Global Crossing Announces Record Revenues, $2 Billion Sales Backlog, Following Merger with Frontier - Company Financial Information

Cambridge Telcom Report, Nov 1, 1999

-- Frontier merger, acquisition of Global Marine Systems, and formation of Asia Global Crossing, all completed during the quarter.

-- New global telecommunications powerhouse, included in the S&P 500 and the Nasdaq 100, will offer seamless end-to-end products and services worldwide.

-- Recurring Adjusted EBITDA for combined companies equals $290 million.

Global Crossing Ltd. (Nasdaq: GBLX), which is building and offering services over the world's first global fiber optic network, Wednesday reported results for the third quarter ended September 30, 1999. The quarter was highlighted by completion of the acquisition of Global Marine Systems on July 2; the formation of Asia Global Crossing, a joint venture with Microsoft and Softbank on September 8; and the completion of the merger with Frontier Corporation on September 28. On October 11, Global Crossing also announced an agreement to acquire Racal Telecom in the United Kingdom.

Combination with Frontier and Global Marine "With the conclusion of the merger with Frontier last month, we can now begin to realize the benefits of the global telecommunications powerhouse we have created by combining these two companies," said Bob Annunziata, Chief Executive Officer of Global Crossing. "The synergies between Global Crossing and Frontier were obvious to us when we announced our merger in March and are now confirmed. The addition of a North American footprint has added immense value to our global network and jump-starts our goal to offer a full range of data, voice, and Internet products and services into international markets. Now we are putting those advanced offerings, such as Global Center's industry-leading Web hosting capabilities, on a fast-track to customers throughout the world. We're moving at record speed to bring integrated networks and products on line, expanding from the U.S. into Europe and Asia. Our agreement earlier this month to acquire Racal Telecom in the UK is just the latest example of how quickly we can move."

With these two strategic acquisitions, the new company will have nearly 13,000 employees around the world; nearly three million customers; 92,700 announced route miles; 1.4 million announced fiber miles; and a fleet of cable laying and maintenance vessels. The company now offers a full range of services including voice, Web hosting, private line, ATM (Asynchronous Transfer Mode), conferencing, and Internet services, in addition to its bandwidth products. These services will be deployed into the 170 major cities in 24 countries to be covered by the Company's global network.

The acquisition of the robust, data-centric Racal network, expected to be completed before the end of the year, will add 20 ATM data switches, 4 AXE-10 voice switches, a frame relay network, and the largest X.25 network in the United Kingdom. The Racal network, the second most extensive in the UK, connects more than 2,000 cities and towns. It reaches deeply into the local exchange network, minimizing interconnection charges, and will lie within five kilometers of two thirds of all UK businesses by the year 2001.

On a three-month pro forma basis, assuming the business combinations with Global Marine Systems and Frontier Corporation had occurred as of the beginning of the quarter, total revenues were $929 million, up 8 percent, as compared with $863 million for the three months ended September 30, 1998, with more than 70 percent of revenue accounted for by the sale of services. Including Global Marine Systems and Frontier, Global Crossing has a contracted sales backlog exceeding $2 billion, most of which is expected to be recognized as revenue over approximately the next three years. Pro forma recurring Adjusted EBITDA for the three months was $290 million, up more than 16% from the three months ended September 30, 1998.

The following pro forma includes Global Marine Systems and Frontier Corporation from the beginning of each period.

Pro forma combined financial highlights for the three and nine months
ended September 30, 1999 and September 30, 1998 (includes Global
Crossing, Global Marine Systems, and Frontier)

                          Three Months Ended     Nine Months Ended
                              September 30,         September 30,
                         -------------------   -------------------
                             1999       1998       1999       1998
Results of               --------   --------   --------   --------
----------                    (Unaudited)           (Unaudited)
Pro Forma Operations: (1)   (in millions, except per share data)
-------------------------
Pro Forma Revenues       $  929.1   $  863.4   $2,792.6   $2,366.6
Pro Forma Recurring
 Adjusted EBITDA         $  290.3   $  251.3   $  886.6   $  653.3
Pro Forma Recurring income
 (loss) applicable to
 common shareholders     $  (34.1)  $   11.7   $  (55.4)  $  (49.4)
Pro Forma Recurring income
 before goodwill
 amortization applicable to
 common shareholders     $   34.6   $   80.6   $  151.0   $  157.1
Pro Forma Recurring income
 (loss) per share,
 basic and diluted       $  (0.04)  $   0.02   $  (0.07)  $  (0.07)
Pro Forma Recurring income
 before goodwill
 amortization per share,
 basic and diluted       $   0.04   $   0.11   $   0.19   $   0.23

(1)  See Unaudited Pro Forma Condensed Consolidated Statements of
     Operations and accompanying footnote.