XO Reports Q4 and 2003

RESTON, Va. -- XO Communications, Inc. (OTCBB:XOCM.OB - News) today reported financial results for the fourth quarter and year ended December 31, 2003. XO reported fourth-quarter 2003 revenue of $261.0 million versus revenue of $299.4 million for the fourth-quarter of 2002. For the fiscal year ended December 31, 2003, XO reported revenue of $1,110.5 million versus revenue of $1,259.9 million for the fiscal year ended December 31, 2002.

The majority of the decline in revenue was caused by downsizings from carrier customers. The commercial offerings to middle market businesses, however, remained relatively stable as revenue acquisition kept pace with attrition. The company estimates that total 2004 revenue will increase as compared to annualized fourth quarter 2003 results.

Of the total fourth quarter revenues, revenue from voice services, which includes local, long distance and other voice services, was $131.6 million, revenue from data services, which includes Internet access, network access and web hosting services, totaled $92.4 million, and fourth quarter revenue from integrated data and voice services was $37.0 million. Of total revenues for the fiscal year ended December 31, 2003, revenue from voice services was $572.8 million, revenue from data services was $392.7 million, and revenue from integrated data and voice services was $145.0 million.

Loss from operations for the fourth quarter of 2003 was $48.7 million versus $176.5 million for the fourth quarter 2002. Loss from operations for the fiscal year ended December 31, 2003 was $111.9 million versus $1,208.9 million for the fiscal year ended December 31, 2002.

"XO's fourth-quarter and full year results reflect the continued competitive pressures faced by companies in the telecommunications industry," said XO Communications' Chief Executive Officer, Carl Grivner. "Despite these challenges, we were able to execute more than 10,000 new customer orders in the fourth quarter. Furthermore, we took action to improve our operational effectiveness by focusing on improving margins and reducing our cash consumption. As a result of these efforts, we were able to generate net cash from operations of $6.3 million during 2003."

XO Communications Inc.