XO Q2 2010

XO Holdings Reports Second Quarter 2010 Financial Results

XO Holdings, Inc. (OTCBB: XOHO) today announced its second quarter 2010 financial and operational results.Adjusted EBITDA was $40.5 million in the second quarter of 2010, an increase of $3.4 million compared to the year-ago period. Net loss in the second quarter of 2010 was $1.2 million, a decrease of 80% compared to the net loss of $6.0 million in the second quarter of 2009.

Total revenue for the second quarter of 2010 was $383.6 million, a decrease of $2.0 million, or 1%, compared to the year-ago period. This decrease primarily resulted from targeted price increases within XO’s wholesale long-distance services, which were implemented to improve margins on selected routes.

The company continues to closely monitor and react to the impact of macro-economic conditions on our industry and customers. “While we, like other wireline telecommunications services providers, continue to face short term challenges, we remain bullish on the long term potential for the company,” said Carl Grivner, chief executive officer of XO Communications.

Financial Results
($ in millions) Q2 2010 Q1 2010 Q2 2009
——– ——– ——–
Revenue $ 383.6 $ 369.5 $ 385.6
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Adjusted EBITDA (1) $ 40.5 $ 30.6 $ 37.1
——– ——– ——–
Adjusted EBITDA % (2) 11% 8% 10%
——– ——– ——–
Net Loss $ (1.2) $ (16.6) $ (6.0)
——– ——– ——–
Preferred Stock Accretion $ (17.7) $ (20.2) $ (19.9)
——– ——– ——–
Net Loss Allocable to Common Shareholders $ (18.9) $ (36.8) $ (25.9)
——– ——– ——–
Capital Expenditures $ 57.6 $ 64.2 $ 51.4
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(1) Adjusted EBITDA is a Non-GAAP financial measure. See the footnote
discussion accompanying the financial statements.
(2) Adjusted EBITDA % is adjusted EBITDA divided by revenue. See the
footnote discussion accompanying the financial statements.

Revenue
In the second quarter of 2010, XO’s Broadband offerings generated $220.0 million in revenue, an increase of $24.6 million, or 13%, from the year-ago period. This increase resulted from the continued growth in XO’s diverse broadband offerings, such as IP-VPN, IP Flex, Ethernet and Dedicated Internet Access services.
The revenue growth in XO’s Broadband services is partially offset by the year-over-year decrease in Integrated/Voice and Legacy TDM services. Revenue for Integrated/Voice Services during the second quarter of 2010 was $56.8 million, a decrease of $17.7 million, or 24%, compared to the year ago period. This category is inclusive of XO’s wholesale long distance offering, Carrier Long Distance Termination (CLDT), which declined $4.2 million compared to the year-ago period. This decline was the result of aforementioned targeted price increases implemented to improve margins on selected routes.