================================================================================
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                               ------------------


                                   FORM 10-Q

[X]      Quarterly Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the quarterly period ended March 31, 2003.

                                       or

[   ]    Transition Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the transition period from _____ to _______

         Commission File Number 000-25015


                         WORLDPORT COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                               84-1127336
                --------                               ----------
       (State or other jurisdiction of           (IRS Employer ID Number)
       incorporation or organization)

                        2626 Warrenville Road, Suite 400
                             Downers Grove, IL 60515
                    (Address of principal executive offices)

                                 (312) 456-2536
                                 --------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]


Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES [ ] NO [X]

As of April 25, 2003, the Registrant had 32,940,207 shares of Common Stock, par
value $0.0001, outstanding.


================================================================================

<PAGE>




                         WORLDPORT COMMUNICATIONS, INC.
                                TABLE OF CONTENTS


                                                                            PAGE
                                                                            ----
PART I - FINANCIAL INFORMATION
------------------------------

       Item 1.   Financial Statements - unaudited

                 Condensed Consolidated Balance Sheets as of
                 March 31, 2003 and December 31, 2002........................  3

                 Condensed Consolidated Statements of Operations
                 for the Three Months Ended March 31, 2003 and 2002..........  4

                 Condensed Consolidated Statements of Cash Flows for the
                 Three Months Ended March 31, 2003 and 2002..................  5

                 Notes to Condensed Consolidated Financial Statements........  6

       Item 2.   Management's Discussion and Analysis of
                 Financial Condition and Results of Operations............... 17

       Item 3.   Quantitative and Qualitative Disclosures About Market Risk.. 24

       Item 4.   Controls and Procedures..................................... 24

PART II - OTHER INFORMATION
---------------------------

       Item 1.   Legal Proceedings........................................... 26

       Item 2.   Changes in Securities....................................... 27

       Item 6.   Exhibits and Reports on Form 8-K............................ 28


SIGNATURE.................................................................... 29



                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>

                 WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)
<CAPTION>

                                                                                              MARCH 31,      DECEMBER 31,
                                                                                                 2003            2002
                                                                                                 ----            ----
                                          ASSETS
<S>                                                                                               <C>             <C>
CURRENT ASSETS:
    Cash and cash equivalents...................................................                  $ 38,681        $ 107,697
    Marketable securities.......................................................                    10,942           10,841
    Other current assets........................................................                       165              284
                                                                                                  --------        ---------
                  Total current assets..........................................                    49,788          118,822
    PROPERTY AND EQUIPMENT, net.................................................                        67              101
    OTHER ASSETS................................................................                       185              197
                                                                                                  --------        ---------
                       TOTAL ASSETS.............................................                  $ 50,040        $ 119,120
                                                                                                  ========        =========


                           LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable...........................................................                  $  2,877          $ 3,014
     Accrued expenses...........................................................                    14,744           14,473
     Net liabilities of non-controlled subsidiaries.............................                     9,582            9,528
     Current portion of obligations under capital leases .......................                     3,389            3,210
     Other current liabilities..................................................                       814              846
                                                                                                  --------        ---------
                    Total current liabilities...................................                    31,406           31,071

      Long-term obligations under capital leases, net of current portion........                      --                834
                                                                                                  --------        ---------
                    Total liabilities...........................................                    31,406           31,905

STOCKHOLDERS' EQUITY:
     Undesignated preferred stock, $0.0001 par value, 4,004,000 shares
        authorized, no shares issued and outstanding............................                        --               --
     Series A convertible preferred stock, $0.0001 par value, 750,000 shares
        authorized, no shares issued and outstanding............................                        --               --
     Series B convertible preferred stock, $0.0001 par value, 3,000,000 shares
        authorized, 34,056 and 956,417 shares issued and outstanding in 2003
        and 2002, respectively .................................................                        --               --
     Series C convertible preferred stock, $0.0001 par value, 1,450,000 shares
        authorized, 0 and 1,416,030 shares issued and outstanding in 2003 and
        2002, respectively .....................................................                        --               --
     Series D convertible preferred stock, $0.0001 par value, 650,000 shares
        authorized, 0 and 316,921 shares issued and outstanding in 2003 and
        2002, respectively .....................................................                        --               --
     Series E convertible preferred stock, $0.0001 par value, 145,000 shares
        authorized, 0 and 141,603 shares issued and outstanding in 2003 and
        2002, respectively .....................................................                        --               --
     Series G convertible preferred stock, $0.0001 par value, 1,000 shares
        authorized, 0 and 1,000 shares issued and outstanding in 2003 and
        2002, respectively .....................................................                        --               --
     Common stock, $0.0001 par value, 200,000,000 shares authorized, 39,087,252
        shares issued and outstanding...........................................                         4                4
     Warrants...................................................................                     2,611            2,611
     Additional paid-in capital.................................................                   124,240          187,213
     Accumulated other comprehensive loss.......................................                    (7,210)          (6,511)
     Accumulated deficit........................................................                  (101,011)         (96,102)
                                                                                                 ---------         --------
                    Total stockholders' equity .................................                    18,634           87,215
                                                                                                  --------        ---------

                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................                  $ 50,040        $ 119,120
                                                                                                  ========        =========

 The accompanying notes are an integral part of these condensed consolidated financial statements.

</TABLE>


                                       3
<PAGE>

<TABLE>

                 WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (Unaudited)
<CAPTION>

                                                                    Three Months Ended
                                                                         March 31,
                                                                  ----------------------------
                                                                  2003              2002
                                                                  ----              ----


<S>                                                                   <C>               <C>
REVENUES........................................................      $   --            $   --

COST OF SERVICES................................................          --                --
                                                                    --------          --------
     Gross profit...............................................          --                --

OPERATING EXPENSES:
     Selling, general and administrative expenses...............         821               930
     Depreciation and amortization..............................          33                39
                                                                    --------          --------
          Operating loss........................................        (854)             (969)

OTHER INCOME (EXPENSE):
     Interest income............................................         309               304
     Interest expense...........................................          --              (111)
     Other income (expense).....................................          57                (4)
                                                                    --------          --------

LOSS BEFORE INCOME TAXES........................................        (488)             (780)

INCOME TAXES....................................................          --                --
                                                                    --------          --------

NET LOSS FROM CONTINUING OPERATIONS.............................        (488)             (780)

LOSS FROM DISCONTINUED OPERATIONS, net of tax...................          --            (7,319)
                                                                    --------          --------

NET LOSS........................................................     $  (488)          $(8,099)
                                                                     =======          ========

NET LOSS PER SHARE FROM CONTINUING OPERATIONS:
   BASIC........................................................    $  (0.01)          $ (0.02)
                                                                    ========          ========
   DILUTED......................................................    $  (0.01)          $ (0.02)
                                                                    ========          ========

NET LOSS PER SHARE:
   BASIC........................................................    $  (0.01)          $ (0.21)
                                                                    ========          ========
   DILUTED......................................................    $  (0.01)          $ (0.21)
                                                                    ========          ========

SHARES USED IN NET LOSS PER SHARE CALCULATION:
    BASIC.......................................................      39,087            38,087
      CONVERTIBLE PREFERRED STOCK...............................          --                --
      WARRANTS..................................................          --                --
      OPTIONS...................................................          --                --
                                                                    --------          --------
    DILUTED.....................................................      39,087            38,087
                                                                    ========          ========

 The accompanying notes are an integral part of these condensed consolidated financial statements.


</TABLE>


                                       4
<PAGE>

<TABLE>


                 WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (Unaudited)
<CAPTION>

                                                                                           Three Months Ended
                                                                                        -------------------------
                                                                                                March 31,
                                                                                                --------
                                                                                           2003            2002
                                                                                           ----            ----

<S>                                                                                     <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ............................................................................   $    (488)   $  (8,099)
Adjustments to reconcile net loss to net cash flows from operating activities:
          Loss from discontinued operations .........................................        --          7,319
          Depreciation and amortization .............................................          33           39
          (Gain) loss on disposal of assets .........................................         (50)           3
          Change in other current and noncurrent assets .............................         131          827
          Change in accounts payable, accrued expenses and other liabilities ........        (207)      (1,276)
                                                                                        ---------    ---------

                    Net cash flows from operating activities ........................        (581)      (1,187)

CASH FLOWS FROM INVESTING ACTIVITIES:
          Proceeds from sale of assets ..............................................          50         --
                                                                                        ---------    ---------

                    Net cash flows from investing activities ........................          50         --

CASH FLOWS FROM FINANCING ACTIVITIES:
      Repurchase of preferred stock, including dividend .............................     (67,382)        --
      Principal payments on obligations under capital leases ........................        --         (1,229)
                                                                                        ---------    ---------

                    Net cash flows from financing activities ........................     (67,382)      (1,229)


Net cash flows from discontinued operations .........................................      (1,103)      (4,154)
                                                                                        ---------    ---------

NET DECREASE IN CASH AND CASH EQUIVALENTS ...........................................     (69,016)      (6,570)

CASH AND CASH EQUIVALENTS, beginning of the period ..................................     107,697       61,475
                                                                                        ---------    ---------

CASH AND CASH EQUIVALENTS, end of the period ........................................   $  38,681    $  54,905
                                                                                        =========    =========

CASH PAID DURING THE PERIOD FOR INTEREST ............................................   $      65    $     111
                                                                                        =========    =========

CASH PAID DURING THE PERIOD FOR INCOME TAXES ........................................   $    --      $    --
                                                                                        =========    =========





 The accompanying notes are an integral part of these condensed consolidated financial statements.

</TABLE>




                                       5
<PAGE>



                 WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



(1)      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization
         ------------

               Worldport Communications, Inc., a Delaware corporation (together
         with its subsidiaries, the "Company"), was originally organized as a
         Colorado corporation under the name Sage Resources, Inc. in January
         1989. Worldport remained inactive until 1996 when the Company's
         domicile was changed to Delaware and the name was changed to Worldport
         Communications, Inc.

               From 1997 to 1999, the Company was a facilities-based global
         telecommunications carrier offering voice, data and other
         telecommunications services to carriers, Internet service providers,
         medium and large corporations and distributors and resellers operating
         in Europe and the United States. In order to meet its obligations under
         its interim loan facility, the Company sold substantially all of its
         material assets during the first quarter of 2000.

                During 2000 and 2001, the Company pursued a new business
         strategy, focused on the delivery of Internet managed hosting services
         to global companies doing business in the European marketplace.
         However, the Company did not achieve the revenue growth it had
         anticipated, which, combined with the general economic downturn and the
         slowdown in technology spending, prompted the Company to review various
         alternatives to its existing business plan. The Company made the
         decision to take restructuring actions and to divest certain assets
         during the fourth quarter of 2001 and the first quarter of 2002, as
         described in Note 3. As a result, the Company no longer has active
         business operations. Accordingly, results of the exited operations have
         been classified as discontinued.

               Since ceasing its business operations in the first quarter of
         2002, the Company has been operating with a minimal headquarters staff
         while it completes the activities related to exiting its prior
         businesses and determines how to use its cash resources. During this
         period, the Company has actively worked to resolve and settle the
         Company's outstanding liabilities. Additionally, the Company has
         considered various alternatives in determining how and when to use its
         cash resources. The Company has sought and reviewed acquisition
         opportunities. However, the Company did not pursue any of these
         opportunities since it did not believe that any of them were in the
         best interests of its stockholders. The Company has also analyzed a
         potential liquidation of the Company and its effects on the Company's
         stockholders.

                As described in Note 6, the Company commenced a self-tender
         offer for the Company's common stock on March 7, 2003. The self-tender
         offer expired on April 11, 2003, and approximately 6.1 million shares
         were repurchased by the Company as a result of the self-tender offer.
         As of April 25, 2003, the Company had approximately 32.9 million shares
         of common stock outstanding after the repurchase of the shares. On
         April 15, 2003, the Company's two largest shareholders and a member of
         the Company's board of directors entered into a stockholders agreement.
         This agreement is described further in Note 6.

               On March 7, 2003, in a separate transaction, the Company
         repurchased approximately 99% of its outstanding preferred stock from
         The Heico Companies, L.L.C. ("Heico"). The shares were repurchased for
         $67.4 million, including a 7% dividend. During April 2003, the Company
         repurchased the remaining preferred stock from the three remaining
         preferred stockholders for an aggregate purchase price of $0.2 million.
         Worldport has retired the preferred stock it has repurchased and as of
         April 25, 2003, the Company had no preferred stock outstanding.


                                       6
<PAGE>

               As of April 25, 2003, after the repurchase of shares pursuant to
         the self-tender offer and the repurchase of the preferred stock, the
         Company had approximately $45.4 million in cash, cash equivalents and
         marketable securities. The Company intends to explore the possible
         benefits to its stockholders of a change in domicile to outside the
         United States of America. The Company also intends to continue to
         consider potential acquisition opportunities, although the Company has
         not identified a specific industry on which it intends to focus and has
         no present plans, proposals, arrangements or understandings with
         respect to the acquisition of any specific business.

         Basis of Presentation
         ---------------------

                The accompanying condensed consolidated financial statements
         have been prepared by the Company without audit pursuant to the rules
         and regulations of the Securities and Exchange Commission. Certain
         information and footnote disclosures normally included in financial
         statements prepared in accordance with generally accepted accounting
         principles have been condensed or omitted in this Form 10-Q pursuant to
         such rules and regulations; however, management believes that the
         disclosures herein are adequate to make the information presented not
         misleading. The financial statements and notes thereto included in this
         Form 10-Q should be read in conjunction with the financial statements
         and notes thereto included in the Company's Annual Report on Form 10-K
         for the year ended December 31, 2002.

                In the opinion of the Company's management, the accompanying
         condensed consolidated financial statements contain all adjustments
         necessary to present fairly the Company's financial position as of
         March 31, 2003, and the results of operations and cash flows for the
         three months ended March 31, 2003 and 2002. The results of operations
         for the three months ended March 31, 2003, are not necessarily
         indicative of the operating results for the full year.

         Consolidation
         -------------

                The accompanying consolidated financial statements include the
         accounts of the Company and its wholly-owned subsidiaries. All
         significant intercompany accounts and transactions have been
         eliminated.

                Under accounting principles generally accepted in the United
         States of America ("GAAP"), consolidation is generally required for
         investments of more than 50% of the outstanding voting stock of any
         investee, except when control is not held by the majority owner. Under
         these principles, legal reorganization or other proceedings (including
         Administration, receivership, or liquidation) represent conditions
         which can preclude consolidation in instances where control rests with
         an administrator, receiver or liquidator rather than the majority
         owner. As discussed in Note 3, the Company's U.K., Irish, German and
         Swedish subsidiaries filed or were placed into the local jurisdiction's
         applicable proceedings. As a result, the Company deconsolidated these
         subsidiaries' financial results and began accounting for its investment
         in the subsidiaries under the equity method of accounting and began
         recording gains and losses upon settlement.

         Use of Estimates
         ----------------

              The Company's financial statements are prepared in accordance with
         GAAP'. Financial statements prepared in accordance with GAAP require
         the use of management estimates and assumptions that affect the
         reported amounts of assets and liabilities, the disclosure of
         contingent assets and liabilities at the date of the financial
         statements, and the reported amounts of revenues and expenses during
         the reporting period. Actual results could differ from those estimates.

         Foreign Currency
         ----------------

                Prior to the transactions described in Note 3, substantially all
         of the Company's operations were in Europe. The assets and liabilities
         of non-U.S. subsidiaries were translated at the rates of exchange as of
         the balance sheet date, and income statement items were translated at
         the average rates prevailing during the period. The resulting
         translation adjustment was recorded as a component of stockholders'


                                       7
<PAGE>

         equity. Exchange gains and losses on intercompany balances of a
         long-term investment nature were also recorded as a component of
         stockholders' equity. Other foreign exchange gains and losses were
         recorded in income on a current basis and have been included in Loss
         from Discontinued Operations. These other foreign exchange gains and
         losses were minimal for the three months ended March 31, 2003 and 2002,
         respectively.

         Derivatives
         -----------

                The Company has used derivative instruments to hedge its foreign
         currency exposure only on a limited basis. Accordingly, the Company is
         not subject to any additional significant foreign currency market risk
         other than normal fluctuations in exchange rates. At March 31, 2003
         there were no significant foreign currency hedge contracts outstanding.

         Earnings (Loss) per Share
         -------------------------

                The Company has applied the provisions of Statement of Financial
         Accounting Standards ("SFAS") No. 128, "Earnings Per Share", which
         establishes standards for computing and presenting earnings per share.
         Basic earnings per share is computed by dividing income available to
         common stockholders by the weighted average number of common shares
         outstanding for the period. The calculation of diluted earnings per
         share includes the effect of dilutive common stock equivalents. In 2003
         and 2002, basic and diluted loss per share is the same because all
         dilutive securities had an antidilutive effect on loss per share.

         New Accounting Pronouncements
         -----------------------------

               In June 2002, the Financial Accounting Standards Board ("FASB")
         issued SFAS No. 146, "Accounting for Costs Associated with Exit or
         Disposal Activities." The statement requires that a liability for a
         cost associated with an exit or disposal activity be recognized when
         the liability is incurred as opposed to the date of an entity's
         commitment to an exit plan. The Company will adopt SFAS No. 146 for any
         exit or disposal activities initiated after December 31, 2002.

               In June 2002, the FASB issued SFAS No. 148, "Accounting for
         Stock-Based Compensation--Transition and Disclosure--an amendment of
         FASB Statement No. 123." The statement amends FASB Statement No. 123,
         "Accounting for Stock-Based Compensation", to provide alternative
         methods of transition for a voluntary change to the fair value based
         method of accounting for stock-based employee compensation. In
         addition, this Statement amends the disclosure requirements of
         Statement 123 to require prominent disclosures in both annual and
         interim financial statements about the method of accounting for
         stock-based employee compensation and the effect of the method used on
         reported results. The Company adopted the new disclosure requirements
         in this statement in 2002.


(2)      COMPREHENSIVE LOSS

               Total comprehensive loss for the three months ended March 31,
         2003 and 2002 was as follows (in thousands):

                                                             Three Months Ended
                                                                  March 31,
                                                             2003        2002
                                                             ----        ----
               Net loss                                    $ (488)      $(8,099)
               Foreign currency translation adjustments      (799)          393
               Unrealized gains on marketable securities
                  held-for-sale                               100           111
                                                           ------       --------
               Total comprehensive loss                  $ (1,187)      $(7,595)
                                                         ========       ========


                                       8
<PAGE>



(3)      DISCONTINUED OPERATIONS

               During 2001, the Company did not achieve its expected revenue
         growth in its managed hosting business. The general economic downturn,
         the slowdown in technology spending and the lengthening in the sales
         cycle for managed hosting services all contributed to these revenue
         shortfalls. Company management believed that these conditions, as well
         as the increasing level of competition and consolidation in the Web
         hosting and Internet infrastructure markets, would continue to have an
         adverse effect on the Company's ability to achieve near term revenue
         targets and, if they continued, could erode the financial resources of
         the Company more rapidly than planned.

               Following the exploration and review of strategic alternatives,
         the Company determined that it was necessary to take certain actions in
         the fourth quarter of 2001 and the first quarter of 2002 to
         dramatically reduce the rate at which its operations were using cash
         and to minimize the Company's exposure in markets that were
         experiencing significantly slower than expected market growth.
         Following is a summary of these fourth quarter 2001 and first quarter
         2002 actions and the subsequent exit activities that have occurred
         related to these actions.

          >    In November 2001, the Company announced that its Irish subsidiary
               was ceasing operations at its Dublin, Ireland facility. An
               orderly shutdown of the Ireland operations was commenced, and was
               substantially completed by December 31, 2001. In April 2002,
               Worldport Ireland Limited was given notice that a petition for
               winding up was filed and would be presented to the Irish High
               Court by Global Crossing Ireland Limited. The petition was heard
               by the Irish High Court on May 13, 2002 and a liquidator was
               appointed for this subsidiary to act on behalf of the creditors.
               As a result of this action, the liquidator gained control over
               this subsidiary's assets. In September 2002, the liquidator
               disclaimed the leases for the two facilities previously used by
               the Irish subsidiary. The Company provided a guarantee with
               respect to the lease of one of these facilities. (See Note 8 for
               a discussion of the legal proceedings relating to this
               guarantee.) The assets and liabilities of the Irish subsidiary
               that were not guaranteed or incurred directly by the parent
               company, Worldport Communications, Inc. ("Worldport Inc."), were
               deconsolidated in the second quarter of 2002 and reflected in Net
               Liabilities of Non-controlled Subsidiaries on the Company's
               balance sheets (see Note 5). At March 31, 2003, the Net
               Liabilities of Non-controlled Subsidiaries relating to Ireland
               equaled $4.1 million. Approximately $18.5 million of liabilities
               that were guaranteed or incurred by Worldport Inc. have not been
               deconsolidated and are reflected as liabilities of the Company at
               March 31, 2003.

          >    In December 2001, the Company sold the assets and certain
               liabilities of its Swedish subsidiary, Hostmark AB, to OM
               Technology AB for a final sales price of 7.5 million Swedish
               kronor (approximately $0.8 million), which was fully collected by
               August 2002. OM also agreed to assume the ownership of Hostmark
               AB's Stockholm Internet solutions center and the operations at
               that center, and all customers' contracts. In September 2002,
               Hostmark AB was put into liquidation and a liquidator was
               appointed to control this subsidiary. As a result of the asset
               sale to OM Technology AB in December 2001, there were no assets
               and minimal liabilities remaining in this Swedish subsidiary.
               Those liabilities were deconsolidated in the third quarter of
               2002 and reflected in Net Liabilities of Non-controlled
               Subsidiaries on the Company's balance sheets (see Note 5). At
               March 31, 2003, the Net Liabilities of Non-controlled
               Subsidiaries relating to Hostmark AB equaled $0.1 million.

          >    In December 2001, the Company sold its Swedish professional
               services business to its employees in a management buyout for
               $0.9 million, the majority of which is in the form of a note. Due
               to uncertainties related to the collectibility of this note, it
               has been fully reserved.

          >    In December 2001, the Company placed its German subsidiary,
               Hostmark GmbH, into receivership under German law. As a result of
               this action, the receiver gained control over this subsidiary's


                                       9
<PAGE>

               assets. The assets and liabilities of Hostmark GmbH held in
               receivership were deconsolidated in the Company's financial
               statements in the fourth quarter of 2001 and reflected in Net
               Liabilities of Non-controlled Subsidiaries on the Company's
               balance sheet as a net liability of approximately $1.4 million
               (see Note 5). As of March 31, 2003, there were no Net Liabilities
               of Non-controlled Subsidiaries relating to Hostmark GmbH.

          >    In March 2002, the Company made the decision to make no further
               investment in its U.K. managed hosting operation. On March 26,
               2002, the Company's U.K. subsidiaries, Hostmark World Limited and
               Hostmark U.K. Limited, filed a petition for Administration under
               the United Kingdom Insolvency Act. An administrator was appointed
               for these subsidiaries to either reorganize, find new investors,
               sell or liquidate the U.K. businesses for the benefit of its
               creditors. As a result of this action, the administrator gained
               control over these subsidiaries' assets. The assets and
               liabilities of the U.K. subsidiaries that were not guaranteed by
               Worldport Inc. were deconsolidated in the Company's financial
               statements in the first quarter of 2002 and reflected in Net
               Liabilities of Non-controlled Subsidiaries on the Company's
               balance sheets (see Note 5). At March 31, 2003, the Net
               Liabilities of Non-controlled Subsidiaries relating to the U.K.
               equaled $5.4 million.

                 In addition, the Company completed the sale of its remaining
         carrier business, Telenational Communications, Inc. ("TNC") in October
         2001 for $0.4 million. Due to uncertainties related to the
         collectibility of this note, the note was fully reserved for in 2001.
         However, in the fourth quarter of 2002, the Company reached an
         agreement with the purchaser to accept $0.3 million in full
         satisfaction of the note. This amount was paid to the Company in the
         fourth quarter of 2002 and resulted in a cash gain of $0.3 million.

                As a result of these transactions, the Company had exited all
         three of its operating segments as of March 31, 2002 and has been
         operating since then with only a minimal headquarters staff.
         Accordingly, results of these exited operations have been classified as
         discontinued.

                There were no operating results from discontinued operations for
         the three months ended March 31, 2003. The operating results of
         discontinued operations for the three months ended March 31, 2002 were
         as follows (in thousands):
                                                              Three Months Ended
                                                                  March 31,
                                                                  ---------
                                                                     2002
                                                                     ----
                    Net revenue                                   $    291
                    Restructuring costs (see Note 4)              $ 10,000
                    Loss before income taxes                      $(12,916)
                    Income tax benefit                            $  5,597
                    Net loss from discontinued operations         $ (7,319)


         Assets and liabilities related to the discontinued operations consist
         of the following (in thousands):

<TABLE>

                                                                       March 31,       December 31,
                                                                          2003             2002
                                                                          ----             ----
                    <S>                                                 <C>             <C>
                    Current assets                                      $      6        $       5
                    Other noncurrent assets                                    9                9
                    Current liabilities                                  (28,109)         (27,578)
                    Long-term liabilities                                     --             (834)
                                                                        ---------       ----------
                    Net liabilities of discontinued operations          $(28,094)       $ (28,398)
                                                                        =========       ==========


</TABLE>


                                       10
<PAGE>


(4)      RESTRUCTURING ACTIVITIES

               In the fourth quarter of 2001 and in the first quarter of 2002,
         the Company recorded restructuring charges of $101.5 million and $10.0
         million, respectively, relating to the actions described in Note 3.
         These restructuring charges primarily included severance, facility exit
         costs, bandwidth contract termination costs, and the write down of
         assets to their expected net realizable value and have been primarily
         included in Income (Loss) from Discontinued Operations.

               The Company compared the carrying value of the long-lived assets
         located primarily in Ireland, Germany and the U.K. to fair values
         determined substantially through independent appraisals and estimated
         future discounted cash flows. The excess carrying value of $84.8
         million was recorded as a non-cash asset impairment charge in the
         fourth quarter of 2001.

               Facility exit costs of $9.3 million and $7.9 million were
         recorded in the fourth quarter of 2001 and the first quarter of 2002,
         respectively. These facility exit costs represented rent payments on
         the Company's U.K., Ireland and German facilities, net of certain
         estimated sublease recoveries. As discussed in Note 5, the obligations
         related to the Slough, U.K., and the Frankfurt, Germany, data center
         leases have been extinguished through the administration or
         receivership proceedings. Accordingly, the Company recognized a
         non-cash gain of $7.7 million and $1.6 million in the second and third
         quarters, respectively, of 2002 related to the Slough and Frankfurt
         lease obligations that were originally recorded as restructuring
         charges.

               Bandwidth contract termination costs of $4.7 million and $0.4
         million were recorded in the fourth quarter of 2001 and the first
         quarter of 2002, respectively. These costs represent early termination
         penalties incurred by the Company to cancel certain bandwidth contracts
         related to its ceased managed hosting operations in Ireland and the
         U.K.

               Severance of $1.3 million was recorded in the fourth quarter of
         2001 and all severance payments had been made by June 30, 2002. The
         headcount reduction affected approximately 100 employees, who were
         primarily located in Ireland. Substantially all employees terminated
         under this plan were released by December 31, 2001, with the few
         remaining employees terminated in the first quarter of 2002.

               Other costs of $1.4 million and $1.7 million were recorded in the
         fourth quarter of 2001 and the first quarter of 2002, respectively, and
         include estimated legal expenses, costs to settle outstanding purchase
         commitments, and other shutdown related expenses.

               The following table summarizes the significant components of the
         restructuring reserve included in Accrued Expenses at March 31, 2003
         (in thousands):

<TABLE>

                                                     Balance At                                   Balance At
                                                     December 31,       Cash        Non-cash      March 31,
                                                        2002          Payments     Adjustments      2003
                                                        ----          --------     -----------      ----
           <S>                                      <C>              <C>              <C>          <C>
           Facility exit costs                      $ 5,887          $  (68)          $ 224        $ 6,043
           Bandwidth contract termination             4,299               --            170          4,469
           Severance                                     --               --            --              --
           Other costs                                  189             (65)              8            132
                                                    -------          -------          -----        -------
           Total                                    $10,375          $ (133)          $ 402        $10,644
                                                    =======          =======          =====        =======

</TABLE>

               The non-cash adjustments of $0.4 million primarily represent the
         impact of foreign currency fluctuations on translated balances.

               The Company's management is continuing to seek opportunities to
         further reduce its liabilities related to the exited businesses and
         evaluate the possible sale or disposition of the remaining assets,
         including potentially subleasing the facilities remaining under


                                       11
<PAGE>

         operating lease agreements. All remaining restructuring costs are due
         to be paid by December 31, 2010, with $4.3 million due in 2003, $0.9
         million in 2004, $0.9 million in 2005, $0.9 million in 2006, $1.0
         million in 2007 and $2.6 million thereafter.

               The Company used estimates to calculate the restructuring
         charges, including the ability and timing of the Company to sublease
         space and the net realizable value of remaining assets. These estimates
         are subject to change based on the sale of the remaining assets along
         with the sublease or settlement of future rent obligations.


(5)      NET LIABILITIES OF NON-CONTROLLED SUBSIDIARIES

                As described in Note 3, the Company placed its German
         subsidiary, Hostmark GmbH, into receivership under German law in
         December 2001 and a receiver was appointed for this subsidiary. In
         March 2002, the Company's U.K. subsidiaries, Hostmark World Limited and
         Hostmark U.K. Limited, filed a petition for Administration under the
         United Kingdom Insolvency Act and an administrator was appointed for
         these subsidiaries. In April 2002, the Company's Irish subsidiary,
         Worldport Ireland Limited, was given notice that a petition for winding
         up was filed and would be presented to the Irish High Court on behalf
         of Global Crossing Ireland Limited. The petition was heard by the Irish
         High Court on May 13, 2002 and a liquidator was appointed for this
         subsidiary to act on behalf of the creditors. In September 2002, the
         Company's Swedish subsidiary, Hostmark AB was placed into liquidation
         and a liquidator was appointed for this subsidiary. As a result of
         these actions, the Company no longer has control over these
         subsidiaries' assets.

                Under generally accepted accounting principles, consolidation is
         generally required for investments of more than 50% of the outstanding
         voting stock of any investee, except when control is not held by the
         majority owner. Under these principles, legal reorganization or other
         proceedings (including Administration, receivership, or liquidation)
         represent conditions which can preclude consolidation in instances
         where control rests with an administrator, receiver or liquidator
         rather than the majority owner. As discussed above, the U.K., Irish,
         German and Swedish subsidiaries filed or were placed into the local
         jurisdiction's applicable proceedings. As a result, the Company
         deconsolidated the subsidiaries' financial results and began accounting
         for its investment in the subsidiaries under the equity method of
         accounting and began recording gains and losses upon settlement.

                Prior to the filing or placement into the respective
         proceedings, under generally accepted accounting principles of
         consolidation, the Company had recognized losses in excess of its
         investment in these subsidiaries of $10.8 million. Since these
         subsidiaries' results are no longer consolidated and the Company
         believes that it is not probable that it will be obligated to fund
         losses related to these investments, any adjustments reflected in the
         subsidiaries' financial statements subsequent to the effective dates of
         these proceedings are not expected to adversely affect the Company's
         consolidated results.

                However, as the liabilities of these subsidiaries exceed the
         recorded value of their assets, there can be no assurance that these
         creditors will not make claims against the parent company, Worldport
         Inc., for these obligations or that, through the proceedings, Worldport
         Inc. would not be required to satisfy any of these obligations. As a
         result, the Company has not reflected any adjustments relating to the
         deconsolidation of these subsidiaries other than by presenting the net
         liability for each of these subsidiaries as Net Liabilities of
         Non-controlled Subsidiaries and discontinuing the recording of earnings
         or losses from these subsidiaries after the effective dates of these
         proceedings. To the extent that any of these liabilities are
         extinguished through these proceedings without funding from the
         Company, the Company may recognize non-cash gains in future periods as
         a result of the forgiveness of such obligations. Conversely, when the
         proceedings are completed and liabilities are extinguished, the Company
         may recognize non-cash losses on the foreign currency translation
         losses currently included in Accumulated Other Comprehensive Income.

                                       12
<PAGE>

                In August 2002, the U.K. administrator identified a new third
         party tenant for the Slough data center. The third party paid
         approximately 5.7 million British pounds to the U.K. administrator, in
         addition to the assumption of the lease liability, for the Slough data
         center operation and related assets. The 5.7 million British pounds
         proceeds may be used to satisfy all or a portion of the Net Liabilities
         of Non-controlled Subsidiaries for the U.K. entities, and accordingly,
         the Company may recognize non-cash gains in future periods as a result
         of this transaction. The Company had previously agreed to guarantee, on
         behalf of its U.K. subsidiary, the Slough data center lease expiring in
         2015. In connection with the August 2002 transaction, the landlord
         agreed to release the underlying lease guarantee and, therefore,
         relieve the Company from the $7.7 million lease liability upon the
         payment of 0.2 million British pounds (approximately $0.3 million),
         which payment was funded by the Company. The $7.7 million lease
         liability had originally been recorded by the Company as part of the
         $10.0 million restructuring charge taken on the U.K. business in the
         first quarter of 2002. Accordingly, the Company reduced its liabilities
         by, and recorded a non-cash gain from discontinued operations of, $7.7
         million in the second quarter of 2002.

                In the third quarter of 2002, the Company was informed by its
         German attorneys that the receiver terminated the Frankfurt lease
         effective December 31, 2002 under the provisions of German law. As a
         result, Hostmark GmbH was no longer obligated for lease payments due
         after the effective date (approximately $1.6 million). The lease
         liability had originally been recorded by the Company as part of the
         $101.5 million restructuring charge taken on the discontinued
         businesses in the fourth quarter of 2001. Additionally, the Company was
         informed that the receiver has declared insufficiency of the estate
         under the provisions of German law. This declaration was made because
         the receiver determined that the remaining net assets of the German
         company were not sufficient to cover the administrative costs of the
         proceedings, and consequently, no distributions could be made to the
         third party creditors (including the Frankfurt landlord for lease
         payments prior to the December 31, 2002 termination date). This
         declaration can be revoked in the future to the extent money is
         collected by the receiver on behalf of Hostmark GmbH in an amount
         sufficient to provide a distribution to the third party creditors.
         Based on its understanding of the German proceedings, the Company did
         not believe it was obligated to fund the Frankfurt lease obligation and
         other creditor liabilities of the German subsidiary. Therefore, in the
         third quarter of 2002, the Company reduced its Net Liabilities of
         Non-controlled Subsidiaries by, and recorded a non-cash gain from
         discontinued operations of, $1.4 million relating to the net
         liabilities of the German subsidiary.

                In addition to the third party creditors of the Company's
         subsidiaries, Worldport Inc. from time to time made advances to these
         subsidiaries prior to the Company's subsidiaries entering into the
         relevant proceedings. Therefore, Worldport Inc. is also a creditor of
         these subsidiaries in these proceedings. The Company is not able to
         determine at this time the priority of Worldport Inc.'s claim in such
         proceedings or whether or not Worldport Inc. will be able to recover
         any portion of these advances. If Worldport Inc. is successful in
         collecting any portion of these advances, the Company would recognize a
         gain and an increase in cash at that time.

                The Company used estimates to calculate the Net Liabilities of
         Non-controlled Subsidiaries. These estimates are subject to change
         based on the ability of the administrator, receiver or liquidator, as
         applicable, to sell the remaining assets and negotiate the final
         liability amounts. Net Liabilities of Non-controlled Subsidiaries do
         not include obligations that the parent company, Worldport Inc., has
         guaranteed or incurred directly. Only those liabilities of these
         subsidiaries which Worldport Inc. believes it will not be required to
         pay have been included in Net Liabilities of Non-controlled
         Subsidiaries.

                Excluding the liabilities of the U.K., Irish and Swedish
         subsidiaries that are recorded in Net Liabilities of Non-controlled
         Subsidiaries as discussed above, there are approximately $21.8 million
         of liabilities reflected on the Company's March 31, 2003, balance sheet
         attributable to Worldport Inc. and the remaining subsidiaries not in
         Administration, receivership or liquidation. The Company has assumed,
         for purposes of calculating these liabilities, that it will not be able
         to mitigate them, however, Company management is currently seeking
         opportunities to further reduce these liabilities. There can be no


                                       13
<PAGE>

         assurance that the Company will be successful in its efforts to
         mitigate these liabilities or that additional claims will not be
         asserted against Worldport Inc.



(6)      EQUITY TRANSACTIONS

               On March 7, 2003, the Company repurchased approximately 99% of
         its outstanding preferred stock from a single owner, The Heico
         Companies L.L.C. The shares were repurchased for $67.4 million, which
         represents the aggregate liquidation preference of the purchased
         shares, including a 7% dividend that was required under the terms of
         the preferred stock before any distributions on or purchase of the
         Company's common stock. As a result of this repurchase, Additional
         Paid-in Capital was reduced by $63.0 million and Accumulated Deficit
         was increased by $4.4 million, reflecting the 7% dividend. In April
         2003, Worldport paid an aggregate purchase price of $0.2 million to
         complete similar purchase offers with the three remaining preferred
         stockholders, who owned, in aggregate, 34,056 shares of Series B
         preferred stock. Worldport has retired the preferred stock it has
         repurchased and as of April 25, 2003, the Company had no preferred
         stock outstanding.

               On December 23, 2002, W.C.I. Acquisition Corp., a Delaware
         corporation ("W.C.I."), commenced a tender offer for any and all of the
         Company's outstanding common stock at a price of $0.50 per share (the
         "W.C.I. Offer"). W.C.I. was formed by Heico, J O Hambro Capital
         Management Limited ("Hambro") and certain of their affiliates to
         complete the W.C.I. Offer. At the time of the W.C.I. Offer, these
         entities owned or had the right to acquire approximately 45% of the
         Company's outstanding common stock. The W.C.I. Offer was conditioned
         on, among other things, the valid tender of a majority of the
         outstanding shares, excluding the shares owned by W.C.I. or its
         stockholders. W.C.I.'s tender offer expired on February 14, 2003
         without purchase of any shares, as certain conditions were not
         satisfied. W.C.I. reported that approximately 6.8 million shares were
         tendered in response to the W.C.I. Offer.

                Recognizing that the tender of shares pursuant to the W.C.I.
         Offer demonstrated the apparent desire of certain stockholders for
         liquidity, the Company's Board of Directors considered and approved a
         self-tender offer. The Company commenced a self-tender offer on March
         7, 2003 for any and all of the Company's outstanding common stock at a
         price of $0.50 per share (the "Self-Tender Offer"). The Self-Tender
         Offer was not conditioned on any minimum number of shares being
         tendered, however it was subject to certain conditions described in the
         Company's Form TO-I filed with the Securities and Exchange Commission
         on March 7, 2003. The Self-Tender Offer expired on April 11, 2003.
         Approximately 6.1 million shares were validly tendered and repurchased
         by the Company for a purchase price of approximately $3.1 million. The
         repurchased shares have been retired by the Company, and, as of April
         25, 2003, the Company had approximately 32.9 million shares of common
         stock outstanding.

                Heico and Hambro, neither of which tendered any shares in the
         offering, are the Company's two largest shareholders. Heico, which is
         controlled by Michael E. Heisley, a director of the Company, and his
         family, including his daughter, Emily Heisley Stoeckel. who is a
         director of the Company, Hambro, and Stanley H. Meadows, a director of
         the Company, entered into a stockholders agreement as of April 15,
         2003, in which they agreed, among other things, to vote all shares of
         the Company's common stock over which they have voting control in order
         to cause the Company's Board to consist of two representatives
         designated by Heico and two representatives designated by Hambro and to
         cause the Company not to take specified actions, including the issuance
         or repurchase of equity securities, a material change in the Company's
         business and certain acquisitions, investments and claim settlements,
         without the approval of a majority of the directors designated by Heico
         and of the majority of the directors designated by Hambro. According to
         the Schedule 13D, as amended, of Michael E. Heisley and Heico, Heico is
         the beneficial owner of 6,077,707 shares of the Company's common stock
         (18.4% of the Company's currently outstanding shares of common stock)
         and holds warrants to purchase 679,451 shares of common stock (2.1% of
         the currently outstanding shares) and Mr. Heisley holds options to
         purchase 2,114,583 shares of common stock (6.4% of the currently


                                       14
<PAGE>

         outstanding shares). According to the Schedule 13D, as amended, of
         Hambro, Hambro is the beneficial owner of 9,367,869 shares of the
         Company's common stock (28.4% of the currently outstanding shares). Mr.
         Meadows is the beneficial owner of 1,764,129 shares of the Company's
         common stock (5.4% of the currently outstanding shares). A copy of the
         stockholders' agreement is attached to the Amended Form 13-D filed by
         Heico on April 28, 2003.


(7)      SEGMENT REPORTING

              SFAS No. 131, "Disclosures about Segments of an Enterprise and
         Related Information", requires the reporting of profit and loss,
         specific revenue and expense items and assets for reportable segments.
         It also requires the reconciliation of total segment revenues, total
         segment profit or loss, total segment assets, and other amounts
         disclosed for segments to the corresponding amounts in the general
         purpose financial statements.

              During 2001, the Company had three reportable segments: managed
         hosting, professional services and carrier operations. The managed
         hosting segment derived revenues primarily from the delivery of
         services including Internet networking, applications and value-added
         services, infrastructure, and systems support. The professional
         services segment derived revenues primarily from Internet-based
         applications, systems development, and content management support. The
         carrier operations segment derived revenues primarily from voice, data
         and other telecommunication services. Company management viewed the
         three distinct business strategies as different business segments when
         making operating and investment decisions and for assessing
         performance.

              As a result of the transactions discussed in Note 3, the Company
         exited all of its operating segments as of March 31, 2002.


(8)      CONTINGENCIES

                In March 2002, an Administrator was appointed for the U.K.
         subsidiaries, Hostmark World Limited and Hostmark U.K. Limited, by an
         order of the Companies Court, Chancery Division of High Court under the
         United Kingdom Insolvency Act. In April 2002, the Irish subsidiary,
         Worldport Ireland Limited, was given notice that a petition for winding
         up was filed and would be presented to the Irish High Court on behalf
         of Global Crossing Ireland Limited. The petition was heard by the Irish
         High Court on May 13, 2002 and a liquidator was appointed for this
         subsidiary to act on behalf of the creditors. As a result of these
         actions, the Administrator or liquidator has control over these
         subsidiaries' assets. The Company believes that each of these
         subsidiaries has liabilities which exceed the recorded value of its
         assets. Certain creditors of these subsidiaries have made claims
         directly against the parent company, Worldport Inc., for liabilities
         related to the operation of these subsidiaries and additional creditors
         could assert similar claims. There can be no assurance that Worldport
         Inc. will be successful in defending these claims and in limiting its
         liability for the obligations of its subsidiaries.

               In June 2002, the High Court of Ireland issued a Summary Summons
         to the parent company, Worldport Inc., on behalf of Cable & Wireless
         (Ireland) Limited, who is seeking payment of 1.0 million British pounds
         and 2.3 million Euros, together with applicable VAT. (Excluding VAT,
         this represents approximately $4.0 million.) These claims relate to
         unpaid invoices for Internet services provided by Cable & Wireless
         (Ireland) Limited to the Company's subsidiary in Ireland (now in
         liquidation) and termination of contract charges. The Company is
         contesting the validity of the claims and believes that the claims, to
         the extent valid, are obligations of the Company's Irish subsidiary and
         not of Worldport Inc., but is continuing to investigate the claims.
         There can be no assurance that such claims will not be successful
         against Worldport Inc. However, the outcome of the matter is not
         expected to have a material adverse effect on the consolidated results
         of the Company in excess of amounts already recorded.


                                       15
<PAGE>

                In October 2002, the Company received a letter from legal
         counsel to Channor Limited, the landlord of the data center in Dublin,
         Ireland, with respect to the Company's guarantee on that facility. This
         letter demanded the payment within 14 days of approximately 0.9 million
         Euros and the confirmation of the Company's liabilities as guarantor
         under the lease. In January 2003, the Company's legal counsel received
         a letter from legal counsel for the landlord in which the landlord
         demanded that the Company assume the position of tenant under the
         lease. Should the Company be forced to assume the position of tenant
         under the lease, the Company could be obligated for the full amount of
         rent through 2010 plus certain taxes and maintenance expenses. In
         February 2003, Channor Limited filed a Notice of Motion in the High
         Court of Ireland against Worldport Inc. in which the landlord demands
         payment of approximately 1.2 million Euros, which included additional
         rent that they claim had accrued since their prior demand. The demand
         amount was subsequently increased to 1.4 million Euros in April 2003.
         The Company is contesting the validity of the landlord's demands.
         However, the outcome of the matter is not expected to have a material
         adverse effect on the consolidated results of the Company in excess of
         amounts already recorded. Included in Accrued Expenses at March 31,
         2003 is $5.9 million, which represents rent payable on the data center
         between January 2002 and 2010, the earliest contractual termination
         date of the lease.

                The Industrial Development Agency Ireland ("IDA") is seeking
         payment of 3.4 million Euros from the Company. These claims relate to
         unpaid invoices for bandwidth services provided to the Company's
         subsidiary in Ireland (now in liquidation). The Company is contesting
         the validity of the claims and believes that the claims, to the extent
         valid, are obligations of the Company's Irish subsidiary and not of
         Worldport Inc., but is continuing to investigate the claims. There can
         be no assurance that such claims will not be successful against
         Worldport Inc. However, the outcome of the matter is not expected to
         have a material adverse effect on the consolidated results of the
         Company in excess of amounts already recorded.

                On January 8, 2003, four substantially identical complaints were
         filed in the Circuit Court of Cook County, Illinois, County Department,
         Chancery Division against Worldport and its current directors.
         Additionally, on January 16, 2003, a complaint was filed in the Court
         of Chancery of the State of Delaware. The foregoing actions purport to
         be brought on behalf of all public stockholders of Worldport in
         connection with the W.C.I. Offer. The actions allege, among other
         things, that certain of the defendants have breached their fiduciary
         duties to Worldport and its stockholders. The complaints purport to
         seek, inter alia, a variety of relief, including in certain
         circumstances damages and an injunction preventing consummation of the
         W.C.I. offer. An amended complaint has been filed that alleges breach
         of fiduciary duties, waste of corporate assets and unjust enrichment
         with regard to the Company's self-tender offer and repurchase of
         preferred stock. The amended complaint purports to seek, inter alia,
         rescission of the Company's self-tender offer and repurchase of the
         Company's preferred stock and damages. The Company believes these
         allegations to be without merit and intends to vigorously contest the
         allegations.

                On March 12, 2003, a complaint was filed in the United States
         Bankruptcy Court for the District of Delaware against the Company. The
         complaint was filed on behalf of one of the Company's former customers
         which is now in bankruptcy and alleges breach of contract, fraud, and
         misrepresentation in connection with the sale of indefeasible rights of
         use ("IRUs") to the customer. The plaintiff is seeking payment of $2.2
         million plus legal costs and punitive damages. The Company is still
         evaluating this claim and has not yet made a determination as to the
         merits of this case. Accordingly, no accrual has been recorded on the
         Company's financial statements at this time. The Company intends to
         vigorously contest the allegations.

                On March 13, 2003, a complaint was filed in the Court of
         Chancery of the State of Delaware against the Company, its current
         directors and Heico. The complaint alleges breach of fiduciary duty
         relating to the March 7, 2003 repurchase of the preferred stock from
         Heico. The complaint seeks relief in the form of a declaration that the
         defendants have breached their fiduciary duties to the Company and its
         common stockholders, an accounting by the defendant to the Company for
         damages resulting from the defendants' breaches of fiduciary duty and
         reimbursement of the plaintiffs' costs for the action, including


                                       16
<PAGE>

         attorneys' fees. The Company believes these allegations to be without
         merit and intends to vigorously contest the allegations.

                In addition to the aforementioned claims, the Company is
         involved in various lawsuits or claims arising in the normal course of
         business, and the Company has established reserves for several such
         suits and claims. In the opinion of management, none of these lawsuits
         or claims will have a material adverse effect on the consolidated
         results of operations of the Company, however there can be no
         assurances that current reserves will be sufficient.





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

         NOTE ON "FORWARD-LOOKING" STATEMENTS
         ------------------------------------

               The information set forth in Management's Discussion and Analysis
         of Financial Condition and Results of Operations ("MD&A") contains
         certain "forward-looking statements" within the meaning of Section 27A
         of the Securities Act of 1933, as amended, Section 21E of the
         Securities Exchange Act of 1934, as amended, and the Private Securities
         Litigation Reform Act of 1995, including, among others (i) expected
         resolution of the Company's contingent liabilities and (ii) prospective
         business opportunities, as further explained in Item 1 of the Company's
         Annual Report on Form 10-K for the year ended December 31, 2002.
         Forward-looking statements are statements other than historical
         information or statements of current condition. Some forward-looking
         statements may be identified by use of terms such as "believes",
         "anticipates", "intends" or "expects". These forward-looking statements
         relate to the plans, objectives and expectations of the Company.
         Although the Company believes that its expectations with respect to the
         forward-looking statements are based upon reasonable assumptions within
         the bounds of its knowledge, in light of the risks and uncertainties
         inherent in all future projections, the inclusion of forward-looking
         statements in this report should not be regarded as a representation by
         the Company or any other person that the objectives or plans of the
         Company will be achieved.

               During the fourth quarter of fiscal 2001 and the first quarter of
         fiscal 2002, the Company either sold or ceased operating all of its
         operating businesses. Accordingly, the Company's results of these
         exited businesses have been classified as discontinued. The Company
         undertakes no obligation to release publicly the results of any future
         revisions it may make to forward-looking statements to reflect events
         or circumstances after the date hereof or to reflect the occurrence of
         unanticipated events.

               The following discussion should be read in conjunction with the
         Condensed Consolidated Financial Statements and Notes thereto included
         under Item 1 of this Form 10-Q. In addition, the Financial Statements
         and Notes thereto and related Management's Discussion and Analysis of
         Financial Condition and Results of Operations included in the Company's
         Annual Report on Form 10-K for the year ended December 31, 2002 should
         be read in conjunction with this Form 10-Q.


         OVERVIEW
         --------

               From 1997 to 1999, Worldport was a facilities-based global
         telecommunications carrier offering voice, data and other
         telecommunications services to carriers, Internet service providers,
         medium and large corporations and distributors and resellers operating
         in Europe and the United States. To finance certain acquisitions, the
         Company borrowed $120 million in June 1998 under an interim loan
         facility ("Interim Loan Facility"). In order to meet its obligations
         under its Interim Loan Facility, the Company sold substantially all of
         its material assets during the first quarter of 2000 (as described
         below).


                                       17
<PAGE>

               In November 1999, the Company entered into a series of agreements
         with Energis Plc to sell its 85% ownership interest in EnerTel. The
         sale was consummated on January 14, 2000 for $453.2 million, net of
         certain transaction expenses. The Company applied a portion of the net
         proceeds realized from the sale to repay existing debt, including debt
         incurred under the Interim Loan Facility, trade credit and other
         liabilities, and paid U.S. federal income taxes of approximately $57
         million on the gain.

               In the second quarter of 2000 the Company announced a new
         business strategy, focused on the delivery of Internet solutions to
         global companies doing business in the European marketplace. Pursuant
         to this strategy, the Company invested over $40 million to construct a
         new Internet solutions SuperCentre in Dublin, Ireland, which became
         operational in October 2000. In September 2000, the Company purchased
         VIS-able, a Swedish professional services firm specializing in complex
         systems development and consulting, for approximately $17.7 million.
         Finally, in April 2001, the Company acquired hostmark entities in the
         U.K., Sweden and Germany ("hostmark"), including the assumption of
         approximately $22 million in liabilities, for 5.1 million shares of the
         Company's common stock. The acquisition of hostmark provided Worldport
         with Internet solution centers ("ISC's") in London, Stockholm and
         Frankfurt. The hostmark companies had minimal revenues when the
         transaction was completed, and only one ISC was open for business.

               During 2001, the Company did not achieve the revenue growth in
         its managed hosting business that the Company had anticipated. The
         Company also experienced a decline in revenue in its Swedish
         professional services business. The general economic downturn, the
         slowdown in technology spending and the lengthening in the sales cycle
         for managed hosting services all contributed to these revenue
         shortfalls. In addition, the Company's Swedish professional services
         business was negatively affected by excess capacity in the Swedish
         consulting market, major pricing pressures, and slower customer
         decisions related to new IT projects for those services. The Company
         believed that these conditions, as well as the increasing level of
         competition and consolidation in the Web hosting and Internet
         infrastructure markets, would continue to have an adverse effect on
         Worldport's ability to achieve near term revenue targets and, if they
         continued, could erode the financial resources of the Company more
         rapidly than planned.

               Following the exploration and review of strategic alternatives,
         the Company determined that it was necessary to dramatically reduce the
         rate at which its operations were using cash and to minimize its
         exposure in markets that were experiencing significantly slower than
         expected market growth. As a result, the Company made a decision to
         take further restructuring actions and to divest itself of certain
         assets. Accordingly, the Company took the following actions in the
         fourth quarter of 2001 and the first quarter of 2002:

          >    In November 2001, the Company announced that its Irish subsidiary
               was ceasing operations at its Dublin, Ireland facility. An
               orderly shutdown of the Ireland operations was commenced, and was
               substantially completed by December 31, 2001.

          >    In December 2001, the Company sold the assets and certain
               liabilities of its managed services business in Stockholm,
               Sweden, to OM Technology AB for a final sales price of 7.5
               million Swedish kronor (approximately $0.8 million), which was
               fully collected by August 2002. OM also agreed to assume the
               ownership of Worldport's Stockholm Internet solution center and
               the operations at that center, and all customers' contracts.

          >    In December 2001, the Company also sold its Swedish professional
               services business (formerly known as VIS-able International AB)
               to its employees in a management buyout for $0.9 million, the
               majority of which is in the form of a note. Due to uncertainties
               related to the collectibility of this note, it has been fully
               reserved.

          >    In December 2001, the Company placed its German subsidiary,
               Hostmark GmbH, into receivership under German law. As a result of
               this action, the receiver has control over this subsidiary's
               assets.


                                       18
<PAGE>

          >    In March 2002, the Company's Board of Directors made the decision
               to make no further investment in its U.K. managed hosting
               operation. The Company recorded a $10.0 million restructuring
               charge in the first quarter of 2002 related to this action. On
               March 26, 2002, the Company's U.K. subsidiaries, Hostmark World
               Limited and Hostmark U.K. Limited, filed a petition for
               Administration under the United Kingdom Insolvency Act. An
               administrator was appointed for these subsidiaries to either
               reorganize, find new investors, sell or liquidate the U.K.
               businesses for the benefit of their creditors. As a result of
               this action, the administrator has control over these
               subsidiaries' assets.

               In connection with these activities, the Company recorded
         restructuring charges of $101.5 million and $10.0 million in the fourth
         quarter of 2001 and first quarter of 2002, respectively. The 2001
         restructuring charges included an $84.8 million asset impairment charge
         to write down the managed hosting long-lived assets to their expected
         net realizable value, facility exit costs of $9.3 million, bandwidth
         contract termination costs of $4.7 million, severance of $1.3 million,
         and other costs of $1.4 million. The 2002 restructuring charges
         included facility exit costs of $7.9 million, bandwidth contract
         termination costs of $0.4 million, and other costs of $1.7 million.

               In addition, the Company completed the sale of its remaining
         carrier business, Telenational Communications, Inc. ("TNC") in October
         2001 for a $0.4 million promissory note. Due to uncertainties related
         to the collectibility of this note, the note was fully reserved in
         2001. However, in the fourth quarter of 2002, the Company reached an
         agreement with the purchaser to accept $0.3 million in full
         satisfaction of the note. This amount was paid to the Company in the
         fourth quarter of 2002 and resulted in a cash gain of $0.3 million.

               As a result of the transactions described above, the Company no
         longer had active business operations as of March 31, 2002.
         Accordingly, the historical results of operations for prior periods are
         not comparable to the current period and are not representative of what
         future results will be.

               Since March 31, 2002, the Company has operated with a minimal
         headquarters staff while it has conducted the activities related to
         exiting its prior businesses. Following is a summary of the significant
         exit activities that have occurred since March 31, 2002.

          >    In April 2002, Worldport Ireland Limited was given notice that a
               petition for winding up was filed and would be presented to the
               Irish High Court by Global Crossing Ireland Limited. The petition
               was heard by the Irish High Court on May 13, 2002 and a
               liquidator was appointed for this subsidiary to act on behalf of
               the creditors. As a result of this action, the liquidator has
               control over this subsidiary's assets.

          >    In August 2002, the U.K. administrator identified a new third
               party tenant for the Slough, U.K., data center. The Company had
               previously agreed to guarantee, on behalf of its U.K. subsidiary,
               the Slough data center lease expiring in 2015. In connection with
               the August 2002 transaction, the landlord agreed to release the
               underlying lease guarantee and, therefore, relieve the Company
               from the $7.7 million lease liability upon the payment of 0.2
               million British pounds (approximately $0.3 million), which
               payment was funded by the Company. The $7.7 million lease
               liability had originally been recorded by the Company as part of
               the $10.0 million restructuring charge taken on the U.K. business
               in the first quarter of 2002. Accordingly, the Company reduced
               its liabilities by, and recorded a non-cash gain from
               discontinued operations of, $7.7 million in the second quarter of
               2002.

          >    In September 2002, the liquidator for the Company's Irish
               subsidiary disclaimed the leases for the two facilities
               previously used by the Irish subsidiary. The Company provided a
               guarantee with respect to the lease of one of the facilities. See
               Part II, Item I "Legal Proceedings" for a discussion of the legal
               proceedings relating to this guarantee.


                                       19
<PAGE>

          >    Also in September 2002, Hostmark AB was put into liquidation and
               a liquidator was appointed to control this subsidiary. As a
               result of the asset sale to OM Technology AB in December 2001,
               there were no assets and minimal liabilities remaining in this
               Swedish subsidiary.

          >    In the third quarter of 2002, the Company was informed by its
               German attorneys that the receiver terminated the Frankfurt lease
               effective December 31, 2002 under the provisions of German law.
               As a result, Hostmark GmbH is no longer obligated for lease
               payments due after the effective date (approximately $1.6
               million). The lease liability had originally been recorded by the
               Company as part of the $101.5 million restructuring charge taken
               on the discontinued businesses in the fourth quarter of 2001.
               Additionally, the Company was informed that the receiver has
               declared insufficiency of the estate under the provisions of
               German law. This declaration was made because the receiver
               determined that the remaining net assets of the German company
               were not sufficient to cover the administrative costs of the
               proceedings, and consequently, no distributions would be made to
               the third party creditors (including the Frankfurt landlord for
               lease payments prior to the December 31, 2002 termination date).
               This declaration can be revoked in the future to the extent money
               is collected by the receiver on behalf of Hostmark GmbH in an
               amount sufficient to provide a distribution to the third party
               creditors. Based on its understanding of the German proceedings,
               the Company does not believe it is obligated to fund the
               Frankfurt lease obligation or other creditor liabilities of the
               German subsidiary. Therefore, in the third quarter of 2002, the
               Company reduced its Net Liabilities of Non-controlled
               Subsidiaries by, and recorded a non-cash gain from discontinued
               operations of, $1.4 million relating to the net liabilities of
               the German subsidiary.


RESULTS OF OPERATIONS
-----------------------

               As described above, the Company had no active business operations
         as of March 31, 2002. Accordingly, results of these exited operations
         have been classified as discontinued.

               There were no revenues or cost of services from continuing
         operations in the first quarter of 2002 and 2001.

               Selling, general and administrative ("SG&A") expenses were $0.8
         million and $0.9 million for the quarters ended March 31, 2003 and
         2002. SG&A expenses in the current and prior year primarily consisted
         of corporate salaries and benefits, professional service fees,
         corporate governance expenses and facility costs.


               Depreciation and amortization expense represented depreciation on
         the corporate office leasehold improvements and related computer
         hardware and software. Depreciation and amortization expense was less
         than $0.1 million for the first quarter of 2003 and 2002.

               Interest income, which was earned on the Company's cash and cash
         equivalents, was $0.3 million for each of the quarters ended March 31,
         2003 and 2002, respectively. As a result of the lack of an operating
         business and its large number of stockholders, the Company must
         maintain its liquid assets in government securities, which generally
         produce low returns, or comply with the requirements of the Investment
         Company Act of 1940. As described in Note 6 to the Condensed
         Consolidated Financial Statements in Part I, Item I, the Company paid
         $67.4 million during the first quarter of 2003 for the repurchase of
         preferred stock from Heico. Therefore, the Company expects to earn less
         interest income from its cash and cash equivalents in future periods.
         The Company incurred interest expense of $0.1 million in the prior year
         first quarter primarily related to equipment financed under capital
         leases.


                                       20
<PAGE>

               Net loss from continuing operations was $0.5 million and $0.8
         million in the quarters ended March 31, 2003 and 2002, respectively.

               The Company had losses from discontinued operations of $7.3
         million during the quarter ended March 31, 2002. The operating results
         of discontinued operations were as follows (in thousands):

                                                               First Quarter
                                                               -------------
                                                                    2002
                                                                    ----
                  Net revenue                                     $    291
                  Restructuring costs                             $ 10,000
                  Loss before income taxes                        $(12,916)
                  Income tax benefit                              $  5,597
                  Net loss from discontinued operations           $ (7,319)

               Restructuring charges of $10.0 million were recorded in the first
         quarter of 2002 relating to the actions taken in the U.K. in March
         2002. These charges consisted of approximately $7.9 million in facility
         exit costs, approximately $0.4 million in bandwidth termination costs,
         and approximately $1.7 million in other related costs. Operating losses
         of $3.0 million were incurred in the first quarter of 2002 from the
         U.K. business prior to it being discontinued. A $5.6 million tax
         benefit from discontinued operations was recorded in the first quarter
         of 2002 as the result of a new U.S. federal tax law that was enacted in
         March 2002. This new tax law allowed the Company to carry back a $5.6
         million AMT tax credit from 2001 against taxable income in 2000 that
         was previously 100% reserved by a valuation allowance.

               As a result, the Company had a net loss of $0.5 million in the
         first quarter of 2003, compared to net loss of $8.1 million for the
         same period in 2002.


               The following table summarizes the significant components of the
         restructuring reserve included in Accrued Expenses at March 31, 2003
         (in thousands):

<TABLE>

                                                   Balance At                                  Balance At
                                                   December 31      Cash         Non-cash       March 31
                                                      2002        Payments     Adjustments       2003
                                                      ----        --------     -----------       ----
           <S>                                      <C>           <C>              <C>          <C>
           Facility exit costs                      $ 5,887       $  (68)          $ 224        $ 6,043
           Bandwidth contract termination             4,299           --             170          4,469
           Severance                                     --           --              --             --
           Other costs                                  189          (65)              8            132
                                                    -------       -------          -----        -------
           Total                                    $10,375       $ (133)          $ 402        $10,644
                                                    =======       =======          =====        =======

</TABLE>

               The non-cash adjustments of $0.4 million primarily represent the
         impact of foreign currency fluctuations on translated balances.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

               The Company's continuing operations used $0.6 million and $1.2
         million during the first quarter of 2003 and 2002, respectively, due
         primarily to salaries and benefits, professional service fees,
         corporate governance expenses and facility costs related to the
         Company's minimal corporate operations remaining after the shut down
         and sale transactions of the fourth quarter of 2001 and the first
         quarter of 2002.

               The Company had minimal or no cash flows from investing
         activities during the first quarter of 2003 and 2002.


                                       21
<PAGE>

               Financing activities used $67.4 million during the first quarter
         of 2003 for the repurchase of preferred stock from Heico in March 2003.
         The shares were repurchased for $67.4 million, which represents the
         aggregate liquidation preference of the purchased shares, including a
         7% dividend that is required under the terms of the preferred stock
         before any distributions on or purchase of the Company's common stock.
         Financing activities used $1.2 million during the three months ended
         March 31, 2002 for principal payments on capital leases.

               The Company's discontinued operations used $1.1 million and $4.2
         million during the first quarter of 2003 and 2002, respectively.


               In April 2002, the Company received its $57.6 million income tax
         refund in connection with the Company's 2001 Federal income tax return.
         However, receipt of this refund does not indicate that the Internal
         Revenue Service agrees with the positions taken by the Company in its
         tax returns. The Company has received a notice dated April 11, 2003,
         that the Internal Revenue Service will conduct such an examination. The
         Internal Revenue Service could require the Company to return all or a
         portion of this refund.

               Since ceasing its business operations, the Company has considered
         various alternatives in determining how and when to use its cash
         resources. The Company has sought and reviewed acquisition
         opportunities. However, the Company did not pursue any of these
         opportunities since it did not believe that any of them were in the
         best interests of its stockholders. The Company has also analyzed a
         potential liquidation of the Company and its effects on the Company's
         stockholders.

               The Company commenced a self-tender offer on March 7, 2003 for
         any and all of its outstanding common stock at a price of $0.50 per
         share (the "Self-Tender Offer"). The Self-Tender Offer expired on April
         11, 2003. Approximately 6.1 million shares were validly tendered and
         repurchased by the Company for a purchase price of approximately $3.1
         million. The repurchased shares have been retired by the Company, and,
         as of April 25, 2003, the Company has approximately 32.9 million shares
         of common stock outstanding.

               On March 7, 2003, in a separate transaction, the Company
         repurchased approximately 99% of its outstanding preferred stock from
         Heico. The shares were repurchased for $67.4 million, which represents
         the aggregate liquidation preference of the purchased shares, including
         a 7% dividend that is required under the terms of the preferred stock
         before any distributions on or purchase of the Company's common stock.
         . In April 2003, Worldport paid an aggregate purchase price of $0.2
         million to complete similar purchase offers with the three remaining
         preferred stockholders, who owned, in aggregate, 34,056 shares of
         Series B preferred stock. Worldport has retired the preferred stock it
         has repurchased and as of April 25, 2003, the Company has no preferred
         stock outstanding. Litigation alleging breach of fiduciary duty has
         been filed relating to the repurchase of the preferred stock from Heico
         (see Part II, Item I "Legal Proceedings"). The Company intends to
         vigorously contest the allegations.

               As of April 25, 2003, the Company had approximately $45.5 million
         in cash, cash equivalents and marketable securities. The Company's cash
         equivalents currently consist of money market funds.

               The Company intends to explore the possible benefits to its
         stockholders of a change in domicile to outside the United States. The
         Company also intends to continue to consider potential acquisition
         opportunities, although the Company has not identified a specific
         industry on which it intends to focus and has no present plans,
         proposals, arrangements or understandings with respect to the
         acquisition of any specific business.


               The Company's March 31, 2003 consolidated balance sheet reflected
         total liabilities of approximately $31.4 million. Included in this
         amount are $9.6 million of Net Liabilities of Non-Controlled
         Subsidiaries for the U.K., Irish and Swedish operations (see Note 5 to


                                       22
<PAGE>

         the Condensed Consolidated Financial Statements in Part I, Item I). The
         Company believes the parent company, Worldport Inc., will not be
         required to pay these liabilities. However, there can be no assurance
         that these creditors will not make claims against Worldport Inc. for
         these obligations. The Company used estimates to calculate these net
         liabilities. These estimates are subject to change based on the ability
         of the administrator, receiver or liquidator, as applicable, to sell
         the remaining assets and negotiate the final liability amounts.

               In August 2002, an agreement was reached between the
         Administrator for Hostmark U.K. Limited and a third party, in which the
         third party paid approximately 5.7 million British pounds, in addition
         to the assumption of the lease liability, for the Slough, U.K., data
         center and related assets. The 5.7 million British pounds proceeds may
         be used to satisfy all or a portion of the Net Liabilities of
         Non-controlled Subsidiaries for the U.K. entities, and accordingly, the
         Company may recognize non-cash gains in future periods as a result of
         this transaction. Additionally, prior to the Company's subsidiaries
         entering into receivership and administrative proceedings, Worldport
         Inc. from time to time made advances to these subsidiaries. Therefore
         Worldport Inc. is also a creditor of these subsidiaries in these
         proceedings. The Company is not able to determine at this time the
         priority of Worldport Inc.'s claim in such proceedings or whether or
         not Worldport Inc. will be able to recover any portion of these
         advances. If Worldport Inc. is successful in collecting any portion of
         these advances, the Company would recognize a gain and an increase of
         cash at that time.

               Excluding the Net Liabilities of Non-Controlled Subsidiaries for
         the U.K., Irish and Swedish operations discussed above, there are
         approximately $21.8 million of liabilities reflected on the Company's
         March 31, 2003, balance sheet attributable to Worldport Inc. and the
         remaining subsidiaries not in Administration, receivership or
         liquidation. Approximately $2.0 million of that amount represents
         normal operating accruals and reserves related to the continuing
         operations. The remaining $19.8 million consist of the following
         accruals for potential obligations related to the exited businesses:

          >    $5.9 million of future rent payments on the Dublin data center
               lease for which Worldport Inc. had provided a guarantee (see Part
               II, Item I "Legal Proceedings"),

          >    $4.8 million accrued for the potential exposure (including VAT)
               related to the litigation by Cable & Wireless (see Part II, Item
               I "Legal Proceedings"),

          >    $3.4 million of obligations under capital leases, which expire in
               2004,

          >    $4.1 million of obligations related to bandwidth contracts
               entered into in Ireland,

          >    $0.8 million of obligations related to the old telecommunications
               business, and

          >    $0.8 million of other Worldport Inc. obligations related to the
               Irish operations.

               The Company has assumed, for purposes of calculating these
         liabilities, that it will not be able to mitigate them. However,
         Company management is currently seeking opportunities to further reduce
         these liabilities. There can be no assurance that the Company will be
         successful in its efforts to mitigate these liabilities or that
         additional claims will not be asserted against Worldport Inc.


               On March 12, 2003, a complaint was filed in the United States
         Bankruptcy Court for the District of Delaware against the Company. The
         complaint was filed on behalf of one of the Company's former customers,
         which is now in bankruptcy and alleges breach of contract, fraud, and
         misrepresentation in connection with the sale of indefeasible rights of
         use ("IRUs") to the customer. The plaintiff is seeking payment of $2.2
         million plus legal costs and punitive damages. The Company is still
         evaluating this claim and has not yet made a determination as to the
         merits of this case. Accordingly, no accrual has been recorded on the
         Company's financial statements at this time. The Company intends to
         vigorously contest the allegations.


                                       23
<PAGE>

                The Company is involved in various lawsuits or claims arising in
         the normal course of business, and the Company has established reserves
         for several such suits and claims. In the opinion of management, none
         of these lawsuits or claims will have a material adverse effect on the
         consolidated results of operations of the Company, however there can be
         no assurances that current reserves will be sufficient. See Part II,
         Item I "Legal Proceedings" for a discussion of ongoing litigation.


         NEW ACCOUNTING PRONOUNCEMENTS
         -----------------------------

               In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
         Associated with Exit or Disposal Activities." The statement requires
         that a liability for a cost associated with an exit or disposal
         activity be recognized when the liability is incurred as opposed to the
         date of an entity's commitment to an exit plan. The Company will adopt
         SFAS No. 146 for any exit or disposal activities initiated after
         December 31, 2002.

               In June 2002, the FASB issued SFAS No. 148, "Accounting for
         Stock-Based Compensation--Transition and Disclosure--an amendment of
         FASB Statement No. 123." The statement amends FASB Statement No. 123,
         "Accounting for Stock-Based Compensation", to provide alternative
         methods of transition for a voluntary change to the fair value based
         method of accounting for stock-based employee compensation. In
         addition, this Statement amends the disclosure requirements of
         Statement 123 to require prominent disclosures in both annual and
         interim financial statements about the method of accounting for
         stock-based employee compensation and the effect of the method used on
         reported results. The Company adopted the new disclosure requirements
         in this statement in 2002.




ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

               Prior to the fourth quarter 2001 and first quarter 2002
         transactions described above, the majority of the Company's operations
         were in Europe, and the revenue and expenses of those operations were
         denominated in local currencies. The remaining assets and liabilities
         of the Company's non-U.S. subsidiaries are translated at period-end
         rates of exchange, and income statement items are translated at the
         average rates prevailing during the period. The resulting translation
         adjustment is recorded as a component of stockholders' equity. Exchange
         gains and losses on intercompany balances of a long-term investment
         nature are also recorded as a component of stockholders' equity. Other
         foreign exchange gains and losses are recorded in income on a current
         basis and have been included in Loss from Discontinued Operations. Due
         to the volatility of currency exchange rates, among other factors, the
         Company cannot predict the effect of exchange rate fluctuations on the
         Company's future operating results. As a result, the Company may incur
         gains and losses on foreign currency fluctuations. Other foreign
         exchange gains and losses included in income were minimal for the three
         months ended March 31, 2003 and 2002. The Company has used derivative
         instruments to hedge its foreign currency exposure only on a limited
         basis, and had no significant foreign currency hedge contracts
         outstanding at March 31, 2003.




ITEM 4.  CONTROLS AND PROCEDURES

               Kathleen A. Cote, the Company's Chief Executive Officer and
         acting Chief Financial Officer, has evaluated the Company's disclosure
         controls and procedures within 90 days of the filing date of this
         report. Based on her evaluation, she has concluded that the Company's
         disclosure controls and procedures are effective to ensure that
         information required to be disclosed in the reports that the Company
         files or submits under the Securities Exchange Act of 1934 is recorded,


                                       24
<PAGE>

         processed, summarized and reported, within the time periods specified
         in the Securities and Exchange Commission's rules and forms.

               There have been no significant changes in the Company's internal
         controls or in other factors that could significantly affect these
         controls subsequent to the date of the previously mentioned evaluation.



                                       25
<PAGE>



         PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


               In March 2002, an Administrator was appointed for the U.K.
         subsidiaries, Hostmark World Limited and Hostmark U.K. Limited, by an
         order of the Companies Court, Chancery Division of High Court under the
         United Kingdom Insolvency Act. In April 2002, the Irish subsidiary,
         Worldport Ireland Limited, was given notice that a petition for winding
         up was filed and would be presented to the Irish High Court on behalf
         of Global Crossing Ireland Limited. The petition was heard by the Irish
         High Court on May 13, 2002 and a liquidator was appointed for this
         subsidiary to act on behalf of the creditors. As a result of these
         actions, the Administrator or liquidator has control over these
         subsidiaries' assets. The Company believes that each of these
         subsidiaries has liabilities which exceed the recorded value of its
         assets. Certain creditors of these subsidiaries have made claims
         directly against the parent company, Worldport Inc., for liabilities
         related to the operation of these subsidiaries and additional creditors
         could assert similar claims. There can be no assurance that Worldport
         Inc. will be successful in defending these claims and in limiting its
         liability for the obligations of its subsidiaries.

               One of the Company's subsidiaries, Hostmark World Limited, was
         the subject of court action by WSP Communications ("WSP") in the
         Companies Court of the Chancery Division of the High Court in the U.K.
         for the payment of approximately $0.5 million. In addition, WSP has
         alleged that a total of approximately $3 million is owed to it by
         Hostmark World Limited. WSP alleges that these amounts are owed for
         work completed on Internet solution centers in Germany, Sweden and the
         U.K. This action was stayed by the appointment of an Administrator for
         Hostmark World Limited.

               In June 2002, the High Court of Ireland issued a Summary Summons
         to the parent company, Worldport Inc., on behalf of Cable & Wireless
         (Ireland) Limited, who is seeking payment of 1.0 million British pounds
         and 2.3 million Euros, together with applicable VAT. (Excluding VAT,
         this represents approximately $4.0 million.) These claims relate to
         unpaid invoices for Internet services provided by Cable & Wireless
         (Ireland) Limited to the Company's subsidiary in Ireland (now in
         liquidation) and termination of contract charges. The Company is
         contesting the validity of the claims and believes that the claims, to
         the extent valid, are obligations of the Company's Irish subsidiary and
         not of Worldport Inc., but is continuing to investigate the claims.
         There can be no assurance that such claims will not be successful
         against Worldport Inc. However, the outcome of the matter is not
         expected to have a material adverse effect on the consolidated results
         of the Company in excess of amounts already recorded.

               In October 2002, the Company received a letter from legal counsel
         to Channor Limited, the landlord of the data center in Dublin, Ireland,
         with respect to the Company's guarantee on that facility. This letter
         demanded the payment within 14 days of approximately 0.9 million Euros
         and the confirmation of the Company's liabilities as guarantor under
         the lease. In January 2003, the Company's legal counsel received a
         letter from legal counsel for the landlord in which the landlord
         demanded that the Company assume the position of tenant under the
         lease. Should the Company be forced to assume the position of tenant
         under the lease, the Company could be obligated for the full amount of
         rent through 2010 plus certain taxes and maintenance expenses. In
         February 2003, Channor Limited filed a Notice of Motion in the High
         Court of Ireland against Worldport Inc. in which the landlord demands
         payment of approximately 1.2 million Euros, which included additional
         rent that they claim had accrued since their prior demand. The demand
         amount was subsequently increased to 1.4 million Euros in April 2003.
         The Company is contesting the validity of the landlord's demands.
         However, the outcome of the matter is not expected to have a material
         adverse effect on the consolidated results of the Company in excess of
         amounts already recorded. Included in Accrued Expenses at March 31,
         2003 is $5.9 million, which represents rent payable on the data center
         between January 2002 and 2010, the earliest contractual termination
         date of the lease.


                                       26
<PAGE>

               On January 8, 2003, four substantially identical complaints were
         filed in the Circuit Court of Cook County, Illinois, County Department,
         Chancery Division against Worldport and its current directors.
         Additionally, on January 16, 2003, a complaint was filed in the Court
         of Chancery of the State of Delaware. The foregoing actions purport to
         be brought on behalf of all public stockholders of Worldport in
         connection with the W.C.I. Offer. The actions allege, among other
         things, that certain of the defendants have breached their fiduciary
         duties to Worldport and its stockholders. The complaints purport to
         seek, inter alia, a variety of relief, including in certain
         circumstances damages and an injunction preventing consummation of the
         W.C.I. offer. An amended complaint has been filed that alleges breach
         of fiduciary duties, waste of corporate assets and unjust enrichment
         with regard to the Company's self-tender offer and repurchase of
         preferred stock. The amended complaint purports to seek, inter alia,
         rescission of the Company's self-tender offer and repurchase of the
         Company's preferred stock and damages. The Company believes these
         allegations to be without merit and intends to vigorously contest the
         allegations.

               On March 12, 2003, a complaint was filed in the United States
         Bankruptcy Court for the District of Delaware against the Company. The
         complaint was filed on behalf of one of the Company's former customers
         which is now in bankruptcy and alleges breach of contract, fraud, and
         misrepresentation in connection with the sale of indefeasible rights of
         use ("IRUs") to the customer. The plaintiff is seeking payment of $2.2
         million plus legal costs and punitive damages. The Company is still
         evaluating this claim and has not yet made a determination as to the
         merits of this case. Accordingly, no accrual has been recorded on the
         Company's financial statements at this time. The Company intends to
         vigorously contest the allegations.

               On March 13, 2003, a complaint was filed in the Court of Chancery
         of the State of Delaware against the Company, its current directors and
         Heico. The complaint alleges breach of fiduciary duty relating to the
         March 7, 2003 repurchase of the preferred stock from Heico. The
         complaint seeks relief in the form of a declaration that the defendants
         have breached their fiduciary duties to the Company and its common
         stockholders, an accounting by the defendant to the Company for damages
         resulting from the defendants' breaches of fiduciary duty and
         reimbursement of the plaintiffs' costs for the action, including
         attorneys' fees. The Company believes these allegations to be without
         merit and intends to vigorously contest the allegations.

               In addition to the aforementioned claims, the Company is involved
         in various lawsuits or claims arising in the normal course of business,
         and the Company has established reserves for several such suits and
         claims. In the opinion of management, none of these lawsuits or claims
         will have a material adverse effect on the consolidated results of
         operations of the Company, however there can be no assurances that
         current reserves will be sufficient.




ITEM 2.  CHANGES IN SECURITIES

               On March 7, 2003, the Company repurchased approximately 99% of
         its outstanding preferred stock from Heico. The shares were repurchased
         for $67.4 million, which represents the aggregate liquidation
         preference of the purchased shares, including a 7% dividend that is
         required under the terms of the preferred stock before any
         distributions on or purchase of the Company's common stock. In April
         2003, Worldport paid an aggregate purchase price of $0.2 million to
         complete similar purchase offers with the three remaining preferred
         stockholders, who owned, in aggregate, 34,056 shares of Series B
         preferred stock. Worldport has retired the stock it has repurchased.

               The Company commenced a self-tender offer on March 7, 2003 for
         any and all of the Company's outstanding common stock at a price of
         $0.50 per share (the "Self-Tender Offer"). The Self-Tender Offer
         expired on April 11, 2003. Approximately 6.1 million shares were
         validly tendered and repurchased by the Company for a purchase price of
         approximately $3.1 million.


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<PAGE>

               Heico, which is controlled by Michael E. Heisley, a director of
         the Company, and his family, including his daughter, Emily Heisley
         Stoeckel. who is a director of the Company, Hambro, and Stanley H.
         Meadows, a director of the Company, entered into a stockholders
         agreement as of April 15, 2003, in which they agreed, among other
         things, to vote all shares of the Company's common stock over which
         they have voting control in order to cause the Company's Board to
         consist of two representatives designated by Heico and two
         representatives designated by Hambro and to cause the Company not to
         take specified actions, including the issuance or repurchase of equity
         securities, a material change in the Company's business and certain
         acquisitions, investments and claim settlements, without the approval
         of a majority of the directors designated by Heico and of the majority
         of the directors designated by Hambro. According to the Schedule 13D,
         as amended, of Michael E. Heisley and Heico, Heico is the beneficial
         owner of 6,077,707 shares of the Company's common stock (18.4% of the
         Company's current outstanding shares of common stock) and holds
         warrants to purchase 679,451 shares of common stock (2.1% of the
         currently outstanding shares) and Mr. Heisley holds options to purchase
         2,114,583 shares of common stock (6.4% of the currently outstanding
         shares). According to the Schedule 13D, as amended, of Hambro, Hambro
         is the beneficial owner of 9,367,869 shares of the Company's common
         stock (28.4% of the currently outstanding shares). Mr. Meadows is the
         beneficial owner of 1,764,129 shares of the Company's common stock
         (5.4% of the currently outstanding shares). A copy of the shareholders'
         agreement is attached to the Amended Form 13-D filed by Heico on April
         28, 2003.




ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   EXHIBITS

               99.1     Certification Pursuant to 18 U.S.C. Section 1350 as
                        Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                        Act of 2002


         (b)   REPORTS ON FORM 8-K


               The Company filed a Current Report on Form 8-K on March 10, 2003.
         The Form 8-K was dated March 7, 2003, and reported information under
         Item 5 related to the Company's announcement that it had completed the
         repurchase of approximately 99% of its outstanding preferred stock from
         The Heico Companies LLC.

               The Company filed a Current Report on Form 8-K on March 26, 2003.
         The Form 8-K was dated March 26, 2003, and reported information under
         Item 5 relating to the Company's announcement that a complaint had been
         filed against the Company, its directors, and The Heico Companies, LLC,
         in connection with the Company's repurchase of preferred stock.

               The Company filed a Current Report on Form 8-K on April 1, 2003.
         The Form 8-K was dated March 31, 2003, and reported information under
         Item 12 relating to the Company's announcement of its fiscal year 2002
         financial results.






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<PAGE>





                                    SIGNATURE


         Pursuant to the requirements of the Securities Exchange Act of 1934,
         the Registrant has duly caused this report to be signed on its behalf
         by the undersigned, thereunto duly authorized.



                         WORLDPORT COMMUNICATIONS, INC.


         Date:    April 30, 2003                     By:   /s/ Kathleen A. Cote
                                                         -----------------------
                                                         Kathleen A. Cote
                                                         Chief Executive Officer



                                 CERTIFICATIONS
                                 --------------

         I, Katheen A. Cote, certify that:

                  1. I have reviewed this quarterly report on Form 10-Q of
         Worldport Communications, Inc.;

                  2. Based on my knowledge, this quarterly report does not
         contain any untrue statement of a material fact or omit to state a
         material fact necessary to make the statements made, in light of the
         circumstances under which such statements were made, not misleading
         with respect to the period covered by this quarterly report;

                  3. Based on my knowledge, the financial statements, and other
         financial information included in this quarterly report, fairly present
         in all material respects the financial condition, results of operations
         and cash flows of the registrant as of, and for, the periods presented
         in this quarterly report;

                  4. I am responsible for establishing and maintaining
         disclosure controls and procedures (as defined in Exchange Act Rules
         13a-14 and 15d-14) for the registrant and I have:

                           a) designed such disclosure controls and procedures
                  to ensure that material information relating to the
                  registrant, including its consolidated subsidiaries, is made
                  known to me by others within those entities, particularly
                  during the period in which this quarterly report is being
                  prepared;

                           b) evaluated the effectiveness of the registrant's
                  disclosure controls and procedures as of a date within 90 days
                  prior to the filing date of this quarterly report (the
                  "Evaluation Date"); and

                           c) presented in this quarterly report our conclusions
                  about the effectiveness of the disclosure controls and
                  procedures based on our evaluation as of the Evaluation Date;

                  5. I have disclosed, based on my most recent evaluation, to
         the registrant's auditors and the audit committee of the registrant's
         Board of Directors (or persons performing the equivalent function):

                           a) all significant deficiencies in the design or
                  operation of internal controls which could adversely affect
                  the registrant's ability to record, process, summarize and


                                       29
<PAGE>

                  report financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

                           b) any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal controls; and

                  6. I have indicated in this quarterly report whether or not
         there were significant changes in internal controls or in other factors
         that could significantly affect internal controls subsequent to the
         date of our most recent evaluation, including any corrective actions
         with regard to significant deficiencies and material weaknesses.

         /s/ Kathleen A. Cote
         --------------------
         Kathleen A. Cote
         Chief Executive Officer and acting Chief Financial Officer


         April 30, 2003



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