<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
---------------
FORM 8-K
---------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 2, 2000
--------------------
Global Crossing Ltd.
(Exact name of registrant as specified in its charter)
--------------------
Bermuda 000-24565 98-0189783
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
Wessex House, 45 Reid Street
Hamilton, Bermuda HM12
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (441) 296-8600
================================================================================
<PAGE>
2
Item 5. Other Events
On May 2, 2000, Global Crossing Ltd., a Bermuda company ("Global
Crossing Ltd."), issued a press release, which is attached as Exhibit 99.1 to
this Form 8-K and is incorporated herein by reference.
Item 7. Financial Statement and Exhibits.
(c) Exhibits.
99.1 Press Release of Global Crossing Ltd., dated May 2, 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
GLOBAL CROSSING LTD.
Dated: May 9, 2000 By: /s/ Dan J. Cohrs
-------------------------------------
Name: Dan J. Cohrs
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
3
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.1 Press Release of Global Crossing Ltd., dated
May 2, 2000.
<PAGE>
Exhibit 99.1
Global Crossing's Recurring Adjusted EBITDA Up 23% From
Fourth Quarter 1999, With 14% Growth in Cash Revenue
. Cash Revenue from data products now represents 51% of total
Telecommunications Services revenue.
. Agreement to acquire IXnet, leading broadband service provider for
multinational financial institutions, will expand IP-based service
offerings for multinational corporations.
. GlobalCenter pushes to expand global web-hosting footprint. Revenue growth
from the prior quarter exceeds 50%.
. Asia Global Crossing accelerates East Asia Crossing and begins to
consolidate Pacific Crossing 1. Global Crossing closes joint venture with
Hutchison Whampoa.
. Completion of common and convertible preferred stock offerings, combined
with other pending financings related to subsidiaries, will complete
planned financing for 2000.
. Gary Cohen from IBM and Joseph Perrone from Arthur Andersen are recruited
to senior management team.
Hamilton, Bermuda - May 2, 2000 - Global Crossing Ltd. (Nasdaq: GBLX), which is
building and offering services over the world's most extensive global IP-based
fiber optic network, today reported first quarter 2000 Cash Revenue of $1,285
million, an increase of 14% over the prior quarter's $1,129 million. Revenue
reported for the quarter was $1,120 million, up 5% from $1,065 million in the
fourth quarter of 1999. The primary difference between the growth rates of
Revenue and Cash Revenue is due to the Company's business practice of selling
capacity under terms that require amortization of revenue over the contract life
rather than terms that qualify for immediate revenue recognition.
Recurring Adjusted EBITDA of $401 million was up 23% from the fourth
quarter's $325 million. Recurring net loss applicable to common shareholders
for the quarter was $279 million, or
<PAGE>
-2-
$0.36 per share, which includes full-quarter impacts of losses from Racal
Telecom and expenses associated with bringing into service Pacific Crossing 1
(PC-1) and Pan European Crossing.
Compared to the first quarter of 1999, giving effect on a pro forma basis
to the acquisitions of Frontier Corporation, Global Marine Systems and Racal
Telecom, as well as the consolidation of PC-1, Cash Revenue increased 21%, from
$1,065 million to $1,285 million, and Recurring Adjusted EBITDA was up 19%, from
$336 million to $401 million.
"Global Crossing is creating a set of assets that will be difficult to
replicate - assets that enable us to hit the sweet spot of two key industries,
data services and complex web-hosting, each of which is growing at exponential
rates," said Leo Hindery, Jr., Global Crossing Chief Executive Officer. "Our
robust global fiber-optic network, which is on track to be fully in place by the
middle of next year, combined with our roll-out of customer-centric product
capabilities, will enable us to provide unmatched data products, applications
and services to multi-national corporations throughout the world. The Global
Crossing network was created to serve these customers and other high bandwidth
users, and we intend to use it accordingly."
Added Hindery: "As we invest the final required capital to deploy our
announced network and product capabilities that will drive our future growth, we
continue to invest as well in our operations, marketing and sales teams in
Europe, the Americas and Asia. Our strong growth in cash flow more than made up
for these planned increases in operating expenses, with both Adjusted EBITDA and
Adjusted EBITDA margin showing strong quarterly increases, as we had indicated
they would."
On May 1, Global Crossing announced that it has recruited to its senior
ranks executives from IBM and Arthur Andersen. Gary A. Cohen, General Manager
of IBM's Global Telecommunications Industry group, will become Chief Operating
Officer of Global Crossing. Cohen, one of the most respected executives in the
world of Internet Protocol and a 22-year veteran of IBM, will be responsible for
regional and network operations, marine operations, construction, technology and
provisioning. Joseph P. Perrone, a senior partner in Arthur Andersen's
Communications, Media & Entertainment Practice, will be Senior Vice President,
Finance for Global Crossing, reporting to Dan J. Cohrs, Chief Financial Officer.
<PAGE>
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During the first quarter, announced route miles scheduled for completion by
the end of the first half of 2001 reached 101,000. At the same time, Global
Crossing continued its expansion of product capabilities across its global fiber
network. By the end of the first quarter, international private line services
were available in five European cities and Tokyo, as well as throughout the
major cities of North America and the United Kingdom. A full range of voice and
data products and data virtual private network services are available in North
America and the U.K. By the end of this year, international private line
services are expected to extend to the entire Pan European Crossing network and
to Japan, Mexico, South America and Hong Kong. Data products, including IP
services, ATM and frame relay as well as web-hosting, are expected to be
extended by the fourth quarter 2000 into major cities of Europe, Japan, South
America and Mexico. Enhanced Advanced Intelligent Network (AIN) features
already available in North America will be extended to Europe starting in the
second quarter of this year.
The Company's recently completed offerings of common and convertible
preferred stock, combined with operating cash and the proceeds from equity and
debt financings to be completed this year related to its Asian joint ventures
and other subsidiaries, are expected to fully fund the anticipated business
expansion activities of the Global Crossing family of companies for the year
2000.
CONSOLIDATED QUARTERLY SEQUENTIAL RESULTS
The following table summarizes the quarterly sequential operating results
of the Company and its subsidiaries for the three months ended March 31, 2000
and December 31, 1999. Results for the three months ended December 31, 1999
include operations of Global Marine Systems and Frontier Corporation for the
full period, and of Racal Telecom from November 24, 1999. Results for the three
months ended March 31, 2000 also include the equity in the loss of the Hutchison
Global Crossing joint venture from January 12, 2000. Asia Global Crossing
recently increased its holdings in PC-1 to 64.5% from 57.75%. As a result of
changes in the PC-1 shareholders agreement, Asia Global Crossing has, starting
January 1, 2000, begun to consolidate PC-1's operating results.
<PAGE>
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<TABLE>
<CAPTION>
Three Months Ended Change
-------------- -------------- -------------- ----------------
March 31, December Amount Percent
2000 31, 1999
-------------- -------------- -------------- ----------------
(Unaudited) (Unaudited)
(in millions)
<S> <C> <C> <C> <C>
Consolidated Information*:
- --------------------------
Cash Revenue $1,285 $1,129 $156 13.8%
Recurring Adjusted EBITDA $ 401 $ 325 $ 76 23.3%
</TABLE>
*See Condensed Consolidated Statements of Operations or schedules attached
thereto.
Telecommunications Services
During the first quarter of 2000, the Company continued to see strong
growth in Telecommunications Services. Cash Revenue for this segment increased
19% from the fourth quarter of 1999, to $1,026 million. Revenue reported for
Telecommunications Services was $860 million compared to $804 million in the
prior quarter, an increase of 7%. The unrecognized sales backlog continued to
exceed $2 billion at the end of the first quarter of 2000.
The portion of the Company's Telecommunications Services segment in North
America formerly represented by Frontier Communications achieved quarterly
sequential growth in Revenue of 12%, and in Cash Revenue of 16%. Comparing to
the same period a year ago, this portion of Telecommunications Services Revenue
increased by 24%, and Cash Revenue by 27%.
Revenue from Telecommunications Services commercial customers grew by 17%
on a quarterly sequential basis, reflecting a full quarter's contribution from
Racal, compared to a partial quarter's contribution in the fourth quarter of
1999, the rapid growth of data revenue within this sector, and a small increase
in North American commercial voice revenue, compared to declines in previous
quarters.
In the Telecommunications Services carrier sector, Cash Revenue was $656
million compared to $536 million in the fourth quarter of 1999, representing a
quarterly sequential increase of 22%. Carrier Revenue of $490 million
represented a 3% increase from the fourth quarter of 1999.
Cash Revenue from all data products now accounts for 51% of
Telecommunications Services Cash Revenue. The continuing shift of the Company's
revenue mix toward high-margin data products contributed to stronger Adjusted
EBITDA margins in the quarter. Data products, including ATM, dedicated Internet
services, frame relay and complex web-hosting, generated triple-digit annualized
growth rates for the eighth consecutive quarter.
<PAGE>
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The primary difference between the growth rates of Revenue and Cash Revenue
for the Telecommunications Services segment, the carrier sector, and data
products, is due to the Company's business practice of selling capacity under
terms that require amortization of revenue over the contract life rather than
terms that qualify for immediate revenue recognition.
During the quarter, state-of-the-art data virtual private network service
was introduced to multiple locations, enabling customers to avoid the cost of
private lines and hardware.
Global Crossing's complex web-hosting business, GlobalCenter, has continued
to show strong growth, and by the end of 2000 is expected to have 1.3 million
square feet of active data centers. Further expansion of the GlobalCenter
footprint is planned in the U.S., Europe and the Asia-Pacific region to meet the
growing demand for complex web-hosting and application services around the
world. These centers are integrated with the Global Crossing network, providing
GlobalCenter's complex web-hosting customers with high-performance Internet
connectivity. GlobalCenter increased its strategic partnerships through the
establishment of significant arrangements with Tanning Technology, LoudCloud and
Storage Networks.
The pending acquisition of IXnet, a leading provider of IP-based services
to multinational financial institutions, was announced on February 22, and is
expected to close in June.
Installation and Maintenance Services
The installation and maintenance business segment, Global Marine, reported
external revenue of $72 million, as compared to $76 million in the fourth
quarter of 1999. Adjusted EBITDA from external contracts remained constant at
$21 million. In January of this year, Global Marine began providing maintenance
services for Global Crossing's subsea cable systems. This internal contract
required Global Marine's incremental capacity for the quarter, accounting for
the unchanged Adjusted EBITDA and the slight decline in revenue from external
sources.
Incumbent Local Exchange Carrier Services
Incumbent Local Exchange Carrier (ILEC) Services reported revenue of $187
million for the quarter, and Adjusted EBITDA of $94 million, both essentially
unchanged from the seasonally strong fourth quarter. During the quarter, the
ILEC segment introduced its high-speed Internet
<PAGE>
-6-
Asynchronous Digital Subscriber Line (ADSL) product called Frontier
LightningLink. It also announced a complete web-hosting solution for small-to-
medium size businesses, which includes web site creation and maintenance at
economical rates.
On May 1, Global Crossing announced that it has retained Chase Securities,
Inc. and Merrill Lynch & Co. to assist it in examining strategic options related
to these operations and assets.
Asia
Asia Global Crossing's expansion of the Global Crossing Network into Asia
was accelerated during the quarter with the announcement that the cable landing
date for Taiwan has been moved up to year-end 2000. The Hutchison Global
Crossing joint venture in Hong Kong was finalized, and GlobalCenter Japan, a
joint venture among Asia Global Crossing, GlobalCenter and IRI, is being formed.
Asia Global Crossing is currently developing and operating several networks
and joint ventures to provide the Asia-Pacific region unequaled access to a
broadband, seamless global network through a combination of high-capacity city
rings, terrestrial systems and undersea cables. This effort is expected to be
the first to market true pan-Asian IP-level capacity to multinational businesses
and carriers in the region.
Capitalizing on continuing delays in the competing Japan-US transoceanic
cable, sales of capacity on PC-1 and Global Access Limited (GAL), which connect
Japan and North America, have been well ahead of forecasted amounts.
Definition of Terms Used
In this press release, "Revenue" refers to revenue reported on the
Company's statements of operations according to Generally Accepted Accounting
Principles. "Cash Revenue" refers to Revenue plus the cash portion of the change
in deferred revenue. Adjusted earnings before interest, taxes, depreciation
and amortization, "Adjusted EBITDA," refers to operating income (loss) plus
goodwill amortization, depreciation and amortization, non-cash cost of capacity
sold, stock related expenses and the cash portion of the change in deferred
revenue, which definition is consistent with the financial covenants contained
in the company's major financial agreements.
<PAGE>
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"Recurring Adjusted EBITDA" refers to Adjusted EBITDA plus one-time merger and
integration expenses and other non-recurring expenses.
About Global Crossing
Global Crossing Ltd. (Nasdaq: GBLX) is building and offering services over
the world's most extensive global IP-based fiber optic network, which will have
more than 101,000 route miles, serving five continents, 27 countries and more
than 200 major cities. Global Crossing's subsidiary, GlobalCenter Inc., is a
leading Internet service business, and its customers include many of the largest
and most densely trafficked sites on the Web. Asia Global Crossing, a joint
venture among Global Crossing, Microsoft Corporation (Nasdaq: MSFT), and
Softbank Corp. (Tokyo Stock Exchange: 9984), is building the first pan-Asian
broadband IP network to provide broadband and Internet services to the Asia-
Pacific region. Global Crossing's operations are headquartered in Hamilton,
Bermuda, with principal offices in Los Angeles, California; London, England;
Morristown, New Jersey; Rochester, New York; and Miami, Florida. Visit Global
Crossing at www.globalcrossing.com on the Web.
# # #
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. 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 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.
Investor contacts:
Jensen Chow
+1 310 385 5283
[email protected]
- ----------------------------
Press contacts:
Tom Goff
+ 1 310 385 5231
[email protected]
- ------------------------
Kim Polan
+ 1 212 687 8080
[email protected]
- -------------------
<PAGE>
-8-
<TABLE>
<CAPTION>
GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2000 and December 31, 1999
(Unaudited)
(In thousands, except share and per share amounts)
==================================================================================================================================
Three Months Ended Change
------------------------------------------- --------------------------------------
March 31, 2000 December 31, 1999 Amount Percent
==================================================================================================================================
<S> <C> <C> <C> <C>
REVENUE $1,119,516 $1,065,461 $ 54,055 5.1%
EXPENSES:
Cost of sales 579,907 571,176 (8,731) (1.5%)
Operations, administrative and maintenance 144,283 117,352 (26,931) (22.9%)
Sales and marketing 103,719 101,211 (2,508) (2.5%)
Network development 17,645 11,667 (5,978) (51.2%)
General and administrative 150,359 121,127 (29,232) (24.1%)
Stock related expense 18,850 12,697 (6,153) (48.5%)
Depreciation and amortization 140,943 107,974 (32,969) (30.5%)
Goodwill amortization 131,634 123,814 (7,820) (6.3%)
- ----------------------------------------------------------------------------------------------------------------------------------
1,287,340 1,167,018 (120,322) (10.3%)
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS) (167,824) (101,557) (66,267) (65.3%)
Equity in income (loss) of affiliates (5,140) 21,180 (26,320) (124.3%)
Minority interest (15,731) (1,338) (14,393) (1,075.7%)
Other income (expense):
Interest income 22,798 21,744 1,054 4.8%
Interest expense (85,676) (57,539) (28,137) (48.9%)
Other income (expense), net (5,628) (34,957) 29,329 83.9%
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME
TAXES AND EXTRAORDINARY ITEM (257,201) (152,467) (104,734) (68.7%)
(Provision) benefit for income taxes (5,000) (16,483) 11,483 69.7%
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (262,201) (168,950) (93,251) (55.2%)
Extraordinary loss on retirement of debt - (30,816) 30,816 100.0%
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (262,201) (199,766) (62,435) (31.3%)
Preferred stock dividends (45,258) (25,359) (19,899) (78.5%)
After tax interest on convertible debt - 30 (30) (100.0%)
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) APPLICABLE TO COMMON
SHAREHOLDERS $ (307,459) $ (225,095) $ (82,364) (36.6%)
==================================================================================================================================
(The three months ended March 31, 2000, includes Global Crossing (with PC-1 consolidated), Frontier, Global Marine Systems, Racal
Telecom and equity in the income (loss) of the Hutchison Global Crossing joint venture from January 12, 2000. The three months
ended December 31, 1999, includes Global Crossing, Frontier, Global Marine Systems, Racal Telecom from November 24, 1999.)
</TABLE>
<PAGE>
-9-
<TABLE>
<CAPTION>
GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2000 and December 31, 1999
(Unaudited)
(In thousands, except share and per share amounts)
===================================================================================================================================
Three Months Ended Change
-------------------------------------------------------------------------------------
March 31, 2000 December 31, 1999 Amount Percent
===================================================================================================================================
<S> <C> <C> <C> <C>
INCOME (LOSS) PER COMMON SHARE:
Income (loss) applicable to common
shareholders before extraordinary item
Basic $ (0.39) $ (0.25) $ (0.14) (56.0%)
Diluted $ (0.39) $ (0.25) $ (0.14) (56.0%)
Extraordinary loss on retirement of debt
Basic $ - $ (0.04) $ 0.04 100.0%
Diluted $ - $ (0.04) $ 0.04 100.0%
Net income (loss) applicable to common
shareholders
Basic $ (0.39) $ (0.29) $ (0.10) (34.5%)
Diluted $ (0.39) $ (0.29) $ (0.10) (34.5%)
Shares used in computing income (loss)
per share
Basic 778,780,323 772,929,855 5,850,468 0.8%
Diluted 778,780,323 772,929,855 5,850,468 0.8%
===================================================================================================================================
RECURRING INCOME (LOSS):
Income (loss) applicable to common
shareholders $ (307,459) $ (225,095) $ (82,364) (36.6%)
Merger-related and severance expenses 12,585 7,600 (4,985) (65.6%)
Non-cash severance 9,862 - (9,862) -
Extraordinary loss on retirement of debt - 30,816 (30,816) (100.0%)
Other (income) expense, net 5,628 34,957 (29,329) (83.9%)
- -----------------------------------------------------------------------------------------------------------------------------------
RECURRING NET INCOME (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS $ (279,384) $ (151,722) $ (127,662) (84.1%)
- -----------------------------------------------------------------------------------------------------------------------------------
Goodwill amortization 131,634 123,814 7,820 6.3%
- -----------------------------------------------------------------------------------------------------------------------------------
RECURRING INCOME (LOSS) APPLICABLE TO
COMMON SHAREHOLDERS BEFORE GOODWILL
AMORTIZATION $ (147,750) $ (27,908) $ (119,842) (429.4%)
- -----------------------------------------------------------------------------------------------------------------------------------
RECURRING NET INCOME (LOSS) PER
COMMON SHARE:
Recurring net income (loss) applicable
to common shareholders
Basic $ (0.36) $ (0.20) $ (0.16) (80.0%)
Diluted $ (0.36) $ (0.20) $ (0.16) (80.0%)
Recurring income (loss) applicable to
common shareholders before goodwill
amortization
Basic $ (0.19) $ (0.04) $ (0.15) (375.0%)
Diluted $ (0.19) $ (0.04) $ (0.15) (375.0%)
Shares used in computing net income
(loss) per share
Basic 778,780,323 772,929,855 5,850,468 0.8%
Diluted 778,780,323 772,929,855 5,850,468 0.8%
===================================================================================================================================
ADJUSTED EBITDA AND RECURRING ADJUSTED
EBITDA:
Operating income (loss) $ (167,824) $ (101,557) $ (66,267) (65.3%)
Goodwill amortization 131,634 123,814 7,820 6.3%
Depreciation and amortization 140,943 107,974 32,969 30.5%
Stock related expense 18,850 12,697 6,153 48.5%
Non-cash cost of capacity sold 99,056 111,175 (12,119) (10.9%)
Cash portion of the change in deferred
revenue 165,932 63,740 102,192 160.3%
- -----------------------------------------------------------------------------------------------------------------------------------
ADJUSTED EBITDA $ 388,591 $ 317,843 $ 70,748 22.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Merger-related and severance expenses 12,585 7,600 4,985 65.6%
- -----------------------------------------------------------------------------------------------------------------------------------
RECURRING ADJUSTED EBITDA $ 401,176 $ 325,443 $ 75,733 23.3%
===================================================================================================================================
(The three months ended March 31, 2000, includes Global Crossing (with PC-1 consolidated), Frontier, Global Marine Systems, Racal
Telecom and equity in the income (loss) of the Hutchison Global Crossing joint venture from January 12, 2000. The three months
ended December 31, 1999, includes Global Crossing, Frontier, Global Marine Systems and Racal Telecom from November 24, 1999.)
</TABLE>
<PAGE>
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<TABLE>
<CAPTION>
GLOBAL CROSSING LTD. AND SUBSIDIARIES
UNAUDITED BUSINESS SEGMENT INFORMATION
For the Three Months Ended March 31, 2000 and December 31, 1999
(In thousands)
===================================================================================================================================
Three Months Ended Change
--------------------------------------------------------------------------------------
March 31, 2000 December 31, 1999 Amount Percent
===================================================================================================================================
<S> <C> <C> <C> <C>
TELECOMMUNICATIONS SERVICES:
CASH REVENUE:
Commercial $ 327,020 $ 279,603 $ 47,417 17.0%
Consumer 43,644 46,661 (3,017) (6.5%)
Carrier 655,696 536,021 119,675 22.3%
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH REVENUE 1,026,360 862,285 164,075 19.0%
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUE:
Commercial 327,020 279,603 47,417 17.0%
Consumer 43,644 46,661 (3,017) (6.5%)
Carrier 489,764 477,357 12,407 2.6%
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE 860,428 803,621 56,807 7.1%
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS) (208,255) (139,095) (69,160) (49.7%)
ADJUSTED EBITDA 286,514 210,297 76,217 36.2%
CASH PAID FOR CAPITAL EXPENDITURES 852,493 559,440 293,053 52.4%
TOTAL ASSETS 18,389,031 16,813,242 1,575,789 9.4%
===================================================================================================================================
INSTALLATION AND MAINTENANCE:
CASH REVENUE 72,266 80,995 (8,729) (10.8%)
REVENUE 72,266 75,919 (3,653) (4.8%)%
OPERATING INCOME (LOSS) (879) (8,841) 7,962 90.1%
ADJUSTED EBITDA 20,733 20,540 193 0.9%
CASH PAID FOR CAPITAL EXPENDITURES 30,315 34,828 (4,513) (13.0%)
TOTAL ASSETS 1,741,712 1,519,166 222,546 14.6%
===================================================================================================================================
INCUMBENT LOCAL EXCHANGE CARRIER:
REVENUE 186,822 185,921 901 0.5%
OPERATING INCOME (LOSS) 53,895 53,979 (84) (0.2%)
ADJUSTED EBITDA 93,929 94,606 (677) (0.7%)
CASH PAID FOR CAPITAL EXPENDITURES 50,940 48,311 2,629 5.4%
TOTAL ASSETS 1,359,227 1,373,172 (13,945) (1.0%)
===================================================================================================================================
CORPORATE OPERATONS AND OTHER:
OPERATING INCOME (LOSS) (12,585) (7,600) (4,985) (65.6%)
ADJUSTED EBITDA (12,585) (7,600) (4,985) (65.6%)
===================================================================================================================================
CONSOLIDATED:
CASH REVENUE 1,285,448 1,129,201 156,247 13.8%
REVENUE 1,119,516 1,065,461 54,055 5.1%
OPERATING INCOME (LOSS) (167,824) (101,557) (66,267) (65.3%)
ADJUSTED EBITDA 388,591 317,843 70,748 22.3%
RECURRING OPERATING INCOME (LOSS) (155,239) (93,957) (61,282) (65.2%)
RECURRING ADJUSTED EBITDA 401,176 325,443 75,733 23.3%
CASH PAID FOR CAPITAL EXPENDITURES 933,748 642,579 291,169 45.3%
TOTAL ASSETS $21,489,970 $19,705,580 $1,784,390 9.1%
===================================================================================================================================
(The three months ended March 31, 2000, includes Global Crossing (with PC-1 consolidated), Frontier, Global Marine Systems, Racal
Telecom and equity in the income (loss) of the Hutchison Global Crossing joint venture from January 12, 2000. The three months
ended December 31, 1999, includes Global Crossing, Frontier, Global Marine Systems and Racal Telecom from November 24, 1999.)
</TABLE>
<PAGE>
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<TABLE>
<CAPTION>
GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
================================================================================================================================
As of Change
---------------------------------------------------------------------------------
March 31, 2000 December 31, 1999 Amount Percent
================================================================================================================================
(unaudited)
<S> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 1,250,953 $ 1,633,499 $ (382,546) (23.4%)
Restricted cash and cash equivalents 133,016 93,294 39,722 42.6%
Accounts receivable, net 912,071 966,973 (54,902) (5.7%)
Other assets and prepaid costs 319,562 252,767 66,795 26.4%
- --------------------------------------------------------------------------------------------------------------------------------
Total current assets 2,615,602 2,946,533 (330,931) (11.2%)
Restricted cash and investments 69,545 138,118 (68,573) (49.6%)
Accounts receivable 42,419 52,052 (9,633) (18.5%)
Property, plant and equipment, net 7,985,651 6,026,053 1,959,598 32.5%
Goodwill, net 9,436,715 9,557,422 (120,707) (1.3%)
Investments in and advances to/from
affiliates, net 604,291 323,960 280,331 86.5%
Other assets 735,747 661,442 74,305 11.2%
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $21,489,970 $19,705,580 $1,784,390 9.1%
================================================================================================================================
LIABILITIES:
Current liabilities:
Accrued construction costs $ 570,461 $ 275,361 $ 295,100 107.2%
Accounts payable and accrued liabilities 919,910 980,131 (60,221) (6.1%)
Accrued interest and preferred dividends 162,260 66,745 95,515 143.1%
Deferred revenue 216,234 127,367 88,867 69.8%
Income taxes payable 88,325 140,034 (51,709) (36.9%)
Current portion of long term debt 11,649 5,496 6,153 111.9%
Other current liabilities 264,314 257,459 (6,855) 2.7%
- --------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 2,233,153 1,852,593 380,560 20.5%
Long term debt 6,031,662 5,018,544 1,013,118 20.2%
Deferred revenue 489,331 383,287 106,044 27.7%
Deferred credits and other 819,485 796,606 22,879 2.9%
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities 9,573,631 8,051,030 1,522,601 18.9%
- --------------------------------------------------------------------------------------------------------------------------------
MINORITY INTEREST 478,030 351,338 126,692 36.1%
PREFERRED STOCK 2,485,267 2,084,697 400,570 19.2%
SHAREHOLDERS' EQUITY:
Common stock 8,030 7,992 38 0.5%
Treasury stock (209,415) (209,415) - 0.0%
Other shareholders' equity 9,575,617 9,578,927 (3,310) (0.0%)
Accumulated deficit (421,190) (158,989) (262,201) (164.9%)
- --------------------------------------------------------------------------------------------------------------------------------
8,953,042 9,218,515 (265,473) (2.9%)
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders'
equity $21,489,970 $19,705,580 $1,784,390 9.1%
================================================================================================================================
(As of March 31, 2000, includes Global Crossing (with PC-1 consolidated), Frontier, Global Marine Systems, Racal Telecom and
investment in the Hutchison Global Crossing joint venture. As of December 31, 2000, includes Global Crossing, Frontier, Global
Marine Systems and Racal Telecom.)
</TABLE>
<PAGE>
-12-
<TABLE>
<CAPTION>
GLOBAL CROSSING LTD. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands)
==================================================================================================================
Three Months Ended Change
--------------------------------- ----------------------------------
March 31, December 31, Amount Percent
2000 1999
==================================================================================================================
<S> <C> <C> <C> <C>
TELECOMMUNICATIONS SERVICES
PRODUCT CASH REVENUE:
Switched Voice $ 400,966 $ 346,534 $ 54,432 15.7%
CLEC (Local and LD) 62,524 60,171 2,353 3.9%
- ------------------------------------------------------------------------------------------------------------------
Total Business Voice Products 463,490 406,705 56,785 14.0%
Data 519,225 408,919 110,306 27.0%
Consumer Long Distance 43,645 46,661 (3,016) (6.5%)
- ------------------------------------------------------------------------------------------------------------------
Total Product Cash Revenue $1,026,360 $ 862,285 $ 164,075 19.0%
- ------------------------------------------------------------------------------------------------------------------
PRODUCT REVENUE:
Switched Voice $ 400,966 $ 346,534 $ 54,432 15.7%
CLEC (Local and LD) 62,524 60,171 2,353 3.9%
- ------------------------------------------------------------------------------------------------------------------
Total Business Voice Products 463,490 406,705 56,785 14.0%
Data 353,293 350,255 3,038 0.9%
Consumer Long Distance 43,645 46,661 (3,016) (6.5%)
- ------------------------------------------------------------------------------------------------------------------
Total Product Revenue $ 860,428 $ 803,621 $ 56,807 7.1%
- ------------------------------------------------------------------------------------------------------------------
MINUTES/1/:
Commercial 1,662,485 1,579,860 82,625 5.2%
Consumer 274,876 277,378 (2,502) (0.9%)
Carrier 5,146,237 3,976,332 1,169,905 29.4%
- ------------------------------------------------------------------------------------------------------------------
TOTAL MINUTES 7,083,598 5,833,570 1,250,028 21.4%
==================================================================================================================
INCUMBENT LOCAL EXCHANGE CARRIER
ACCESS LINES/1/
Commercial 337 335 2 0.6%
Consumer 745 737 8 1.1%
- ------------------------------------------------------------------------------------------------------------------
TOTAL ACCESS LINES 1,082 1,072 10 0.9%
==================================================================================================================
(Including Global Crossing (with PC-1 consolidated), Frontier, Global Marine Systems and
Racal Telecom for all periods presented)
</TABLE>
- -------------------------------------
/1/Data presented for former Frontier Corporation only.
