AT&T Canada Reports Record Fourth Quarter 1999 Financial and Operating Results - Company Financial Information

Cambridge Telcom Report, Feb 21, 2000

* Completed integration and cross training of the direct sales forces of the former AT&T Canada LDS, MetroNet and ACC TelEnterprises into a 700 plus person segmented and channelized sales organization. This direct sales organization - located across the country and the largest in the Canadian telecom industry - began selling a full bundle of the new AT&T Canada's products and services in mid-January, 2000.

Operations and Network Deployment * Activated an additional 4,200 kilometre segment of its broadband pan Canadian fibre optic network along the Calgary-United States-Toronto route with SONET OC-192 and next-generation of Dense-Wavelength Division Multiplexing (D-WDM) electronics to close its national backbone ring.

* Successfully completed the largest single implementation of local number portability (LNP) ever undertaken in Canada with the porting of 4,800 local numbers over the course of a single day for a large Manitoba customer implementation. Overall, the number of local access telephone numbers ported using LNP grew by approximately 48 percent sequentially from third quarter 1999 to more than 49,000. Permanent LNP allows customers to switch their local telephone service to AT&T Canada's network without changing existing telephone numbers.

* Launched commercial availability of a full suite of on-net local voice, data and Internet service offerings in the Hull, Quebec market on its recently completed full service fibre optic network.

* Completed its 1999 plan to more than double the number of fibre-served collocation facilities in incumbent providers' host central offices for the provision of local and data service over unbundled loops. AT&T Canada now has facilities collocated in 57 incumbent telephone company host central offices and plans to be in approximately 90 collocations by the end of 2000.

* Successfully completed the interconnection of all MetroNet CLEC local switching and signaling systems with the long distance switching and signaling systems of AT&T Canada Long Distance Services.

Financial * Grew quarterly revenues to $347.1 million and EBITDA to $20.1 million, with sales growth occurring across all of the company's primary lines of business. EBITDA results were, and will continue to be, impacted by start-up losses from the company's extensive CLEC network deployments.

* Deployed $260.2 million of capital expenditures during the quarter, bringing the total property, plant and equipment that the new AT&T Canada has invested in its networks as of December 31, 1999 to $2.2 billion.

* Refinanced approximately $730 million of preferred shares, subordinated debentures and shareholder loans of AT&T Canada Long Distance Services which existed prior to its June 1, 1999 strategic combination with MetroNet Communications. The refinancing was completed utilizing funds from its successful September 1999 senior notes offerings.

* Closed its previously announced $600 million senior secured credit facility. The six and one-half year term, dual-tranche (operating and revolving) facility replaced both of the company's earlier $200 million and $40 million credit facilities and it remained untapped at December 31, 1999.