Intermedia Communications 2Q Results; Increased Growth Pushes Quarterly Revenue to $218 Million - 2nd qtr 1999 - Company Financial Information

Cambridge Telcom Report, August 16, 1999

"Our core business is delivering improving financial performance, and we expect that trend to continue in the second half of the year," said Manning. "And, by creating a public entity at Digex, we have attracted the management talent and financing to aggressively pursue the opportunities in the managed web hosting and applications outsourcing marketplace, while retaining the vast majority of the financial benefits and all of the strategic benefits."

EBITDA consists of earnings before interest and other income, income taxes, depreciation, amortization and charges for in-process R & D and business restructuring, integration and other charges. EBITDA does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA should not be considered as an alternative to net loss as an indicator of the Company's operating performance or to cash flows as a measure of liquidity. In addition, EBITDA is not a term defined by generally accepted accounting principles, and, as a result, the measure of EBITDA presented herein may not be comparable to similarly titled measures used by other companies.

Intermedia Communications provides integrated solutions to business and government customers. These solutions include voice and data, local and long distance, and advanced network access services in major U.S. markets. Intermedia's enhanced data portfolio, including frame relay networking, ATM, and a full range of business Internet solutions and web hosting services, offers seamless end-to-end service virtually anywhere in the world.

Intermedia is one of the top 5 Internet services providers (ISPs) to businesses and is consistently rated at or near the top of all ISPs for network performance and customer services by such industry publications as Keynote and Boardwatch. Intermedia Communications Inc. is headquartered in Tampa, Florida, and can be found on the World Wide Web at www.intermedia.com.

Digex is a leading provider of Web and application hosting services for some of the world's leading companies that rely on the Internet as a critical business tool. Digex also offers value-added enterprise and professional services, including performance and security testing, monitoring, reporting and networking services. Digex customers, from mainstream corporations to Internet-based businesses, leverage Digex's services to deploy secure, scalable, high performance business solutions, including electronic retailing, online banking, online procurement and customer self-service applications. Digex, Incorporated is headquartered in Beltsville, Maryland and is a subsidiary of Intermedia Communications. Additional information on Digex is available at http://www.digex.com.

                 INTERMEDIA COMMUNICATIONS INC.
                      Financial Highlights
                (In thousands, except share data)

                         Three Months Ended     Six Months Ended
                              June 30,               June 30,
                          1999       1998       1999        1998
Revenues:
 Local network services$ 55,475  $  38,193  $  108,457  $  71,869
 Enhanced data services  66,675     42,668     126,768     79,205
 Interexchange services  64,329     82,747     131,942    127,498
 Integration services    31,410     26,622      55,444     48,443
    Total revenues      217,889    190,230     422,611    327,015

Expenses:
 Network operations      93,996     88,015     187,904    159,557
 Facilities administration
  and maintenance        23,171     18,536      45,807     33,568
 Cost of goods sold      19,501     17,218      35,305     30,909
 Selling, general and
  administrative         71,102     56,402     128,416    102,747
 Depreciation and
  amortization           68,772     50,215     140,383     90,991
 Charge-off of purchased
  in process R & D           --         --          --     63,000
 Business restructuring,
  integration and other
  charges                 3,439     50,081       8,838     50,081
    Total operating
     expenses           279,981    280,467     546,653    530,853
Loss from operations    (62,092)   (90,237)   (124,042)  (203,838)

Other income (expense)
 Interest               (69,224)   (47,858)   (131,402)   (97,159)
 Other                   13,749      6,040      20,307     16,770

Net loss               (117,567)  (132,055)   (235,137)  (284,227)
Preferred stock dividends
 and accretions         (22,965)   (18,876)    (45,448)   (37,471)
Net loss attributable to
 common stockholders  $(140,532) $(150,931)  $(280,585) $(321,698)

Loss per common share:

Net loss before charge
 for in-process R&D and
 restructuring        $   (2.74) $   (2.33)  $   (5.47) $   (5.30)
Charge for in-process
 R&D                         --         --          --  $   (1.60)
Charge for business
 restructuring,
 integration and
 other charges        $   (0.07) $   (1.16)  $   (0.18) $   (1.27)
Basic and diluted net
 loss per common share$   (2.81) $   (3.49)  $   (5.65) $   (8.17)

Weighted average shares
 outstanding basic and
 diluted             50,009,473  43,300,889  49,682,966  39,373,704

EBITDA (1)            $  10,119  $  10,059   $  25,179  $     234


Other Data:
                                              June 30,  March 31,
                                                1999      1999
Local and Long Distance Services (2)
 Buildings (3)                                 4,374     4,359
 Voice switches in operation                      25        23
 Access line equivalents                     407,675   376,742
 Access line equivalents per local switch (4) 14,315    13,862

Enhanced Data Services (2)
 Data switches in operation                      173       167
 Nodes in service (5)                         42,741    39,171
 NNI connections                                 793       728

 Employees                                     4,252     4,128