LONDON -- Global Crossing (Nasdaq: GLBC - News) today announced unaudited third quarter financial results for its subsidiary, Global Crossing (UK) Telecommunications Limited (GCUK).

Highlights

GCUK continued to perform steadily in the third quarter, generating a sequential increase in its "invest and grow" segment, namely that part of the business focused on serving global enterprises, carrier data and indirect channel customers. GCUK generated revenue of 60 million pounds and EBITDA margin of 24 percent of revenue. On October 11, 2006, Global Crossing completed its acquisition of UK-based Fibernet, and integration of Fibernet's customer networks, complementary services and operational systems is already well under way.

"We continue to assert ourselves as a leader in the highly-competitive and rapidly-consolidating UK market by expanding our regional and global capabilities to provide customers with a superior experience," said John Legere, Global Crossing's chief executive officer. "Since the third quarter we have taken steps to further strengthen our competitive position in the UK, as well as continue to meet the growing demand for global converged IP services, Ethernet and managed service offerings."

Revenue, Margin and Costs

GCUK generated total revenue of 60 million pounds sterling, including a 1 million pound sequential increase in its "invest and grow" segment. Revenue for the third quarter of 2006 increased by 3 percent compared with the third quarter of 2005, including contributions from the recently signed contract for managed telephony and conferencing for the Crown Prosecution Service.

Adjusted gross margin, as defined in Table 7 below, was 41 million pounds or 68 percent of revenue for the third quarter of 2006, compared to 40 million pounds or 67 percent of revenue in the second quarter of 2006.

Cost of revenue, which includes cost of access; real estate, network and operations; third party maintenance and cost of equipment sales, was 39 million pounds in the third quarter, flat compared with the second quarter of 2006. Sales, general and administrative expenses (SG&A) were also flat sequentially at 7 million pounds for the third quarter.

Earnings

GCUK's earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2006, as defined in Table 5 that follows, were 15 million pounds, compared with 13 million pounds in the second quarter of 2006.

GCUK's net income for the third quarter of 2006 was 4 million pounds, compared with net income of 6 million pounds in the second quarter.

Cash Position

As of September 30, 2006, GCUK had 28 million pounds sterling of cash and cash equivalents. During the third quarter of 2006, GCUK generated 5 million pounds sterling of cash, after using 6 million pounds for capital expenditures and principal payments on capital leases.

Non-GAAP Financial Metrics

Consistent with the Securities and Exchange Commission's (SEC's) Regulation G, the attached schedules include definitions of EBITDA and adjusted gross margin, which are non-GAAP financial metrics, as well as reconciliations of such measures to the most directly comparable financial metrics calculated and presented in accordance with International Financial Reporting Standards (IFRS).

International Financial Reporting Standards ("IFRS")

GCUK's results reported here include unaudited consolidated financial results for the three and nine months ended September 30, 2006 and September 30, 2005, and unaudited consolidated balance sheet as of September 30, 2006 and audited consolidated balance sheet as of December 31, 2005, in accordance with IFRS, as adopted by the European Union. GCUK's third quarter 2006 and 2005 results were included in Global Crossing's consolidated results previously reported on November 9, 2006, in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP).

Global Crossing (Nasdaq: GLBC)