"'On March 8th, we released information describing our plans to restructure and streamline our business operations,' said John Legere, chief executive of Global Crossing. "As part of this turn-around strategy we made a commitment to keep our customers, employees and the business community updated on the state of our business. We continue to fulfill that commitment, and are pleased to report today that Global Crossing's overall performance for the first quarter of 2002 was well in line with the goals contained in the operating plan that we had previously presented to our creditors. We said we would aggressively restructure costs and cash management and we did so - without compromising service or quality."
For continuing operations in the first quarter of 2002, Global Crossing expects to report consolidated revenue of approximately $788 million, including service revenue of approximately $754 million. Excluding Asia Global Crossing and reflecting certain eliminations and adjustments, these amounts were approximately $768 million for revenue and $736 million for service revenue. Figures from continuing operations exclude Global Marine. (These figures should be read in conjunction with the Notes appearing below).
In addition, Global Crossing expects to report a cash balance as of March 31, 2002 of approximately $894 million which includes $485 million unrestricted cash, $335 million restricted cash and $74 million from Global Marine This number excludes $350 million of Asia Global Crossing cash. These cash balance amounts represent preliminary Generally Accepted Accounting Principles (GAAP) book balances as of March 31, 2002.
Yesterday, Global Crossing filed its Monthly Operating Report (MOR) for the month ended March 31, 2002 with the United States Bankruptcy Court for the Southern District of New York. In addition, the MOR will be attached as an exhibit to a Current Report on Form 8-K that will be filed with the United States Securities and Exchange Commission (SEC).
STATUS OF REORGANIZATION
Global Crossing continues to work with creditors and potential investors to develop a plan of reorganization to be filed with the Bankruptcy Court to restructure approximately $8 billion of claims against those Global Crossing companies that filed for chapter 11 protection. More than sixty potential new investors have expressed interest. Global Crossing does not expect that any plan of reorganization, if and when approved by the Bankruptcy Court, would include a capital structure in which existing common or preferred equity would retain any value.
RETAINING CUSTOMERS, WINNING NEW CONTRACTS
During the quarter, Global Crossing's resources and personnel were primarily focused on ensuring that existing customers were satisfied and continued to turn to Global Crossing for additional services.
In addition to maintaining a steady base of existing customer business, Global Crossing signed approximately 475 new service agreements during the period, including both renewals and new business. Included are Convergia, a new carrier customer announced earlier this week, and FAPESP, the largest research network in Brazil, which chose Global Crossing to provide an ExpressRoute IP-VPN solution between Brazil and the United States. Global Crossing also announced during the quarter network service agreements with Agnostic Media, Club Med, Washingtonpost-Newsweek Interactive, Jabil, NBC News Channel, DANTE, Nextel Argentina, and ABZ Ingenieros. Global Crossing also signed renewal contracts during the quarter with Techtel, Radiant, OPEX and CNBC Europe.
"In a very difficult market and during a very challenging time for Global Crossing, our sales teams and sales support personnel kept their focus on ensuring that our existing customers were well served and satisfied," noted Mr. Legere. "This effort paid off in our low customer turn-over rate and high number of renewed contracts. As we predicted, new sales slowed on a relative basis during our restructuring effort; however, we are very pleased to have signed up some valuable new customers. We appreciate the support of our customers, existing and new, and would like to publicly thank our employees who have worked so diligently to ensure customer satisfaction."