Global Crossing Reports Second Quarter 2009 Results

• Consolidated revenue of $633 million, representing sequential growth of 4 percent and a year-over- year decline of 3 percent as reported.
• Consolidated revenue growth of 2 percent sequentially and 6 percent year over year on a constant currency basis.
• "Invest and grow" revenue of $539 million, representing an increase of 4 percent sequentially and 9 percent year over year on a constant currency basis.
• OIBDA of $93 million, representing an increase of 24 percent sequentially and 66 percent year over year as reported.

Florham Park, N.J. - July 28, 2009 -- Global Crossing (NASDAQ: GLBC), a leading global IP solutions provider, today announced second quarter 2009 results. The company said it will discuss its consolidated financial and operational results for the second quarter 2009 on a conference call tomorrow.

Business Highlights
Global Crossing generated consolidated revenue of $633 million for the second quarter of 2009. Revenue from the company's "invest and grow" category - that part of the business focused on serving global enterprises and carrier customers, excluding wholesale voice - was $539 million, representing a sequential increase of 6 percent and a year-over-year decrease of 1 percent as reported. On a constant currency basis, "invest and grow" revenue increased 4 percent sequentially and 9 percent year over year. Operating Income Before Depreciation and Amortization (OIBDA) for the quarter was $93 million, representing an increase of 24 percent sequentially and 66 percent year over year. Free Cash Flow was negative $10 million in the quarter, an improvement of $22 million sequentially and $23 million year over year. OIBDA and Free Cash Flow are non-GAAP measures that are defined and reconciled in our financial tables.

"Global Crossing's return to sequential revenue growth demonstrates continued strength in demand for our advanced IP-based solutions," said John Legere, CEO of Global Crossing. "Our compelling value proposition, strong emphasis on customer satisfaction, and unique strategic position continue to enable expected improvements in our profitability and free cash flow."

Operational Results
Global Crossing's consolidated revenue was $633 million in the second quarter of 2009, representing a sequential increase of $24 million or 4 percent, including an $11 million favorable foreign exchange impact. Year-over-year consolidated revenue decreased $21 million or 3 percent, including a $58 million unfavorable foreign exchange impact. On a constant currency basis, consolidated revenue increased 2 percent sequentially and 6 percent year over year.

The company's "invest and grow" category generated revenue of $539 million for the second quarter. This represents a sequential increase of $29 million or 6 percent, including substantially all of the $11 million favorable sequential foreign exchange impact. Year-over-year "invest and grow" revenue decreased $8 million or 1 percent, including a $57 million unfavorable foreign exchange impact. On a constant currency basis, "invest and grow" revenue increased 4 percent sequentially and 9 percent year over year. Revenue in the quarter included $8 million for a customer's buyout of certain long-term obligations under an existing contract.

On a segment basis, GCUK generated $113 million in "invest and grow" revenue compared with $107 million in the prior quarter and $154 million in the second quarter of 2008. GC Impsat generated $121 million in "invest and grow" revenue compared with $113 million in the prior quarter and $117 million in the second quarter of 2008. Rest-of-World (ROW) generated $309 million in "invest and grow" revenue compared with $294 million in the prior quarter and $280 million in the second quarter of 2008. Sequentially, on a constant currency basis, GCUK, GC Impsat and ROW "invest and grow" revenues increased 1 percent, 3 percent and 5 percent, respectively. Year over year, in constant currency terms, "invest and grow" revenues in GC Impsat and ROW increased 16 percent and 13 percent, respectively, while revenues in GCUK declined 4 percent.

Wholesale voice revenue decreased by $4 million on a sequential basis and $12 million year over year to $94 million. The decline was associated with the continued management of the wholesale voice business for margin. Substantially all of the wholesale voice revenue is earned in the United States, within the ROW segment.

Cost of revenue -- which includes cost of access; technical real estate, network and operations; third-party maintenance; and cost of equipment sales -- was $432 million in the second quarter, compared with $430 million in the prior quarter and $469 million in the second quarter of 2008. On a sequential basis, cost of revenue increased due to an unfavorable foreign exchange impact of $6 million, partially offset by an operational improvement in access costs. The year-over-year decrease in cost of revenue was primarily attributable to a favorable foreign exchange impact of $39 million and lower incentive compensation accruals, partially offset by an increase in cost of equipment, professional services and third-party maintenance costs.

The company reported Gross Margin, defined as "Revenue" less "Cost of Revenue," of $201 million in the second quarter of 2009, compared with $179 million in the prior quarter and $185 million in the second quarter of 2008. On a sequential basis, Gross Margin increased $22 million primarily due to an increase in "invest and grow" revenue, accompanied by a favorable foreign exchange impact of $5 million. Year over year, Gross Margin increased $16 million due to an operational improvement in revenue and lower incentive compensation compared to the year ago period, partially offset by an unfavorable foreign exchange impact of $19 million.

Sales, general and administrative (SG&A) expenses were $108 million in the second quarter of 2009, compared with $104 million in the prior quarter and $129 million in the second quarter of 2008. On a sequential basis, SG&A increased primarily due to higher professional fees. The year-over-year decrease was primarily attributable to $12 million favorable foreign exchange impact, as well as lower incentive compensation accruals and savings related to cost reduction initiatives.

Global Crossing reported $93 million of Operating Income Before Depreciation and Amortization (OIBDA) in the second quarter, a sequential increase of $18 million, including a $3 million favorable foreign exchange impact. On a year-over-year basis, OIBDA increased $37 million, including an unfavorable foreign exchange impact of $7 million and a $10 million decrease in incentive compensation accruals. The sequential and year-over-year improvement in OIBDA was principally driven by higher revenue on a constant currency basis and improved revenue mix. On a segment basis, GCUK, GC Impsat and ROW contributed OIBDA of $21 million, $44 million and $28 million, respectively.

Global Crossing's consolidated net income applicable to common shareholders was $26 million for the second quarter of 2009, including $57 million in foreign exchange gains reflected in Other Income, net. On a sequential basis, net income increased $85 million due to the previously described increase in OIBDA and a favorable foreign exchange impact. Year over year, net income increased $116 million principally due to the previously described improvements in OIBDA and a favorable foreign exchange impact, as well as a lower income tax provision.

Cash and Liquidity
For the second quarter of 2009, the company reported Free Cash Flow of negative $10 million, as compared to negative $32 million in the prior quarter and negative $33 million in the second quarter of 2008. The sequential increase in Free Cash Flow was primarily driven by the improvement in OIBDA and a reduction in cash used for working capital, partially offset by an increase in capital expenditures. The year-over-year increase in Free Cash Flow was primarily attributable to an increase in OIBDA and lower interest expense.

Cash flow provided by operating activities for the second quarter was $44 million. Global Crossing received $27 million in proceeds from the sale of indefeasible rights of use (IRUs) and prepaid services in the second quarter. Global Crossing used $54 million for purchases of property, plant and equipment, including approximately $12 million for upgrades to its Atlantic and South American subsea systems, and entered into $20 million of capital lease agreements to finance various equipment purchases and software licenses.

As of June 30, 2009, Global Crossing had unrestricted cash of $268 million compared to $306 million at March 31, 2009. The company had $289 million in total cash at June 30, 2009, compared to $322 million in total cash at March 31, 2009.

2009 Guidance
The following table is provided for informational purposes only and represents the Company's 2009 guidance as provided on February 16, 2009.

Non-GAAP Measures
Pursuant to the Securities and Exchange Commission's (SEC's) Regulation G, the attached financial tables include definitions of non-GAAP financial 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 Wednesday, July 29, 2009 at 9:00 a.m. EDT to discuss its financial results. The call may be accessed by dialing +1 212 231 2924 or by dialing +44 203 300 0095. Callers are advised to access the call 15 minutes prior to the start time. A Webcast with presentation slides will be available at investors.globalcrossing.com/events.cfm.

A replay of the call will be available on Wednesday, July 29, 2009 beginning at 11:30 a.m. EDT and will be accessible until Wednesday, August 5, 2009 at 11:30 a.m. EDT. To access the replay, callers should dial +1 402 977 9140 or +1 800 633 8284 and enter reservation number 21432271. Callers in the United Kingdom should dial +44 (0) 870 000 3081 or (0) 800 692 0831 and enter reservation number 21432271.

ABOUT GLOBAL CROSSING
Global Crossing (NASDAQ: GLBC) is a leading global IP solutions provider with the world's first integrated global IP-based network. The company offers a full range of secure data, voice, and video products to approximately 40 percent of the Fortune 500, as well as to 700 carriers, mobile operators and ISPs. It delivers services to more than 690 cities in more than 60 countries and six continents around the globe.

Website Access to Company Information

Global Crossing maintains a corporate website at www.globalcrossing.com, and you can find additional information about the company through the Investors pages on that website at 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 and 8-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: Global Crossing's history of substantial operating losses and the fact that, in the near term, funds from operations will not satisfy cash requirements; legal and contractual restrictions on the inter-company transfer of funds by the company's subsidiaries; the company's ability to continue to connect its network to incumbent carriers' networks or maintain Internet peering arrangements on favorable terms; the consequences of any inadvertent violation of the company's Network Security Agreement with the U.S. Government; 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; risks associated with movements in foreign currency exchange rates; 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 contingent liabilities; and other risks referenced from time to time in the company'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

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

Analysts/Investors Contact

Mark Gottleib
+ 1 800 836 0342
glbc@globalcrossing.com

Antonio Suarez
+ 1 973 937 0233
glbc@globalcrossing.com

2009

2008

2007

2006

2005

Earlier Releases

Financial Tables