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

                                 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 September 30, 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 November 14, 2003, the Registrant had 32,940,207 shares of Common Stock,
par value $0.0001, outstanding.


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                                       1
<PAGE>




                         WORLDPORT COMMUNICATIONS, INC.
                                TABLE OF CONTENTS


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

       Item 1.   Financial Statements

                 Condensed Consolidated Balance Sheets as of
                 September 30, 2003 and December 31, 2002...................   3

                 Condensed Consolidated Statements of Operations
                 for the Three Months and Nine Months Ended September 30,
                 2003 and 2002..............................................   4

                 Condensed Consolidated Statements of Cash Flows for the
                 Nine Months Ended September 30, 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..............  18

       Item 3.   Quantitative and Qualitative Disclosures About Market Risk.  26

       Item 4.   Controls and Procedures....................................  26

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

       Item 1.   Legal Proceedings..........................................  27

       Item 2.   Changes in Securities......................................  28

       Item 6.   Exhibits and Reports on Form 8-K...........................  30


SIGNATURE...................................................................  30


                                    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>

                                                                                           SEPTEMBER 30,     DECEMBER 31,
                                                                                                2003             2002
                                                                                                ----             ----
                                         ASSETS
<S>                                                                                           <C>               <C>
CURRENT ASSETS:
    Cash and cash equivalents...................................................              $    27,828       $   107,697
    Marketable securities.......................................................                   11,008            10,841
    Other current assets........................................................                      505               284
                                                                                              -----------       -----------
                  Total current assets..........................................                   39,341           118,822
    PROPERTY AND EQUIPMENT, net.................................................                        9               101
    OTHER ASSETS................................................................                       99               197
                                                                                              -----------       -----------
                       TOTAL ASSETS.............................................              $    39,449       $   119,120
                                                                                              ===========       ===========


                          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable...........................................................              $     2,752       $     3,014
     Accrued expenses...........................................................                    9,589            14,473
     Net liabilities of non-controlled subsidiaries.............................                   10,156             9,528
     Current portion of obligations under capital leases .......................                       --             3,210
     Other current liabilities..................................................                      771               846
                                                                                              -----------       -----------
                    Total current liabilities...................................                   23,268            31,071

      Long-term obligations under capital leases, net of current portion........                       --               834
                                                                                              -----------       -----------
                    Total liabilities...........................................                   23,268            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,  0 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, 200,000,00 shares authorized, 32,940,207 and
        39,087,252 shares issued and outstanding in 2003 and 2002, respectively.                        3                 3
     Warrants...................................................................                    2,611             2,611
     Additional paid-in capital.................................................                  120,984           187,213
     Accumulated other comprehensive loss.......................................                   (7,418)           (6,511)
     Accumulated deficit........................................................                  (99,999)          (96,102)
                                                                                              -----------       -----------
                    Total stockholders' equity .................................                   16,181            87,215
                                                                                              -----------       -----------
                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................              $    39,449       $   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                NINE MONTHS ENDED
                                                                             SEPTEMBER 30,                      SEPTEMBER 30,
                                                                             -------------                      -------------
                                                                           2003            2002             2003             2002
                                                                           ----            ----             ----             ----

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

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

OPERATING EXPENSES:
     Selling, general and administrative expenses...........                 461             665           2,159             2,573
     Depreciation and amortization..........................                   3              38              50               115
                                                                        --------        --------        --------          --------
           Operating loss...................................                (464)           (703)         (2,209)           (2,688)
                                                                        --------        ---------       --------          --------

OTHER INCOME (EXPENSE):
     Interest income  ......................................                  97             545             551             1,444
     Other income (expense), net............................                  (5)             20              36                16
                                                                        --------        --------        --------          --------

LOSS BEFORE INCOME TAXES....................................                (372)           (138)         (1,622)           (1,228)

INCOME TAX PROVISION........................................                  --              --              --                --
                                                                        --------        --------        --------          --------

NET LOSS FROM CONTINUING OPERATIONS.........................                (372)           (138)         (1,622)           (1,228)

INCOME FROM DISCONTINUED
  OPERATIONS, net of tax....................................               2,146           1,604           2,146             1,136
                                                                        --------        --------        --------          --------

NET INCOME (LOSS)...........................................            $  1,774        $  1,466        $    524          $    (92)
                                                                        ========        ========        ========          ========

NET LOSS PER SHARE FROM CONTINUING OPERATIONS:
   BASIC....................................................
   DILUTED..................................................            $  (0.01)      $    0.00       $   (0.05)         $  (0.03)
                                                                        =========       =========       =========         ========
                                                                        $  (0.01)      $    0.00       $   (0.05)         $  (0.03)
                                                                        =========       =========       =========         ========

NET INCOME (LOSS) PER SHARE:
   BASIC....................................................            $   0.05       $    0.04       $    0.01         $    0.00
                                                                        =========       =========       =========         =========
   DILUTED..................................................            $   0.05       $    0.02       $    0.01         $    0.00
                                                                        =========       =========       =========         =========

SHARES USED IN NET INCOME (LOSS) PER SHARE
  CALCULATION:
    BASIC...................................................              32,940          39,087          35,349           39,087
    CONVERTIBLE PREFERRED STOCK.............................                  --          22,066              --               --
    WARRANTS................................................                 663             663             663               --
    OPTIONS.................................................                  --              --              --               --
                                                                        --------        --------        --------          --------
    DILUTED.................................................              33,603          61,816          36,012            39,087
                                                                        =========       =========       =========         =========

                   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>

                                                                                                 NINE MONTHS ENDED
                                                                                                     SEPTEMBER 30,
                                                                                                     -------------
                                                                                               2003            2002
                                                                                               ----            ----

<S>                                                                                        <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...................................................................       $       524     $       (92)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
          Income from discontinued operations.......................................            (2,146)         (1,136)
          Depreciation and amortization.............................................                50             115
          Gain on disposal of assets................................................               (38)            (16)
          Change in other current and noncurrent assets.............................              (119)            672
          Change in accounts payable, accrued expenses and other liabilities........            (1,030)         (2,208)
                                                                                           -----------     ------------

                    Net cash flows from operating activities........................            (2,759)         (2,665)

CASH FLOWS FROM INVESTING ACTIVITIES:
          Proceeds from sale of assets..............................................                80              20
                                                                                           -----------     -----------

                    Net cash flows from investing activities........................                80              20

CASH FLOWS FROM FINANCING ACTIVITIES:
      Repurchase of preferred stock, including dividend.............................           (67,577)             --
      Repurchase of common stock ...................................................            (3,074)             --
                                                                                           -----------     -----------

                    Net cash flows from financing activities........................           (70,651)             --


Net cash flows from discontinued operations.........................................            (6,539)         49,540
                                                                                           -----------     -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS................................           (79,869)         46,895

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

CASH AND CASH EQUIVALENTS, end of the period........................................       $    27,828     $   108,370
                                                                                           ===========     ===========

CASH PAID DURING THE PERIOD FOR INTEREST............................................       $        --     $        --
                                                                                           ===========     ===========

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 Notes 3 and 4. 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 had 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. In the second quarter of 2003, the Company's Chief
         Executive Officer resigned and its remaining employees were terminated.
         As a result, the Company does not currently have any employees. Certain
         employees of The Heico Companies, L.L.C. and its affiliates ("Heico")
         are assisting the Company in maintaining its books and records and
         performing other administrative functions. Heico is controlled by
         Michael E. Heisley, Chairman and Chief Executive Officer of the
         Company.

               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, all of
         which have been retired. 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.

               In October 2003, the Company's board of directors authorized the
         repurchase of up to 5 million shares of its outstanding common stock
         from time to time, through open market purchases, private transactions
         or other means.


                                       6
<PAGE>

               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 represented
         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 or purchase of the Company's common stock.
         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 September 30, 2003, the Company had
         no preferred stock outstanding. As of September 30, 2003, the Company
         had approximately 32.9 million shares of common stock outstanding.

               As of November 13, 2003, the Company had approximately $37.5
         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 or
         terminating the registration of its securities under the Securities
         Exchange Act of 1934. The Company 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 accounting principles generally
         accepted in the United States of America ("GAAP") 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
         September 30, 2003, and the results of operations and cash flows for
         the respective periods ended September 30, 2003 and 2002. The results
         of operations for the three months and nine months ended September 30,
         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 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.




                                       7
<PAGE>


         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'
         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 and nine months ended
         September 30, 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 September 30, 2003
         there were no 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.

         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 adopted 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.


                                       8
<PAGE>

(2)      COMPREHENSIVE LOSS

               Total comprehensive income (loss) for the three and nine months
         ended September 30, 2003 and 2002 was as follows:

<TABLE>

                                                                 THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                    SEPTEMBER 30,               SEPTEMBER 30,
                                                                 2003          2002          2003          2002
                                                                 ----          ----          ----          ----

<S>                                                             <C>           <C>            <C>          <C>
Net income (loss)                                               $   1,774     $   1,466      $    524     $     (92)
Foreign currency translation adjustments                            1,204          (196)       (1,074)       (3,208)
Unrealized gain on marketable securities held-for-sale                 21          (199)          167            38
                                                                ---------     ---------      --------     ---------
Total comprehensive income (loss)                               $   2,999     $   1,071      $   (383)    $  (3,262)
                                                                =========     =========      ========     =========

</TABLE>

(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.

               |X|  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 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 September 30, 2003, the Net Liabilities of Non-controlled
                    Subsidiaries relating to Ireland equaled $4.4 million.
                    Approximately $10.6 million of liabilities that were
                    guaranteed or incurred by Worldport Inc. have not been
                    deconsolidated and are reflected as accounts payable and
                    accrued expenses in the condensed consolidated balance
                    sheets at September 30, 2003.

               |X|  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


                                       9
<PAGE>

                    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 September 30, 2003, the Net Liabilities of Non-controlled
                    Subsidiaries relating to Hostmark AB equaled $0.1 million.

               |X|  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.

               |X|  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 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
                    September 30, 2003, there were no Net Liabilities of
                    Non-controlled Subsidiaries relating to Hostmark GmbH.

               |X|  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 their creditors. As a
                    result of this action, the administrator gained control over
                    these subsidiaries' assets. The assets and liabilities of
                    the U.K. subsidiaries 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 September
                    30, 2003, the Net Liabilities of Non-controlled Subsidiaries
                    relating to the U.K. equaled $5.7 million.

               |X|  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. On August 8, 2003, a Company Voluntary
                    Arrangement was approved for the Company's UK subsidiaries.
                    The voluntary arrangements contemplate a first and final
                    dividend of approximately 18 pence in the pound in the case
                    of Hostmark World Limited and 60 pence in the pound in the
                    case of Hostmark UK Limited, both of which are anticipated
                    to be paid to unsecured creditors by March 2004. Based on
                    the amount of the Company's current claims in such
                    proceedings, the Company would receive aggregate dividends
                    of approximately $6 million if dividends were made in these
                    amounts. Additionally, the Company would reduce Liabilities
                    of Non-controlled Subsidiaries by up to $5.7 million. It is
                    still possible that creditors or other parties in interest
                    could challenge the Company's claim or could assert
                    additional claims. Therefore, there can be no assurance that
                    the Company will receive a distribution in these
                    proceedings, or if a distribution is received, there can be
                    no assurance that the Company will receive the amount
                    currently contemplated by the Company Voluntary
                    Arrangements. The Company will record a gain related to any
                    potential dividends upon receipt.

                 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 received by the Company in
         the fourth quarter of 2002 and resulted in a gain of $0.3 million.


                                       10
<PAGE>

                As a result of these transactions, the Company had exited all
         three of its operating segments as of March 31, 2002. Accordingly,
         results of these exited operations have been classified as
         discontinued.

                The operating results of discontinued operations for the three
         and nine months ended September 30, 2003 and 2002 were as follows:

<TABLE>

                                                   THREE MONTHS ENDED              NINE MONTHS ENDED
                                                      SEPTEMBER 30,                  SEPTEMBER 30,
                                                      -------------                  -------------
                                                    2003         2002           2003             2002
                                                    ----         ----           ----             ----

   <S>                                          <C>           <C>             <C>           <C>
   Net revenue                                 $      --     $     --        $      --     $     291
   Restructuring costs, net (see Note 4)          (2,146)      (1,611)          (2,146)          672
   Income (loss) before income taxes               2,146        1,604            2,146        (4,239)
   Income tax benefit                                 --           --               --         5,597
   Income from discontinued operations             2,146        1,604            2,146         1,136

</TABLE>

           Assets and liabilities related to the discontinued operations as of
     September 30, 2003 and December 31, 2002 consist of the following:

                                                      SEPTEMBER 30, DECEMBER 31,
                                                          2003          2002
                                                          ----          ----

                Current assets                        $       14     $        5
                Noncurrent assets                              9              9
                Current liabilities                      (20,802)       (27,578)
                Long-term liabilities                         --           (834)
                                                      ----------     ----------
                Net liabilities of discontinued
                  operations                          $  (20,779)    $  (28,398)
                                                      ==========     ==========


(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. These charges have been
         primarily included in Income 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. In October 2003, the Company settled claims related to the
         rent payments for the data center in Ireland, and reversed a portion of
         previously recorded restructuring reserves resulting in a non-cash gain
         of $2.2 million, which is recorded in Income from Discontinued
         Operations. As part of the settlement, the Company is obligated to pay


                                       11
<PAGE>

         $2.6 million, of which, $1.5 million was paid prior to September 30,
         2003, with the remainder due in the fourth quarter of 2003.

               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 accrued by the Company for the cancellation of 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.
         Additionally, during the second quarter of 2003, the Company accepted
         the resignation of its existing Chief Executive Officer and terminated
         certain headquarters staff and recorded a charge of approximately $0.2
         million in selling, general and administrative expenses.

               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 September 30,
         2003:

<TABLE>

                                        BALANCE AT                                      CURRENCY          BALANCE AT
                                       DECEMBER 31,         NET            CASH        TRANSLATION     SEPTEMBER 30,
                                           2002        REDUCTIONS(a)     PAYMENTS      ADJUSTMENTS          2003
                                           ----        -------------     --------      -----------          ----

<S>                                       <C>              <C>          <C>               <C>              <C>
Facility exit costs                       $  5,887         $ (2,191)    $  (1,706)        $   (825)        $     1,165
Bandwidth contract termination               4,299               --            --              478               4,777
Other costs                                    189              (29)         (160)              --                  --
                                          --------         --------     ---------         --------         -----------
Total                                     $ 10,375         $ (2,220)    $  (1,866)        $   (347)        $     5,942
                                          ========         ========     =========         ========         ===========

      (a) The net reductions include a gain on the settlement of the lease in Dublin, Ireland of $2.2 million.

</TABLE>

               The Company's management is continuing to seek opportunities to
         further reduce its liabilities related to the exited businesses. All
         remaining restructuring costs are due to be paid by December 31, 2004,
         with $1.2 million due in 2003 and $4.7 million in 2004.

               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


                                       12
<PAGE>

         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 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 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 GAAP, 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 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 losses on the foreign currency translation losses
         currently included in Accumulated Other Comprehensive Loss.

               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 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
         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


                                       13
<PAGE>

         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 does
         not believe it is 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 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. As described below, the Company has been
         informed that it may receive a distribution as the result of the
         administration proceedings of its U.K. subsidiaries. If Worldport Inc.
         is successful in collecting any portion of the advances made to any of
         its subsidiaries, 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 $13.1 million
         of liabilities reflected on the Company's September 30, 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 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 August 8, 2003, a Company Voluntary Arrangement was approved
         for the Company's UK subsidiaries. The voluntary arrangements
         contemplate a first and final dividend of approximately 18 pence in the
         pound in the case of Hostmark World Limited and 60 pence in the pound
         in the case of Hostmark UK Limited, both of which are anticipated to be
         paid to unsecured creditors by March 2004. Based on the amount of the
         Company's current claims in such proceedings, the Company would receive
         aggregate dividends of approximately $6 million if dividends were made
         in these amounts. Additionally, the Company would reduce Liabilities of
         Non-controlled Subsidiaries by up to $5.6 million. It is still possible
         that creditors or other parties in interest could challenge the
         Company's claim or could assert additional claims. Therefore, there can
         be no assurance that the Company will receive a distribution in these
         proceedings, or if a distribution is received, there can be no
         assurance that the Company will receive the amount currently
         contemplated by the Company Voluntary Arrangements. The Company will
         record a gain related to any potential dividends upon receipt.


(6)      EQUITY TRANSACTIONS

               On March 7, 2003, the Company repurchased approximately 99% of
         its outstanding preferred stock from a single owner, Heico. The shares
         were repurchased for $67.4 million, which represented the aggregate
         liquidation preference of the purchased shares, including a 7% dividend


                                       14
<PAGE>

         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 all of
         the preferred stock it has repurchased and as of September 30, 2003,
         the Company had no preferred stock outstanding.

               In October 2003, the Company's board of directors authorized the
         repurchase of up to 5 million shares of its outstanding common stock
         from time to time, through open market purchases, private transactions,
         or other means.

               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
         September 30, 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, 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
         outstanding shares as of September 30, 2003) and holds warrants to
         purchase 679,451 shares of common stock (2.1% of the outstanding shares
         as of September 30, 2003) and Mr. Heisley holds options to purchase
         2,114,583 shares of common stock (6.4% of the outstanding shares as of
         September 30, 2003). 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 outstanding shares as of September
         30, 2003). Mr. Meadows is the beneficial owner of 1,764,129 shares of
         the Company's common stock (5.4% of the outstanding shares as of
         September 30, 2003). A copy of the stockholders' agreement is attached
         to the Amended Form 13-D filed by Heico on April 28, 2003.


                                       15
<PAGE>



(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. 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 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. The Company has been informed that it may receive a
         distribution as the result of the administration proceedings of its
         U.K. subsidiaries. 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 $4.3 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 Euro 900,000 in


                                       16
<PAGE>

         accrued rent and charges and the confirmation of the Company's
         liabilities as guarantor under the lease. 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
         Euro 1,200,000, which included additional rent that they claim had
         accrued since their prior demand. The demand amount was subsequently
         increased to Euro 1,400,000 in April 2003. In June 2003, judgment was
         entered against Worldport requiring that Worldport pay Channor Limited
         Euro 750,000. In addition the High Court required that Worldport place
         Euro 500,000 into escrow with the Court pending plenary hearing. The
         Company made these payments in July 2003. This claim was settled in
         October 2003 for Euro 2,250,000, inclusive of the payments of Euro
         1,250,000 made in July 2003. As a result of the settlement, the Company
         reversed a portion of previously recorded restructuring reserves,
         resulting in a non-cash gain of $2.2 million, included in income from
         discontinued operations.

               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 the Company and its then current directors
         (the "Illinois actions"). 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 the Company 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 the Company 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.

               In one of the Illinois actions, on April 30, 2003 an amended
         complaint was filed (which added Heico and J O Hambro Capital
         Management Limited ("Hambro") as defendants) that purports to allege
         both class and shareholder derivative claims for 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, damages, costs and attorneys' fees. On July 8, 2003 the Illinois
         actions were consolidated, and on July 10, 2003 a Consolidated Amended
         Class and Derivative Complaint was filed which, on behalf of the
         plaintiffs in each of the Illinois actions, purports to assert the same
         claims, seeking the same relief against the same parties, as were
         asserted in the amended complaint.

               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 intends to
         defend this claim and believes that it has meritorious defenses.

               On March 12, 2003, a shareholder derivative complaint was filed
         in the Court of Chancery of the State of Delaware against the Company,
         its then current directors and Heico. The complaint alleges breaches of
         fiduciary duty relating to the Company's repurchase of the Company's
         preferred stock. The complaint seeks a declaration that the defendants
         have breached their fiduciary duties to the Company and its common
         stockholders, damages, costs, and attorneys' fees.

                On August 8, 2003, the plaintiffs in the Delaware action filed
         an Amended Complaint, which added claims that had been alleged in the
         Consolidated Amended Class and Derivative Complaint filed in Illinois


                                       17
<PAGE>

         and added Hambro as a defendant. The Company believes these allegations
         to be without merit and intends to vigorously contest the allegations.
         Discovery is ongoing. The plaintiffs have moved to voluntarily dismiss
         without prejudice the Illinois actions.


               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.

               In April 2002,  the Company  received a $57.6 million  income tax
         refund in connection with the Company's 2001 Federal income tax return.
         However,  receipt of the refund  does not  indicate  that the  Internal
         Revenue  Service agrees with the positions  taken by the Company in its
         tax returns.  The Internal  Revenue  Service is currently  conducting a
         survey of the refund claim.  The Internal Revenue Service could require
         the Company to return all or a portion of this refund.




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. 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.

               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 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.



                                       18
<PAGE>



         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).

               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:

               |X|  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.

               |X|  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


                                       19
<PAGE>

                    the ownership of Worldport's Stockholm Internet solution
                    center and the operations at that center, and all customers'
                    contracts.

               |X|  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.

               |X|  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.

               |X|  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.

               Following is a summary of the significant exit activities that
         have occurred since March 31, 2002.

               |X|  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.

               |X|  In August 2002, the U.K. administrator identified a new
                    third party tenant for the Slough, U.K., 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 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


                                       20
<PAGE>

                    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.

               |X|  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.

               |X|  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.

               |X|  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.

               |X|  In the second quarter of 2003, the Company's Chief Executive
                    Officer resigned and its remaining employees were
                    terminated. As a result, the Company does not currently have
                    any employees. Therefore, the Board appointed Michael E.
                    Heisley as Chief Executive Officer and Jonathan Y. Hicks as
                    Chief Financial Officer. Mr. Hicks is an employee of a Heico
                    affiliate, and certain employees of Heico are assisting the
                    Company in maintaining its books and records and performing
                    other administrative functions.

               |X|  On August 8, 2003, a Company Voluntary Arrangement was
                    approved for the Company's UK subsidiaries. The voluntary
                    arrangements contemplate a first and final dividend of
                    approximately 18 pence in the pound in the case of Hostmark
                    World Limited and 60 pence in the pound in the case of
                    Hostmark UK Limited, both of which are anticipated to be
                    paid to unsecured creditors by March 2004. Based on the
                    amount of the Company's current claims in such proceedings,
                    the Company would receive aggregate dividends of
                    approximately $6 million if dividends were made in these
                    amounts. Additionally, the Company would reduce Liabilities
                    of Non-controlled Subsidiaries by up to $5.6 million. It is
                    still possible that creditors or other parties in interest
                    could challenge the Company's claim or could assert
                    additional claims. Therefore, there can be no assurance that
                    the Company will receive a distribution in these
                    proceedings, or if a distribution is received, there can be
                    no assurance that the Company will receive the amount
                    currently contemplated by the Company Voluntary
                    Arrangements. The Company will record a gain related to any
                    potential dividends upon receipt.



                                       21
<PAGE>

               |X|  In October 2003, the Company settled certain claims related
                    to the lease of its data center in Ireland for Euro
                    2,250,000. Euro 1,250,000 was paid prior to September 30,
                    2003, with the balance paid in October 2003. The Company
                    reversed a portion of previously recorded restructuring
                    reserves, resulting in a non-cash gain of $2.2 million,
                    recorded in Income from Discontined Operations.

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 three and nine months ended September 30, 2003 and
         2002.

               Selling, general and administrative ("SG&A") expenses were $0.5
         million and $0.7 million for the quarters ended September 30, 2003 and
         2002, respectively, and were $2.2 million and $2.6 million for the nine
         months ended September 30, 2003 and 2002, respectively. 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. For the nine months ended September 30, 2003, SG&A
         expenses included $0.2 million of severance charges offset by the
         reversal of a previously established litigation reserve.

               Depreciation and amortization expense represented depreciation on
         the corporate office leasehold improvements and related computer
         hardware and software. Depreciation and amortization expense was $0.1
         million for the nine months ended September 30, 2003 and 2002.

               Interest income, which was earned on the Company's cash and cash
         equivalents, was $0.1 million and $0.6 million for the quarters ended
         September 30, 2003 and 2002, respectively, and was $0.6 million and
         $1.4 million for the nine months ended September 30, 2003 and 2002,
         respectively. As a result of the lack of an operating business and its
         large number of stockholders, the Company must either maintain its
         liquid assets in government securities, which generally produce low
         returns, or otherwise 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, for the nine
         months ended September 30, 2003, the Company paid $67.6 million to
         repurchase preferred stock and $3.1 million to repurchase common stock.
         Therefore, the Company expects to earn less interest income from its
         cash and cash equivalents in future periods.

               Net loss from continuing operations was $0.4 million and $0.1
         million in the quarters ended September 30, 2003 and 2002,
         respectively, and was $1.6 million and $1.2 million for the nine months
         ended September 30, 2003 and 2002, respectively.

               The operating results of discontinued operations for the three
         and nine months ended September 30, 2003 and 2002 were as follows:

<TABLE>

                                                  THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                    SEPTEMBER 30,                       SEPTEMBER 30,
                                                    -------------                       -------------
                                                    2003            2002             2003               2002
                                                    ----            ----             ----               ----

   <S>                                         <C>             <C>              <C>               <C>
   Net revenue                                 $        --     $        --      $        --       $       291
   Restructuring costs, net  (see Note 4)           (2,146)         (1,611)          (2,146)              672
   Income (loss) before income taxes                 2,146           1,604            2,146            (4,239)
   Income tax benefit                                   --              --               --             5,597
   Income from discontinued operations               2,146           1,604            2,146             1,136

</TABLE>


                                       22
<PAGE>

               For the three and nine months ended September 30, 2003, the
         Company had income from discontinued operations of $2.1 million, which
         consisted primarily of the reversal of a portion of previously recorded
         restructuring reserves resulting from the settlement of certain claims
         related to the lease of its data center in Ireland.

               As a result, the Company had net income of $1.8 million in the
         third quarter of 2003, compared to net income of $1.5 million for the
         same period in 2002. The Company had net income of $0.5 million for the
         nine months ended September 30, 2003, as compared to a net loss of $0.1
         million for the same period in 2002.

               The Company had income from discontinued operations of $1.6
         million in the third quarter of 2002. $1.4 million of non-cash income
         was recorded in the third quarter of 2002 relating to the Company's
         understanding that it is not obligated to fund the Frankfurt lease
         obligation and other creditor liabilities of the German subsidiary. The
         remaining $0.2 million was primarily a result of favorably settling
         previously estimated accruals on items related to the discontinued
         businesses.

               The Company had income from discontinued operations of $1.1
         million for the nine months ended September 30, 2002. This $1.1 million
         in income primarily consisted of the following:

               |X|  $1.6 million income from discontinued operations for the
                    third quarter of 2002 described above.
               |X|  $10.0 million restructuring charge recorded in the first
                    quarter of 2002 on the U.K. business.
               |X|  $3.0 million of operating losses from the U.K. business
                    prior to it being discontinued.
               |X|  $7.7 million gain recorded in the second quarter, which is a
                    result of the Company's release from its underlying lease
                    guarantee on the Slough, U.K. data center lease.
               |X|  $5.6 million tax benefit that was recognized in the first
                    quarter of 2002. The first quarter tax benefit was the
                    result of a new U.S. federal tax law that was enacted in
                    March 2002, which allowed the Company to carryback a $5.6
                    million AMT tax credit from 2001 against taxable income in
                    2000, that was previously 100% reserved by a valuation
                    allowance.
               |X|  $1.1 million asset impairment charge recorded in the second
                    quarter of 2002 related to certain equipment from the
                    discontinued businesses.
               |X|  $0.3 million loss recorded in the second quarter of 2002 as
                    a result of the final adjustment to the sale price for
                    Hostmark AB.
               |X|  $0.7 million gain recorded in the second quarter of 2002 as
                    a result of favorably settling previously estimated accruals
                    on items related to the discontinued businesses.

               The following table summarizes the significant components of the
         restructuring reserve included in Accrued Expenses at September 30,
         2003:

<TABLE>

                                           BALANCE AT                                    CURRENCY          BALANCE AT
                                             DECEMBER         NET           CASH        TRANSLATION     SEPTEMBER 30,
                                            31, 2002     REDUCTIONS(a)    PAYMENTS      ADJUSTMENTS          2003
                                            --------     -------------    --------      -----------          ----

   <S>                                        <C>         <C>             <C>             <C>              <C>
   Facility exit costs                        $  5,887    $  (2,191)      $  (1,706)      $   (825)        $  1,165
   Bandwidth contract termination                4,299           --              --            478            4,777
   Other costs                                     189          (29)           (160)            --               --
                                              --------    ---------       ---------       --------         --------
   Total                                      $ 10,375    $  (2,220)      $  (1,866)      $   (347)        $  5,942
                                              ========    =========       =========       ========         ========

      (a) The net reductions include a gain on the settlement of the lease in Dublin, Ireland of $2.2 million.

</TABLE>

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

               The Company's cash flows from operating activities used $2.8
         million during the nine months ended September 30, 2003, compared to a
         use of cash of $2.7 million during the nine months ended September 30,
         2002. These expenditures were primarily for salaries and benefits,

                                       23
<PAGE>

         severance, professional service fees, corporate governance expenses and
         facility costs related to the Company's minimal remaining corporate
         operations.

               The Company had minimal cash flows from investing activities
         during the nine months ended September 30, 2003 and 2002.

               Financing activities used $70.7 million during the first nine
         months of 2003. $67.6 million was used for the repurchase of preferred
         stock, 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. Financing activities also used $3.1 million
         for the repurchase of common stock pursuant to the Self-Tender Offer
         during the nine months ended September 30, 2003.

               The Company's discontinued operations used $6.5 million during
         the nine months ended September 30, 2003, as compared to net cash flows
         from discontinued operations of $49.5 million for the nine months ended
         September 30, 2002. The cash used for discontinued operations for the
         nine months ended September 2003, consisted primarily of repayment of
         capital lease obligations of $4.5 million and payments for the
         settlement of the lease on the data center in Ireland of $1.5 million.
         The cash provided by discontinued operations for the nine months ended
         September 30, 2002 were primarily attributable to the receipt of a
         $57.6 million income tax refund in April 2002.

               In April 2002, the Company received a $57.6 million income tax
         refund in connection with the Company's 2001 Federal income tax return.
         However, receipt of the refund does not indicate that the Internal
         Revenue Service agrees with the positions taken by the Company in its
         tax returns. The Internal Revenue Service is currently conducting a
         survey of the refund claim. 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 September 30, 2003, the Company has approximately 32.9 million
         shares of common stock outstanding.

               In October 2003, the Company's board of directors authorized the
         repurchase of up to 5 million shares of its outstanding common stock
         from time to time, through open market purchases, private transactions,
         or other means.

               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 September 30, 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.


                                       24
<PAGE>

               As of November 13, 2003, the Company had approximately $37.5
         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 changing its domicile to outside the United States or
         terminating the registration of its securities under the Securities
         Exchange Act of 1934. The Company 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 September 30, 2003 consolidated balance sheet
         reflected total liabilities of $23.3 million. Included in this amount
         are $10.2 million of Net Liabilities of Non-Controlled Subsidiaries for
         the U.K., Irish and Swedish operations (see Note 5 to 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. The Company has been informed that it may receive a
         distribution as a result of the administration proceedings related to
         its U.K. subsidiaries of approximately $6.0 million. If Worldport Inc.
         is successful in collecting any portion of the advances made to any of
         its subsidiaries, 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 $13.1 million of liabilities reflected on the Company's
         September 30, 2003, balance sheet attributable to Worldport Inc. and
         the remaining subsidiaries not in Administration, receivership or
         liquidation. Approximately $1.6 million of that amount represents
         normal operating accruals and reserves related to the continuing
         operations. The remaining $11.5 million consist of the following
         accruals for potential obligations related to the exited businesses:

               |X|  $1.2 million as a final settlement payment on the Dublin
                    data center lease. (See Part II, Item I "Legal
                    Proceedings"),

               |X|  $5.1 million accrued for the potential exposure (including
                    VAT) related to the litigation by Cable & Wireless (see Part
                    II, Item I "Legal Proceedings"),

               |X|  $4.3 million of obligations related to bandwidth contracts
                    entered into in Ireland,

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

               |X|  $0.1 million of other Worldport Inc. obligations related to
                    the Irish operations.


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<PAGE>

               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.

               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 adopted
         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 nine
         months ended September 30, 2003 and 2002. The Company has used
         derivative instruments to hedge its foreign currency exposure only on a
         limited basis, and had no derivative instruments outstanding at
         September 30, 2003.


ITEM 4.  CONTROLS AND PROCEDURES

               The Company's Chief Executive Officer and Chief Financial Officer
         have concluded, based on their evaluation as of the end of the period
         covered by the report, 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


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<PAGE>

         Securities Exchange Act of 1934 is recorded, processed, summarized and
         reported, within the time periods specified in the Securities and
         Exchange Commission's rules and forms.

                              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. 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 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. The Company has been informed that it may receive a
         distribution as a result of the administration proceedings of its U.K.
         subsidiaries. Certain creditors of the Company's 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 Euro 900,000 in
         accrued rent and charges and the confirmation of the Company's
         liabilities as guarantor under the lease. 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
         Euro 1,200,000, which included additional rent that they claim had
         accrued since their prior demand. The demand amount was subsequently
         increased to Euro 1,400,000 in April 2003. In June 2003, judgment was
         entered against Worldport requiring that Worldport pay Channor Limited
         Euro 750,000. In addition the High Court required that Worldport place
         Euro 500,000 into escrow with the Court pending plenary hearing. The
         Company made these payments in July 2003. These amounts were previously



                                       27
<PAGE>

         accrued in the fourth quarter of 2001. In October 2003, the Company
         settled these claims for Euro 2,250,000, including the Euro 1,250,000
         that was paid in July 2003, and the remaining balance of Euro 1,000,000
         was paid in October 2003. Under the terms of the settlement, the
         Company released its interest in the leased premises in full
         satisfaction of its obligations under its guarantee.

               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 then current directors (the
         "Illinois actions"). 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
         the Company 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 the Company 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.

               In one of the Illinois actions, on April 30, 2003, an amended
         complaint has been filed (which added Heico and J O Hambro Capital
         Management Limited ("Hambro") as defendants) that purports to allege
         both class and shareholder derivative claims for 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, damages, costs and attorneys' fees. On July 8, 2003 the Illinois
         actions were consolidated, and on July 10, 2003 a Consolidated Amended
         Class and Derivative Complaint was filed which, on behalf of the
         plaintiffs in each of the Illinois actions, purports to assert the same
         claims, seeking the same relief against the same parties, as were
         asserted in the amended complaint.

               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 intends to
         defend this claim and believes its has meritorious defenses

               On March 12, 2003, a shareholder derivative complaint was filed
         in the Court of Chancery of the State of Delaware against the Company,
         its then current directors, and Heico ("the Delaware action"). The
         complaint alleges breaches of fiduciary duty relating to the Company's
         repurchase of the Company's preferred stock. The complaint seeks a
         declaration that the defendants have breached their fiduciary duties to
         the Company and its common stockholders, damages, costs and attorneys'
         fees.

               On August 8, 2003, the plaintiffs in the Delaware action filed an
         Amended Complaint, which added claims that had been alleged in the
         Consolidated Amended Class and Derivative Complaint filed in Illinois
         and added Hambro as a defendant. The Company believes these allegations
         to be without merit and intends to vigorously contest the allegations.
         Discovery is ongoing. The plaintiffs have moved to voluntarily dismiss
         without prejudice the Illinois actions.

               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.



                                       28
<PAGE>


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.

               Heico is controlled by Michael E. Heisley, Chairman and Chief
         Executive Officer of the Company, and his family. Heico, 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
         outstanding shares as of September 30, 2003) and holds warrants to
         purchase 679,451 shares of common stock (2.1% of the outstanding shares
         as of September 30, 2003) and Mr. Heisley holds options to purchase
         2,114,583 shares of common stock (6.4% of the outstanding shares as of
         September 30, 2003). 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 outstanding shares as of September
         30, 2003). Mr. Meadows is the beneficial owner of 1,764,129 shares of
         the Company's common stock (5.4% of the outstanding shares as of
         September 30, 2003). A copy of the shareholders' agreement is attached
         to the Amended Form 13-D filed by Heico on April 28, 2003.




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<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   EXHIBITS


               31.1 Certification of Chief Executive Officer pursuant to 15
               U.S.C. Section 10A, as adopted pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.

               31.2 Certification of the Chief Financial Officer pursuant to 15
               U.S.C. Section 10A, as adopted pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.

               32.1 Certification of the Chief Executive Officer 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 October 16,
         2003. The Form 8-K was dated October 16, 2003, and reported information
         under Item 12 relating to the Company's announcement of a claim
         settlement.





                                    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:    November 14, 2003                  By:   /s/ Jonathan Y. Hicks
                                                         -----------------------
                                                         Jonathan Y. Hicks
                                                         Chief Financial Officer




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