Global Crossing Limited and Subsidiaries

Table 1

Condensed Consolidated Balance Sheets

($ in millions)

June 30, 2011

December 31, 2010

(unaudited)

ASSETS:

Current assets:

Cash and cash equivalents

$ 259

$ 372

Restricted cash and cash equivalents - current portion

5

4

Accounts receivable, net of allowances of $46 and $45

370

324

Prepaid costs and other current assets

110

91

Total current assets

744

791

Restricted cash and cash equivalents - long term

5

5

Property and equipment, net of accumulated depreciation of $1,691 and $1,514

1,191

1,179

Intangible assets, net (including goodwill of $217 and $208)

234

227

Other assets

110

108

Total assets

$ 2,284

$ 2,310

LIABILITIES:

Current liabilities:

Accounts payable

$ 273

$ 297

Accrued cost of access

90

78

Short term debt and current portion of long term debt

48

27

Obligations under capital leases - current portion

54

51

Deferred revenue - current portion

173

184

Other current liabilities

346

376

Total current liabilities

984

1,013

Long term debt

1,346

1,311

Obligations under capital leases

81

72

Deferred revenue

365

338

Other deferred liabilities

56

53

Total liabilities

2,832

2,787

SHAREHOLDERS' DEFICIT:

Common stock, 110,000,000 shares authorized, $.01 par value,

61,187,796 and 60,497,709 shares issued and outstanding as of

June 30, 2011 and December 31, 2010, 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

1,448

1,443

Accumulated other comprehensive income

6

15

Accumulated deficit

(2,005)

(1,938)

Total shareholders' deficit

(548)

(477)

Total liabilities and shareholders' deficit

$ 2,284

$ 2,310

Global Crossing Limited and Subsidiaries

Table 2

Unaudited Condensed Consolidated Statements of Operations

($ in millions)

Three Months Ended

June 30,

March 31,

June 30,

2011 ¹

2011 ¹

2010

Revenue

$ 692

$ 661

$ 630

Cost of revenue (excluding depreciation and amortization, shown separately below):

Cost of access

(299)

(298)

(276)

Real estate, network and operations

(121)

(108)

(103)

Third party maintenance

(23)

(24)

(26)

Cost of equipment and other sales

(25)

(26)

(26)

Total cost of revenue

(468)

(456)

(431)

Gross margin

224

205

199

Selling, general and administrative

(128)

(121)

(106)

Depreciation and amortization

(82)

(80)

(82)

Operating income

14

4

11

Other income (expense):

Interest income

1

-

1

Interest expense

(45)

(45)

(48)

Other income (expense), net

(5)

18

(6)

Loss before benefit (provision) for income taxes

(35)

(23)

(42)

Benefit (provision) for income taxes

1

(10)

(5)

Net loss

(34)

(33)

(47)

Preferred stock dividends

(1)

(1)

(1)

Loss applicable to common shareholders

$ (35)

$ (34)

$ (48)

Loss per common share, basic and diluted:

Loss applicable to common shareholders

$ (0.57)

$ (0.56)

$ (0.79)

Weighted average number of common shares

61,149,087

60,755,348

60,434,227

Global Crossing Limited and Subsidiaries

Table 3

Unaudited Condensed Consolidated Statements of Cash Flows

($ in millions)

Three Months Ended

June 30,

March 31,

June 30,

2011 ¹

2011 ¹

2010

Cash flows provided by (used in) operating activities:

Net loss

$ (34)

$ (33)

$ (47)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Deferred income tax

4

2

-

Non-cash stock compensation expense

4

4

5

Depreciation and amortization

82

80

82

Provision for doubtful accounts

2

1

-

Amortization of prior period IRUs

(7)

(7)

(6)

Change in long term deferred revenue

33

4

(2)

Other

(7)

(20)

18

Change in operating working capital:

- Changes in accounts receivable

(12)

(28)

23

- Changes in accounts payable and accrued cost of access

10

(27)

(30)

- Changes in other current assets

(15)

(12)

1

- Changes in other current liabilities

(4)

(21)

(8)

Net cash provided by (used in) operating activities

56

(57)

36

Cash flows provided by (used in) investing activities:

Purchases of property and equipment

(46)

(36)

(49)

Proceeds from sale of property and equipment

-

-

1

Change in restricted cash and cash equivalents

-

-

(1)

Net cash used in investing activities

(46)

(36)

(49)

Cash flows provided by (used in) financing activities:

Repayment of capital lease obligations

(13)

(16)

(14)

Repayment of long term debt (including current portion)

(5)

(1)

(3)

Proceeds from exercise of stock options

1

1

-

Finance costs incurred

-

(1)

-

Proceeds from sales/leasebacks

-

4

-

Payment of employee taxes on share-based compensation

-

(3)

-

Other

1

-

-

Net cash used in financing activities

(16)

(16)

(17)

Effect of exchange rate changes on cash and cash equivalents

-

2

(1)

Net decrease in cash and cash equivalents

(6)

(107)

(31)

Cash and cash equivalents, beginning of period

265

372

359

Cash and cash equivalents, end of period

$ 259

$ 265

$ 328

Global Crossing Limited and Subsidiaries

Table 4

Unaudited Condensed Consolidated Statements of Operations

($ in millions)

Quarter Ended June 30, 2011

Quarter Ended March 31, 2011

Quarter Ended June 30, 2010

GCUK

GC Impsat

ROW ^{1, 2}

Eliminations

Total

GCUK

GC Impsat

ROW ^{1, 2}

Eliminations

Total

GCUK

GC Impsat

ROW ¹

Eliminations

Total

Revenue

$ 116

$ 164

$ 418

$ (6)

$ 692

$ 114

$ 152

$ 403

$ (8)

$ 661

$ 115

$ 137

$ 384

$ (6)

$ 630

Cost of revenue

Cost of access

(38)

(33)

(233)

5

(299)

(35)

(34)

(237)

8

(298)

(35)

(31)

(215)

5

(276)

Real estate, network and operations

(19)

(32)

(71)

1

(121)

(19)

(24)

(65)

-

(108)

(18)

(24)

(62)

1

(103)

Third party maintenance

(5)

(6)

(12)

-

(23)

(5)

(6)

(13)

-

(24)

(6)

(6)

(14)

-

(26)

Cost of equipment and other sales

(16)

(7)

(2)

-

(25)

(17)

(5)

(4)

-

(26)

(17)

(5)

(4)

-

(26)

Total cost of revenue

(78)

(78)

(318)

6

(468)

(76)

(69)

(319)

8

(456)

(76)

(66)

(295)

6

(431)

Gross margin

38

86

100

-

224

38

83

84

-

205

39

71

89

-

199

Selling, general and administrative

(21)

(36)

(71)

-

(128)

(20)

(34)

(67)

-

(121)

(19)

(30)

(57)

-

(106)

Depreciation and amortization

(16)

(20)

(46)

-

(82)

(16)

(20)

(44)

-

(80)

(15)

(20)

(47)

-

(82)

Operating income (loss)

1

30

(17)

-

14

2

29

(27)

-

4

5

21

(15)

-

11

Other income (expense):

Interest income

2

-

4

(5)

1

2

1

3

(6)

-

2

-

6

(7)

1

Interest expense

(13)

(3)

(34)

5

(45)

(15)

(3)

(33)

6

(45)

(14)

(6)

(35)

7

(48)

Other income (expense), net

(1)

-

(4)

-

(5)

7

1

10

-

18

(1)

1

(6)

-

(6)

Income (loss) before benefit (provision) for income taxes

(11)

27

(51)

-

(35)

(4)

28

(47)

-

(23)

(8)

16

(50)

-

(42)

Benefit (provision) for income taxes

-

1

-

-

1

-

(9)

(1)

-

(10)

-

(6)

1

-

(5)

Net income (loss)

(11)

28

(51)

-

(34)

(4)

19

(48)

-

(33)

(8)

10

(49)

-

(47)

Preferred stock dividends

-

-

(1)

-

(1)

-

-

(1)

-

(1)

-

-

(1)

-

(1)

Income (loss) applicable to common shareholders

$ (11)

$ 28

$ (52)

$ -

$ (35)

$ (4)

$ 19

$ (49)

$ -

$ (34)

$ (8)

$ 10

$ (50)

$ -

$ (48)

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 October 29, 2010, Global Crossing acquired Genesis Networks Inc. (Genesis), and since that date Genesis' results have been consolidated into Global Crossing results as ROW.

Global Crossing Limited and Subsidiaries

Table 5

Unaudited Summary of Consolidated Revenue

($ in millions)

Quarter Ended June 30, 2011

GCUK

GC Impsat

ROW ^{1, 2}

Eliminations

Total

Revenue:

Enterprise, carrier data and indirect sales channel

$ 116

$ 160

$ 346

$ -

$ 622

Carrier voice

-

1

68

-

69

Other

-

-

1

-

1

Intersegment revenue

-

3

3

(6)

-

Consolidated revenue

$ 116

$ 164

$ 418

$ (6)

$ 692

Quarter Ended March 31, 2011

GCUK

GC Impsat

ROW ^{1, 2}

Eliminations

Total

Revenue:

Enterprise, carrier data and indirect sales channel

$ 113

$ 148

$ 326

$ -

$ 587

Carrier voice

1

2

71

-

74

Intersegment revenue

-

2

6

(8)

-

Consolidated revenue

$ 114

$ 152

$ 403

$ (8)

$ 661

Quarter Ended June 30, 2010

GCUK

GC Impsat

ROW ¹

Eliminations

Total

Revenue:

Enterprise, carrier data and indirect sales channel

$ 113

$ 132

$ 310

$ -

$ 555

Carrier voice

2

3

69

-

74

Other

-

-

1

-

1

Intersegment revenue

-

2

4

(6)

-

Consolidated revenue

$ 115

$ 137

$ 384

$ (6)

$ 630

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 October 29, 2010, Global Crossing acquired Genesis Networks Inc. (Genesis), and since that date Genesis' results have been consolidated into Global Crossing results as ROW.

Global Crossing Limited and Subsidiaries

Table 6

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 and preferred stock dividends. OIBDA should be considered in addition to, and not as a substitute for, other measures of financial performance reported in accordance with GAAP.