They released some quarterly numbers and an update on progress this morning. Looks fine. maybe i'll listen to the CC later.
Wednesday April 28, 5:00 am Eastern Time
Company Press Release
SOURCE: Global Crossing Ltd.
Global Crossing Announces First Quarter Results; Accelerates Pacific Crossing Connecting Asia and the Americas
-- 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.
HAMILTON, Bermuda, April 28 /PRNewswire/ -- 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.
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.
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