RealTime IT News

Global Crossing Delays Reporting Results

Bankrupt international voice and data carrier Global Crossing Ltd., under a cloud of suspicion for alleged accounting improprieties, said Tuesday that it will delay the release of its fourth quarter and full year 2001 results, expected to reflect a net loss in the billions of dollars.

The company was scheduled to release those results Tuesday, but deferred the release in order to complete the filing of its annual report on Form 10-K. Instead, the company announced preliminary, unaudited estimates of its revenue for the fourth quarter and full year which ended Dec. 31, 2001.

The company explained that it is still evaluating the appropriate write-down of certain of its tangible assets, and also noted that the accounting treatment of certain of its capacity transactions is under investigation by an independent committee of its board of directors, the U.S. Securities and Exchange Commission, and the U.S. Attorney's Office for the Central District of California.

Global Crossing said it expects revenue from continuing operations in the fourth quarter to amount to about $804 million, including service revenue of about $764 million. For the full year of 2001, the company expects to report revenue from continuing operations of about $3.2 billion, including about $3.1 billion in service revenue.

However, Global Crossing also said it expects to report a "significant" net loss applicable to common shareholders for the fourth quarter and for 2001. The company said the 2001 loss will reflect items previously reported during the first three quarters, including restructuring charges of $294 million, $545 million related to the impairment of goodwill associated with its Global Marine unit, and about $2 billion due to the write down of its equity investment portfolio, including its investment in Exodus Communications.

The company also said its net loss for both the fourth quarter and the full year is expected to reflect the write-off of its remaining goodwill and other identifiable intangible assets (about $8 billion), as well as a multi-billion dollar write-down of its tangible assets. The company explained the write-off of goodwill and other identifiable intangible assets and write-down of tangible assets will be non-cash charges.

The company also said it holds about $1.5 billion in cash in its bank accounts on a consolidated basis as of Feb. 25, 2002, including about $492 million of cash in Asia Global Crossing bank accounts and about $327 million in other bank accounts that are restricted. However, the company noted those amounts do not represent Generally Accepted Accounting Principles (GAAP) cash balances.

In related news, Global Crossing named a new chief operating officer and a new senior vice president of product management Tuesday.

The company named Carl Grivner, who had been serving as executive vice president of global operations, to the chief operating officer position, where he will oversee sales and marketing for enterprise and carrier customers, product management and global operations.

Anthony Christie, who joined Global Crossing as senior vice president of global strategy and business integration from Asia Global Crossing, will step into the senior vice president of product management, where he will be responsible for the development, deployment and on-going management of the company's product and services suite. He will report to Grivner.