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Press Release -- February 16th, 2010
Source: Global Crossing
Tags: Equipment, Ethernet, Exchange

Global Crossing Announces Fourth Quarter and Full Year 2009 Results

  • - 2009 results in line with guidance for Revenue, OIBDA and Free Cash Flow.
  • - 2009 Free Cash Flow increased to $82 million, an improvement of $71 million year over year.
  • - Full-year OIBDA increased to $342 million, a 31 percent improvement year-over-year in constant currency terms.
  • - Full-year “Invest and grow” revenue increased to $2.16 billion, a 6 percent improvement year-over-year in constant currency terms.
  • - 2010 guidance reflects strong growth in OIBDA and continued positive full-year Free Cash Flow.

FLORHAM PARK, N.J., Feb. 16 /PRNewswire-FirstCall/ -- Global Crossing (NASDAQ: GLBC), a leading global IP solutions provider, today announced unaudited fourth quarter and full-year 2009 results.  The company said it will discuss its consolidated financial and operational results for the fourth quarter and full-year 2009 on a conference call tomorrow.  The following table highlights financial results:

    Results at a Glance
    (Dollars in millions)
                         4Q Yr/Yr Growth               2009 Yr/Yr Growth
                   4Q 2009  Reported  Constant     2009  Reported  Constant
                                      Currency                     Currency
    Consolidated
     Revenues        $ 651        1%       -1%  $ 2,536       -2%        3%
    "Invest and
     Grow" Revenues  $ 557        3%        0%  $ 2,159       -1%        6%
    OIBDA             $ 83      -19%      -22%    $ 342       25%       31%
    Free Cash Flow    $ 72     $ 42                $ 82     $ 71

The company’s OIBDA, Free Cash Flow and constant currency measures are non-GAAP measures. See “Non-GAAP Metrics,” below, and the reconciliations of OIBDA and Free Cash Flow to the most directly comparable GAAP measures included in the attached financial tables.

Business Highlights

Global Crossing completed the year within its annual guidance ranges for Revenue, OIBDA and Free Cash Flow.  The company reported Free Cash Flow of $82 million, an increase of $71 million compared to 2008.  Global Crossing also reported “invest and grow” revenue of $2.16 billion, an increase of 6 percent compared with 2008 in constant currency terms.  The company generated $342 million of OIBDA for 2009, an increase of 31 percent compared with 2008 in constant currency terms.

“Global Crossing delivered on its 2009 guidance despite a challenging economic environment,” said John Legere, CEO of Global Crossing.  “We enter 2010 with a world-class global network and a differentiated set of product capabilities that provide a platform for continued growth and unparalleled customer satisfaction.”

Full Year Results

Global Crossing’s consolidated business generated $2.54 billion of revenue in 2009, representing a $63 million decline year over year, including a $138 million unfavorable foreign exchange impact.  The company’s “invest and grow” services – namely that part of the business focused on serving global enterprises and carrier customers, excluding wholesale voice – generated revenue of $2.16 billion in 2009, including a $135 million unfavorable foreign exchange impact.  Excluding the foreign exchange impact, “invest and grow” revenue increased $123 million, or 6 percent, year over year.

On a segment basis, the company’s “rest of world” (ROW), GC Impsat and GCUK segments generated “invest and grow” revenue of $1.23 billion, $492 million, and $460 million, respectively.  In constant currency terms, ROW and GC Impsat “invest and grow” revenue increased by 10 percent and 9 percent, respectively, as compared to 2008.  GCUK’s “invest and grow” revenue decreased 5 percent in constant currency terms as compared to 2008, principally due to the completion of the Camelot contract at the end of 2008.

Wholesale voice revenue declined 12 percent, or $50 million, year over year to $374 million.  The decline reflects continued focus on managing the wholesale voice business for margin.  Substantially all of the wholesale voice revenue is earned in the United States, within the ROW segment.

Global Crossing reported gross margin of $770 million or 30.4 percent of consolidated revenue for 2009, an increase of $6 million compared with 2008 including a $46 million unfavorable foreign exchange impact.  Gross margin of $764 million in 2008 was 29.4 percent of consolidated revenue.  Year-over-year the improvement in gross margin as a percent of consolidated revenue was driven by revenue growth in constant currency terms, improved revenue mix, lower cost of access and lower incentive compensation, partly offset by higher cost of equipment and other sales, real estate expense and payroll costs.

Sales, general and administrative (SG&A) expenses were $428 million in 2009, a $63 million decrease from $491 million in 2008, including a $30 million favorable foreign exchange impact.  Excluding the impact of foreign exchange, the year-over-year improvement was driven primarily by cost reduction initiatives and, to a lesser degree, lower professional fees and incentive compensation accruals.

The company reported $342 million of OIBDA for 2009, a year-over-year improvement of $69 million, including an unfavorable foreign exchange impact of $16 million.  Excluding the impact of foreign exchange, OIBDA grew $85 million or 31 percent year over year.  On a segment basis, ROW, GC Impsat and GCUK contributed $89 million, $160 million and $93 million of OIBDA, respectively.

Global Crossing’s consolidated net loss applicable to common shareholders was $145 million for 2009, compared with a loss of $288 million in 2008.  The year-over-year improvement was primarily driven by the improvement in OIBDA previously described, favorable foreign exchange impacts reflected in other income, net, and a lower provision for income tax and interest expense.

Fourth Quarter Results

Global Crossing’s consolidated revenue was $651 million in the fourth quarter of 2009, representing a 1 percent increase both sequentially and year over year.  The sequential increase included a $4 million favorable foreign exchange impact and the year-over-year increase included a $13 million favorable foreign exchange impact.  In constant currency terms, consolidated revenue increased 1 percent sequentially and declined 1 percent year over year.  The year-over-year revenue comparison was adversely impacted by the completion of the Camelot contract at the end of 2008 within the GCUK segment.

The company’s “invest and grow” services generated revenue of $557 million in the fourth quarter.  This represents an increase of 1 percent sequentially and 3 percent year over year, including substantially all of the favorable foreign exchange impacts referenced above.  In constant currency terms, “invest and grow” revenue was essentially flat sequentially and year-over-year.  Sequentially, “invest and grow” revenue was unfavorably impacted by a non-recurring benefit of $4 million in the third quarter within the ROW segment for one customer’s buyout of certain long-term obligations under an existing contract.

On a segment basis, ROW, GC Impsat and GCUK generated “invest and grow” revenue of $316 million, $131 million, and $123 million, respectively.  In constant currency terms, this represented a sequential increase of 1 percent for both ROW and GC Impsat and an increase of 6 percent for GCUK.  Year-over-year, in constant currency terms, ROW increased 5 percent and GC Impsat and GCUK declined 2 percent and 5 percent, respectively.

The company’s wholesale voice business generated revenue of $93 million in the fourth quarter, a 4 percent increase sequentially and a 7 percent decline year over year.

Global Crossing reported gross margin for the fourth quarter of $190 million compared with $200 million in the third quarter of 2009 and $212 million in the fourth quarter of 2008.  The sequential decrease of $10 million in gross margin was driven by revenue mix, the non-recurring third quarter benefit from one customer’s contract buyout, and an increase in accrued incentive compensation.  The year-over-year decrease of $22 million in gross margin was primarily driven by a $10 million increase in accrued incentive compensation, as the year-ago period included a net reversal of accrued incentive compensation.  In addition, changes in revenue mix resulted in higher cost of equipment and other sales compared with the year-ago period.

SG&A expenses were $107 million in the fourth quarter of 2009, compared with $109 million in the third quarter of 2009 and $110 million in the fourth quarter of 2008.  Foreign currency unfavorably impacted SG&A by $1 million sequentially and $2 million year over year.  Excluding foreign exchange impacts, the sequential decline was due to lower commissions, professional fees and restructuring costs, partly offset by other miscellaneous costs increases.  Year-over-year, the decline in SG&A was associated with lower commissions and professional fees, partly offset by a $4 million increase in accrued incentive compensation.

Global Crossing reported $83 million of OIBDA in the fourth quarter, compared with $91 million in the third quarter of 2009 and $102 million in the fourth quarter of 2008.  The year-over-year decrease included a $14 million increase in accrued incentive compensation, partly offset by a favorable foreign exchange impact of $3 million.  On a segment basis, ROW, GC Impsat and GCUK contributed $26 million, $33 million and $24 million, respectively.

Global Crossing’s consolidated net loss applicable to common shareholders was $38 million for the fourth quarter of 2009.  On a sequential basis, net loss decreased $36 million, principally due to a non-recurring $29 million loss on the extinguishment of debt in the prior quarter and a benefit in the provision for income taxes in the current quarter, partly offset by higher interest expense and lower OIBDA described above.  On a year-over-year basis, net loss decreased $15 million, principally due to favorable foreign exchange impacts and a benefit in the provision for income taxes, partly offset by higher depreciation and amortization and lower OIBDA described above.

Cash and Liquidity

As of December 31, 2009, Global Crossing had $477 million of unrestricted cash and cash equivalents, compared with $360 at December 31, 2008 and $429 at September 30, 2009.  Including $16 million of restricted cash, Global Crossing had total cash of $493 million at December 31, 2009.

For 2009, cash flow from operating activities was $256 million, including $117 million of interest on indebtedness.  Global Crossing received $130 million in proceeds from the sale of indefeasible rights of use (IRUs) and prepaid services in 2009.  The company reported Free Cash Flow of $82 million for 2009.  Uses of cash for the year included $249 million used for capital expenditures and for principal payments on capital leases.

Cash flow from operating activities for the fourth quarter was $121 million.   Global Crossing received $38 million in proceeds from the sale of IRUs and prepaid services in the fourth quarter.  The company reported Free Cash Flow of $72 million.  Uses of cash for the quarter included $77 million for capital expenditures and for principal payments on capital leases.

2010 Guidance

“We expect to grow again in 2010, fueled by investments in our products, network and sales force.  We will continue to make investments for growth, as we did in 2009, using internally-generated cash from operations while delivering another year of positive Free Cash Flow in 2010,” added John Legere.

Based on foreign exchange rates as of February 15, 2010, company guidance measures for 2010 are as follows:

    Metric                   2009 Actual    2010 Guidance
    ($in millions)

    “Invest & Grow” Revenue    $2,159      $2,300 - $2,375
    OIBDA                        $342        $390 - $440
    Free Cash Flow                $82         $10 – $60

Free Cash Flow Guidance reflects $55 million of additional interest expense as well as lower sales of IRUs and prepaid services compared to 2009.

The above guidance represents management’s current good faith estimates for the designated measures and is based on various assumptions which may or may not materialize. Some of the risks and uncertainties that could cause actual results to differ materially from these estimates are referenced at the end of this press release.

Non-GAAP Metrics

Pursuant to the Securities and Exchange Commission’s (SEC’s) Regulation G and Item 10(e)(1)(i) of Regulation S-X, the attached financial tables include definitions of non-GAAP financial measures, as well as reconciliations of such measures to the most directly comparable financial measures calculated and presented in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP).  In addition, measures referred to in this press release as being calculated “in constant currency terms” are non-GAAP measures intended to present the relevant information assuming a constant exchange rate between the two periods being compared.  Such measures are calculated by applying the currency exchange rates used in the preparation of the prior period financial results to the subsequent period results.

Conference Call

The company will hold a conference call on Wednesday, February 17, 2009 at 9:00 a.m. EST to discuss its financial results.  The call may be accessed by dialing +1 212 271 4651 or, if calling from within the United Kingdom, by dialing +44 203 300 0097.  Callers are advised to access the call 15 minutes before the start time.  A Webcast with presentation slides will be available at http://investors.globalcrossing.com/events.cfm.

A replay of the call will be available on Wednesday, February 17, 2010 beginning at 11:30 a.m. EST and will be accessible until Friday, February 26, 2010 at 11:30 a.m. EST.  To access the replay, North American callers may dial +1 402 977 9140 or +1 800 633 8284 and enter reservation number 21455839.  Callers in the United Kingdom may dial +44 (0) 870 000 3081 or (0) 800 692 0831 and enter reservation number 21455839.

ABOUT GLOBAL CROSSING

Global Crossing (NASDAQ: GLBC) is a leading global IP and Ethernet solutions provider with the world's first integrated global IP-based network.  The company offers a full range of data, voice and collaboration services with an industry leading customer experience and delivers service to approximately 40 percent of the Fortune 500, as well as to 700 carriers, mobile operators and ISPs.  It delivers converged IP services to more than 700 cities in more than 70 countries around the world.

Website Access to Company Information

Global Crossing maintains a corporate website at www.globalcrossing.com, and you can find additional information about the company through the Investors pages on that website at http://investors.globalcrossing.com.  Global Crossing utilizes its website as a channel of distribution of important information about the company.  Global Crossing routinely posts financial and other important information regarding the company and its business, financial condition and operations on the Investors web pages.

Visitors to the Investors web pages can view and print copies of Global Crossing's SEC filings, including periodic and current reports on Forms 10-K, 10-Q and 8-K, as soon as reasonably practicable after those filings are made with the SEC.  Copies of the charters for each of the standing committees of Global Crossing's Board of Directors, its Corporate Governance Guidelines, Ethics Policy, press releases and analysts presentations are all available through the Investors web pages.

Please note that the information contained on any of Global Crossing's websites is not incorporated by reference in, or considered to be a part of, any document unless expressly incorporated by reference therein.

This press release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties that could cause the actual results to differ materially, including: Global Crossing's history of substantial operating losses and the fact that, in the near term, funds from operations will not satisfy cash requirements; legal and contractual restrictions on the inter-company transfer of funds by the company's subsidiaries; the company's ability to continue to connect its network to incumbent carriers' networks or maintain Internet peering arrangements on favorable terms; the consequences of any inadvertent violation of the company's Network Security Agreement with the U.S. Government; increased competition and pricing pressures resulting from technology advances and regulatory changes; competitive disadvantages relative to competitors with superior resources; political, legal and other risks due to the company's substantial international operations; risks associated with movements in foreign currency exchange rates; risks related to restrictions on the conversion of  the Venezuelan bolivar into U.S. dollars and to the resultant buildup of a material excess bolivar cash balance, which is carried on Global Crossing’s books at the official exchange rate, attributing to the bolivar a value that is significantly greater than the value prevailing on the parallel market; potential weaknesses in internal controls of acquired businesses, and difficulties in integrating internal controls of those businesses with the company’s own internal controls; the concentration of revenue in a limited number of customers, and the rights of such customers to terminate their contracts or to simply cease purchasing services thereunder; exposure to contingent liabilities; and other risks referenced from time to time in the company's filings with the Securities and Exchange Commission. Global Crossing undertakes no duty to update information contained in this press release or in other public disclosures at any time.

CONTACT GLOBAL CROSSING:
Press Contacts
Michael Schneider
+ 1 973 937 0146
Michael.Schneider@globalcrossing.com
Analysts/Investors Contact
Mark Gottlieb
+ 1 800 836 0342
glbc@globalcrossing.com
Antonio Suarez
+1 973 937 0233
Antonio.Suarez@globalcrossing.com

IR/PR1

    Global Crossing Limited                                          Table 1
    Consolidated Balance Sheets
    ($ in millions)                                                        

                                                 December 31,    December 31,
                                                     2009            2008
                                                 -----------     -----------
                                                  (unaudited)   (as adjusted)
     ASSETS:
         Current assets:
             Cash and cash equivalents                  $477            $360
             Restricted cash and cash
              equivalents - current portion                9               7
             Accounts receivable, net of
              allowances of $50 and $58                  328             336
             Prepaid costs and other current assets      101             103
                                                      ------         ------- 

                 Total current assets                    915             806
                                                      ------         -------

         Restricted cash and cash equivalents -
          long term                                        7              11
         Property and equipment, net of
          accumulated depreciation of $1,216
          and $851                                     1,280           1,300
         Intangible assets, net
          (including goodwill of $175 and $147)          198             172
         Other assets                                     88              60
                                                      ------          ------ 

                 Total assets                         $2,488          $2,349
                                                      ======          ====== 

     LIABILITIES:
         Current liabilities:
           Accounts payable                             $312            $329
           Accrued cost of access                         87              92
           Short term debt and current portion of
            long term debt                                37              26
           Accrued restructuring costs - current
            portion                                       12              13
           Deferred revenue - current portion            174             138
           Other current liabilities                     421             361
                                                      ------          ------
                 Total current liabilities             1,043             959
                                                      ------          ------

           Long term debt                              1,295           1,127
           Obligations under capital leases               90              93
           Deferred revenue                              334             308
           Accrued restructuring costs                    13              14
           Other deferred liabilities                     73              94
                                                      ------          ------

                 Total liabilities                     2,848           2,595
                                                      ------          ------

     SHAREHOLDERS' DEFICIT:
           Common stock,  110,000,000 shares
            authorized, $.01 par value,
            60,219,817 and 56,696,312 shares issued
            and outstanding as of December 31, 2009
            and December 31, 2008, respectively           $1              $1
           Preferred stock with controlling
            shareholder, 45,000,000 shares
            authorized, $.10 par value, 18,000,000
            shares issued and outstanding                  2               2
         Additional paid-in capital                    1,427           1,399
         Accumulated other comprehensive loss            (24)            (23)
         Accumulated deficit                          (1,766)         (1,625)
                                                      ------          ------ 

         Total shareholders' deficit                    (360)           (246)
                                                      ------          ------

                  Total liabilities and
                   shareholders' deficit              $2,488          $2,349
                                                      ======          ====== 

    Note 1. On January 1, 2009, the Company adopted Financial Accounting
    Standard Board ("FASB") Accounting Standards Codification ("ASC") Subtopic
    470-20 ("Debt with Conversion and Other Options")("ASC Subtopic 470-20").
    ASC Subtopic 470-20 specifies that issuers of convertible instruments
    should separately account for the liability and equity components in a
    manner that will reflect the entity's non-convertible debt borrowing rate
    when interest cost is recognized in subsequent periods. ASC Subtopic 470-
    20 must be applied on a retrospective basis. As a result of applying ASC
    Subtopic 470-20, additional paid-in capital and accumulated deficit have
    increased $38 and $17 respectively, and other assets and long term debt
    have decreased $1 and $22 respectively in the consolidated
    balance sheet at December 31, 2008. 

    Global Crossing Limited                                       Table 2
    Consolidated Statements of Operations
    ($ in millions)                                                           

                                                 Year Ended December 31,
                                                -------------------------
                                                   2009           2008
                                                ----------    -----------
                                                (unaudited)  (as adjusted)    

    Revenue                                         $2,536         $2,599  

    Cost of revenue (excluding depreciation
     and amortization, shown separately below):
        Cost of access                              (1,159)        (1,211)
        Real estate, network and operations           (406)          (423)
        Third party maintenance                       (103)          (107)
        Cost of equipment and other sales              (98)           (94)
                                                ----------     ----------
            Total cost of revenue                   (1,766)        (1,835)
                                                ----------     ----------
    Gross margin                                       770            764
    Selling, general and administrative               (428)          (491)
    Depreciation and amortization                     (340)          (326)
                                                ----------     ----------
    Operating income (loss)                              2            (53)
    Other income (expense):
        Interest income                                  7             10
        Interest expense                              (160)          (176)
        Other income (expense), net                     11            (26)
                                                ----------     ----------
    Loss before preconfirmation contingencies
     and provision for income taxes                   (140)          (245)
        Net gain on preconfirmation
         contingencies                                   -             10
                                                ----------     ----------
    Loss before provision for income taxes            (140)          (235)
        Provision for income taxes                      (1)           (49)
                                                ----------     ----------
    Net loss                                          (141)          (284)
    Preferred stock dividends                           (4)            (4)
                                                ----------     ----------
    Loss applicable to common shareholders           $(145)         $(288)
                                                ==========     ==========   

    Loss per common share, basic and diluted:
        Loss applicable to common shareholders      $(2.45)        $(5.16)
                                                ==========     ==========
        Weighted average number of common
         shares                                 59,290,355     55,771,867
                                                ==========     ==========   

    Note 1. On January 1, 2009, the Company adopted FASB ASC Subtopic 470-20.
    ASC Subtopic 470-20 specifies that issuers of convertible instruments
    should separately account for the liability and equity components in a
    manner that will reflect the entity's non-convertible debt borrowing rate
    when interest cost is recognized in subsequent periods. ASC Subtopic 470-
    20 must be applied on a retrospective basis. As a result of applying ASC
    Subtopic 470-20, interest expense has increased $7 for the year ended
    December 31, 2008. 

    Note 2. For the year ended December 31, 2008, $7 of sales taxes netted
    against revenue were reclassified to selling, general and administrative
    expenses to be consistent with the presentation of other similar taxes.
    Additionally, $17 of costs incurred to operate the GC Impsat Segment data
    center business, primarily employee-related expenses, were reclassified
    from selling, general and administrative to real estate, network and
    operations as they represent service delivery costs and therefore are
    appropriately reported as cost of revenue. 

    Global Crossing Limited                                         Table 3
    Consolidated Statements of Cash Flows
    ($ in millions)                                                         

                                                    Year Ended December 31,
                                                   ------------------------
                                                      2009          2008
                                                   ---------     ----------
                                                  (unaudited)  (as adjusted)
    Cash flows provided by (used in) operating
     activities:
        Net loss                                       $(141)         $(284)
        Adjustments to reconcile net loss to net
         cash provided by operating activities:
            Gain on sale of property and
             equipment                                     -             (4)
            Loss on sale of marketable
             securities                                    -              2
            Non-cash loss on extinguishment of debt       15              -
            Deferred income tax                          (20)            (1)
            Non-cash income tax provision                  -             35
            Non-cash stock compensation expense           18             55
            Depreciation and amortization                340            326
            Provision for doubtful accounts                7              6
            Amortization of prior period IRUs            (22)           (15)
            Deferred reorganization costs                 (3)            (3)
            Gain on preconfirmation contingencies          -            (10)
            Change in long term deferred revenue          42             83
            Other                                        (28)            45
            Change in operating working capital:
              - Changes in accounts receivable            17            (25)
              - Changes in accounts payable              (30)            59
              - Changes in other current assets          (16)           (52)
              - Changes in other current
               liabilities                                77            (14)
                                                        ----           ----
        Net cash provided by operating
         activities                                      256            203
                                                        ----           ---- 

      Cash flows provided by (used in) investing
       activities:
            Purchases of property and equipment         (174)          (192)
            Purchases of marketable securities             -            (11)
            Proceeds from sale of property and
             equipment                                     -             10
            Proceeds from sale of marketable
             securities                                    4             16
            Change in restricted cash and cash
             equivalents                                   2             31
                                                        ----           ----
      Net cash used in investing activities             (168)          (146)
                                                        ----           ---- 

      Cash flows provided by (used in) financing
       activities:
            Proceeds from short and long term debt       741             10
            Repayment of capital lease obligations       (75)           (59)
            Repayment of long term debt
             (including current portion)                (597)           (24)
            Premium paid on extinguishment of debt       (14)             -
            Proceeds from exercise of stock options        -              1
            Proceeds from sales/leasebacks                 7              -
            Finance costs incurred                       (23)             -
            Payment of employee taxes on share-
             based compensation                          (13)            (3)
                                                        ----           ----
      Net cash provided by (used in) financing
       activities                                         26            (75)
                                                        ----           ---- 

      Effect of exchange rate changes on cash
       and cash equivalents                                3            (19)
                                                        ----           ----
      Net increase (decrease) in cash and cash
       equivalents                                       117            (37)
      Cash and cash equivalents, beginning of
       period                                            360            397
                                                        ----           ----
      Cash and cash equivalents, end of period          $477           $360
                                                        ====           ==== 

    Note 1. On January 1, 2009, the Company adopted FASB ASC Subtopic 470-20.
    ASC Subtopic 470-20 specifies that issuers of convertible instruments
    should separately account for the liability and equity components in a
    manner that will reflect the entity's non-convertible debt borrowing rate
    when interest cost is recognized in subsequent periods. ASC Subtopic 470-
    20 must be applied on a retrospective basis. As a result of applying ASC
    Subtopic 470-20, net loss and other within cash flows provided by (used
    in) operating activities has increased $7 for the year ended December
    31, 2008. 

    Global Crossing Limited and Subsidiaries                          Table 4
    Unaudited Consolidated Statements of Operations
    ($ in millions)                                                           

                                        Year Ended December 31, 2009
                              -----------------------------------------------
                              GCUK   GC Impsat   ROW (1)  Eliminations  Total
                              ----   ---------   -------  ------------  ----- 

    Revenue                   $470      $504     $1,586       $(24)    $2,536
    Cost of revenue
        Cost of access        (140)     (118)      (923)        22     (1,159)
        Real estate, network
         and operations        (76)      (83)      (249)         2       (406)
        Third party
         maintenance           (21)      (23)       (59)         -       (103)
        Cost of equipment
         and other sales       (70)      (15)       (13)         -        (98)
                            ------    ------     ------     ------     ------
            Total cost of
             revenue          (307)     (239)    (1,244)        24     (1,766)
                            ------    ------     ------     ------     ------
    Gross margin               163       265        342          -        770
    Selling, general and
     administrative            (70)     (105)      (253)         -       (428)
    Depreciation and
     amortization              (66)      (87)      (187)         -       (340)
                            ------    ------     ------     ------     ------
    Operating income (loss)     27        73        (98)         -          2
    Other income (expense):
        Interest income          8         6          9        (16)         7
        Interest expense       (53)      (33)       (90)        16       (160)
        Other income
         (expense), net         18         -         (7)         -         11
                            ------    ------     ------     ------     ------
    Income (loss) before
     benefit (provision) for
     income taxes                -        46       (186)         -       (140)
        Benefit (provision)
         for income taxes       (1)        2         (2)         -         (1)
                            ------    ------     ------     ------     ------
    Net income (loss)           (1)       48       (188)         -       (141)
    Preferred stock
     dividends                   -         -         (4)         -         (4)
                            ------    ------     ------     ------     ------
    Income (loss)
     applicable
     to common
     shareholders              $(1)      $48      $(192)        $-      $(145)
                            ======    ======     ======     ======     ====== 

                                        Year Ended December 31, 2008
                              ------------------------------------------------
                              GCUK  GC Impsat(3) ROW (1,2) Eliminations  Total
                              ----  ------------ --------- ------------  -----

    Revenue                   $599      $482     $1,536       $(18)    $2,599
    Cost of revenue
        Cost of access        (184)     (115)      (929)        17     (1,211)
        Real estate, network
         and operations        (93)      (75)      (256)         1       (423)
        Third party
         maintenance           (32)      (20)       (55)         -       (107)
        Cost of equipment
         and other sales       (69)      (11)       (14)         -        (94)
                             -----     -----      -----      -----     ------
            Total cost of
             revenue          (378)     (221)    (1,254)        18     (1,835)
                             -----     -----     ------      -----     ------
    Gross margin               221       261        282          -        764
    Selling, general and
    administrative             (87)     (123)      (281)         -       (491)
    Depreciation and
     amortization              (84)      (81)      (161)         -       (326)
                             -----     -----      -----      -----      -----
    Operating income (loss)     50        57       (160)         -        (53)
    Other income (expense):
        Interest income          8         3          6         (7)        10
        Interest expense       (65)      (35)       (83)         7       (176)
        Other income
         (expense), net        (57)      (20)        51          -        (26)
                             -----     -----      -----      -----      -----
    Income (loss) before
     preconfirmation
     contingencies and
     provision for income
     taxes                     (64)        5       (186)         -       (245)
        Net gain on
         preconfirmation
         contingencies           -         4          6          -         10
                             -----     -----      -----      -----      -----
    Income (loss) before
     provision for
     income taxes              (64)        9       (180)         -       (235)
        Provision for
         income taxes           (1)      (17)       (31)         -        (49)
                             -----     -----      -----      -----      -----
    Net loss                   (65)       (8)      (211)         -       (284)
    Preferred stock
     dividends                   -         -         (4)         -         (4)
                             -----     -----      -----      -----      -----
    Loss applicable to
     common shareholders      $(65)      $(8)     $(215)        $-      $(288)
                             =====     =====      =====      =====      ===== 

    (1) Rest of World (ROW) represents operations of Global Crossing Limited
    and subsidiaries excluding Global Crossing (UK) Telecommunications Ltd.
    and subsidiaries (GCUK) and GC Impsat Holdings I Plc and subsidiaries (GC
    Impsat). 

    (2) On January 1, 2009, the Company adopted FASB ASC Subtopic 470-20. ASC
    Subtopic 470-20 specifies that issuers of convertible instruments should
    separately account for the liability and equity components in a manner
    that will reflect the entity's non-convertible debt borrowing rate when
    interest cost is recognized in subsequent periods. ASC Subtopic 470-20
    must be applied on a retrospective basis. As a result of applying ASC
    Subtopic 470-20, interest expense has increased $7 for the year ended
    December 31, 2008. 

    (3) For the year ended December 31, 2008 $7 of sales taxes netted against
    revenue were reclassified to selling, general and administrative expenses
    to be consistent with the presentation of other similar taxes.
    Additionally, $17 of costs incurred to operate the GC Impsat Segment data
    center business, primarily employee-related expenses, were reclassified
    from selling, general and administrative to real estate, network and
    operations as they represent service delivery costs and therefore are
    appropriately reported as cost of revenue. 

    Global Crossing Limited and Subsidiaries                          Table 5
    Unaudited Consolidated Statements of Operations
    ($ in millions)                                                           

                                       Quarter Ended December 31, 2009
                               ----------------------------------------------
                               GCUK   GC Impsat  ROW (1)  Eliminations  Total
                               ----   ---------  -------  ------------  ----- 

    Revenue                    $125       $134     $405       $(13)     $651
    Cost of revenue
        Cost of access          (37)       (37)    (238)         12     (300)
        Real estate, network
         and operations         (18)       (24)     (64)          1     (105)
        Third party
         maintenance             (5)        (7)     (14)          -      (26)
        Cost of equipment and
         other sales            (22)        (6)      (2)          -      (30)
                               ----       ----     ----        ----     ----
            Total cost of
             revenue            (82)       (74)    (318)         13     (461)
                               ----       ----     ----        ----     ----
    Gross margin                 43         60       87           -      190
    Selling, general and
     administrative             (19)       (27)     (61)          -     (107)
    Depreciation and
     amortization               (17)       (24)     (49)          -      (90)
                               ----       ----     ----        ----     ----
    Operating income (loss)       7          9      (23)          -       (7)
    Other income (expense):
        Interest income           2          1        4          (7)       -
        Interest expense        (14)        (8)     (32)          7      (47)
        Other income
         (expense), net           1          1       (2)          -        -
                               ----       ----     ----        ----     ----
    Income (loss) before
     benefit for income taxes    (4)         3      (53)          -      (54)
        Benefit for income
         taxes                    -         17        -           -       17
                               ----       ----     ----        ----     ----
    Net income (loss)            (4)        20      (53)          -      (37)
    Preferred stock dividends     -          -       (1)          -       (1)
                               ----       ----     ----        ----     ----
    Income (loss) applicable
     to common shareholders     $(4)       $20     $(54)         $-     $(38)
                               ====       ====     ====        ====     ====  

                                         Quarter Ended September 30, 2009
                               -----------------------------------------------
                               GCUK   GC Impsat   ROW (1)  Eliminations  Total
                               ----   ---------   -------  ------------  -----

    Revenue                    $120       $129     $397         $(3)    $643
    Cost of revenue
        Cost of access          (33)       (27)    (231)          3     (288)
        Real estate, network
         and operations         (22)       (20)     (65)          1     (106)
        Third party
         maintenance             (5)        (6)     (15)          -      (26)
        Cost of equipment and
         other sales            (16)        (4)      (3)          -      (23)
                               ----       ----     ----        ----     ----
            Total cost of
             revenue            (76)       (57)    (314)          4     (443)
                               ----       ----     ----        ----     ----
    Gross margin                 44         72       83           1      200
    Selling, general and
     administrative             (19)       (28)     (61)         (1)    (109)
    Depreciation and
     amortization               (18)       (22)     (49)          -      (89)
                               ----       ----     ----        ----     ----
    Operating income (loss)       7         22      (27)          -        2
    Other income (expense):
        Interest income           3          2        -          (3)       2
        Interest expense        (14)        (8)     (20)          3      (39)
        Other expense, net       (8)       (13)     (11)          -      (32)
                               ----       ----     ----        ----     ----
    Income (loss) before
     provision for income
      taxes                     (12)         3      (58)          -      (67)
        Provision for income
         taxes                    -         (6)       -           -       (6)
                               ----       ----     ----        ----     ----
    Net loss                    (12)        (3)     (58)          -      (73)
    Preferred stock dividends     -          -       (1)          -       (1)
                               ----       ----     ----        ----     ----
    Loss applicable to common
     shareholders              $(12)       $(3)    $(59)         $-     $(74)
                               ====       ====     ====        ====     ====  

                                        Quarter Ended December 31, 2008
                              ------------------------------------------------
                              GCUK  GC Impsat (3) ROW (1,2) Eliminations Total
                              ----  ------------- --------- ------------ -----

    Revenue                    $134       $124     $394         $(8)    $644
    Cost of revenue
        Cost of access          (42)       (30)    (232)          8     (296)
        Real estate, network
         and operations         (19)       (14)     (56)          -      (89)
        Third party
         maintenance             (7)        (5)     (12)          -      (24)
        Cost of equipment and
         other sales            (16)        (3)      (4)          -      (23)
                               ----       ----     ----        ----     ----
            Total cost of
             revenue            (84)       (52)    (304)          8     (432)
                               ----       ----     ----        ----     ----
    Gross margin                 50         72       90           -      212
    Selling, general and
     administrative             (25)       (32)     (53)          -     (110)
    Depreciation and
     amortization               (19)       (21)     (42)          -      (82)
                               ----       ----     ----        ----     ----
    Operating income (loss)       6         19       (5)          -       20
    Other income (expense):
        Interest income           2          1        1          (2)       2
        Interest expense        (14)        (8)     (20)          2      (40)
        Other income
         (expense), net         (41)       (14)      26           -      (29)
                               ----       ----     ----        ----     ----
    Income (loss) before
     preconfirmation
     contingencies and
     provision
     for income
     taxes                      (47)        (2)       2           -      (47)
        Net gain on
         preconfirmation
         contingencies            -          -        1           -        1
                               ----        ---     ----        ----     ----
    Income (loss) before
     provision for income
     taxes                      (47)        (2)       3           -      (46)
        Provision for income
         taxes                    -         (2)      (4)          -       (6)
                               ----       ----     ----        ----     ----
    Net loss                    (47)        (4)      (1)          -      (52)
    Preferred stock dividends     -          -       (1)          -       (1)
                               ----       ----     ----        ----     ----
    Loss applicable to common
     shareholders              $(47)       $(4)     $(2)         $-     $(53)
                               ====       ====     ====        ====     ====  

    (1) Rest of World (ROW) represents operations of Global Crossing Limited
    and subsidiaries excluding Global Crossing (UK) Telecommunications Ltd.
    and subsidiaries (GCUK) and GC Impsat Holdings I Plc and subsidiaries (GC
    Impsat). 

    (2) On January 1, 2009, the Company adopted FASB ASC Subtopic 470-20. ASC
    Subtopic 470-20 specifies that issuers of convertible instruments should
    separately account for the liability and equity components in a manner
    that will reflect the entity's non-convertible debt borrowing rate when
    interest cost is recognized in subsequent periods. ASC Subtopic 470-20
    must be applied on a retrospective basis. As a result of applying ASC
    Subtopic 470-20, interest expense has increased $2 for the three months
    ended December 31, 2008. 

    (3) For the three months ended December 31, 2008 $2 of sales taxes netted
    against revenue were reclassified to selling, general and administrative
    expenses to be consistent with the presentation of other similar taxes.
    Additionally, $3 of costs incurred to operate the GC Impsat Segment data
    center business, primarily employee-related expenses, were reclassified
    from selling, general and administrative to real estate, network and
    operations as they represent service delivery costs and therefore are
    appropriately reported as cost of revenue. 

    Global Crossing Limited and Subsidiaries                           Table 6
    Unaudited Summary of Consolidated Revenue
    ($ in millions)                                                       

                                          Year Ended December 31, 2009
                                  --------------------------------------------
                                  GCUK  GC Impsat  ROW (1) Eliminations  Total
                                  ----  ---------  ------- ------------  -----

     Revenue:
     Enterprise, carrier data
      and indirect sales channel   $460     $483  $1,216       $-      $2,159
     Carrier voice                   10       12     352        -         374
     Other                            -        -       3        -           3
     Intersegment revenue             -        9      15      (24)          -
                                 ------   ------  ------   ------      ------
     Consolidated revenue          $470     $504  $1,586     $(24)     $2,536
                                 ======   ======  ======   ======      ======

                                          Year Ended December 31, 2008
                                  -------------------------------------------
                                  GCUK GC Impsat(2) ROW (1) Eliminations Total
                                  ---- ------------ ------- ------------ -----

     Revenue:
     Enterprise, carrier data
      and indirect sales channel  $588    $466     $1,117         $-    $2,171
     Carrier voice                  11       9        404          -       424
     Other                           -       -          4          -         4
     Intersegment revenue            -       7         11        (18)        -
                                ------  ------     ------     ------    ------
     Consolidated revenue         $599    $482     $1,536       $(18)   $2,599
                                ======  ======     ======     ======    ======

    (1) Rest of World (ROW) represents operations of Global Crossing Limited
    and subsidiaries excluding Global Crossing (UK) Telecommunications Ltd.
    and subsidiaries (GCUK) and GC Impsat Holdings I Plc and subsidiaries (GC
    Impsat). 

    (2) For the year ended December 31, 2008 $7 of sales taxes netted against
    revenue were reclassified to selling, general and administrative expenses
    to be consistent with the presentation of other similar taxes. 

    Global Crossing Limited and Subsidiaries                           Table 7
    Unaudited Summary of Consolidated Revenue
    ($ in millions)                                                      

                                        Quarter Ended December 31, 2009
                                ----------------------------------------------
                                GCUK  GC Impsat  ROW (1)  Eliminations   Total
                                ----  ---------  -------  ------------   -----
     Revenue:
     Enterprise, carrier data
      and indirect sales
      channel                  $123      $128     $306         $-        $557
     Carrier voice                2         3       88          -          93
     Other                        -         -        1          -           1
     Intersegment revenue         -         3       10        (13)          -
                               ----      ----     ----       ----        ----
     Consolidated revenue      $125      $134     $405       $(13)       $651
                               ====      ====     ====       ====        ====

                                      Quarter Ended September 30, 2009
                                ----------------------------------------------
                                GCUK  GC Impsat  ROW (1)  Eliminations   Total
                                ----  ---------  -------  ------------   -----
     Revenue:
     Enterprise, carrier data
      and indirect sales
      channel                  $117      $125     $311         $-        $553
     Carrier voice                3         2       84          -          89
     Other                        -         -        1          -           1
     Intersegment revenue         -         2        1         (3)          -
                               ----      ----     ----       ----        ----
     Consolidated revenue      $120      $129     $397        $(3)       $643
                               ====      ====     ====        ===        ====

                                       Quarter Ended December 31, 2008
                              ------------------------------------------------
                              GCUK  GC Impsat (2) ROW (1) Eliminations   Total
                              ----  ------------- ------- ------------   -----
     Revenue:
     Enterprise, carrier data
      and indirect sales
      channel                 $132       $120       $291        $-       $543
     Carrier voice               2          2         96         -        100
     Other                       -          -          1         -          1
     Intersegment revenue        -          2          6        (8)         -
                              ----       ----       ----      ----       ----
     Consolidated revenue     $134       $124       $394       $(8)      $644
                              ====       ====       ====       ===       ====

    (1) Rest of World (ROW) represents operations of Global Crossing Limited
    and subsidiaries excluding Global Crossing (UK) Telecommunications Ltd.
    and subsidiaries (GCUK) and GC Impsat Holdings I Plc and subsidiaries (GC
    Impsat). 

    (2) For the three months ended December 31, 2008 $2 of sales taxes netted
    against revenue were reclassified to selling, general and administrative
    expenses to be consistent with the presentation of other similar taxes. 

    Global Crossing Limited                                          Table 8
    Unaudited Reconciliation of OIBDA to Income (Loss) Applicable
     to Common Shareholders
    ($ in millions)                                                         

    Pursuant to the SEC's Regulation G, the following table provides a
    reconciliation of OIBDA, which is considered a non-GAAP (Generally
    Accepted Accounting Principles) financial measure, to income (loss)
    applicable to common shareholders. 

    OIBDA is defined as operating income (loss) before depreciation and
    amortization. OIBDA differs from operating income (loss) in that it
    excludes depreciation and amortization.  Such excluded expenses primarily
    reflect the non-cash impacts of historical capital investments, as opposed
    to the cash impacts of capital expenditures made in recent periods.  In
    addition, OIBDA does not give effect to cash used for debt service
    requirements and thus does not reflect available funds for reinvestment,
    distributions or other discretionary uses.  

    Management uses OIBDA as an important part of our internal reporting and
    planning processes and as a key measure to evaluate profitability and
    operating performance, make comparisons between periods, and to make
    resource allocation decisions.   Management believes that the investment
    community uses similar performance measures to compare performance of
    competitors in our industry.  

    There are material limitations to using non-GAAP financial measures.  Our
    calculation of OIBDA may differ from similarly titled measures used by
    other companies, and may not be comparable to those other measures.
    Additionally, OIBDA does not include certain significant items such as
    depreciation and amortization, interest income, interest expense, income
    taxes, other non-operating income or expense items, preferred stock
    dividends, and gains and losses on pre-confirmation contingencies.  OIBDA
    should be considered in addition to, and not as a substitute for, other
    measures of financial performance reported in accordance with GAAP. 

    Management believes that OIBDA is useful to our investors as it is a
    relevant indicator of operating performance, especially in a capital-
    intensive industry such as telecommunications.  OIBDA provides investors
    with an indication of the underlying performance of our everyday business
    operations.  It excludes the effect of items associated with our
    capitalization and tax structures, such as interest income, interest
    expense and income taxes, and of other items not associated with our
    everyday operations. 

                                          Year Ended December 31, 2009
                                ----------------------------------------------
                                GCUK  GC Impsat   ROW (1)  Eliminations  Total
                                ----  ---------   -------  ------------  -----

     OIBDA                       $93     $160      $89          $-       $342
     Depreciation and
      amortization               (66)     (87)    (187)          -       (340)
                               -----    -----    -----       -----      -----
     Operating income (loss)      27       73      (98)          -          2
     Interest income               8        6        9         (16)         7
     Interest expense            (53)     (33)     (90)         16       (160)
     Other income (expense),
      net                         18        -       (7)          -         11
     Benefit (provision) for
      income taxes                (1)       2       (2)          -         (1)
     Preferred stock dividends     -        -       (4)          -         (4)
                               -----     -----    -----      -----      -----
     Income (loss) applicable
      to common shareholders     $(1)     $48    $(192)         $-      $(145)
                               =====    =====    =====       =====      ===== 

                                          Year Ended December 31, 2008
                                ----------------------------------------------
                                GCUK  GC Impsat  ROW (1,2) Eliminations  Total
                                ----  ---------  --------- ------------  -----

     OIBDA                      $134     $138       $1          $-       $273
     Depreciation and
      amortization               (84)     (81)    (161)          -       (326)
                               -----    -----    -----       -----      -----
     Operating income (loss)      50       57     (160)          -        (53)
     Interest income               8        3        6          (7)        10
     Interest expense            (65)     (35)     (83)          7       (176)
     Other income (expense),
      net                        (57)     (20)      51           -        (26)
     Net gain on
      preconfirmation
     contingencies                 -        4        6           -         10
     Provision for income
      taxes                       (1)     (17)     (31)          -        (49)
     Preferred stock dividends     -        -       (4)          -         (4)
                               -----    -----    -----       -----      ------
     Loss applicable to common
      shareholders              $(65)     $(8)   $(215)         $-      $(288)
                               =====    =====    =====       =====      ===== 

    (1) Rest of World (ROW) represents operations of Global Crossing Limited
    and subsidiaries excluding Global Crossing (UK) Telecommunications Ltd.
    and subsidiaries (GCUK) and GC Impsat Holdings I Plc and subsidiaries (GC
    Impsat). 

    (2) On January 1, 2009, the Company adopted FASB ASC Subtopic 470-20. ASC
    Subtopic 470-20 specifies that issuers of convertible instruments should
    separately account for the liability and equity components in a manner
    that will reflect the entity's non-convertible debt borrowing rate when
    interest cost is recognized in subsequent periods. ASC Subtopic 470-20
    must be applied on retrospective basis. As a result of applying ASC
    Subtopic 470-20, interest expense has increased $7 for the year ended
    December 31, 2008. 

    Global Crossing Limited                                          Table 9
    Unaudited Reconciliation of OIBDA to Income (Loss) Applicable
     to Common Shareholders
    ($ in millions)                                                      

    Pursuant to the SEC's Regulation G, the following table provides a
    reconciliation of OIBDA, which is considered a non-GAAP (Generally
    Accepted Accounting Principles) financial measure, to income (loss)
    applicable to common shareholders. 

    OIBDA is defined as operating income (loss) before depreciation and
    amortization. OIBDA differs from operating income (loss) in that it
    excludes depreciation and amortization.  Such excluded expenses primarily
    reflect the non-cash impacts of historical capital investments, as opposed
    to the cash impacts of capital expenditures made in recent periods.  In
    addition, OIBDA does not give effect to cash used for debt service
    requirements and thus does not reflect available funds for reinvestment,
    distributions or other discretionary uses. 

    Management uses OIBDA as an important part of our internal reporting and
    planning processes and as a key measure to evaluate profitability and
    operating performance, make comparisons between periods, and to make
    resource allocation decisions.   Management believes that the investment
    community uses similar performance measures to compare performance of
    competitors in our industry.  

    There are material limitations to using non-GAAP financial measures.  Our
    calculation of OIBDA may differ from similarly titled measures used by
    other companies, and may not be comparable to those other measures.
    Additionally, OIBDA does not include certain significant items such as
    depreciation and amortization, interest income, interest expense, income
    taxes, other non-operating income or expense items, preferred stock
    dividends, and gains and losses on pre-confirmation contingencies.  OIBDA
    should be considered in addition to, and not as a substitute for, other
    measures of financial performance reported in accordance with GAAP. 

    Management believes that OIBDA is useful to our investors as it is a
    relevant indicator of operating performance, especially in a capital-
    intensive industry such as telecommunications.  OIBDA provides investors
    with an indication of the underlying performance of our everyday business
    operations.  It excludes the effect of items associated with our
    capitalization and tax structures, such as interest income, interest
    expense and income taxes, and of other items not associated with our
    everyday operations. 

                                     Quarter Ended December 31, 2009
                             ----------------------------------------------
                             GCUK  GC Impsat   ROW (1)   Eliminations Total
                             ----  ---------   -------   ------------ ----- 

     OIBDA                    $24      $33      $26          $-        $83
     Depreciation and
      amortization            (17)     (24)     (49)          -        (90)
                             ----     ----     ----        ----       ----
     Operating income
      (loss)                    7        9      (23)          -         (7)
     Interest income            2        1        4          (7)         -
     Interest expense         (14)      (8)     (32)          7        (47)
     Other income (expense),
      net                       1        1       (2)          -          -
     Benefit for income
      taxes                     -       17        -           -         17
     Preferred stock
      dividends                 -        -       (1)          -         (1)
                             ----     ----     ----        ----       ----
     Income (loss)
      applicable to
      common shareholders     $(4)     $20     $(54)         $-       $(38)
                             ====     ====     ====        ====       ==== 

                                     Quarter Ended September 30, 2009
                             ----------------------------------------------
                             GCUK  GC Impsat   ROW (1)   Eliminations Total
                             ----  ---------   -------   ------------ -----

     OIBDA                    $25      $44      $22          $-        $91
     Depreciation and
      amortization            (18)     (22)     (49)          -        (89)
                             ----     ----     ----        ----       ----
     Operating income
      (loss)                    7       22      (27)          -          2
     Interest income            3        2        -          (3)         2
     Interest expense         (14)      (8)     (20)          3        (39)
     Other expense, net        (8)     (13)     (11)          -        (32)
     Provision for income
      taxes                     -       (6)       -           -         (6)
     Preferred stock
      dividends                 -        -       (1)          -         (1)
                             ----     ----     ----        ----       ----
     Loss applicable to
      common shareholders    $(12)     $(3)    $(59)         $-       $(74)
                             ====     ====     ====        ====       ====   

                                     Quarter Ended December 31, 2008
                             ----------------------------------------------
                             GCUK  GC Impsat  ROW (1,2)  Eliminations Total
                             ----  ---------  ---------  ------------ ----- 

     OIBDA                    $25      $40      $37          $-       $102
     Depreciation and
      amortization            (19)     (21)     (42)          -        (82)
                             ----     ----     ----        ----       ----
     Operating income
      (loss)                    6       19       (5)          -         20
     Interest income            2        1        1          (2)         2
     Interest expense         (14)      (8)     (20)          2        (40)
     Other income (expense),
      net                     (41)     (14)      26           -        (29)
     Net gain on
      preconfirmation
     contingencies              -        -        1           -          1
     Provision for income
      taxes                     -       (2)      (4)          -         (6)
     Preferred stock
      dividends                 -        -       (1)          -         (1)
                             ----     ----     ----        ----       ----
     Loss applicable to
      common shareholders    $(47)     $(4)     $(2)         $-       $(53)
                             ====     ====     ====        ====       ====   

    (1) Rest of World (ROW) represents operations of Global Crossing Limited
    and subsidiaries excluding Global Crossing (UK) Telecommunications Ltd.
    and subsidiaries (GCUK) and GC Impsat Holdings I Plc and subsidiaries (GC
    Impsat). 

    (2) On January 1, 2009, the Company adopted FASB ASC Subtopic 470-20. ASC
    Subtopic 470-20 specifies that issuers of convertible instruments should
    separately account for the liability and equity components in a manner
    that will reflect the entity's non-convertible debt borrowing rate when
    interest cost is recognized in subsequent periods. ASC Subtopic 470-20
    must be applied on retrospective basis. As a result of applying ASC
    Subtopic 470-20, interest expense has increased $2 for the three months
    ended December 31, 2008. 

    Global Crossing Limited and Subsidiaries                          Table 10
    Unaudited Reconciliations of Free Cash Flow to Net Cash
     Provided by Operating Activities
    ($ in millions)                                                      

    Pursuant to the SEC's Regulation G, the following table provides a
    reconciliation of Free Cash Flow, which is considered a non-GAAP
    (Generally Accepted Accounting Principles) financial measure, to net cash
    provided by operating activities. 

    We define Free Cash Flow as net cash provided by (used in) operating
    activities less purchases of property and equipment as disclosed in the
    statement of cash flows.  Free Cash Flow differs from the net change in
    cash and cash equivalents in the statement of cash flows in that it
    excludes the cash impact of: all investing activities (other than capital
    expenditures, which are a fundamental and recurring part of our business);
    all financing activities; and exchange rate changes on cash and cash
    equivalents balances.

    Management uses Free Cash Flow as a relevant indicator of our ability to
    generate cash to pay debt.  Free Cash Flow also is an important part of
    our internal reporting and a key measure used by management to evaluate
    liquidity from period to period. We believe that the investment community
    uses similar performance measures to compare performance of competitors in
    our industry.   

    There are material limitations to using non-GAAP financial measures.  Our
    calculation of Free Cash Flow may differ from similarly titled measures
    used by other companies, and may not be comparable to those other
    measures.  Moreover, we do not currently pay a significant amount of
    income taxes due to net operating losses, and we therefore generate higher
    Free Cash Flow than comparable businesses that do pay income taxes.
    Additionally, Free Cash Flow is subject to variability quarter over
    quarter as a result of the timing of payments related to accounts
    receivable and accounts payable and capital expenditures.  Free Cash Flow
    also does not include certain significant cash items such as purchases and
    sales out of the ordinary course of business, proceeds from financing
    activities, repayments of capital lease obligations and other debt, and
    the effect of exchange rate changes on cash and cash equivalents balances.
    Free Cash Flow should be considered in addition to, and not as a
    substitute for, net change in cash and cash equivalents in the statement
    of cash flows reported in accordance with GAAP.

    Management believes that Free Cash Flow is useful to our investors as it
    provides an indication of the underlying cash position of our everyday
    business operations and the ability to pay debt.                    

                                                         Year Ended
                                                        December 31,
                                                            2009
                                                        ------------         

       Free Cash Flow                                        $82
       Purchases of property and equipment                   174
                                                            ----
       Net cash provided by operating activities            $256
                                                            ====         

                                                         Year Ended
                                                        December 31,
                                                            2008
                                                        ------------         

       Free Cash Flow                                        $11
       Purchases of property and equipment                   192
                                                            ----
       Net cash provided by operating activities            $203
                                                            ====         

    Global Crossing Limited and Subsidiaries                          Table 11
    Unaudited Reconciliations of Free Cash Flow to Net Cash
     Provided by Operating Activities
    ($ in millions)                                                       

    Pursuant to the SEC's Regulation G, the following table provides a
    reconciliation of Free Cash Flow, which is considered a non-GAAP
    (Generally Accepted Accounting Principles) financial measure, to net cash
    provided by operating activities. 

    We define Free Cash Flow as net cash provided by (used in) operating
    activities less purchases of property and equipment as disclosed in the
    statement of cash flows.  Free Cash Flow differs from the net change in
    cash and cash equivalents in the statement of cash flows in that it
    excludes the cash impact of: all investing activities (other than capital
    expenditures, which are a fundamental and recurring part of our business);
    all financing activities; and exchange rate changes on cash and cash
    equivalents balances.

    Management uses Free Cash Flow as a relevant indicator of our ability to
    generate cash to pay debt.  Free Cash Flow also is an important part of
    our internal reporting and a key measure used by management to evaluate
    liquidity from period to period. We believe that the investment community
    uses similar performance measures to compare performance of competitors in
    our industry.  

    There are material limitations to using non-GAAP financial measures.  Our
    calculation of Free Cash Flow may differ from similarly titled measures
    used by other companies, and may not be comparable to those other
    measures.  Moreover, we do not currently pay a significant amount of
    income taxes due to net operating losses, and we therefore generate higher
    Free Cash Flow than comparable businesses that do pay income taxes.
    Additionally, Free Cash Flow is subject to variability quarter over
    quarter as a result of the timing of payments related to accounts
    receivable and accounts payable and capital expenditures.  Free Cash Flow
    also does not include certain significant cash items such as purchases and
    sales out of the ordinary course of business, proceeds from financing
    activities, repayments of capital lease obligations and other debt, and
    the effect of exchange rate changes on cash and cash equivalents balances.
    Free Cash Flow should be considered in addition to, and not as a
    substitute for, net change in cash and cash equivalents in the statement
    of cash flows reported in accordance with GAAP.

    Management believes that Free Cash Flow is useful to our investors as it
    provides an indication of the underlying cash position of our everyday
    business operations and the ability to pay debt.                     

                                                        Quarter Ended
                                                         December 31,
                                                             2009
                                                        -------------         

       Free Cash Flow                                         $72
       Purchases of property and equipment                     49
                                                             ----
       Net cash provided by operating activities             $121
                                                             ====         

                                                        Quarter Ended
                                                        September 30,
                                                             2009
                                                        -------------         

       Free Cash Flow                                         $52
       Purchases of property and equipment                     33
                                                              ---
       Net cash provided by operating activities              $85
                                                              ===         

                                                        Quarter Ended
                                                         December 31,
                                                             2008
                                                        -------------         

       Free Cash Flow                                         $30
       Purchases of property and equipment                     49
                                                              ---
       Net cash provided by operating activities              $79
                                                              ===         

    Global Crossing Limited and Subsidiaries                          Table 12
    Unaudited Reconciliations of 2010 OIBDA and Free Cash
     Flow Guidance
    ($ in millions)                                                          

    When providing projections for non-GAAP measures, we are required to
    provide a reconciliation of the non-GAAP measure to the most directly
    comparable GAAP metric to the extent available without unreasonable
    efforts.  In such cases, we may indicate an amount or range for GAAP
    measures that are components of the reconciliation.  The provision of such
    amounts or ranges must not be interpreted as explicit or implicit
    projections of those GAAP components. To reconcile the non-GAAP financial
    metric to GAAP, we must use amounts or ranges for the GAAP components that
    arithmetically add up to the non-GAAP financial metric. While we feel
    reasonably comfortable with the methodology used to generate the
    projections of our non-GAAP financial metrics, we fully expect that the
    amounts or ranges used for the GAAP components will vary from actual
    results. We have made numerous assumptions in preparing our projections.
    These assumptions, including the amounts of the various components that
    comprise a financial metric, may or may not prove to be correct. We will
    consider our projections of non-GAAP financial metrics to have been
    achieved if the specific non-GAAP measure is met or exceeded, even if the
    GAAP components of the reconciliation are materially different from those
    provided in an earlier reconciliation.

    This reconciliation was prepared based on the Company's guidance as
    provided on February 16, 2010, which is included in the preceding
    press release for informational purposes only.                          

                                               Twelve months ended
                                                December 31, 2010
                                    ------------------------------------------
                                    Low End of Guidance   High End of Guidance

     OIBDA                                     $390                     $440
     Depreciation and
      amortization                             (380)                    (383)
                                                ---                      ---
    Operating income                             10                       57
     Interest expense, net                     (200)                    (200)
     Provision for income taxes                 (25)                     (25)
     Preferred stock dividends                   (4)                      (4)
                                                ---                      ---
     Net loss applicable to
      common shareholders                     $(219)                   $(172)
                                                ===                      ===

     Free Cash Flow                             $10                      $60
     Purchases of property and
      equipment                                 165                      195
                                                ---                      ---
     Net cash provided by
      operating activities                     $175                     $255
                                                ===                      ===

    For definitions and further description of these non-GAAP measures see
    table 13.                                                        

    Global Crossing Limited and Subsidiaries                          Table 13
    Definitions of Non-GAAP measures                                       

    Operating Income (Loss) Before Depreciation and Amortization ("OIBDA"):
    OIBDA is defined as operating income (loss) before depreciation and
    amortization. OIBDA differs from operating income (loss), as calculated in
    accordance with GAAP and reflected on our consolidated financial
    statements, in that it excludes depreciation and amortization.  Such
    excluded expenses primarily reflect the non-cash impacts of historical
    capital investments, as opposed to the cash impacts of capital
    expenditures made in recent periods.  In addition, OIBDA does not give
    effect to cash used for debt service requirements and thus does not
    reflect available funds for reinvestment, distributions or other
    discretionary uses.  

    Management uses OIBDA as an important part of our internal reporting and
    planning processes and as a key measure to evaluate profitability and
    operating performance, make comparisons between periods, and to make
    resource allocation decisions.   Management believes that the investment
    community uses similar performance measures to compare performance of
    competitors in our industry.  

    There are material limitations to using non-GAAP financial measures.  Our
    calculation of OIBDA may differ from similarly titled measures used by
    other companies, and may not be comparable to those other measures.
    Additionally, OIBDA does not include certain significant items such as
    depreciation and amortization, interest income, interest expense, income
    taxes, other non-operating income or expense items, preferred stock
    dividends, and gains and losses on preconfirmation contingencies.  OIBDA
    should be considered in addition to, and not as a substitute for, other
    measures of financial performance reported in accordance with GAAP. 

    Management believes that OIBDA is useful to our investors as it is a
    relevant indicator of operating performance, especially in a capital-
    intensive industry such as telecommunications.  OIBDA provides investors
    with an indication of the underlying performance of our everyday business
    operations.  It excludes the effect of items associated with our
    capitalization and tax structures, such as interest income, interest
    expense and income taxes, and of other items not associated with our
    everyday operations. 

    Free Cash Flow:
    Free Cash Flow is a non-GAAP financial measure.  We define Free Cash Flow
    as net cash provided by (used in) operating activities less purchases of
    property and equipment as disclosed in the statement of cash flows.  Free
    Cash Flow differs from the net change in cash and cash equivalents in the
    statement of cash flows in that it excludes the cash impact of: all
    investing activities (other than capital expenditures, which are a
    fundamental and recurring part of our business); all financing activities;
    and exchange rate changes on cash and cash equivalents balances.

    Management uses Free Cash Flow as a relevant indicator of our ability to
    generate cash to pay debt.  Free Cash Flow also is an important part of
    our internal reporting and a key measure used by management to evaluate
    liquidity from period to period. We believe that the investment community
    uses similar performance measures to compare performance of competitors in
    our industry. 

    There are material limitations to using non-GAAP financial measures.  Our
    calculation of Free Cash Flow may differ from similarly titled measures
    used by other companies, and may not be comparable to those other
    measures.  Moreover, we do not currently pay a significant amount of
    income taxes due to net operating losses, and we therefore generate higher
    Free Cash Flow than comparable businesses that do pay income taxes.
    Additionally, Free Cash Flow is subject to variability quarter over
    quarter as a result of the timing of payments related to accounts
    receivable and accounts payable and capital expenditures.  Free Cash Flow
    also does not include certain significant cash items such as purchases and
    sales out of the ordinary course of business, proceeds from financing
    activities, repayments of capital lease obligations and other debt, and
    the effect of exchange rate changes on cash and cash equivalents balances.
    Free Cash Flow should be considered in addition to, and not as a
    substitute for, net change in cash and cash equivalents in the statement
    of cash flows reported in accordance with GAAP.

    Management believes that Free Cash Flow is useful to our investors as it
    provides an indication of the underlying cash position of our everyday
    business operations and the ability to pay debt.

SOURCE Global Crossing

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