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Dear XO Business Partner:
In today's economic environment, you may be wondering about the strength of your telecommunications provider. This is a natural question to ask at a time when the macroeconomic news has been poor and when so many telecommunications companies are saddled with heavy debt burdens, diminished cash resources and challenges to grow revenue and make investments to better serve you and your customers during an adverse economic environment.
While many telecommunications companies are facing these challenges, XO Communications' financial performance through the first three quarters of this year has been strong. In the third quarter of 2008, we delivered another solid quarter of revenue growth and significant EBITDA gains, due largely to our strategic focus on data and IP services - services that are helping our partners offer solutions that help businesses improve productivity and operate more efficiently. During the third quarter, revenue from data and IP services grew 25 percent. Our total third quarter revenue grew by nearly 4 percent compared to the same period last year.
Although the capital markets have been under severe pressure, XO has eliminated its long-term debt and has significant cash available to fund our operations. At the end of the third quarter of 2008, XO had nearly $320 million in cash. As we look across the competitive landscape, it's clear that many other companies in our industry may require access to capital markets to remain viable. Instead, we are in a unique position to pursue growth opportunities. As a result of our financial flexibility, XO has been able to invest significantly in our network to support the growing bandwidth demands of businesses and to deliver new, advanced IP and networking services to help customers cost-effectively power their businesses. Over the past two years, XO has invested more than $450 million in these capabilities.
The current macroeconomic environment has also had an impact on companies' stock prices across the board, including our own. In addition, our stock is thinly traded with a majority of the outstanding shares held by our Chairman, Mr. Carl Icahn. Furthermore, because our stock is traded over-the-counter and not on a major stock exchange, very few investment firms can hold our stock. These factors also contribute to our stock's volatility. While numerous factors impact a company's stock price, we do not believe that our current stock price is a proxy for the financial and operational performance of our business or our ability to successfully grow our business. Our financial position is strong and we are in the enviable position to have the flexibility to make investments independent of the current credit environment.
At the end of the day, our business is about providing the highest quality service possible to our partners and customers. And while other telecommunications companies may be distracted because they are focused on getting their own house in order, we are totally focused on our partners and customers.
If you have any questions or if there is a communications issue you or one of your customers is currently facing that we can help you overcome, do not hesitate to let us know.
Sincerely,
Tom Cady
President, XO Business Services
XO Communications |
