Global Crossing Announces First Quarter Results /

Accelerates Pacific Crossing Connecting Asia and the Americas HAMILTON, Bermuda (ots-PRNewswire) - -- Expanding customer base drives first quarter revenues to $178 million and adjusted EBITDA to $95 million. -- Acquisition of Global Marine undersea cable service fleet expected to close within 60 days. -- Merger with Frontier expected to close in third quarter. -- Pacific Crossing accelerated to fill current shortage of trans-Pacific capacity. Global Crossing Ltd. (Nasdaq: GBLX; BSX), the owner and operator of the world's most advanced IP-based fiber optic network, today reported results for the first quarter ended March 31, 1999, and announced the acceleration of its Pacific Crossing fiber optic cable connecting the U.S. to Japan. First quarter revenues were $178 million, adjusted EBITDA was $95 million, the net loss before extraordinary item was $0.2 million, and the net loss was $15 million. "We're very pleased with our progress in the first quarter," said Bob Annunziata, Chief Executive Officer of Global Crossing. "Our expanding sales and customer base, along with soaring demand for telecommunications in Asia, drives our decision today to accelerate to December 31 the initial service date for our Pacific Crossing system connecting Japan and the Americas. In North America, our agreement during the quarter to acquire Frontier Corporation puts us on a path to add 120 cities in the U.S. to our global network. We expect to close the merger in the third quarter, as we announced previously. In the meantime, we are pushing to complete the global fiber optic network we are already building. We saw full ring completion on Atlantic Crossing 1 (AC-1) in February, expanded our plans in Europe, and announced new systems for South America and the Atlantic. We also reached an agreement to combine our network with Cable & Wireless' Global Marine's undersea capabilities, allowing us to offer unprecedented service packages to our customers." Pacific Crossing service accelerated Initial service for Pacific Crossing (PC-1), previously planned for March of 2000, has been accelerated to December 31, 1999. PC-1, a fiber optic cable link between Asia and the Americas, will connect with the Global Crossing global network at two landing points in the United States and two landing stations in Japan. A 1,300 route-kilometer terrestrial system being constructed by Global Access Limited (GAL) will link PC-1 with Tokyo and also be in service by December 31, 1999. GAL will add Osaka and Nagoya to the system in 2000. "Tokyo, Osaka, and Nagoya account for more than 70% of Japan's international telecommunications traffic," said David Lee, Global Crossing's President and Chief Operating Officer. "Global Crossing and Marubeni Corporation, our partner on PC-1 and GAL, are entering the market just as Japanese internet users approach the 20 million mark and bandwidth needs between Japan and major cities of the world are growing at 50% per year." Global Marine acquisition On April 26, Global Crossing announced a definitive agreement to acquire the Global Marine business of Cable & Wireless plc in a transaction valued at 550 million pounds (approximately $885 million). Global Marine is the world's largest and most advanced undersea cable installation and maintenance company servicing more than one-third of the undersea cable in the world. The acquisition will give Global Crossing a unique asset at a time of rapid growth in the $10 billion market for undersea cable deployment driven by exploding international demand for data, voice, video and Internet connectivity. Global Marine is expected to generate cash flow approaching $100 million in the current fiscal year. The transaction, which is expected to be completed within 60 days, is subject to certain regulatory and other approvals. Financial highlights for the three months ended March 31, 1999 and 1998 Three Months Ended Three Months Ended March 31, 1999 March 31, 1998 (Unaudited) (Unaudited) (in millions, except per share data) Results of Operations: * Revenues $ 178.2 $ -- Operating income (loss) $ 41.1 $ (3.8) Income (loss) before extraordinary item and preferred dividends $ 12.8 $ (3.7) Net loss before extraordinary item $ (0.2) $ (8.1) Net loss applicable to common shareholders $ (15.0) $ (8.1) Adjusted EBITDA $ 94.8 $ (3.8) Income (loss) per share before extraordinary item and preferred dividends, diluted $ 0.03 $(0.02) Net loss per share before extraordinary item, diluted $ (0.00) $(0.02) *See Statements of Operations and accompanying footnote. Network highlights Route Kilometers In-service 14,300 km Under contract 55,500 km Announced 87,900 km Network Service Capacity (STM-1 circuits) 256 Accounting for start-up activities Global Crossing adopted Statement of Position 98-5 (SOP 98-5), "Reporting on the Cost of Start-Up Activities," issued by the American Institute of Certified Public Accountants, in the first quarter of 1999. SOP 98-5 requires that certain start-up expenditures previously capitalized during system development be expensed. Global Crossing incurred a one-time charge in the first quarter of 1999 of $14.7 million (net of tax benefit), that represents startup costs spent and capitalized during previous periods. During the first quarter of 1999, Global Crossing incurred approximately $3.8 million of start- up expenditures, which were expensed. Quarterly milestones -- Merger with Frontier. Global Crossing entered into a definitive agreement and plan of merger with Frontier Corporation, which, if completed, will create a combined network connecting 159 cities around the world. The board of directors of each company has approved the merger. Completion of the transaction is anticipated to occur during the third quarter of 1999. -- Bob Annunziata becomes Chief Executive Officer. Bob Annunziata joined the company in February as Chief Executive Officer and a Director. Since September 1998, Annunziata had been President of AT&T's $22 billion business services group, responsible for AT&T's global network and for providing voice, data, and Internet services to 8 million business customers worldwide. -- South American Crossing. Also in March Global Crossing announced plans for the development of South American Crossing (SAC), an 18,000 km undersea and terrestrial fiber optic network directly linking the major cities of South America. Service is scheduled to commence in the fourth quarter of 2000, with full ring completion expected in the first quarter of 2001. -- Pan European Network expanded to 24 cities. Global Crossing announced in March the addition of an eastern ring connecting six German cities including Berlin, Munich, and Stuttgart to its previously announced Pan European Crossing. Global Crossing's Pan European Crossing system will feature more than 620,000 fiber kilometers, stretched over a geographic route of 10,000 kilometers, linking 24 major metropolitan centers in Europe. -- Atlantic Crossing-2. Global Crossing announced its intention in late March to develop and construct Atlantic Crossing-2 (AC-2), an additional eight fiber pair, 2.5 terabit cable connecting the United States to Europe. The new cable is expected to be in service in the first quarter of 2001. -- Lucent Agreement. Global Crossing signed a technology agreement with Lucent Technologies Inc. in late January that will give Global Crossing priority access to Lucent's fiber optic technology. In addition, Global Crossing entered into a supply contract with Lucent to provide fiber, equipment, and financing for Pan European Crossing (PEC). The agreement with Lucent also provides for financing of future systems if Lucent is selected as the contractor. -- Stock split. The Board of Directors declared a 2-for-1 stock split in the form of a stock dividend to shareholders of record on February 16, 1999, effective March 9, 1999. About Global Crossing Global Crossing is building and operating the world's most advanced global IP-based fiber optic platform for data, voice, video and Internet transmissions. The Global Crossing Network will span four continents and address 80% of the world's international traffic. Global Crossing's operations are headquartered in Hamilton, Bermuda, with offices in Los Angeles; New York City; Morristown, New Jersey; San Francisco; Miami; London; Amsterdam; and Buenos Aires. 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. It is important to note that the company's actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the company's filings with the U.S. Securities and Exchange Commission (SEC). Copies of these filings may be obtained by contacting the company or the SEC. ots Original Text Service: Global Crossing Ltd. Internet: http://www.newsaktuell.de Contact: Investor/Analyst: Jensen Chow, 310-385-5283, jchow@globalcrossing.com, or Press: Tom Goff, 310-385-5231, tgoff@globalcrossing.com, both of Global Crossing Ltd. Web site: http://www.globalcrossing.bm Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. Protext is a commercial service providing distribution of press releases from clients, who are identified in the text of Protext reports and who bear full responsibility for their contents. PROTEXT