2001, the Company has entered into new commercial service contracts which are expected to result in a total of approximately $1.1 billion in additional revenue to the Company over the life of the contracts. During the quarter, the Company announced agreements with customers such as CNBC Europe CNBC Europe is a business and financial news channel broadcast in Europe. It is the European version of CNBC. It is operated by NBC Universal, and headquartered in London. and DIRECTV DirecTV (trademarked as "DIRECTV") is a direct broadcast satellite (DBS) service based in El Segundo, California, USA, that transmits digital satellite television and audio to households in the United States, the Caribbean and Latin America except for Mexico. in the Media & Entertainment market; Securities Dealing Systems and NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). in the Financial Market; Hyatt Hyatt is an international brand of hotels within the Global Hyatt Corporation that operates numerous properties.Hyatt is a part of the Marmon Group which is owned by Chicago's Pritzker Family. Mark S. Hoplamazian is the current President and CEO of Global Hyatt Corporation. Hotels Corporation, 3M and Alcatel Alcatel Société Alsacienne de Constructions Atomiques, de Télécomunications et d'Electronique in the Multinational Corporation multinational corporation, business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as a transnational or international corporation. These corporations originated early in the 20th cent. market; the Department of Defense in the Government market; and agreements with Comcast Comcast Corporation, (NASDAQ: CMCSA) is the largest[1] cable television (CATV) company and the second largest Internet service provider in the United States. Business Communications and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. Telecom in the Carrier-NextGen market. Within Telecommunications Services, the Commercial sector recorded robust sequential revenue growth consistent with the Company's increased focus on this segment. Service Revenue from Commercial voice and data services increased 5% sequentially. Commercial Data Service Revenue, excluding the effects of relatively slower growth in equipment sales by IPC (1) (InterProcess Communication) The exchange of data between one program and another either within the same computer or over a network. It implies a protocol that guarantees a response to a request. , increased 11% sequentially and 50% over second quarter 2000 results. Carrier Cash Revenue was $959 million in the second quarter of 2001, an increase of 32% over second quarter 2000 and essentially unchanged from first quarter 2001 results. The flat sequential performance is due partly to the loss of carrier data service (IP, Frame Relay A high-speed packet switching protocol used in wide area networks (WANs). Providing a granular service of up to DS3 speed (45 Mbps), it has become popular for LAN to LAN connections across remote distances, and services are offered by most major carriers. , ATM, and Private Line) customers because of bankruptcies and disconnections; however, this shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. was offset by the strong performance of the Company's carrier voice business, which increased 10% sequentially to $287 million due to accelerating growth in minutes and a smaller decline in average revenue per minute. The turnover in weaker carrier data service customers is expected to reduce growth in the carrier segment only temporarily, and neither bad debt expense nor receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed balances have increased as a result of this turnover. Cash Revenue from the sale of capacity in the form of IRU's was $567 million for the quarter, an increase of 38% from the second quarter of 2000 and flat sequentially. Included in this amount, and in Recurring Adjusted EBITDA, was $345 million received from significant carrier customers who signed contracts during the quarter to purchase $381 million of capacity on the Global Crossing Network, and to whom Global Crossing made substantial cash commitments during the quarter (see "Network and Capital Plan" below). Installation and Maintenance Services Segment The Company's installation and maintenance business segment, consisting of its Global Marine subsidiary, reported revenue of $177 million for the second quarter of 2001, as compared to $209 million in the first quarter of 2001. This decrease in revenue was due to more vessels being deployed to maintenance services versus installation projects. 2001 PROJECTED FINANCIAL RESULTS The Company has reduced its previously announced projections for Service Revenue and Revenue for the fiscal year ending December December: see month. 31, 2001, while raising the top end of the range for its projections of capacity sales for the year. Global Crossing expects its continuing operations to generate approximately $6.4-$6.9 billion of Cash Revenue, Service Revenue of approximately $4.4-$4.5 billion and Recurring Adjusted EBITDA of $1.6-$2.0 billion. The Company stated that the current consensus of analysts' estimates of Recurring Net Income for both the full-year 2001 and for the third quarter of 2001 are reasonable. The reductions in full year 2001 projections for Service Revenue are due to projections of slower growth in Commercial Service Revenue and Carrier Data Service Revenue resulting from a lengthened length·en tr. & intr.v. length·ened, length·en·ing, length·ens To make or become longer. length  en·er n. sales cycle
due to the financial problems experienced by some of the Company's
more vulnerable carrier customers and the reduction in the revenue run
rate resulting from a weak economic environment. At the same time, the
Company believes that continuing demand for network capacity and the
failures of certain of its competitors are likely to result in new
capacity and network outsourcing deals, leading the Company to increase
the top end of its projected range for IRU sales for the year 2001.The Company's growth in Service Revenue during the first quarter of this year was consistent with its previous projections. However, the projected acceleration in growth for the remainder of the year has been scaled back for the reasons described above. The Company projects continued acceleration in Commercial Data Services and Carrier Voice; flatness in Commercial Voice, declines in Consumer, and a recovery of growth late in the year in Carrier Data Service Revenue. NETWORK AND CAPITAL PLAN During the quarter, Global Crossing completed its core network which links 27 countries and over 200 major cities in Europe, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. and Asia. During this period, the Company connected Caracas Caracas (kəră`kəs, kərä`–, Span. kärä`käs), city (1990 pop. 1,824,892), Federal Dist., N Venezuela, the capital and largest city of the country, near the Caribbean Sea. Its port is La Guaira. , Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. and Lima, Peru to the western leg of South American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Crossing thus completing the final link in the global network. The network operates as one seamless system and has been engineered to be the best-performing, most secure and lowest-cost network in the world, utilizing the latest in network Multi Protocol Label Switching (networking) label switching - A routing technique that uses information from existing IP routing protocols to identify IP datagrams with labels and forwards them to a modified switch or router, which then uses the labels to switch the datagrams through the network. (MPLS (1) (MultiProtocol Lambda Switching) The earlier name for GMPLS. See GMPLS. (2) (MultiProtocol Label Switching) A standard from the IETF for including routing information in the packets of an IP network. ) technology over a mesh Refers to an interconnect architecture that cross- connects several devices. See mesh network, wireless mesh network and switch fabric. (character) mesh - The INTERCAL name for hash. architecture. Global Crossing is the first carrier to deploy OC-192 service across its entire global IP backbone, which allowed the Company to scale its network to core optical speeds and provide the bandwidth necessary for next-generation IP services (VPNs and VoIP). Beyond the core network, Asia Global Crossing (NYSE:AX) is currently building a previously announced extension that will connect Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). , Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. and the Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. to the global network. This fully funded extension is expected to be complete in the first quarter of next year. During the quarter, Global Crossing entered into several agreements with various carrier customers for the purchase or lease of capacity and co-location Placing equipment owned by a customer or competitor in an organization's own facility. Telephone companies often allow co-location in order to provide the best interconnection between devices. space. These transactions were implemented in order to acquire cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. local network expansions; to provide for cost-effective alternatives to new construction in certain markets in which the Company anticipates shortages of capacity; and to provide additional levels of physical diversity in the network as the Company implements its global mesh architecture. The new cash commitments totaled approximately $358 million. The Company projects that these new commitments will be more than offset by a combination of lower network volumes, network efficiencies, use of existing inventories, lower-than-planned prices from vendors, and spending at slower than budgeted rates. Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. for continuing operations during 2001 (including spending by Asia Global Crossing) is expected to be less than $4.5 billion, a portion of which is likely to be deferred through vendor financing Vendor Financing The lending of money by a company to one of its customers so that the customer can buy products from it. By doing this, the company increases its sales even though it is basically buying its own products. arrangements. DEFINITION OF TERMS USED Throughout this press release, Pro Forma results have been discussed, which give effect to the the acquisition of IPC/IXnet and the dispositions of both its ILEC business and GlobalCenter, as if each had occurred on January 1, 2000. In this press release, Revenue refers to revenue reported on the Company's statements of operations under Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Cash Revenue refers to Revenue plus the cash portion of the change in deferred revenue. Service Revenue excludes all impacts of IRU sales, and refers to Revenue less any revenue recognized immediately for circuit activations that qualified as sales type leases; less the revenue recognized due to the amortization of IRU's sold in prior periods and not recognized as sales-type leases Sales-type lease The leasing out of a firm's own equipment, such as a printing company leasing its own presses, thereby competing with an independent leasing company. . Adjusted EBITDA refers to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) plus goodwill and intangibles amortization, depreciation and amortization, non-cash cost of capacity sold, stock related expense and the cash portion of the change in deferred revenue, which definition is consistent with the financial covenants contained in the Company's major financing agreements Financing Agreements In the context of project financing, the documents which provide the project financing and sponsor support for the project as defined in the project contracts. . Recurring Adjusted EBITDA refers to Adjusted EBITDA plus one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. merger and integration expenses and other non-recurring expenses. For all periods presented, net income generated by the ILEC and GlobalCenter businesses is reported as "Income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , net of taxes" on the accompanying Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Statements of Operations. ABOUT GLOBAL CROSSING Global Crossing Ltd. (NYSE:GX) provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. Global Crossing operates throughout the Americas A·mer·i·cas , the See America. and Europe, and provides services in Asia through its subsidiary, Asia Global Crossing (NYSE:AX). Global Crossing Solutions provides integrated telecommunications solutions, including network outsourcing, to large global enterprises. Please visit www.globalcrossing.com or www.asiaglobalcrossing.com for more information. Statements made in this press release that state the Company's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include: the ability to complete systems within currently estimated time frames and budgets; the ability to compete effectively in a rapidly evolving and price competitive marketplace; changes in the nature of telecommunications regulation in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and other countries; changes in business strategy; the successful integration of newly-acquired businesses; the impact of technological change; and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission.
GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited) (Unaudited)
Three Months Three Months
Ended Ended
June 30, June 30, March 31,
2001 2000 2001
REVENUES $ 1,068,874 $ 898,213 $ 1,081,661
OPERATING EXPENSES:
Cost of access and maintenance 544,808 413,232 518,680
Other operating expenses 613,069 456,288 663,631
Depreciation and amortization 449,748 318,311 412,609
Total operating expenses 1,607,625 1,187,831 1,594,920
OPERATING LOSS (538,751) (289,618) (513,259)
Other income (expense):
Equity in (loss) income
of affiliates (7,887) (13,429) (11,035)
Minority interest 39,156 3,101 40,573
Interest income 15,988 32,661 26,951
Interest expense (139,938) (94,303) (142,112)
Other income (expense), net (4,914) (8,172) (8,762)
(LOSS) INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES, EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE (636,346) (369,760) (607,644)
Benefit (provision) from
income taxes 77,298 65,275 45,773
(LOSS) INCOME BEFORE
EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE (559,048) (304,485) (561,871)
(Loss) income from discontinued
operations, net(1) (70,529) (60,889) (54,003)
Extraordinary loss on retirement
of debt, net -- -- --
Cumulative effect of change in
accounting principle, net -- -- --
NET LOSS (629,577) (365,374) (615,874)
Preferred stock dividends (59,478) (58,540) (59,492)
Conversion of preferred stock
into common stock -- (92,277) --
NET LOSS APPLICABLE TO
COMMON SHAREHOLDERS $ (689,055) $ (516,191) $ (675,366)
NET LOSS PER COMMON SHARE:
Loss from continuing operations
applicable to common shareholders
Basic and diluted $ (0.70) $ (0.55) $ (0.70)
Loss from discontinued
operations, net
Basic and diluted (0.08) (0.07) (0.06)
Extraordinary loss on
retirement of debt, net
Basic and diluted -- -- --
Cumulative effect of change in
accounting principle, net
Basic and diluted -- -- --
Net loss applicable to
common shareholders
Basic and diluted $ (0.78) $ (0.62) $ (0.76)
Shares used in computing
loss per share
Basic and diluted 886,109,573 830,903,109 884,702,182
(Unaudited)
Pro forma
Three Months Ended
June 30, June 30,
2001 2000
REVENUES $ 1,068,874 $ 978,937
OPERATING EXPENSES:
Cost of access and maintenance 544,808 437,790
Other operating expenses 613,069 534,546
Depreciation and amortization 449,748 417,351
Total operating expenses 1,607,625 1,389,687
OPERATING LOSS (538,751) (410,750)
Other income (expense):
Equity in (loss) income of affiliates (7,887) (26,080)
Minority interest 39,156 29,208
Interest income 15,988 33,916
Interest expense (139,938) (116,416)
Other income (expense), net (4,914) (8,189)
(LOSS) INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES,
EXTRAORDINARY ITEMS AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (636,346) (498,311)
Benefit (provision) from income taxes 77,298 68,058
(LOSS) INCOME BEFORE EXTRAORDINARY ITEMS
AND CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE (559,048) (430,253)
(Loss) income from discontinued
operations, net(1) (70,529) (60,889)
Extraordinary loss on retirement of
debt, net -- --
Cumulative effect of change in
accounting principle, net -- --
NET LOSS (629,577) (491,142)
Preferred stock dividends (59,478) (58,540)
Conversion of preferred stock into
common stock -- (92,277)
NET LOSS APPLICABLE TO COMMON SHAREHOLDERS $ (689,055) $ (641,959)
NET LOSS PER COMMON SHARE:
Loss from continuing operations
applicable to common shareholders
Basic and diluted $ (0.70) $ (0.67)
Loss from discontinued operations, net
Basic and diluted (0.08) (0.07)
Extraordinary loss on retirement of
debt, net
Basic and diluted -- --
Cumulative effect of change in
accounting principle, net
Basic and diluted -- --
Net loss applicable to common shareholders
Basic and diluted $ (0.78) $ (0.74)
Shares used in computing loss per share
Basic and diluted 886,109,573 873,134,665
(Unaudited) (Unaudited)
Three Months Three Months
Ended Ended
June 30, June 30, March 31,
2001 2000 2001
RECURRING NET LOSS PER COMMON SHARE:
Net loss applicable to common
shareholders $ (689,055) $ (516,191) $ (675,366)
Tyco claims settlement -- -- --
Merger-related expenses and
severance 6,541 12,897 4,589
Non-cash severance -- -- --
Extraordinary loss on retirement
of debt, net -- -- --
Reversal of tax provision related
to prior year adjustments -- (73,040) --
Conversion of preferred stock
into common stock -- 92,277 --
(Loss) income from discontinued
operations, net 70,529 60,889 54,003
Other (income) expense, net 4,914 8,172 8,762
RECURRING NET LOSS APPLICABLE TO COMMON
SHAREHOLDERS $ (607,071) $ (414,996) $ (608,012)
Recurring net loss applicable
to common shareholders
Basic and diluted $ (0.69) $ (0.50) $ (0.69)
ADJUSTED EBITDA AND RECURRING ADJUSTED EBITDA
Operating loss $ (538,751) $ (289,618) $ (513,259)
Depreciation and amortization 449,748 318,311 412,609
Stock related expense 3,862 7,837 5,126
Cash portion of the change in
deferred revenue 551,483 307,891 531,585
ADJUSTED EBITDA $ 466,342 $ 344,421 $ 436,061
Merger-related expenses and
severance 5,983 12,897 5,147
Tyco claims settlement -- -- --
RECURRING ADJUSTED EBITDA $ 472,325 $ 357,318 $ 441,208
(Unaudited)
Pro forma
Three Months Ended
June 30, June 30,
2001 2000
RECURRING NET LOSS PER COMMON SHARE:
Net loss applicable to common
shareholders $ (689,055) $ (641,959)
Tyco claims settlement -- --
Merger-related expenses and
severance 6,541 23,984
Non-cash severance -- --
Extraordinary loss on retirement
of debt, net -- --
Reversal of tax provision related
to prior year adjustments -- (73,040)
Conversion of preferred stock
into common stock -- 92,277
(Loss) income from discontinued
operations, net 70,529 60,889
Other (income) expense, net 4,914 8,189
RECURRING NET LOSS APPLICABLE TO COMMON
SHAREHOLDERS $ (607,071) $ (529,660)
Recurring net loss applicable
to common shareholders
Basic and diluted $ (0.69) $ (0.61)
ADJUSTED EBITDA AND RECURRING ADJUSTED EBITDA
Operating loss $ (538,751) $ (410,750)
Depreciation and amortization 449,748 417,351
Stock related expense 3,862 17,757
Cash portion of the change in
deferred revenue 551,483 307,891
ADJUSTED EBITDA $ 466,342 $ 332,249
Merger-related expenses and
severance 5,983 23,984
Tyco claims settlement -- --
RECURRING ADJUSTED EBITDA $ 472,325 $ 356,233
(1) This amount is comprised of approximately $7 million in income
from the results of discontinued operations for the quarter, as
well as a current period loss of $78 million, net of tax, related
to the sale of the ILEC business to Citizens Communications, which
was closed on June 29, 2001. The year to date loss resulting
from the sale of the ILEC business was approximately $208 million.
GLOBAL CROSSING LTD. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
(In thousands)
Reported(1)
Three Months Three Months
Ended Ended
June 30, June 30, March 31,
2001 2000 2001
Revenue Summary:
CASH REVENUE:
Commercial 460,248 316,286 422,222
Consumer 37,919 42,482 40,137
Carrier 959,462 727,919 955,878
Telecommunications Services
Cash Revenue 1,457,629 1,086,687 1,418,237
Telecommunications Services
Cash Revenue -- Data Products 904,623 564,940 893,396
Telecommunications Services
Cash Revenue -- Voice Products 553,006 521,747 524,841
Telecommunications Services
Cash Revenue 1,457,629 1,086,687 1,418,237
Installation and Maintenance
Cash Revenue(3) 177,274 146,239 209,486
Continuing Operations Cash
Revenue(3) 1,620,358 1,206,104 1,613,246
REVENUE:
Commercial 443,135 316,286 422,007
Consumer 37,919 42,482 40,137
Carrier:
Service Revenue 409,374 315,811 389,175
Sales Type Lease Revenue -- 98,833 18,029
Amortization of prior
period IRUs 15,717 5,384 17,304
Carrier 425,091 420,028 424,508
Telecommunications Services
Revenue 906,145 778,796 886,652
Telecommunications Services
Revenue -- Data Products 353,139 257,049 361,811
Telecommunications Services
Revenue -- Voice Products 553,006 521,747 524,841
Telecommunications Services
Revenue 906,145 778,796 886,652
Installation and Maintenance
Revenue(3) 177,274 146,239 209,486
Continuing Operations Revenue(3) 1,068,874 898,213 1,081,661
SERVICE REVENUE:
Telecommunications Services
Service Revenue -- Data Products 337,422 152,832 326,478
Telecommunications Services
Service Revenue -- Voice Products 553,006 521,747 524,841
Telecommunications Services
Service Revenue 890,428 674,579 851,319
Continuing Operations Service
Revenue(3) 1,053,157 793,996 1,046,328
Selected Financial Information
Recurring Adjusted EBITDA
TELECOMMUNICATIONS SERVICES(4) 447,877 325,893 415,187
INSTALLATION & MAINTENANCE(4) 24,448 31,425 26,021
CONTINUING OPERATIONS(4) 472,325 357,318 441,208
Cash Paid For Capital Expenditures
TELECOMMUNICATIONS SERVICES 1,013,530 872,561 1,253,540
INSTALLATION & MAINTENANCE 18,978 19,678 15,829
CONTINUING OPERATIONS 1,032,508 892,239 1,269,369
Discontinued Operations
REVENUE 194,331 234,262 191,124
RECURRING ADJUSTED EBITDA 84,709 77,718 98,172
CASH PAID FOR CAPITAL EXPENDITURES 63,800 128,512 49,584
Pro forma(2)
Three Months Ended
June 30, June 30,
2001 2000
Revenue Summary:
CASH REVENUE:
Commercial 460,248 397,010
Consumer 37,919 42,482
Carrier 959,462 727,919
Telecommunications Services
Cash Revenue 1,457,629 1,167,411
Telecommunications Services
Cash Revenue -- Data Products 904,623 645,664
Telecommunications Services
Cash Revenue -- Voice Products 553,006 521,747
Telecommunications Services
Cash Revenue 1,457,629 1,167,411
Installation and Maintenance
Cash Revenue(3) 177,274 146,239
Continuing Operations Cash
Revenue(3) 1,620,358 1,286,828
REVENUE:
Commercial 443,135 397,010
Consumer 37,919 42,482
Carrier:
Service Revenue 409,374 315,811
Sales Type Lease Revenue -- 98,833
Amortization of prior period IRUs 15,717 5,384
Carrier 425,091 420,028
Telecommunications Services
Revenue 906,145 859,520
Telecommunications Services
Revenue -- Data Products 353,139 337,773
Telecommunications Services
Revenue -- Voice Products 553,006 521,747
Telecommunications Services Revenue 906,145 859,520
Installation and Maintenance
Revenue(3) 177,274 146,239
Continuing Operations Revenue(3) 1,068,874 978,937
SERVICE REVENUE:
Telecommunications Services
Service Revenue -- Data Products 337,422 233,556
Telecommunications Services
Service Revenue -- Voice Products 553,006 521,747
Telecommunications Services
Service Revenue 890,428 755,303
Continuing Operations Service
Revenue(3) 1,053,157 874,720
Selected Financial Information
Recurring Adjusted EBITDA
TELECOMMUNICATIONS SERVICES(4) 447,877 324,808
INSTALLATION & MAINTENANCE(4) 24,448 31,425
CONTINUING OPERATIONS(4) 472,325 356,233
Cash Paid For Capital Expenditures
TELECOMMUNICATIONS SERVICES
INSTALLATION & MAINTENANCE
CONTINUING OPERATIONS
Discontinued Operations
REVENUE
RECURRING ADJUSTED EBITDA
CASH PAID FOR CAPITAL EXPENDITURES
(1) The Reported amounts in the table above reflect the Company's
quarterly results for continuing operations for the three months
ended June 30, 2001 and June 30, 2000.
(2) The Pro forma amounts in the table above reflect, for both periods
presented, the Company's acquisition of IPC/IXnet and the
dispositions of both the ILEC and GlobalCenter, as if each had
occurred on January 1, 2000.
(3) Installation and Maintenance Revenue includes $14,545, $26,822 and
$14,477 in revenue related to services performed for the
Telecommunications Services Segment for the three month periods
ended 6/30/01, 6/30/00 and 3/31/01, respectively. These revenues
and the related intercompany profit are eliminated in
consolidation.
(4) The Recurring Adjusted EBITDA Segment information has been
reclassified for all periods presented in order to reflect the
services provided to the Telecommunications Services Segment by
the Installation and Maintenance Segment at their contract values.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion