Global Crossing Announces Second Quarter 2008 Financial Results

- Consolidated revenue grew for the ninth consecutive quarter.

FLORHAM PARK, N.J., Aug. 5 /PRNewswire-FirstCall/ -- Global Crossing
(Nasdaq: GLBC), a leading global IP solutions provider, today reported its
unaudited consolidated financial and operational results for the second
quarter of 2008.
Summary
Global Crossing's consolidated revenue grew 19 percent year over year to
$653 million for the second quarter of 2008, and adjusted gross margin was
$347 million or 53 percent of revenue. Revenue from the company's "invest and
grow" category - namely that part of the business focused on serving global
enterprises and carrier customers, excluding wholesale voice - increased 26
percent year over year to $546 million. Adjusted cash EBITDA was $77 million,
and the company generated $15 million in cash from operating activities.
Adjusted cash EBITDA and adjusted gross margin are non-GAAP measures which are
defined and reconciled below.
"We delivered solid results in the second quarter of 2008, as we continued
to manage the business for profitable growth while aggressively managing our
costs," said John Legere, Global Crossing's chief executive officer. "We're
executing our strategy amid market trends that support strong demand for our
services, resulting in positive momentum for our business and continued
financial progress."
Revenue and Margin
Note: Global Crossing acquired Impsat Fiber Networks on May 9, 2007.
References made to segment "invest and grow" revenue and costs are gross of
intersegment eliminations as reported in the attached financial tables.
Global Crossing generated total consolidated revenue of $653 million in
the second quarter of 2008. This compares with consolidated revenue of $630
million in the first quarter of 2008 and $547 million in the second quarter of
2007. The company's "invest and grow" category generated revenue of $546
million for the second quarter, an increase of $29 million or 6 percent
sequentially and an increase of $114 million or 26 percent year over year.
The sequential growth in "invest and grow" revenue was attributable to
continued growth of the company's core services across all segments.
The company's "Rest of World" (ROW) segment reported $283 million of
"invest and grow" revenue, an improvement of $18 million or 7 percent
sequentially and $45 million or 19 percent on a year-over-year basis. The
company's GCUK segment reported $154 million in "invest and grow" revenue, a
sequential increase of $4 million or 3 percent and a year-over-year increase
of $15 million or 11 percent. GC Impsat segment generated "invest and grow"
revenue of $113 million, a sequential increase of $8 million or 8 percent.
The company continues to manage its wholesale voice business for margin.
This business generated $106 million of revenue in the quarter, a decrease of
$6 million compared to the first quarter of 2008 and a decrease of $8 million
on a year-over-year basis. Wholesale voice adjusted gross margin remained
relatively flat compared to the second quarter of 2007, declining by $1
million to $12 million.
The company's order levels remain healthy, building a foundation for
continued revenue growth. New orders per month during the second quarter
continued at levels comparable to the first quarter of this year.
For the second quarter, Global Crossing reported consolidated adjusted
gross margin of $347 million or 53 percent of revenue. This compares with
$331 million or 53 percent in the first quarter of 2008 and $266 million or 49
percent in the second quarter of 2007. The company's "invest and grow"
business generated $334 million of adjusted gross margin or 61 percent of
revenue during the second quarter. This compares with "invest and grow"
adjusted gross margin of $314 million or 61 percent in the first quarter of
2008 and $252 million or 58 percent in the second quarter of 2007. Excluding
the impact of GC Impsat, adjusted gross margin expanded as a percentage of
revenue on a year-over-year basis.
Costs
Cost of access expense for the second quarter was $306 million, compared
with $299 million for the first quarter of 2008 and $281 million for the
second quarter of 2007. Cost of access expense increased by $7 million on a
sequential basis on consolidated revenue growth of $23 million.
Cost of revenue -- which includes cost of access; technical real estate,
network and operations; third party maintenance; and cost of equipment sales
-- increased to $464 million in the second quarter, compared with $453 million
in the first quarter of 2008 and $430 million in the second quarter of 2007.
Cost of revenue as a percentage of revenue totaled 71 percent during the
quarter. This compares with 72 percent in the first quarter of 2008 and 79
percent in the second quarter of 2007.
Excluding cost of access, cost of revenue was $158 million in the second
quarter of 2008, compared with $154 million in the first quarter of 2008 and
$149 million in the second quarter of 2007. The sequential increase in these
costs resulted primarily from an increase in rent and utility charges.
Excluding the impact of GC Impsat, these costs declined on a year-over-year
basis even after higher facilities costs associated with establishment of the
company's European collocation business.
Sales, general and administrative (SG&A) expenses were essentially flat on
a sequential basis at $133 million in the second quarter and increased by $5
million compared to the second quarter of 2007. SG&A as a percentage of
revenue was 20 percent, compared to 21 percent in the first quarter of 2008
and 23 percent in the second quarter of 2007. The second quarter of 2007
included severance expenses of $14 million. Excluding the impact of GC
Impsat and the severance expenses referenced above, SG&A grew $3 million on a
year-over-year basis primarily due to higher salaries and benefits.
Earnings
Global Crossing reported adjusted cash EBITDA of $77 million in the second
quarter of 2008, compared with $67 million in the prior quarter and $8 million
in the second quarter of 2007.
For the second quarter of 2008, all segments reported positive adjusted
cash EBITDA. GCUK, ROW and GC Impsat segments generated $39 million, $6
million and $32 million of adjusted cash EBITDA, respectively.
Global Crossing's consolidated net loss applicable to common shareholders
was $89 million for the second quarter of 2008, compared with a loss of $70
million in the first quarter of 2008 and a loss of $101 million in the second
quarter of 2007. The sequential increase was primarily due to lower foreign
exchange gains compared to the prior quarter, as well as an increase in the
provision for income taxes due to increasing taxable income in certain
countries as a result of the company's strong revenue growth.
Cash and Liquidity
As of June 30, 2008, Global Crossing had $377 million of cash and cash
equivalents, including $59 million of restricted cash and cash equivalents.
Cash flow provided by operating activities for the second quarter was $15
million, including $49 million in cash interest paid and $31 million in
proceeds from the sale of Indefeasible Rights of Use (IRUs) and prepaid
services. The company used $66 million for capital expenditures including
principal payments on capital leases and vendor debt financing. The company's
net decrease in unrestricted cash and cash equivalents in the second quarter
was $44 million.
Note regarding GC Brazil transfer
During the second quarter, Global Crossing transferred its GC Brazil
operations from its ROW segment to its GC Impsat segment and in accordance
with SFAS No. 141, "Business Combinations," since the transfer is between
entities under common control, the company is required to retroactively
restate its GC Impsat segment results to include GC Brazil in those results
and similarly remove GC Brazil from its ROW segment results for all periods
presented.
Guidance
The following table is provided for informational purposes only and
represents the company's 2008 guidance as provided on March 12, 2008.

Metric 2008 Guidance
($ in millions)
Revenue $2,570 - $2,675
Adjusted Cash EBITDA $320 - $380
Cash Use ($85) - ($35)

Non-GAAP Metrics
Pursuant to the Securities and Exchange Commission's (SEC's) Regulation G,
the attached schedules include definitions of Global Crossing's adjusted cash
EBITDA and adjusted gross margin 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).
Conference Call
The company will hold a conference call on Tuesday, August 5, 2008 at 9:00
a.m. EDT to discuss its financial results. The call may be accessed by dialing
+1 212 346 6507 or +44 (0) 870 001 3146. Callers are advised to access the
call 15 minutes prior to 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 Tuesday, August 5, 2008
beginning at 11:00 a.m. EDT and will be accessible until Tuesday, August 12,
2008 at 11:00 a.m. EDT. To access the replay, North American callers should
dial +1 402 977 9140 or +1 800 633 8284 and enter reservation number 21389022.
Callers in the United Kingdom should dial +44 (0) 870 000 3081 or +44 (0) 800
692 0831 and enter reservation number 21389022.
ABOUT GLOBAL CROSSING
Global Crossing (Nasdaq: GLBC) provides telecommunications solutions over
the world's first integrated global IP-based network. Its core network
connects approximately 390 cities in more than 30 countries worldwide, and
delivers services to approximately 690 cities in more than 60 countries and 6
continents around the globe. The company's global sales and support model
matches the network footprint and, like the network, delivers a consistent
customer experience worldwide.
Global Crossing IP services are global in scale, linking the world's
enterprises, governments and carriers with customers, employees and partners
worldwide in a secure environment that is ideally suited for IP-based business
applications, allowing e-commerce to thrive. The company offers a full range
of data, voice and security products to approximately 40 percent of the
Fortune 500, as well as 700 carriers, mobile operators and ISPs. Its
Professional Services and Managed Solutions provide VoIP, security and network
consulting and management services to support its Global Crossing IP VPN
service and Global Crossing VoIP services. Global Crossing was the first
global communications provider with IPv6 natively deployed in both its private
and public backbone networks.
Please visit www.globalcrossing.com or blogs.globalcrossing.com/ for more
information about Global Crossing.
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; our expectation to arrange a material amount of equipment
financings, which will depend on credit market conditions which have continued
to tighten over the past year; greater than anticipated increases in operating
expenses and capital expenditures needed to support the company's revenue
growth; the company's reliance on cash generated by individually significant
prepayments for services; demands from access vendors to reduce the company's
days payable outstanding; legal and contractual restrictions on the inter-
company transfer of funds by the company's subsidiaries; failure to achieve
expected synergies or operating results resulting from the acquisition of
Impsat; possible violations of the Foreign Corrupt Practices Act, particularly
by Impsat and other acquired businesses; 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, including currency exchange-related risks; 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 significant
contingent liabilities; and other risks referenced from time to time in the
company's and GC Impsat'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
Becky Yeamans
+ 1 973 937 0155
Becky.Yeamans@globalcrossing.com

Michael Schneider
+ 1 973 937 0146
Michael.Schneider@globalcrossing.com

Analysts/Investors Contact
Suzanne Lipton
+ 1 800 836 0342
glbc@globalcrossing.com

Gino Mathew
+1 973 937 0133
Gino.Mathew@globalcrossing.com

IR/PR1

Global Crossing Limited and Subsidiaries
Unaudited Summary of Consolidated Revenues, Cost of Access, and
Adjusted Gross Margin
($ in millions)

Quarter Ended June 30, 2008
GCUK GC Impsat ROW(1) Eliminations Total

Revenues:
Enterprise, carrier data
and indirect channels $154 $110 $282 $- $546
Wholesale voice 3 2 101 - 106
Other - - 1 - 1
Intersegment revenue - 3 1 (4) -
Consolidated revenues $157 $115 $385 $(4) $653

Cost of access:
Enterprise, carrier data
and indirect channels $(46) $(25) $(141) $- $(212)
Wholesale voice (2) (2) (90) - (94)
Other - - - - -
Intersegment cost of access - (1) (2) 3 -
Consolidated cost of
access $(48) $(28) $(233) $3 $(306)

Adjusted Gross Margin:
Enterprise, carrier data and
indirect channels $108 $85 $141 $- $334
Wholesale voice 1 - 11 - 12
Other - - 1 - 1
Intersegment adjusted gross
margin - 2 (1) (1) -
Consolidated adjusted gross
margin $109 $87 $152 $(1) $347

Quarter Ended March 31, 2008
GCUK GC Impsat ROW(1) Eliminations Total
(as (as (as
restated restated restated
(2)) (2)) (2))

Revenues:
Enterprise, carrier data
and indirect channels $150 $104 $263 $- $517
Wholesale voice 3 2 107 - 112
Other - - 1 - 1
Intersegment revenue - 1 2 (3) -
Consolidated revenues $153 $107 $373 $(3) $630

Cost of access:
Enterprise, carrier data
and indirect channels $(44) $(24) $(135) $- $(203)
Wholesale voice (2) (2) (92) - (96)
Other - - - - -
Intersegment cost of access - (2) (1) 3 -
Consolidated cost of
access $(46) $(28) $(228) $3 $(299)

Adjusted Gross Margin:
Enterprise, carrier data and
indirect channels $106 $80 $128 $- $314
Wholesale voice 1 - 15 - 16
Other - - 1 - 1
Intersegment adjusted gross
margin - (1) 1 - -
Consolidated adjusted gross
margin $107 $79 $145 $- $331

Quarter Ended June 30, 2007
GCUK GC Impsat ROW(1) Eliminations Total
(as (as (as
restated restated restated
(2)) (2)) (2))

Revenues:
Enterprise, carrier data and
indirect channels $139 $56 $237 $- $432
Wholesale voice 2 1 111 - 114
Other - - 1 - 1
Intersegment revenue - 1 1 (2) -
Consolidated revenues $141 $58 $350 $(2) $547

Cost of access:
Enterprise, carrier data and
indirect channels $(40) $(13) $(127) $- $(180)
Wholesale voice (1) (1) (99) - (101)
Other - - - - -
Intersegment cost of access - (1) - 1 -
Consolidated cost of
access $(41) $(15) $(226) $1 $(281)

Adjusted Gross Margin:
Enterprise, carrier data and
indirect channels $99 $43 $110 $- $252
Wholesale voice 1 - 12 - 13
Other - - 1 - 1
Intersegment adjusted gross
margin - - 1 (1) -
Consolidated adjusted gross
margin $100 $43 $124 $(1) $266

(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) In May 2008, Global Crossing Limited transferred its GC Brazil
operations from the ROW Segment to the GC Impsat Segment. Since the
transfer is between entities under common control, the Company has
retroactively restated GC Impsat's results to include GC Brazil
operations and removed GC Brazil from ROW for all periods presented.

On May 9, 2007, Global Crossing announced that it had acquired Impsat
Fiber Networks Inc. (Impsat), and since that date Impsat's results have been
consolidated into Global Crossing's results as part of GC Impsat.
Definition: Adjusted gross margin is revenue minus cost of access. See
Table 4 for the reconciliation of adjusted gross margin to gross margin.

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

Quarter Ended June 30, 2008
GCUK GC Impsat ROW(1) Eliminations Total

REVENUE $157 $115 $385 $(4) $653
Cost of revenue
Cost of access (48) (28) (233) 3 (306)
Real estate, network and
operations (24) (17) (67) 1 (107)
Third party maintenance (9) (4) (15) - (28)
Cost of equipment sales (17) (3) (3) - (23)
Total cost of revenue (98) (52) (318) 4 (464)
Selling, general and
administrative (22) (34) (77) - (133)
Depreciation and amortization (21) (21) (42) - (84)
OPERATING INCOME (LOSS) 16 8 (52) - (28)
OTHER INCOME (EXPENSE)
Interest expense, net (16) (10) (17) - (43)
Other income (expense), net 1 4 3 - 8
INCOME (LOSS) BEFORE REORGANIZATION
ITEMS, NET AND INCOME TAXES 1 2 (66) - (63)
Net gain on preconfirmation
contingencies - - 4 - 4
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE PROVISION FOR
INCOME TAXES 1 2 (62) - (59)
Provision for income taxes (1) (11) (17) - (29)
NET LOSS - (9) (79) - (88)
Preferred stock dividends - - (1) - (1)
LOSS APPLICABLE TO COMMON
SHAREHOLDERS $- $(9) $(80) $- $(89)

Quarter Ended March 31, 2008
GCUK GC Impsat ROW(1) Eliminations Total
(as (as (as
restated restated restated
(2)) (2)) (2))

REVENUE $153 $107 $373 $(3) $630
Cost of revenue
Cost of access (46) (28) (228) 3 (299)
Real estate, network and
operations (25) (14) (65) - (104)
Third party maintenance (9) (5) (13) - (27)
Cost of equipment sales (18) (2) (3) - (23)
Total cost of revenue (98) (49) (309) 3 (453)
Selling, general and
administrative (20) (32) (80) - (132)
Depreciation and amortization (22) (18) (36) - (76)
OPERATING INCOME (LOSS) 13 8 (52) - (31)
OTHER INCOME (EXPENSE)
Interest expense, net (15) (7) (18) - (40)
Other income (expense), net - (1) 21 - 20
INCOME (LOSS) BEFORE REORGANIZATION
ITEMS, NET AND INCOME TAXES (2) - (49) - (51)
Net gain on preconfirmation
contingencies - - - - -
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE PROVISION FOR
INCOME TAXES (2) - (49) - (51)
Provision for income taxes - (5) (13) - (18)
NET LOSS (2) (5) (62) - (69)
Preferred stock dividends - - (1) - (1)
LOSS APPLICABLE TO COMMON
SHAREHOLDERS $(2) $(5) $(63) $- $(70)

Quarter Ended June 30, 2007
GCUK GC Impsat ROW(1) Eliminations Total
(as (as (as
restated restated restated
(2)) (2)) (2))

REVENUE $141 $58 $350 $(2) $547
Cost of revenue
Cost of access (41) (15) (226) 1 (281)
Real estate, network and
operations (26) (7) (69) 1 (101)
Third party maintenance (9) (4) (12) - (25)
Cost of equipment sales (14) (2) (7) - (23)
Total cost of revenue (90) (28) (314) 2 (430)
Selling, general and
administrative (23) (18) (87) - (128)
Depreciation and amortization (20) (10) (33) - (63)
OPERATING INCOME (LOSS) 8 2 (84) - (74)
OTHER INCOME (EXPENSE)
Interest expense, net (15) (4) (22) - (41)
Other income (expense), net 3 (5) 26 - 24
INCOME (LOSS) BEFORE REORGANIZATION
ITEMS, NET AND INCOME TAXES (4) (7) (80) - (91)
Net gain on preconfirmation
contingencies - - - - -
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE PROVISION FOR
INCOME TAXES (4) (7) (80) - (91)
Provision for income taxes - (2) (7) - (9)
NET LOSS (4) (9) (87) - (100)
Preferred stock dividends - - (1) - (1)
LOSS APPLICABLE TO COMMON
SHAREHOLDERS $(4) (9) $(88) $- (101)

(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) In May 2008, Global Crossing Limited transferred its GC Brazil
operations from the ROW Segment to the GC Impsat Segment. Since the
transfer is between entities under common control, the Company has
retroactively restated GC Impsat's results to include GC Brazil
operations and removed GC Brazil from ROW for all periods presented.

On May 9, 2007, Global Crossing announced that it had acquired Impsat Fiber
Networks Inc. (Impsat), and since that date Impsat's results have been
consolidated into Global Crossing's results as part of GC Impsat.
Pursuant to the SEC's Regulation G, the following table provides a
reconciliation of Adjusted Cash EBITDA, which is considered a non-GAAP
(Generally Accepted Accounting Principles) financial metric, to net income
(loss) applicable to common shareholders, which is the most directly
comparable GAAP measure. Global Crossing's calculation of its Adjusted Cash
EBITDA measure may not be consistent with EBITDA measures of other companies.
Management believes that Adjusted Cash EBITDA is a relevant indicator of
operating performance, especially in a capital-intensive industry such as
telecommunications. Adjusted Cash EBITDA is an important aspect of the
company's internal reporting and is also used by the investment community in
assessing financial performance. This non-GAAP measure should be used in
addition to, but not as a substitute for, the analysis provided in the
statement of operations.

Global Crossing Limited
Unaudited Reconciliation of Adjusted Cash EBITDA to Net Loss Applicable to
Common Shareholders
($ in millions)

Quarter Ended June 30, 2008
GCUK GC Impsat ROW(1) Total

Adjusted Cash EBITDA $39 $32 $6 $77
Non-cash stock compensation expense (2) (3) (16) (21)
Depreciation and amortization (21) (21) (42) (84)
Interest expense, net (16) (10) (17) (43)
Other income (expense), net 1 4 3 8
Net gain on preconfirmation
contingencies - - 4 4
Income tax provision (1) (11) (17) (29)
Preferred stock dividends - - (1) (1)
Net loss applicable to common
shareholders $- $(9) $(80) $(89)

Quarter Ended March 31, 2008
GCUK GC Impsat ROW(1) Total
(as (as
restated restated
(2)) (2))
Adjusted Cash EBITDA $38 $29 $- $67
Non-cash stock compensation expense (3) (3) (16) (22)
Depreciation and amortization (22) (18) (36) (76)
Interest expense, net (15) (7) (18) (40)
Other income (expense), net - (1) 21 20
Net gain on preconfirmation
contingencies - - - -
Income tax provision - (5) (13) (18)
Preferred stock dividends - - (1) (1)
Net loss applicable to common
shareholders $(2) $(5) $(63) $(70)

Quarter Ended June 30, 2007
GCUK GC Impsat ROW(1) Total
(as (as
restated restated
(2)) (2))

Adjusted Cash EBITDA $30 $12 $(34) $8
Non-cash stock compensation expense (2) - (17) (19)
Depreciation and amortization (20) (10) (33) (63)
Interest expense, net (15) (4) (22) (41)
Other income (expense), net 3 (5) 26 24
Net gain on preconfirmation
contingencies - - - -
Income tax provision - (2) (7) (9)
Preferred stock dividends - - (1) (1)
Net loss applicable to common
shareholders $(4) $(9) $(88) $(101)

(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) In May 2008, Global Crossing Limited transferred its GC Brazil
operations from the ROW Segment to the GC Impsat Segment. Since the
transfer is between entities under common control, the Company has
retroactively restated GC Impsat's results to include GC Brazil
operations and removed GC Brazil from ROW for all periods presented.

On May 9, 2007, Global Crossing announced that it had acquired Impsat
Fiber Networks Inc. (Impsat), and since that date Impsat's results have been
consolidated into Global Crossing's results as part of GC Impsat.
Definition: Adjusted cash EBITDA is earnings before interest, taxes,
depreciation and amortization, other income/(expense), net, net gain on
pre-confirmation contingencies, preferred stock dividends and non-cash stock
compensation.
Pursuant to the SEC's Regulation G, the following table provides
reconciliation of adjusted gross margin, which is considered a non-GAAP
financial metric, to gross margin, which is the most directly comparable GAAP
measure. Management believes that adjusted gross margin is a relevant
indicator of operating performance since it links revenue lines with the
largest and most directly related costs incurred to generate such revenue.
Adjusted Gross Margin should be used in addition to, but not as a substitute
for, the analysis provided in the statement of operations.

Global Crossing Limited and Subsidiaries
Unaudited Reconciliation of Adjusted Gross Margin to Gross Margin
($ in millions)

Quarter Ended June 30, 2008
GCUK GC Impsat ROW(1) Eliminations Total

Adjusted gross margin $109 $87 $152 $(1) $347
Real estate, network
and operations (24) (17) (67) 1 (107)
Third party maintenance (9) (4) (15) - (28)
Cost of equipment sales (17) (3) (3) - (23)
Gross margin $59 $63 $67 $- $189

Quarter Ended March 31, 2008
GCUK GC Impsat ROW(1) Eliminations Total
(as (as (as
restated restated restated
(2)) (2)) (2))

Adjusted gross margin $107 $79 $145 $- $331
Real estate, network
and operations (25) (14) (65) - (104)
Third party maintenance (9) (5) (13) - (27)
Cost of equipment sales (18) (2) (3) - (23)
Gross margin $55 $58 $64 $- $177

Quarter Ended June 30, 2007
GCUK GC Impsat ROW(1) Eliminations Total
(as (as (as
restated restated restated
(2)) (2)) (2))

Adjusted gross margin $100 $43 $124 $(1) $266
Real estate, network
and operations (26) (7) (69) 1 (101)
Third party maintenance (9) (4) (12) (25)
Cost of equipment sales (14) (2) (7) (23)
Gross margin $51 $30 $36 $- $117

(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) In May 2008, Global Crossing Limited transferred its GC Brazil
operations from the ROW Segment to the GC Impsat Segment. Since the
transfer is between entities under common control, the Company has
retroactively restated GC Impsat's results to include GC Brazil
operations and removed GC Brazil from ROW for all periods presented.

On May 9, 2007, Global Crossing announced that it had acquired Impsat
Fiber Networks Inc. (Impsat), and since that date Impsat's results have been
consolidated into Global Crossing's results as part of GC Impsat.

Global Crossing Limited
Condensed Consolidated Balance Sheets
($ in millions, except share and per share data)

June 30, December 31,
2008 2007
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $318 $397
Restricted cash and cash equivalents -
current portion 45 18
Accounts receivable, net of allowances of
$65 and $52 363 345
Prepaid costs and other current assets 147 121
Total current assets 873 881
Restricted cash and cash equivalents -
long term 14 35
Property and equipment, net of accumulated
depreciation of $800 and $664 1,470 1,467
Intangible assets, net (including goodwill
of $181 and $158) 214 193
Other assets 85 91
Total assets $2,656 $2,667

LIABILITIES:
Current liabilities:
Short term debt $2 $-
Accounts payable 293 286
Accrued cost of access 113 107
Current portion of long term debt 22 26
Accrued restructuring costs - current
portion 17 17
Deferred revenue - current portion 169 164
Other current liabilities 442 395
Total current liabilities 1,058 995
Long term debt 1,253 1,249
Obligations under capital leases 115 123
Deferred revenue 287 262
Accrued restructuring costs 20 20
Other deferred liabilities 73 81
Total liabilities 2,806 2,730

SHAREHOLDERS' DEFICIT:
Common stock, 110,000,000 shares authorized,
$.01 par value, 56,049,062 and 54,552,045
shares issued and outstanding as of June 30,
2008 and December 31, 2007, respectively 1 1
Preferred stock with controlling shareholder,
45,000,000 shares authorized, $.10 par value,
18,000,000 shares issued to controlling
shareholder and outstanding 2 2
Additional paid-in capital 1,369 1,307
Accumulated other comprehensive loss (34) (42)
Accumulated deficit (1,488) (1,331)
Total shareholders' deficit (150) (63)
Total liabilities and shareholders'
deficit $2,656 $2,667

Global Crossing Limited
Unaudited Condensed Consolidated Statements of Cash Flows
($ in millions)

Six Months Ended
June 30,
2008 2007

Cash flows provided by (used in)
operating activities:
Net loss $(157) $(220)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities
Loss on sale of property and equipment - 1
Loss on sale of marketable securities 3 -
Gain on settlement of contracts due to
Impsat acquisition - (27)
Non-cash income tax provision 27 18
Non-cash stock compensation expense 43 34
Depreciation and amortization 160 113
Provision for doubtful accounts 5 3
Amortization of prior period IRUs (7) (5)
Gain on preconfirmation contingencies (4) -
Change in long term deferred revenue 32 46
Change in operating working capital (25) (83)
Other (37) 4
Net cash provided by (used in)
operating activities 40 (116)

Cash flows provided by (used in)
investing activities:
Purchases of property and equipment (92) (77)
Purchases of marketable securities (11) -
Proceeds from sale of property and equipment 4 -
Proceeds from sale of marketable securities 12 4
Payment for Impsat, net of cash acquired - (75)
Change in restricted cash and cash
equivalents (6) (53)
Net cash used in investing activities (93) (201)

Cash flows provided by (used in)
financing activities:
Proceeds from long term debt 7 597
Repayment of capital lease obligations (29) (20)
Repayment of long term debt (9) (238)
Proceeds from exercise of stock options 1 3
Finance costs incurred - (23)
Cash flows provided by (used in) financing
activities (30) 319

Effect of exchange rate changes on cash and
cash equivalents 4 1
Net increase (decrease) in cash and cash
equivalents (79) 3

Cash and cash equivalents, beginning of period 397 459
Cash and cash equivalents, end of period $318 $462
Non cash investing and financing activities:
Capital lease and debt obligations incurred $27 $43
Accrued interest converted to convertible
notes $- $6

SOURCE Global Crossing

Press: Becky Yeamans, +1-973-937-0155, Becky.Yeamans@globalcrossing.com,
Michael Schneider, +1-973-937-0146, Michael.Schneider@globalcrossing.com,
Analysts-Investors: Suzanne Lipton, 1-800-836-0342, glbc@globalcrossing.com,
Gino Mathew, +1-973-937-0133, Gino.Mathew@globalcrossing.com, all of Global
Crossing