-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P2L8Fm2Kshabuma01Fhud2mS24DTqPHIJZv8VBhzP3forx5jK2dyrTN+4UPA1xZG DhO0nxB98EkAhljVWfYiIA== 0000950130-99-003141.txt : 19990519 0000950130-99-003141.hdr.sgml : 19990519 ACCESSION NUMBER: 0000950130-99-003141 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990516 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990518 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S WEST INC /DE/ CENTRAL INDEX KEY: 0001054522 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 840953188 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14087 FILM NUMBER: 99629958 BUSINESS ADDRESS: STREET 1: 1801 CALIFORNIA STREET STREET 2: SUITE 390 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036722700 MAIL ADDRESS: STREET 1: 1801 CALIFORNIA STREET STREET 2: SUITE 390 CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: USW-C INC DATE OF NAME CHANGE: 19980204 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) May 16, 1999 ____________ U S WEST, Inc. (Formerly "USW-C, Inc.") ________________________________________________________ (Exact Name of Registrant as Specified in Charter) Delaware 1-14087 84-0953188 ____________________________ ___________ ___________________ (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1801 California Street, Denver, Colorado 80202 ________________________________________________________________________________ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (303) 672-2700 ______________ USW-C, Inc. ________________________________________________________________________________ (Former Name or Former Address, if Changed Since Last Report) ================================================================================ Item 5. Other Events. On May 17, 1999, U S WEST, Inc., a Delaware corporation ("U S WEST") and Global Crossing Ltd., a Bermuda company ("Global Crossing"), announced a definitive agreement to merge. A copy of the Global Crossing and U S WEST press release, dated May 17, 1999, and the Global Crossing and U S WEST joint analyst presentation, dated May 17, 1999 (the "Analyst Presentation"), are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference. Statements made in the Analyst Presentation that state the intentions, beliefs, expectations or predictions of Global Crossing, U S WEST or their respective managements for the future are forward-looking statements. It is important to note that both Global Crossing's and U S WEST's actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the filings of each of Global Crossing and U S WEST with the U.S. Securities and Exchange Commission (the "SEC"). Copies of these filings may be obtained by contacting Global Crossing or U S WEST, as applicable, or the SEC. Item 7. Exhibits. The following exhibits are filed as part of this Current Report on Form 8-K: Exhibit Number Exhibit - ---------------- ------- 99.1 Joint Press Release of Global Crossing Ltd., and U S WEST, Inc., dated May 17, 1999 99.2 Joint Analyst Presentation of Global Crossing Ltd. and U S WEST, Inc., dated May 17, 1999 2 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. U S WEST, Inc. (Formerly "USW-C, Inc.") (Registrant) /s/ Thomas O. McGimpsey ____________________________ Thomas O. McGimpsey Assistant Secretary Date: May 18, 1999 3 4 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Joint Press Release of Global Crossing Ltd. and U S WEST, Inc., dated May 17, 1999 99.2 Joint Analyst Presentation of Global Crossing Ltd. and U S WEST, Inc., dated May 17, 1999 EX-99.1 2 JOINT PRESS RELEASE OF GLOBAL CROSSING LTD. EXHIBIT 99.1 GLOBAL CROSSING AND U S WEST TO MERGE Leaders In DSL, Next-Generation Network Create First Global & Local Service Provider - - Will deliver seamless end-to-end connectivity for local, national and international customers - Two separate tracking stocks will provide choice for income and growth investors - $75 billion company with 115,000 route miles will connect 185 cities worldwide HAMILTON, BERMUDA and DENVER, CO, May 17, 1999 - Global Crossing Ltd. (NASDAQ: GBLX) and U S WEST, Inc. (NYSE: USW) today announced a definitive agreement for an industry-transforming merger that will create a seamless end-to-end local-to- global broadband network, provide integrated telecommunications and data services, and accelerate the deployment of high speed Internet services to local, national and global markets. The new company, which will be called Global Crossing Corporation, will be the first Global and Local Service Provider in an era when traditional RBOCs and long distance carriers are becoming obsolete. Including Frontier Corporation (NYSE: FRO), a leading provider of integrated telecommunications and Internet services which is being acquired by Global Crossing, the combination has a current pro forma market capitalization of more than $75 billion. The new company will be 50% owned by Global Crossing/Frontier shareholders and 50% owned by U S WEST shareholders. The three companies had combined 1998 sales in excess of $15 billion; earnings before interest, taxes, depreciation and amortization (EBITDA) of over $6.2 billion, and over 63,000 employees. They will have over 115,000 combined route miles, more than 2.8 million fiber miles and a network linking 19 countries and 185 cities. Solomon D. Trujillo, Chairman, President and CEO of U S WEST, said, "This merger brings together the first mile, the last mile and everything in between. It opens up a new world of advanced communications services to local customers across the globe. It combines all the elements necessary for building the data- centric telecommunications network of the future for both residential and commercial customers." Robert Annunziata, Chief Executive Officer of Global Crossing, said, "This transaction will give local users in the U.S. and around the world seamless access to a full array of advanced data, voice and Internet capabilities and services across a cutting-edge global network. The combination will create an aggressive, high-bandwidth communications carrier which will target telecom markets worldwide. U S WEST's advanced technology and more than 25 million customers in the fastest growing region of the U.S. make it an ideal partner as we continue to expand our global infrastructure." 2 The new company will establish two separate tracking stocks to give investors a choice of high-growth and income-oriented investment options. Global Crossing "Class G" (Global Service Provider) shares will track the high-growth global data and voice network and Internet assets and are not expected to pay a cash dividend. Global Crossing "Class L" (Local Service Provider) shares will track the performance of the combined companies' existing local telecommunications assets and are expected to pay an attractive cash dividend. In the transaction, each U S WEST share will be exchanged for approximately 1.2 shares of Class G or Class L Global Crossing stock, and each Global Crossing share will be exchanged for one share of either of the two Global Crossing tracking stocks. At their option, each U S WEST and Global Crossing shareholder may elect to receive differing percentages of the two tracking stocks, subject to proration. The exact number of Class G and Class L Global Crossing shares to be issued in the transaction will be in proportion to the relative valuations of the Class G and Class L shares, as determined through an appraisal process shortly before the transaction is completed. As part of the transaction, U S WEST will make a cash tender offer for approximately 39 million Global Crossing shares (or approximately 9.5% of Global Crossing's outstanding shares) at a price of $62.75 per share. The tender offer will commence within five business days and is expected to be completed next month. Annunziata, who was the founder of Teleport - the first competitive local exchange carrier to compete head-on with regional Bell operating companies - continued: "A decade and a half after the break-up of AT&T, competition in the telecommunications industry has spread around the world. Today we are joining forces with a former regional Bell operating company that knows how to compete and offers customers a compelling array of integrated voice and data services." Trujillo, who has created the country's most aggressive local supplier of high- speed data services, said, "Rarely in business do we have the opportunity to bring together two leading-edge companies to create a faster, more entrepreneurial global competitor with unique products and solutions for both residential and commercial customers. We are confident we can address any regulatory issues and gain approval for the merger on a timely basis. In addition to global scope and scale, this merger is also about innovation, speed- to-market and superior customer service-true to the vision of Gary Winnick, Global Crossing's founder and largest shareholder." Annunziata and Trujillo will become Co-Chairmen and Co-CEOs of the combined company. There will be a 22-member Board of Directors: 10 designated by Global Crossing, 10 designated by U S WEST, and two selected by mutual agreement. 3 The Board of Directors of U S WEST intends to declare a special cash dividend of $0.215 per share payable to U S WEST shareholders in each quarter prior to closing. This will increase U S WEST quarterly dividend payments to $0.75 per share prior to closing. In addition, U S WEST intends to declare a one-time special cash dividend of up to $1.00 per share (plus the proportionate share of the unpaid special dividend in the quarter in which the merger closes) payable to U S WEST shareholders immediately prior to closing. Merger Benefits Benefits of the merger, approved unanimously by the Boards of both companies, include: - - First Global and Local Service Provider with state-of-the-art domestic and international backbone facilities and world-class data networking services. - - High-quality, last-mile access; high-speed data and global reach; enhanced ability to compete in the projected $1 trillion global telecommunications market. - - Leadership position in Internet services, applications support, web hosting and e-commerce. - - Greater ability for the local service provider to retain and grow large business accounts in need of truly national or global voice, data and Internet services. - - Combination enables U S WEST, the nation's largest local digital subscriber line (DSL) provider, to become a powerful national and global data local exchange carrier. - - Ability to enhance services in local markets. - - Strong balance sheet to support further growth. Composition of Tracking Stocks The new Global Crossing Class G shares will include: - - Global Crossing's state-of-the-art global fiber optic network, connecting four continents and 39 cities in Europe, Japan and the Americas. - - U S WEST's !NTERPRISE data networking business (including data network integration services, Internet access, hosted applications and DSL services). - - U S WEST's frame relay and asynchronous transfer mode (ATM) network, one of the largest in the world. 4 - - U S WEST's wireless PCS business. - - U S WEST's Internet Yellow Pages directory business. - - Frontier's state-of-the-art U.S. fiber optic network, connecting 120 cities. - - Frontier's long distance business. - - Frontier's GlobalCenter Internet web hosting and data center business. - - Frontier's CLEC (competitive local exchange carrier) business. - - New U.S. and international data local exchange carrier (DLEC) businesses. The new Global Crossing Class L shares will include: - - U S WEST's 16.6 million local telephone lines in 14 Western and Midwestern states. - - Frontier's 1.0 million local telephone lines. - - The U S WEST Dex printed directory business. - - Frontier's printed directory business. The merger is expected to be immediately accretive to Global Crossing Class G operating cash flow and to Global Crossing Class L earnings per share. The transaction will be accounted for as a purchase, and is expected to be tax-free to U S WEST and Global Crossing shareholders. The new Global Crossing Corporation will be incorporated in Delaware, headquartered in New York City, and have operations in Denver; Rochester, NY; Los Angeles; the New York/New Jersey metropolitan area; Minneapolis; Phoenix; Seattle; London; Tokyo; Amsterdam; Buenos Aires and many other locations throughout the world. The transaction is subject to the approval of shareholders of both companies, expiration of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, and approval by the Federal Communications Commission and other regulatory review. It is expected to close by mid-2000. Frontier has consented to the U S WEST transaction, and Global Crossing has modified its merger agreement with Frontier to provide that the number of Global Crossing shares to be received by Frontier shareholders will be adjusted to provide a value of $63 per Frontier share as long as Global Crossing shares trade within a range between $34.56 and $56.78 per share (the collar) during a pricing period prior to closing of the Frontier transaction. Outside the collar, Frontier shareholders will 5 receive a fixed number of Global Crossing shares: 1.1095 shares per Frontier share at the top end of the collar and 1.8229 shares per Frontier share at the bottom end of the collar. If the Frontier transaction does not close by December 31, 1999, the $63 per share value will be increased by 7% per annum compounded daily until closing (unless the Global Crossing share price is over the top end of the collar). These modifications to the Global Crossing/Frontier merger agreement will become effective only after shares are purchased in the U S WEST tender offer for Global Crossing shares. The transaction is another step in the execution of both companies' aggressive growth strategies. In June 1998, U S WEST split off its cable assets, MediaOne Group (NYSE: UMG), to concentrate on its telecommunications and Internet businesses. Global Crossing announced in March 1999 that it would acquire Frontier Corporation. Antitrust clearance has been received for the Frontier acquisition, which is expected to close in the third quarter of 1999. Salomon Smith Barney, Inc. and Chase Securities, Inc. served as financial advisers to Global Crossing, and Merrill Lynch & Co. served as financial adviser to U S WEST. J.P. Morgan & Co. is arranging a credit facility for the U S WEST tender offer for Global Crossing shares. About U S WEST U S WEST provides a full range of advanced telecommunications services - including wireline, wireless PCS, data networking, directory and information services-to more than 25 million customers nationally and in some of the nation's fastest growing communities in 14 Western and Midwestern states (headquartered in Denver, its larger markets include Denver, Minneapolis, Phoenix, Portland, Salt Lake City and Seattle). It is the nation's leader in the deployment of digital subscriber line (DSL) technology. More information about U S WEST can be found at www.uswest.com. About Global Crossing Global Crossing is building and operating the world's most advanced global fiber optic platform for data, voice, video and Internet transmissions. The Global Crossing network will span four continents and address 80% of the world's international traffic. Global Crossing's operations are headquartered in Hamilton, Bermuda, with offices in Los Angeles; New York City; Morristown, New Jersey; San Francisco; Miami; London; Amsterdam; Tokyo; and Buenos Aires. More information about Global Crossing can be found at www.globalcrossing.com. Statements made in this press release that state either a company's or managment's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. It is important to note that both companies' actual results could differ materially from those projected in such forward- looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statemetns is contained from time to time in each company's filings with the U.S. Securities and Exchange Commission (SEC) and is incorporated herein by reference. Copies of these filings may be obtained by contacting either company or the SEC. 6 Investors and analysts may contact: Jensen Chow 310/385-5283 E-mail: jchow@globalcrossing.com Reporters and editors may contact: Tom Goff 310/385-5231 E-mail: tgoff@globalcrossing.com EX-99.2 3 JOINT ANALYST PRESENTATION Exhibit 99.2 Global Crossing / U S WEST The New Premiere Global and Local Service Provider Bob Annunziata Sol Trujillo CEO CEO 2 Regarding Forward-Looking Statements Statements made in this presentation that state the Companies' or management intentions, beliefs, expectations or predictions for the future are forward- looking statements. It is important to note that the Companies' actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time- to-time in the Companies' SEC filings. Copies of these filings may be obtained by contacting the Companies or the SEC. 3 Global Crossing / U S WEST / Frontier . Creates Leading Global and Local Service Provider . Customer-to-Customer Connectivity and Service Around the World . Financial Structure Highlights Value and Promotes Growth 4 The New Global Crossing
Global Crossing Frontier U S WEST Communications International Fiber Optic . US Fiber . Local Voice, Network Optic Network Data, . Data and Internet, . Connecting Continents Internet and Wireless . European Terrestrial . Long Distance Services . Japanese Terrestrial . Local . Broadband . South American Connectivity Access Terrestrial . CLEC . Wireless and Wireline Network . All-Digital Data-Centric Core Network
World's Leading Global and Local Service Provider 5 Global Reach/Local Service
Global Connectivity Cities Customers . Voice Global House . xDSL . Private Line Cable . Switching . Integrated . Routing Services . Bandwidth Management . Web Hosting . Data Centers
6 Global Reach / Local Service
[right [right LOCAL arrow] NATIONAL arrow] GLOBAL IP / HOSTED APP U S WEST Frontier Global Crossing DATA NETWORKS U S WEST Frontier Global Crossing LONG DISTANCE NA Frontier Global Crossing BACKBONE U S WEST Frontier Global Crossing ACCESS U S WEST Frontier Global Crossing Frontier CLEC Europe/Japan/ South America
7 Financial Structure Highlights Value Business Financial Structure Global Reach [right and left arrow] GSP - Global Service Provider Local Services LSP - Local Service Provider Value Enhanced growth in GSP Enhanced service in LSP 8 The Transaction Initial Tender Offer [right arrow] Corporate Alliance . U S WEST to Tender Immediately for 9.5% of Global Crossing Shares . $62.75 Per Share . Cash Tender Commences Within Five Business Days 9 The Transaction The Merger . Stock-for-Stock Merger of Equals - Following Global Crossing/Frontier Merger . Global Crossing/Frontier and U S WEST Shareholders Each Will Own 50% . Each Global Crossing Share Will Represent 1.0 Shares and Each U S WEST Share Will Represent Approximately 1.2 Shares in the New Company 10 The Transaction The Merger . Each Share of the New Company Entitles the Shareholder to Elect a Mix of GSP and LSP Tracking Stocks Subject to Proration If Either Is Oversubscribed . Tax-free, Purchase Accounting . Closing Expected Mid-2000 11 Amendment to Global Crossing/Frontier Merger Agreement . Frontier Board of Directors has Consented to Global Crossing/ U S WEST Merger . Assuming Completion of U S WEST Tender Offer for 9.5% of Global Crossing Shares: - Minimum Value to Frontier Shareholders Increased to $63 - Changed Exchange Ratio Range, . Previous: 1.0919 - 1.7939 . Revised: 1.1095 - 1.8229 12 U S WEST Special Dividends . Until the Merger Closes, U S WEST Intends to Pay a Special Dividend of $0.215 Each Quarter Increasing the Quarterly Payment to $0.75 Per Share . Immediately Prior to Closing, U S WEST Intends to Pay a Special Dividend of $1.00 Per Share 13 Two Tracking Stocks
Global Service Provider Local service Provider (GSP) (LSP) . Global Crossing Subsea . US WEST Local Exchange and Terrestrial Global Fiber Network . US WEST In-Region Long Distance . U S WEST !NTERPRISE Data Activities . US WEST Private Lines and Directory Operations . Frontier US Fiber Network, Internet, Data, . Frontier Local Exchange and Long Distance . Frontier CLEC Operation . U S WEST Wireless and Internet Yellow Pages
14 Two Tracking Stocks Proforma 2000 Estimates* Class G Class L Global Service Local Service Provider Provider Revenue $ 6.0B $13.5B Adjusted EBITDA $ 1.4B $ 6.7B Proforma Growth Accelerates Global Enhanced Earnings Profile Crossing EBITDA Visibility with Growth to less than Stable Growth 40% * Proforma as if merger closes January 1, 2000 15 Local Service Provider Assets . Distribution Channel for DSL and other Global Service Provider Products . 17 million Local Access Lines . Local Service in 25 States . 7,800 SONET Rings . $1.2 billion Vertical Services Revenue Stream . $1.2 billion Revenues from Print Yellow Pages . Attractive Demographics, Rapid Growth Region 16 U S WEST Local Network [Map showing the states of Washington, Oregon, Montana, Idaho, Utah, Arizona, Wyoming, Colorado, New Mexico, North Dakota, South Dakota, Nebraska, Minnesota and Iowa] . 21 SONET ring network . 94% digital switching . Data switches - 417 frame relay - 133 ATM . 40,444 miles of fiber cable across 14 states . DSL in 215 wire centers 17 Frontier Local Network Local Access Lines [Map showing the states of Florida, Georgia, Alabama, Missouri, Pennsylvania, New York, Ohio, Minesota, Indiana, Illinois, Wisconsin, Louisiana and Montana as Frontier services territory.] . NY: 650,000 . Total: 1,034,000 . 34 Cities in 13 States 18 Global Service Provider Assets Fiber: 115,000 Route Miles / 2.85 Million Fiber Miles Data: 173 ATM Switches 454 Frame Switches with over 70,000 Frame Nodes 35,000 DSL Customers 2,000 VDSL Customers 12 Web Hosting / Data Centers U S WEST Internet Yellow Pages $1.8 billion of Long Distance Revenue less than 200,000 ISP Subscribers Voice: 230,000 CLEC Lines 220,000 PCS Subscribers Products: Global Voice, Video, Data and IP Applications 19 Frontier DMS 500 Network [United States map showing terminal sites and switches of Frontier DMS 500 Network.] [Legend containing the following information:] . Completed . By the end of June '99 20 Frontier National Network [United States map showing coverage and routes of the Frontier national network.] [Legend containing the following information:] Network Route Network Miles ------------- ------------- . Base Network - 24 Fibers 13,054 miles . Southeast Build - 12 Fibers 2,985 miles . Northwest Network Swap (WTCI) 1,660 miles . Western Network Swap (Enron) 1,896 miles . Frontier Terminal Site . Frontier Switch 21 From Local to National to Global Reach* [World map showing the routes of PC-1, GAL, PAC, SAC, AC-1, MAC and PEC with "Growth" indicated for undeveloped areas of Asia.] *Based on announced networks 22 Pan European Crossing [Map of Europe showing the route of Pan European Crossing.] . [Legend containing the following information:] . Wholesale Switching . DSL . Data and Internet Services 23 Global Fiber Network*
Frontier New Communi Global Global Crossing -cations U S WEST Crossing Route 54,900 20,000 40,444 155,344 Miles Fiber 800,900 348,000 1,700,00 2,848,900 Miles Count- 18 3 1 19 ries On Network Cities On 39 120 44 185 Network Total Invest- $ 4.9 $ 1.1 $ 1.2 $ 7.2 ment in billion billion billion billion Announ- ced system
*Based on Announced Networks 24 Addressable Market Explodes New Global Crossing Global Crossing Frontier Communications US WEST $100 billion + $100 billion + $35 billion International National LD Local Global Bandwidth and Services $ 1 trillion in 2005 Sources: IDC, ITU, Tom Soja & Associates, Yankee Group and Company Estimates 25 World's Largest DLEC Number of Subscribers
1Q99 1999E Reach Market Value USW/GBLX 35,000 100,000 Global $ [arrow pointing upwards] billion Covad 8,6000 35,000 National $ 4.6 billion North Point 3,200 NA National $ 5.3 billion Rhythms 1,255 12,000 National $ 5.3 billion
While serving 10% of the U.S. population, U S WEST has captured 40% of the nation's DSL subscribers and 30% of the nations local frame relay ports. These capabilities will be unleashed to national and global markets. 26 Web Hosting and Internet Services [Digital Distribution map] . 12 Hosting / Distribution Centers . Over 200,000 Dial-up Internet Customers . 54 billion Hits per Month . Extensive Line of Network-Based Applications . Worldwide IP Network - Tier 1 Peering . less than 100% Growth Rate 27 Regulatory Environment . No Approval Required for U S WEST to acquire 9.5% of Global Crossing Shares . Combined Companies Prohibited from Originating Long Distance Traffic from U S WEST Territories Pending Section 271 Approval . Regulatory Approval for Merger is Expected . U S WEST Section 271 Approval Efforts Accelerated 28 Compelling Financial Profile New Global Crossing* Revenues less than $ 19 billion Adjusted EBITDA less than $ 8 billion Current Market Value less than $ 75 billion *2000 Company Estimates - proforma as if merger closed January 1, 2000 29 Combination Offers Substantial Synergies . Ability to Combine Back Office and Administrative Functions . Post 271 Approvals - Owned Network Generates Enhanced Long Distance Margin and Market Share . Expand Existing GlobalCenter Web Hosting Business to Include Applications Hosting via Worldwide Network 30 Combination Creates New Market Opportunities . Expansion of Existing DSL Technology to Global Markets With Suite of Existing Data Products . Expansion of Existing Voice, Data Transport, Internet Access and Vertical Services to Global Markets Served by the Global Crossing Global Network 31 Combination Offers Synergies and Opportunities Net Present Value ($ Billions) Market Synergies Opportunities Operating Efficiencies $1 Long Distance $2 Global 1 Hop $4 Loss of Bermuda Tax Benefit ($1) National DLEC $3-6 International Voice, Data Transport, Internet Access and Vertical Services $15-30 ------ TOTAL $6 $18-36 32 From Local to Global Reach* [World map showing the routes of PC-1, GAL, PAC, SAC, AC-1, MAC and PEC with "Growth" indicated for undeveloped areas of Asia.] *Based on announced networks -----END PRIVACY-ENHANCED MESSAGE-----