XO Communications Reports Record Breaking Revenue in Third Quarter as Sales of Data Services Expand.Business/Financial Editors RESTON, Va.--(BUSINESS WIRE)--Oct. 30, 2000 XO Communications XO Communications is a United States telecommunications firm and one of the largest Competitive Local Exchange Carrier (CLEC) in the country. It is owned by XO Holdings, Inc OTCBB: XOHO. , Inc. (Nasdaq:XOXO XOXO Hugs and Kisses XOXO Extensible Open Xhtml Outlines XOXO XO Communications, Inc. (former stock symbol) ), one of the world's fastest growing providers of broadband communications services and formerly known as NEXTLINK/Concentric, today announced financial results for the quarter and nine month period ended September 30, 2000. Total revenue grew to $224.3 million in the third quarter of 2000, a 59 percent increase over revenue reported in the second quarter of 2000, and a 199 percent increase over revenue reported in the third quarter of 1999. Year-to-date revenue totaled $470.8 million as of September 30, 2000, a 155 percent increase over the comparable period in 1999. In June 2000, XO consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. a merger with Concentric Coming from the center, or circles within circles. For example, tracks on a hard disk are concentric. Tracks on optical media are concentric or spiral shaped (in a coil) depending on the type. Networks, which contributed to the increase in revenue over prior periods. Of the total revenue reported in the third quarter of 2000, $104 million was derived from voice services revenue, including revenue from local, long distance voice and other enhanced voice services, and $117.9 million resulted from data services, which includes Internet access See how to access the Internet. , network access, and web hosting Making a Web site available on the Internet. Many ISPs host a few personal Web pages for an individual at no additional cost above the monthly service fee, but the address is subordinate to the ISP; for example, www.friendlyisp.com/pat_smith. . Other revenue for the third quarter of 2000 was $2.4 million. Financial results for the last 15 days of the second quarter of 2000 and for the third quarter of 2000 include the operations of Concentric Networks following the completion of its merger with the company on June 16, 2000. The 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 loss totaled $88.9 million in the third quarter of 2000, compared to an EBITDA loss of $55.6 million in the third quarter of 1999. Year-to-date EBITDA loss totaled $220.7 million as of September 30, 2000 compared to an EBITDA loss of $154.8 million in the first nine months of 1999. "We are pleased to have once again delivered on our business plan this past quarter and believe our performance further illustrates XO Communication's ability to consistently deliver solid financial results for our investors," said XO Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Dan Akerson. "That we were able to execute our plan during a transition time in our industry, and in a quarter during which we experienced a Verizon work stoppage stoppage - /sto'p*j/ Extreme lossage that renders something (usually something vital) completely unusable. "The recent system stoppage was caused by a fried transformer." that impacted many of our largest markets is a tribute to our employees, all of whom are intensely focused on winning in this marketplace." Today, XO reported that it had launched commercial broadband wireless See wireless broadband. service in 13 markets in the third quarter and now has fixed wireless capabilities in 17 markets including New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Boston, Chicago, Cleveland, Newark, Philadelphia, Columbus, St. Louis, Washington D.C., Dallas, Houston, Memphis, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Orange County, Sacramento, San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden and Seattle. XO expects to reach its goal of serving 25 markets via broadband wireless by year-end. Additionally, last month, XO announced that it launched broadband services See broadband and broadband service provider. in Portland, Oregon and Austin, Texas, which brings the total number of XO markets in service to 53. During the third quarter, XO made a number of important announcements that showed continued progress toward the company's goal of becoming a global provider of integrated, facilities-based broadband communications services. In late September, XO announced the introduction of revolutionary flat rate service packages 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. for small and medium-sized business locations with 10-100 employees that include local, long distance, Internet Access and Web hosting services A web hosting service is a type of Internet hosting service that allows individuals and organizations to provide their own websites accessible via the World Wide Web. Web hosts are companies that provide space on a server they own for use by their clients as well as providing . The company also announced that the XO Communications name would replace the NEXTLINK and Concentric brands in the marketplace and would be supported in the U.S. by an extensive fall advertising campaign that is now underway. "As we begin to productize our unrivaled broadband network assets, XO is blurring the lines between local and long distance and voice and data services," continued Akerson. "The result is that customers are now buying fully integrated communications services with the simplicity and quality they crave through XO service packages that are extremely difficult for our competitors to truly match." Additionally, XO announced that it is launching a suite of Ethernet services including Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. (GigE) in selected markets in November and expects to launch those services throughout most of its 53 markets in the United States by mid-next year. At the same time, the company announced that XO would be a preferred provider of Ethernet services to Internet giant Yahoo.! XO also made progress on its international expansion initiatives during the quarter. Last month, XO named industry-veteran Mike Read as President of XO Europe. Prior to joining XO, Read was CEO of Internet Service Provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. OneMain.com, and prior to OneMain, he spent more than 30 years at British Telecom The telephone and communications carrier that provides services in Great Britain and Northern Ireland. It used to be a division of the British Post Office, but was privatized in 1984 under Margaret Thatcher's administration. , finishing his career as BT's Chief of Global Engineering where he was responsible for the company's network and system strategy throughout its worldwide alliances. Currently XO has more than 400 employees in Europe providing commercial Internet Access, hosting and security solutions and operating broadband networks  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. and four European data centers in the United Kingdom, Paris and Amsterdam. Earlier this year, XO announced plans to extend its broadband network presence into Europe with an agreement in principle to acquire five metro European networks, a Pan-European inter-city network and transatlantic capacity that will reach 10 Gbps in the next two years. About XO Communications XO Communications is one of the world's leading providers of broadband communications services offering local and long distance voice communication services, Digital Subscriber Line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary ) access, Web hosting and e-commerce service, Virtual Private Networks (VPNs), dedicated access, global transit and application infrastructure services for delivering applications over the Internet or a VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. . XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships that, when complete, will serve much of the United States, Canada and Europe. In the United States, XO has more than 570,000 metro and intercity in·ter·cit·y adj. Relating to, involving, or connecting two or more cities: intercity rivalry; an intercity bus. Intercity Adjective trademark fiber miles in operation. The Company is also North America's largest holder of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities and a partnership with licenses covering all of the top cities in Canada This is a list of incorporated cities of Canada in alphabetical order categorized by province. More thorough lists of communities are available for each province. Significant cities . XO has also agreed in principle to acquire more than 80,000 metro fiber miles in Europe to serve the London, Frankfurt, Brussels, Amsterdam and Paris markets and an 88,000 fiber-mile Pan-European fiber network connecting 21 major European cities and transatlantic capacity that will eventually expand to 10 Gbps. The statements contained in this release that are not historical facts 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. " (as such term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995). These statements include those describing XO's planned European and domestic networks, and Ethernet services and fixed wireless deployment. Management wishes to caution the reader that these forward-looking statements are only predictions and are subject to risks and uncertainties and actual results may differ materially from those indicated in the forward-looking statements as a result of a number of factors. These factors include, but are not limited to, the ability of XO to market, sell and provision its services, to negotiate and reach definitive agreements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the purchase of the European network on satisfactory terms, to design and construct fiber optic networks and, install cable and facilities, including switching electronics, to develop, install and provision LMDS (Local Multipoint Distribution Service) A digital wireless transmission system that works in the 28 GHz range in the U.S. and 24-40 GHz overseas. It requires line of sight between transmitter and receiving antenna, which can be from one to four miles apart equipment and interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. that equipment with its fiber networks and connect those networks to customers. The XO business is subject to other risks and uncertainties described from time to time in its reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 1999 and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2000. XO, the XO design logo are trademarks of XO Communications, Inc.
XO COMMUNICATIONS, INC.
Financial Highlights
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000(a) 1999
-------- --------- --------- --------
Revenue $ 224,254 $ 75,059 $ 470,753 $184,302
Costs and expenses:
Operating 144,107 59,328 317,015 156,395
Selling, general
and administrative 169,082 71,322 374,452 182,755
Stock based
compensation 13,396 2,535 39,609 4,711
Depreciation and
amortization 234,365 28,456 356,772 78,606
In-process research
and development (b) - - 36,166 -
---------- ----------- ---------- ---------
Loss from operations (336,696) (86,582) (653,261) (238,165)
Interest income 50,248 24,428 141,347 61,713
Interest expense (108,893) (79,419) (324,557) (190,172)
Other income (loss)
(c) 1,160 - 226,735 -
---------- ----------- ---------- ---------
Net loss $ (394,181) $ (141,573) $ (609,736) $ (366,624)
============ =========== =========== ==========
Preferred stock
dividends and
accretion of
preferred stock
redemption
obligation,
including issue
costs (42,306) (17,525) (107,505) (51,179)
----------- ----------- ---------- ---------
Loss applicable to
common shares (d) $ (436,487) $ (159,098) $ (717,241) $ (417,803)
=========== ============ =========== ===========
Basic loss per share
(d), (e) $ (1.20) $ (0.63) $ (2.33) $ (1.71)
=========== ============ =========== ===========
Basic weighted
average shares
outstanding (e) 362,802,391 250,753,388 307,774,101 244,714,684
============= ============ =========== ============
EBITDA (f) $ (88,935) $ (55,591) $ (220,714) $ (154,848)
(a) On June 16, 2000, the Company completed the acquisition of
Concentric Network Corporation (Concentric). The Concentric
acquisition was accounted for as a purchase: accordingly, the
operating results of Concentric are included from date of
acquisition.
(b) In connection with the Concentric acquisition, the Company
allocated $36,166 of the purchase price to in-process research
and development.
(c) Other income (loss) for the nine months ended September 30,
2000 includes $225,112 associated with a realized gain from
the sale of equity securities.
(d) Excluding the aforementioned in-process research and
development charge of $36,166 and the aforementioned gain of
$225,112, loss applicable to common shares and basic loss per
share for the nine months ended September 30, 2000 was
($906,187) and ($2.94), respectively.
(e) The net loss per share data and weighted average shares
outstanding have been adjusted for the stock split effected in
2000.
(f) EBITDA consists of net loss before other income (loss), net
interest expense, in-process research and development charge,
depreciation, amortization and stock based compensation
expense. EBITDA is commonly used to analyze companies on the
basis of operating performance, leverage and liquidity.
XO COMMUNICATIONS, INC.
Condensed Consolidated Statements of Financial Position
(Dollars in thousands)
As of
September 30, December 31,
2000 1999
------------- -------------
Cash, cash equivalents, and marketable
securities $ 2,710,170 $ 1,881,764
Other current assets 200,524 105,244
Pledged securities 26,465 40,759
------------- -------------
Total current assets 2,937,159 2,027,767
Property and equipment, net 2,088,819 1,180,021
Investment in fixed wireless licenses 986,980 933,128
Other long-term assets, net 251,866 364,764
Goodwill and other intangibles, net 3,077,103 91,428
------------- -------------
Total assets $ 9,341,927 $ 4,597,108
============= =============
Current liabilities $ 544,647 $ 249,217
Long-term debt 4,365,996 3,733,342
Other long-term liabilities 31,359 15,319
Redeemable preferred stock, net of
issuance costs 2,071,401 612,352
Total shareholders' equity (deficit) 2,328,524 (13,122)
-------------- -------------
Total liabilities and
shareholders' equity (deficit) $ 9,341,927 $ 4,597,108
============= =============
(a) The balance sheet includes the consolidation of Concentric
Network Corporation (Concentric), which was acquired by the
Company on June 16, 2000.
XO COMMUNICATIONS, INC.
Operating Data (a)
As of As of As of As of
September 30, June 30, March 30, December 31,
2000 2000 2000 1999
------------- ----------- ------------ -------------
Route miles 8,677 5,380 4,356 4,285
Fiber miles 572,674 435,992 413,407 378,200
On-net buildings
connected 1,761 1,738 1,485 1,320
Off-net buildings
connected 47,221 43,264 31,797 28,656
Voice switches
operational 34 32 32 32
ATM switches
operational 46 43 - -
Access lines in
service 737,433 627,162 521,139 428,035
DSL lines in service 23,140 17,759 - -
Managed servers 2,582 2,373 - -
Hosted shared
websites 212,327 189,157 - -
Data centers
operational 8 8 - -
Employees 6,757 6,155 3,872 3,500
Definitions ---------------------------------------------------------------------- Route Miles The number of miles that are spanned by a telecommunications network. It does not include combined wire mileage due to multiple wires or fibers within a single cable or by overlapping segments, just the total geographic distance between cities or other terminal points. - The number of operational miles of the telecommunications path in which the leased or Company-owned fiber optic cables Noun 1. fiber optic cable - a cable made of optical fibers that can transmit large amounts of information at the speed of light fibre optic cable transmission line, cable, line - a conductor for transmitting electrical or optical signals or electric power are installed. These include metro and intercity miles. Fiber Miles - The number of operational route miles installed along a telecommunications path, multiplied by the Company's estimate of the number of fibers along that path. These include metro and intercity miles. On-Net buildings connected - Buildings physically connected to the Company's networks, excluding those connected by unbundled incumbent local exchange carrier ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the break up of AT&T into the Regional Bell Operating Companies (RBOCs) also known as the "Baby Bells". (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. ) facilities. Off-Net buildings connected - Buildings connected to the Company's networks through leased or unbundled ILEC facilities. Access lines in services - The number of access lines for which the Company is billing services. The Company defines an access line as a telephone connection between a customer purchasing local telephone services and XO. This connection does not include the concept of access line equivalents (ALEs), and is a one-for-one relationship with no multipliers used for trunk ratios, except for those trunks over which primary rate interface (PRI PRI: see Institutional Revolutionary party. (Primary Rate Interface) An ISDN service that provides 23 64 Kbps B (Bearer) channels and one 64 Kbps D (Data) channel (23B+D), which is equivalent to the 24 channels of a T1 line. ) service is provided, which are counted as 23 access lines. DSL lines in service - The number of digital subscriber lines for which the Company is billing service. DSL is dedicated access technology that allows high speed digital service over regular telephone lines via modems. Managed servers - The number of Company or customer owned servers that are dedicated to hosting a single customer's websites which reside in the Company's data centers. Hosted shared websites - The number of websites that are hosted for multiple customers on shared servers. (a) The operating data for all periods presented include the statistics of the Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. network, which the Company manages and in which the Company has a 40% membership interest. |
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