LONDON, April 8, 2010 /PRNewswire/ -- Global Crossing Limited , a leading global IP solutions provider, today announced fourth quarter and full year 2009 financial results for its subsidiary, Global Crossing (UK) Telecommunications Limited (GCUK).

Highlights

GCUK generated 78 million pounds of revenue in the fourth quarter and Operating Income Before Depreciation and Amortization (OIBDA) of 16 million pounds. (OIBDA is a non-GAAP measure defined and reconciled below.) The company also reported cash generated from operations of 29 million pounds before interest payments of 15 million pounds.

Despite a challenging economic environment, we observed healthy demand for our robust suite of IP-based services in GCUK, said John Legere, Global Crossing's chief executive officer. We see an opportunity to grow the business and further diversify our customer base in 2010, supported by an augmented sales force, our continued investment in the products and services demanded by the marketplace, and our recognized ability to provide a differentiated customer experience.

Fourth Quarter Results

The results discussed below are prepared in accordance with International Financial Reporting Standards and presented in U.S. Generally Accepted Accounting Principles (U.S. GAAP) format. GCUK generated revenue of 78 million pounds, a sequential increase of 3 million pounds, or 4 percent, and a year-over-year decrease of 4 million pounds, or 4 percent. The sequential increase in revenue was primarily due to increased sales in the company's invest and grow business - that part of the business focused on serving enterprise, carrier and government customers excluding wholesale voice - including an increase in non-recurring fees. The year-over-year decline in revenue was primarily due to the completion of the Camelot contract in December 2008, partially offset by growth in other invest and grow revenue.

Gross margin was 27 million pounds for the quarter, a 4 million pound decrease sequentially and year over year. Sequentially, gross margin was unfavorably impacted by benefits in the third quarter from a 4 million pound favorable regulatory ruling related to access costs paid in periods prior to 2009 and a 2 million pound non-recurring reduction in property tax charges. The unfavorable sequential impact of these items was partially offset by increased revenue. The year-over-year decline in gross margin was principally due to lower revenue.

Sales, general and administrative expenses (SGA) were 11 million pounds for the quarter, compared with 10 million pounds in the prior quarter and 14 million pounds in the fourth quarter of 2008. The year-over-year variance was primarily due to a decrease in allocated corporate overhead costs.

GCUK's OIBDA for the fourth quarter was 16 million pounds, compared with 20 million pounds in the third quarter of 2009 and 16 million pounds in the fourth quarter of 2008. The sequential decrease in OIBDA was primarily due to the non-recurring items benefitting gross margin in the third quarter. Year over year, lower gross margin was offset by a decrease in allocated corporate overhead costs.

GCUK recorded a net loss of 2 million pounds for the fourth quarter, compared with a net loss of 2 million pounds in the third quarter of 2009 and a net loss of 25 million pounds in the fourth quarter of 2008. The year-over-year decrease in net loss was primarily due to an unfavorable foreign exchange impact on net U.S. dollar-denominated debt in the year-ago period.

Full Year Results

GCUK generated revenue of 309 million pounds in 2009, compared with 323 million pounds for 2008. The year-over-year decline in revenue was primarily due to the completion of the Camelot contract, which was partially offset by increases in other invest and grow revenue.

Gross margin for 2009 was 106 million pounds, or 34 percent of revenue, compared with the prior year in which gross margin was 119 million pounds, or 37 percent of revenue. The year-over-year decline in gross margin was principally due to lower revenue as described above and higher cost of equipment and professional services costs. These movements were somewhat offset by lower cost of access and third party maintenance costs.

SGA was 40 million pounds for the year, compared with 43 million pounds in the prior year. The year-over-year variance was primarily due to a decrease in allocated corporate overhead costs.

GCUK's OIBDA for 2009 was 66 million pounds, compared with 76 million pounds in 2008. The year-over-year decline in OIBDA was principally due to lower gross margin due to the factors described above, partially offset by a decrease in allocated corporate overhead costs.

GCUK recorded net income of 5 million pounds for 2009, compared with a net loss of 30 million pounds in 2008. The year-over-year improvement was primarily due to an unfavorable foreign exchange impact on net U.S. dollar-denominated debt in the prior year.

Cash and Liquidity

As of December 31, 2009, GCUK had cash and cash equivalents of 37 million pounds compared with 26 million pounds at the end of September 30, 2009, and 36 million pounds at the end of December 31, 2008.

GCUK's cash and cash equivalents increased 11 million pounds in the fourth quarter. Net cash from operating activities during the fourth quarter totaled 14 million pounds, including cash flow from operating working capital of 13 million pounds and interest payments of 15 million pounds. During the quarter, GCUK recorded purchases of property, plant and equipment of 3 million pounds, principal payments on finance leases and other debt of 4 million pounds and proceeds from refinancing a capital lease of 4 million pounds.

GCUK's cash and cash equivalents increased by 1 million pounds during 2009. Net cash from operating activities during 2009 totaled 18 million pounds, including operating working capital use of 9 million pounds and interest payments of 32 million pounds. During 2009, GCUK recorded purchases of property, plant and equipment of 12 million pounds, principal payments on finance leases and other debt of 12 million pounds and proceeds from refinancing a capital lease of 4 million pounds.

During the year, the company also repurchased 7 million pounds of the Senior Secured Notes, excluding accrued interest. To support this debt repurchase and other working capital needs, GCUK borrowed 15 million dollars (approximately 10 million pounds) from GC Impsat.

International Financial Reporting Standards

GCUK's results reported here include audited consolidated financial results for the year ended December 31, 2008; unaudited consolidated financial results for the year ended December 31, 2009 and the three months ended December 31, 2009, September 30, 2009 and December 31, 2008; unaudited consolidated balance sheet as of December 31, 2009; and audited consolidated balance sheet as of December 31, 2008, all in accordance with IFRS, as published by the International Accounting Standards Board (IASB). GCUK's fourth quarter 2009 and 2008 and third quarter of 2009 results, as well as those for the full years 2009 and 2008, were included in Global Crossing's consolidated results previously reported on February 16, 2010, in accordance with U.S. GAAP and in U.S. dollars.

Non-GAAP Financial Measures

Consistent with the U.S. Securities and Exchange Commission's (SEC's) Regulation G, the attached tables include a definition of OIBDA, as well as a reconciliation of such measure to the most directly comparable financial measure calculated in accordance with IFRS and presented in the US GAAP reporting format.

Conference Call

Management has scheduled a conference call for Thursday, April 8, 2010, at 9:00 a.m. EDT/2:00 p.m. BST to discuss GCUK's financial results. The call may be accessed by dialing +1-212-231-2911 or +44(0)20-8196-2883. Callers are advised to dial in 15 minutes prior to the 9:00 a.m. EDT start time. The call will also be Webcast at http://investors.globalcrossing.com/results.cfm.

A replay of the call will be available on Thursday, April 8, 2010, beginning at 11:00 a.m. EDT/4:00 p.m. BST and will be accessible until Thursday, April 15, 2010, at 11:00 a.m. EDT/4:00 p.m. BST. To access the replay, dial +1-402-977-9140 or +1-800-633-8284 and enter reservation number 21463689. UK callers may access the replay by dialing +44(0)87-0000-3081 or (0)-80-0692-0831 and entering reservation number 21463689.

ABOUT GLOBAL CROSSING (UK) TELECOMMUNICATIONS LIMITED.

Global Crossing UK Telecommunications Limited provides a full range of managed telecommunications services in a secure environment ideally suited for IP-based business applications. The company provides managed voice, data, Internet and e-commerce solutions to a strong and established commercial customer base, including more than 100 UK government departments, as well as systems integrators, rail sector customers and major corporate clients. In addition, Global Crossing UK provides carrier services to national and international communications service providers.

ABOUT GLOBAL CROSSING

Global Crossing 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 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 globe.

Website Access to Company Information

Global Crossing maintains a corporate website at http://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, 8-K, and in respect of GCUK's Forms 20-F and 6-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: the impact on the business of current global economic conditions and the tightening in global credit markets; increased competition and pricing pressures resulting from technology advances and regulatory changes; competitive disadvantages relative to competitors with superior resources; the impact on the business of an economic downturn or recession; dependence on a number of key personnel; 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; the influence of the company's parent, and possible conflicts of interest of the parent or of certain of GCUK's directors and officers; our ability to raise capital through financing activities; exposure to contingent liabilities; and other risks referenced from time to time in GCUK'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 Contact Michael Schneider +1-973-937-0146 Michael.Schneider@globalcrossing.com Analysts/Investors Contacts Mark Gottlieb +1-800-836-0342 glbc@globalcrossing.com Gino Mathew United Kingdom +1-973-937-0133 gino.mathew@globalcrossing.com

IR/PR1

Table 1 Global Crossing (UK) Telecommunications Limited and Subsidiaries Consolidated Statements of Financial Position Results below are in pounds sterling in thousands December 31, December 31, 2009 2008 ------------ ------------ (unaudited) Non-current assets Intangible assets, net 11,417 11,955 Property, plant and equipment, net 157,526 179,544 Investment in associate 210 178 Retirement benefit asset 468 1,020 Trade and other receivables 33,230 37,006 ------- ------- 202,851 229,703 ------- ------- Current assets Trade and other receivables 58,125 56,276 Derivative financial instrument - 2,787 Cash and cash equivalents 37,331 36,100 ------ ------ 95,456 95,163 ------- ------- Total assets 298,307 324,866 ======= ======= Current liabilities Trade and other payables (81,085) (81,909) Senior secured notes (11,819) (7,382) Deferred revenue (37,313) (38,751) Provisions (1,281) (1,590) Obligations under finance leases (7,310) (10,182) Other debt obligations (285) (740) -------- -------- (139,093) (140,554) -------- -------- Non-current liabilities Trade and other payables (10,830) (335) Senior secured notes (255,496) (279,546) Deferred revenue (90,326) (100,694) Retirement benefit obligation (2,551) (2,880) Provisions (2,211) (3,786) Obligations under finance leases (12,262) (14,043) Other debt obligations (9) (240) -------- -------- (373,685) (401,524) -------- -------- Total liabilities (512,778) (542,078) -------- -------- Net liabilities (214,471) (217,212) ======== ======== Capital and reserves Equity share capital (101,000 shares outstanding at 1 pound each) 101 101 Capital reserve 31,271 30,504 Hedging reserve - 2,694 Accumulated deficit (245,843) (250,511) -------- -------- Total equity (214,471) (217,212) ======== ========

Table 2 Global Crossing (UK) Telecommunications Limited and Subsidiaries Consolidated Statements of Operations Results below are in pounds sterling in thousands Three months ended ------------------ IFRS in IFRS December 31, September 30, December 31, Reporting Format 2009 2009 2008 ------------ ------------- ----------------- (unaudited) (unaudited) (unaudited) Revenue 78,126 74,841 81,647 Cost of sales (50,457) (45,257) (51,435) ------ ------ ------ Gross profit 27,669 29,584 30,212 Distribution costs (5,417) (4,775) (4,723) Administrative expenses (16,839) (15,666) (22,694) ------ ------ ------ Operating profit 5,413 9,143 2,795 Finance revenue 1,026 1,510 1,212 Finance charges (8,538) (8,557) (8,413) Net foreign exchange gain/ (loss) on foreign currency borrowings, net 686 (3,576) (20,706) ------ ------ ------- (Loss) before tax (1,413) (1,480) (25,112) Tax charge (149) (89) (142) ------ ------ ------ (Loss) for the period (1,562) (1,569) (25,254) ========= ========= ========== Year ended ---------- IFRS in IFRS December 31, December 31, Reporting Format 2009 2008 ------------- ------------ (unaudited) Revenue 308,864 322,832 Cost of sales (197,160) (200,487) ------- ------- Gross profit 111,704 122,345 Distribution costs (19,352) (18,361) Administrative expenses (68,708) (75,037) ------ ------ Operating profit 23,644 28,947 Finance revenue 4,924 4,436 Finance charges (34,311) (34,422) Net foreign exchange gain/ (loss) on foreign currency borrowings, net 11,009 (28,374) ------ ------- Profit/(loss) before tax 5,266 (29,413) Tax charge (598) (432) ------ ------ Profit/(loss) for the period 4,668 (29,845) ======== ==========

Three months ended IFRS in U.S. GAAP ------------------ Reporting Format December 31, September 30, December 31, 2009 2009 2008 ----------- ------------ ------------ (unaudited) (unaudited) (unaudited) REVENUES 78,126 74,841 81,647 Cost of revenue (excluding depreciation and amortization shown separately below) Cost of access (23,966) (20,780) (26,058) Real estate, network and Operations (11,387) (10,144) (11,568) Third party maintenance (3,094) (3,417) (3,681) Cost of equipment and other sales (13,140) (10,295) (9,954) ------- ------- ------- Total cost of revenue (51,587) (44,636) (51,261) ------- ------- ------- Gross margin 26,539 30,205 30,386 Selling, general and administrative (10,679) (9,861) (14,143) Depreciation and amortization (10,657) (10,742) (11,393) ------- ------- ------- OPERATING INCOME 5,203 9,602 4,850 OTHER INCOME (EXPENSE) Interest expense, net (7,512) (7,047) (7,201) Other income (expense), net 896 (4,035) (22,761) ------- ------- ------- (LOSS) BEFORE PROVISION FOR INCOME TAXES (1,413) (1,480) (25,112) Provision for income taxes (149) (89) (142) ------- ------- ------- NET (LOSS) (1,562) (1,569) (25,254) ======= ======= ======= Year ended ---------- IFRS in U.S. GAAP Reporting Format December 31, December 31, 2009 2008 ------------- ------------ (unaudited) (unaudited) REVENUES 308,864 322,832 Cost of revenue (excluding depreciation and amortization shown separately below) Cost of access (94,731) (101,092) Real estate, network and operations (49,389) (49,409) Third party maintenance (13,875) (16,577) Cost of equipment and other sales (44,966) (36,866) ------- ------- Total cost of revenue (202,961) (203,944) ------- ------- Gross margin 105,903 118,888 Selling, general and administrative (39,983) (42,937) Depreciation and amortization (43,124) (44,699) ------- ------- OPERATING INCOME 22,796 31,252 OTHER INCOME (EXPENSE) Interest expense, net (29,387) (29,986) Other income (expense), net 11,857 (30,679) ------- ------- INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 5,266 (29,413) Provision for income taxes (598) (432) ------- ------- NET INCOME (LOSS) 4,668 (29,845) ======= =======

Note: The classification differences between reporting under IFRS and U.S. GAAP reporting format are as follows:

Cost of sales:

Under IFRS reporting format, the company includes cost of access, third party maintenance, customer-specific costs and depreciation on network assets within cost of sales.

Cost of revenue:

Under U.S. GAAP reporting format, the company includes cost of access, real estate, network and operations, third party maintenance and cost of equipment and other sales within cost of revenue.

Foreign currency gains and losses:

Under IFRS reporting format, the company includes foreign currency gains and losses within operating profit, except for those related to the senior secured notes and loans from and to related parties, which are included in net foreign exchange gain/(loss) on foreign currency borrowings, net. Under U.S. GAAP reporting format, all foreign exchange gains and losses are included in other income (expense), net.

Table 3 Global Crossing (UK) Telecommunications Limited and Subsidiaries Consolidated Statements of Cash Flows Results below are in pounds sterling in thousands For the year ended ------------------ December 31, December 31, 2009 2008 --------- -------- (unaudited) Operating activities Profit/(loss) for the period 4,668 (29,845) Adjustments for: Finance costs, net 18,378 58,360 Income tax charges 598 432 Depreciation of property, plant and equipment 35,256 35,466 Amortization of intangible assets 1,803 2,201 Amortization of prepaid connection costs 8,637 9,588 Share based payment expense 767 2,856 Gain on disposal of property, plant and equipment (19) (11) Equity (income)/loss for associate (32) 22 Change in provisions (2,098) (1,181) Change in operating working capital (9,111) 605 Change in other assets and liabilities (8,294) (4,562) ------- -------- Cash generated from operations 50,553 73,931 Interest paid (32,208) (33,062) ------- -------- Net cash provided by operating activities 18,345 40,869 ------- ------- Investing activities Interest received 1,230 4,438 Proceeds from disposal of property, plant and equipment 58 12 Purchase of property, plant and equipment (12,000) (21,860) ------- ------- Net cash used in investing activities (10,712) (17,410) -------- -------- Financing activities Loans provided by group companies 9,908 - Repayment of senior secured notes (7,382) (1,158) Repayment of employee taxes on share-based payments (1,047) - Proceeds from sale/leaseback 4,455 - Repayments of capital elements under finance leases (11,649) (10,108) Proceeds from debt obligations - 474 Repayment of capital element of other debt obligations (687) (521) ------- -------- Net cash used in financing activities (6,402) (11,313) ------- -------- Net increase in cash and cash equivalents 1,231 12,146 Cash and cash equivalents at beginning of period 36,100 23,954 ------ ------ Cash and cash equivalents at end of period 37,331 36,100 ======= ======= Non-cash investing activities: Capital lease and debt obligations incurred 2,542 4,917 ====== ======

Table 4 Global Crossing (UK) Telecommunications Limited and Subsidiaries Summary of Consolidated Revenues Results below are in pounds sterling in thousands Three months ended -------------------------------------------------------- December 31, September 30, December 31, 2009 2009 2008 ---------------- ---------------- ---------------- (unaudited) (unaudited) (unaudited) Revenues: Enterprise, carrier data and indirect sales channels 76,618 73,379 79,674 Carrier voice 1,383 1,337 1,848 ------ ------ ------ Revenues from third party customers 78,001 74,716 81,522 Revenues from Global Crossing group companies 125 125 125 ------ ------ ------ Consolidated revenues 78,126 74,841 81,647 ====== ====== ====== Year ended -------------------------------------------------------- December 31, December 31, 2009 2008 ---------------- --------------- (unaudited) Revenues: Enterprise, carrier data and indirect sales channels 301,924 316,222 Carrier voice 6,440 6,110 ------- ------- Revenues from third party customers 308,364 322,332 Revenues from Global Crossing group companies 500 500 ------- ------- Consolidated revenues 308,864 322,832 ======= ======== Table 5 Global Crossing (UK) Telecommunications Limited and Subsidiaries Reconciliation of OIBDA to Net (Loss) Income Results below are in pounds sterling in thousands

Pursuant to the SEC's Regulation G, the following table provides a reconciliation of OIBDA, which is considered a non-GAAP financial measure, to net (loss) income under U.S. GAAP reporting format.

OIBDA is defined as operating income before depreciation and amortization, based upon our IFRS results in U.S. GAAP reporting format consolidated statements of operations. OIBDA differs from operating income, 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 and other non-operating income or expense items. 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.

Three months ended ------------------ December September December 31, 2009 30, 2009 31, 2008 --------- ---------- --------- (unaudited) (unaudited) (unaudited) OIBDA 15,860 20,344 16,243 Depreciation and amortization (10,657) (10,742) (11,393) ------- ------- ------- Operating income 5,203 9,602 4,850 Interest expense, net (7,512) (7,047) (7,201) Other income (expense), net 896 (4,035) (22,761) Provision for income taxes (149) (89) (142) ------- ------- -------- Net (loss) income (1,562) (1,569) (25,254) ======= ======= ======== Year ended ------------------ December 31, 2009 December 31, 2008 ------------------ ----------------- (unaudited) (unaudited) OIBDA 65,920 75,951 Depreciation and amortization (43,124) (44,699) ------- ------- Operating income 22,796 31,252 Interest expense, net (29,387) (29,986) Other income (expense), net 11,857 (30,679) Provision for income taxes (598) (432) ------- ------- Net (loss) income 4,668 (29,845) ======= =======

SOURCE: Global Crossing

CONTACT: Press Contact , Michael Schneider, +1-973-937-0146,Michael.Schneider@globalcrossing.com, or Analysts/Investors Contacts, MarkGottlieb, +1-800-836-0342, glbc@globalcrossing.com, or Gino Mathew, UnitedKingdom , +1-973-937-0133, gino.mathew@globalcrossing.com