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



                                  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, 2002.

                                       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)

                           975 Weiland Road, Ste. 160
                          Buffalo Grove, Illinois 60089
                          -----------------------------
                    (Address of principal executive offices)

                                 (847) 229-8200
                                 --------------
              (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 [ ]



As of November 1, 2002, the  Registrant  had 39,087,252  shares of Common Stock,
par value $0.0001, outstanding.



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

<PAGE>




                         WORLDPORT COMMUNICATIONS, INC.


                                TABLE OF CONTENTS


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

       Item 1.      Financial Statements (unaudited)

                    Condensed Consolidated Balance Sheets as of
                    September 30, 2002 and December 31, 2001.................  3

                    Condensed Consolidated Statements of Operations
                    for the Three and Nine Months Ended September 30, 2002
                    and 2001.................................................  4

                    Condensed Consolidated Statements of Cash Flows for the
                    Three and Nine Months Ended September 30, 2002 and 2001..  5

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

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

       Item 3.      Quantitative and Qualitative Disclosures About
                    Market Risk.. ........................................... 25

       Item 4.      Controls and Procedures.................................. 25

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

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

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

       Item 6.      Exhibits and Reports on Form 8-K......................... 27


SIGNATURE.................................................................... 28

CERTIFICATIONS............................................................... 28



<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,
                                         ASSETS                                            2002          2001
                                                                                           ----          ----
<S>                                                                                     <C>          <C>
CURRENT ASSETS:
    Cash and cash equivalents .......................................................   $ 108,370    $  61,475
    Marketable securities ...........................................................      10,797       10,759
    Income tax receivable ...........................................................        --         51,964
    Other current assets ............................................................         431        3,230
                                                                                        ---------    ---------
                  Total current assets ..............................................     119,598      127,428
    PROPERTY AND EQUIPMENT, net .....................................................         736        5,666
    OTHER ASSETS ....................................................................         679        1,722
                                                                                        ---------    ---------
                       TOTAL ASSETS .................................................   $ 121,013    $ 134,816
                                                                                        =========    =========


                          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable ...............................................................   $   2,831    $   9,938
     Accrued expenses ...............................................................      13,777       21,264
     Net liabilities of non-controlled subsidiaries .................................       9,663        1,277
     Current portion of obligations under capital leases ............................       2,979        4,335
     Other current liabilities ......................................................       1,440        2,543
                                                                                        ---------    ---------
                    Total current liabilities .......................................      30,690       39,357
      Long-term obligations under capital leases, net of current portion ............       1,559        3,433
                                                                                        ---------    ---------
                    Total liabilities ...............................................      32,249       42,790

COMMITMENTS AND CONTINGENCIES

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, 956,417 and 965,642 shares issued and outstanding in 2002
        and 2001, respectively.......................................................        --           --
     Series C convertible preferred stock, $0.0001 par value, 1,450,000 shares
        authorized, 1,416,030 shares issued and outstanding .........................        --           --
     Series D convertible preferred stock, $0.0001 par value, 650,000 shares
        authorized, 316,921 shares issued and outstanding ...........................        --           --
     Series E convertible preferred stock, $0.0001 par value, 145,000 shares
        authorized, 141,603 shares issued and outstanding ...........................        --           --
     Series G convertible preferred stock, $0.0001 par value, 1,000 shares
        authorized, 1,000 shares issued and outstanding .............................        --           --
     Common stock, $0.0001 par value, 200,000,000 shares authorized, 39,087,252
        and 38,087,252 shares issued and outstanding in 2002 and 2001,
        respectively.................................................................           4            4
     Warrants .......................................................................       2,611        2,611
     Additional paid-in capital .....................................................     187,213      187,213
     Accumulated other comprehensive loss ...........................................      (5,108)      (1,938)
     Accumulated deficit ............................................................     (95,956)     (95,864)
                                                                                        ---------    ---------
                    Total stockholders' equity ......................................      88,764       92,026
                                                                                        ---------    ---------
                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......................   $ 121,013    $ 134,816
                                                                                        =========    =========

         The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

<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,
                                                                                --------------               -------------
                                                                              2002          2001           2002         2001
                                                                              ----          ----           ----         ----

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

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

OPERATING EXPENSES:
     Selling, general and administrative expenses .....................          665         1,397         2,573         4,803
     Depreciation and amortization ....................................           38            51           115           150
                                                                            --------      --------      --------      --------
           Operating loss .............................................         (703)       (1,448)       (2,688)       (4,953)
                                                                            --------      --------      --------      --------

OTHER INCOME (EXPENSE):
     Interest income ..................................................          545           973         1,444         4,132
     Interest expense .................................................         --            --            (111)          (67)
    Gain (loss) on sale of assets .....................................           20          --              16          (289)
     Other income (expense), net ......................................         --            --            --              28
                                                                            --------      --------      --------      --------

LOSS BEFORE INCOME TAXES ..............................................         (138)         (475)       (1,339)       (1,149)

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

NET LOSS FROM CONTINUING OPERATIONS ...................................         (138)         (475)       (1,339)       (1,149)

INCOME (LOSS) FROM DISCONTINUED
  OPERATIONS, net of tax ..............................................        1,604       (27,105)        1,247       (51,490)
                                                                            --------      --------      --------      --------

NET INCOME (LOSS) .....................................................     $  1,466      $(27,580)     $    (92)     $(52,639)
                                                                            ========      ========      ========      ========

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

NET INCOME (LOSS) PER SHARE:
   BASIC ..............................................................     $   0.04      $ (0.71)    $    (0.00)    $   (1.43)
                                                                            ========      =======     ==========     =========
   DILUTED ............................................................     $   0.02      $ (0.71)    $    (0.00)    $   (1.43)
                                                                            ========      =======     ==========     =========

SHARES USED IN NET INCOME (LOSS) PER SHARE
  CALCULATION:
    BASIC .............................................................       39,087        39,062        39,087        36,794
    CONVERTIBLE PREFERRED STOCK .......................................       22,066          --            --            --
    WARRANTS ..........................................................          663          --            --            --
    OPTIONS ...........................................................         --            --            --            --
                                                                            --------       -------     ---------       -------
    DILUTED ...........................................................       61,816        39,062        39,087        36,794
                                                                            ========       =======     =========       =======

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

</TABLE>

<PAGE>

<TABLE>

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


                                                                                    Three Months Ended          Nine Months Ended
                                                                                       September 30,               September 30,
                                                                                       ------------                -------------

                                                                                    2002          2001          2002           2001
                                                                                    ----          ----          ----           ----

<S>                                                                             <C>          <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ............................................................  $   1,466    $ (27,580)    $     (92)    $ (52,639)
Adjustments to reconcile net income (loss) to net cash flows from
operating activities:
          (Income) loss from discontinued operations .........................     (1,604)      27,105        (1,247)       51,490
          Depreciation and amortization ......................................         38           51           115           150
          Gain on sale of assets .............................................        (20)        --             (16)          289
          Change in other current and noncurrent assets ......................        579           17           672           (59)
          Change in accounts payable, accrued expenses and other liabilities .       (778)      (4,339)       (2,208)       (5,886)
                                                                                ---------    ---------     ---------     ---------

                    Net cash flows from operating activities .................       (319)      (4,746)       (2,776)       (6,655)

CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchase of marketable securities ..................................       --        (11,000)         --         (11,000)
          Capital expenditures ...............................................       --            (27)         --             (51)
          Proceeds from sale of assets .......................................         20         --              20         1,311
                                                                                ---------    ---------     ---------     ---------

                    Net cash flows from investing activities .................         20      (11,027)           20        (9,740)

CASH FLOWS FROM FINANCING ACTIVITIES:
           Principal payments on obligations under capital leases ............       --           --          (1,229)         (405)
                                                                                ---------    ---------     ---------     ---------

                    Net cash flows from financing activities .................       --           --          (1,229)         (405)

Net cash flows from discontinued operations ..................................       (909)     (20,135)       50,880       (43,201)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .........................     (1,208)     (35,908)       46,895       (60,001)

CASH AND CASH EQUIVALENTS, beginning of the period ...........................    109,578      108,303        61,475       132,396
                                                                                ---------    ---------     ---------     ---------

CASH AND CASH EQUIVALENTS, end of the period .................................  $ 108,370    $  72,395     $ 108,370     $  72,395
                                                                                =========    =========     =========     =========

CASH PAID DURING THE PERIOD FOR INTEREST .....................................  $      81    $     158     $     279     $     402
                                                                                =========    =========     =========     =========

SUPPLEMENTAL SCHEDULE OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES:

       Acquisition of hostmark through the issuance of common stock ..........  $    --      $     --       $    --      $  11,975
                                                                                =========    =========      =========    =========
       Acquisition of property and equipment under capital lease .............  $    --      $     --       $    --      $   7,875
                                                                                =========    =========      =========    =========


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



</TABLE>



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

                After   completing  the   activities   related  to  exiting  our
         subsidiaries  and  satisfying  the  related  liabilities,  we expect to
         continue to have significant cash resources. We are currently operating
         with a minimal  headquarters  staff  while we complete  the  activities
         related to exiting our prior  businesses  and  determine how to use our
         cash  resources.  We will have broad  discretion in determining how and
         when to use these cash resources. Alternatives being considered include
         potential   acquisitions,   a  recapitalization   which  might  provide
         liquidity  to  some  or  all  shareholders,   and  a  full  or  partial
         liquidation.

                Since  ceasing  our  business  operations,  we have  sought  and
         reviewed acquisition  opportunities.  However, we have not yet actively
         pursued any of these opportunities since we did not believe that any of
         them were in the best interests of our shareholders. Although we intend
         to continue to consider potential  acquisition  opportunities,  we have
         not identified a specific industry on which we intend to focus and have
         no  present  plans,  proposals,  arrangements  or  understandings  with
         respect to the acquisition of any specific business.

               We are also continuing to analyze a potential  liquidation of the
         Company  and  its  effects  on the  Company's  stockholders.  Upon  any
         liquidation,  dissolution or winding up of the Company,  the holders of
         our   outstanding   preferred   stock  would  be  entitled  to  receive
         approximately  $68 million prior to any  distribution to the holders of
         our common stock.

               We have also actively  worked to resolve and settle the Company's
         outstanding  liabilities.  For  example,  as  described  in  Note 4, we
         settled a $7.7 million  liability in August 2002 related to a lease for
         real property in Slough, U.K.

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

                The accompanying  condensed  consolidated  financial  statements
         have been prepared by the Company pursuant to the rules and regulations
         of the  Securities and Exchange  Commission.  Certain  information  and
         footnote disclosures normally included in financial statements prepared
<PAGE>

         in accordance with generally accepted  accounting  principles have been
         condensed  or  omitted  in this Form 10-Q  pursuant  to such  rules and
         regulations;  however,  management believes that the disclosures herein
         are adequate to make the  information  presented  not  misleading.  The
         financial  statements  and  notes  thereto  included  in this Form 10-Q
         should be read in conjunction  with the financial  statements and notes
         thereto  included in the  Company's  Annual Report on Form 10-K for the
         year ended  December 31, 2001 and the Company's  Current Report on Form
         8-K dated June 6, 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, 2002,  and the results of  operations  and cash flows for
         the  three and nine  months  ended  September  30,  2002 and 2001.  The
         results of operations for the three and nine months ended September 30,
         2002, 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  that are
         under the Company's control. All significant  intercompany accounts and
         transactions have been eliminated.

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

              The Company's financial statements are prepared in accordance with
         accounting  principles  generally  accepted  in the  United  States  of
         America ("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 are translated at month-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.  These other
         foreign  exchange  gains and losses were minimal for the three and nine
         months ended September 30, 2002 and 2001, 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.

               In June 2000, the Financial  Accounting  Standards Board ("FASB")
         issued Statement of Financial  Accounting  Standards  ("SFAS") No. 138,
         "Accounting  for Certain  Derivative  Instruments  and Certain  Hedging
         Activities--an Amendment of FASB Statement No. 133," which is effective
         for  fiscal  years   beginning  after  June  15,  2000.  SFAS  No.  133
         establishes   accounting   and  reporting   standards  for   derivative
         instruments and transactions  involving hedge  accounting.  The Company
         adopted  SFAS No.  133, as  amended,  on January 1, 2001,  which had no
         impact on the consolidated financial statements.

               At  September  30,  2002  there were no  foreign  currency  hedge
         contracts outstanding.

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

                The  Company  has  applied  the  provisions  of  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

<PAGE>

         average  number  of  common  shares  outstanding  for the  period.  The
         calculation  of  diluted  earnings  per share  includes  the  effect of
         dilutive common stock equivalents.  For the nine months ended September
         30, 2002,  and for the three and nine months ended  September 30, 2001,
         basic and  diluted  loss per  share is the same  because  all  dilutive
         securities had an antidilutive  effect on loss per share. For the three
         months ended  September 30, 2002,  diluted  earnings per share includes
         the effect, if any, of the Company's convertible preferred stock, stock
         options and warrants. The If Converted method was used to calculate the
         weighted  average shares  outstanding for convertible  preferred stock.
         The Treasury  Stock method was used to calculate  the weighted  average
         shares  outstanding for warrants and options.  There were approximately
         5.4 million  options  outstanding  as of  September  30, 2002 that were
         excluded from the earnings per share calculation because their exercise
         prices exceeded market value.

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

                In  June  2001,   the  FASB  issued  SFAS  No.  141,   "Business
         Combinations,"  and  SFAS  No.  142,  "Goodwill  and  Other  Intangible
         Assets." SFAS No. 141 prospectively  prohibits the pooling of interests
         method of accounting for business combinations initiated after June 30,
         2001.  Under SFAS No. 142,  goodwill  amortization  ceases when the new
         standard is adopted.  In the three and nine months ended  September 30,
         2001, the Company recorded goodwill  amortization of approximately $0.8
         million and $2.5 million,  respectively.  No goodwill  amortization was
         recorded  in 2002.  SFAS No.  142 also  requires  an  initial  goodwill
         impairment  assessment in the year of adoption and an  impairment  test
         both on an annual basis and upon the  occurrence of any event or change
         in  circumstances  that would reduce the fair value of a reporting unit
         below its  carrying  value.  SFAS No. 142 also  requires the Company to
         complete a transitional  goodwill  impairment  test six months from the
         date of adoption. The Company adopted this standard at the beginning of
         its 2002 fiscal year. As the Company had no goodwill or  intangibles at
         December 31, 2001,  the adoption of this statement had no impact on the
         Company's   consolidated   financial   statements.   Following   is   a
         reconciliation  of net income (loss) and earnings  (loss) per share for
         the three and nine months ended  September  30, 2002 and 2001  assuming
         the adoption of SFAS 142 at the beginning of the periods presented:

<TABLE>

                                                        Three Months Ended        Nine Months Ended
                                                           September 30,            September 30,
                                                           -------------            -------------
                                                          2002        2001         2002         2001
<S>                                                  <C>          <C>           <C>          <C>
Net loss from continuing operations, as reported     $    (138)   $     (475)   $  (1,339)   $   (1,149)
Goodwill amortization from continuing operations          --            --           --            --
                                                     ---------    ----------    ---------    ----------
Net loss from continuing operations, proforma        $    (138)   $     (475)   $  (1,339)   $   (1,149)
                                                     =========    ==========    =========    ==========

Net income (loss), as reported                       $   1,466    $  (27,580)   $     (92)   $  (52,639)
Goodwill amortization                                     --             796         --           2,533
                                                     ---------    ----------    ---------    ----------
Net income (loss), proforma                          $   1,466    $  (26,784)   $     (92)   $  (50,106)
                                                     =========    ==========    =========    ==========

Basic loss per share from continuing operations,
   as reported                                       $   (0.00)   $    (0.01)   $   (0.03)   $    (0.03)
Goodwill amortization from continuing operations          --            --           --            --
                                                     ---------    ----------    ---------    ----------
Basic loss per share from continuing operations,
   proforma                                          $   (0.00)   $    (0.01)   $   (0.03)   $    (0.03)
                                                     =========    ==========    =========    ==========

Diluted loss per share from continuing operations,
   as reported                                       $   (0.00)   $    (0.01)   $   (0.03)   $    (0.03)
Goodwill amortization from continuing operations          --            --           --            --
                                                     ---------    ----------    ---------    ----------
Diluted loss per share from continuing operations,
   proforma                                          $   (0.00)   $    (0.01)   $   (0.03)   $    (0.03)
                                                     =========    ==========    =========    ==========

Basic income (loss) per share, as reported           $    0.04    $    (0.71)   $   (0.00)   $    (1.43)
Goodwill amortization                                     --            0.02      --               0.07
                                                     ---------    ----------    ---------    ----------
Basic income (loss) per share, proforma              $    0.04    $    (0.69)   $   (0.00)   $    (1.36)
                                                     =========    ==========    =========    ==========

Diluted income (loss) per share, as reported         $    0.02    $    (0.71)   $   (0.00)   $    (1.43)
Goodwill amortization                                     --            0.02      --               0.07
                                                     ---------    ----------    ---------    ----------
Diluted income (loss) per share, proforma            $    0.02    $    (0.69)   $   (0.00)   $    (1.36)
                                                     =========    ==========    =========    ==========

</TABLE>

               In August 2001, the FASB issued SFAS No. 144, "Accounting for the
         Impairment or Disposal of Long-Lived  Assets." The statement provides a
         single  accounting  model for long-lived  assets to be disposed of. The

<PAGE>

         Company  adopted SFAS No. 144 at the beginning of its 2002 fiscal year.
         The  adoption  of  this  statement  had  no  impact  on  the  Company's
         consolidated financial statements.

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

         Certain Reclassifications
         -------------------------

               Certain  reclassifications  have been made to amounts  previously
         reported to conform to current period presentation.


(2)      COMPREHENSIVE INCOME (LOSS)

               Total  comprehensive  income (loss) for the three and nine months
         ended September 30, 2002 and 2001 was as follows:

<TABLE>

                                                         Three Months Ended           Nine Months Ended
                                                            September 30,               September 30,
                                                          2002          2001          2002          2001
                                                          ----          ----          ----          ----
      <S>                                               <C>          <C>            <C>         <C>
      Net income (loss)                                $ 1,466      $(27,580)      $   (92)     $ (52,639)
      Foreign currency translation adjustments            (196)        5,662        (3,208)        (4,056)
      Unrealized gains (losses) on marketable
         securities available-for-sale                    (199)         (134)           38           (134)
                                                        -------      --------      --------      ---------
      Total comprehensive income (loss)                $ 1,071      $(22,052)      $(3,262)     $ (56,829)
                                                        =======     ==========     ========     ==========

</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  the   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 in
         2002 related to these actions.

          --   In  November  2001,  we  announced  that  our  Irish  subsidiary,
               Worldport Ireland Limited,  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 has
               control over this subsidiary's assets. The assets and liabilities
               of the Irish  subsidiary  that were not  guaranteed  or  incurred
               directly by the parent company,  Worldport  Communications,  Inc.
               ("Worldport  Inc."), were deconsolidated in the second quarter of
               2002  and  reflected  in  Net   Liabilities   of   Non-controlled
               Subsidiaries  on the  Company's  balance  sheet  (see Note 5). At
               September  30,  2002,  the  Net  Liabilities  of   Non-controlled
               Subsidiaries   relating   to  Ireland   equaled   $4.2   million.
               Approximately  $18.9 million of liabilities  that were guaranteed
               or incurred by Worldport  Inc. have not been  deconsolidated  and
               continue  to be  reflected  as  liabilities  of the  Company.  In
               September 2002, the liquidator  disclaimed the leases for the two
               facilities  previously  used  by  the  Irish  subsidiary.  We had
               provided a letter of credit to the  landlord of these  facilities
               equal to approximately  0.5 million Euros to support the lease of
               one of the  facilities,  A  partial  draw  of  approximately  0.2
               million  Euros was made in October  2002 and paid to the landlord
               under the letter of credit. We expect that the full amount of the
               letter  of credit  will be drawn  out.  This  letter of credit is
               reflected  in Other Assets on the  Company's  balance  sheet.  We
               provided  a  guarantee  with  respect  to the  lease of the other
               facility and accrued $5.3 million for that  obligation as part of
               the $18.9  million of  liabilities  referred to above.  Under the

<PAGE>

               terms of our guarantee, in the event of a disclaimer of the lease
               by a  liquidator,  the  landlord  may, by written  notice  within
               twelve months after such disclaimer,  compel us, as guarantor, to
               enter into a new lease on the same terms.  If the  landlord  does
               not require us to enter into a new lease,  the lease  requires us
               to pay to the landlord,  upon demand, a sum equal to the rent and
               other amounts payable under the lease for the twelve month period
               following  the  disclaimer  or for such shorter  period until the
               landlord has granted a lease of the property to a third party. On
               October 29, 2002, we received a letter from legal counsel for the
               landlord with respect to our  guarantee.  This letter demands the
               payment within 14 days of approximately 0.9 million Euros and the
               confirmation  of our liabilities as guarantor under the lease. We
               are  attempting  to  determine  the  validity  of the  landlord's
               demand.

          --   In December  2001, we sold the assets and certain  liabilities of
               our Swedish  subsidiary,  Hostmark  AB, to OM  Technology  AB for
               approximately   10  million  Swedish   kronor,   subject  to  the
               resolution of a final  working  capital  adjustment.  The parties
               agreed  to a final  sales  price of 7.5  million  Swedish  kronor
               (approximately  $0.8  million)  in July  2002,  which  was  fully
               collected by August 2002.  OM also agreed to assume the ownership
               of Hostmark  AB's  Stockholm  Internet  solutions  center and the
               operations  at that  center,  and all  customers'  contracts.  In
               September  2002,  Hostmark  AB was  put  into  liquidation  and a
               liquidator was appointed to control this subsidiary.  As a result
               of the asset sale to OM  Technology  AB in December  2001,  there
               were no assets and minimal liabilities  remaining in this Swedish
               subsidiary.  Those  liabilities have been  deconsolidated  in the
               Company's  financial  statements  in the current  quarter and are
               reflected in Net  Liabilities of  Non-controlled  Subsidiaries on
               the Company's  balance sheet as a net liability of less than $0.1
               million.

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

          --   In December 2001, we placed our German subsidiary, Hostmark GmbH,
               into  receivership  under German law. As a result of this action,
               the  receiver  has 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 were  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). 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,  we were  informed  that the  receiver has declared
               insufficiency  of the estate under the  provisions of German law.
               This  declaration  was made because the receiver  determined that
               the  remaining  net  assets  of  the  German   company  were  not
               sufficient to cover the administrative  costs of the proceedings,
               and  consequently,  no  distributions  could be made to the third
               party  creditors  (including  the  Frankfurt  landlord  for lease
               payments prior to the December 31, 2002 termination  date).  This
               declaration  can be revoked in the future to the extent  money is
               collected by the receiver on behalf of Hostmark GmbH in an amount
               sufficient  to  provide  a   distribution   to  the  third  party
               creditors.  Based on its understanding of the German proceedings,
               the  Company  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

<PAGE>

               Subsidiaries by, and recorded  non-cash income from  discontinued
               operations  of, $1.4 million  relating to the net  liabilities of
               the German subsidiary.

          --   In March 2002, we made the decision to make no further investment
               in our U.K.  Managed  Hosting  operation.  On March 26, 2002, our
               U.K.  subsidiaries,  Hostmark  World  Limited and  Hostmark  U.K.
               Limited,  filed a petition  for  Administration  under the United
               Kingdom  Insolvency Act. An administrator was appointed for these
               subsidiaries to either  reorganize,  find new investors,  sell or
               liquidate the U.K.  businesses  for the benefit of its creditors.
               As a result of this action,  the  administrator  has control over
               these  subsidiaries'  assets.  The assets and  liabilities of the
               U.K. subsidiaries that were not guaranteed by Worldport Inc. were
               deconsolidated in the Company's financial statements in the first
               quarter   of  2002   and   reflected   in  Net   Liabilities   of
               Non-controlled  Subsidiaries on the Company's  balance sheet (see
               Note  5).  At  September  30,  2002,   the  Net   Liabilities  of
               Non-controlled  Subsidiaries  relating to the U.K.  equaled  $5.4
               million.  Approximately  $7.7 million of liabilities  relating to
               the  Slough,  U.K.  data  center  lease that were  guaranteed  by
               Worldport Inc. were not  deconsolidated  on the Company's balance
               sheet.  In August 2002, the U.K.  administrator  identified a new
               third party  tenant for the Slough data  center.  The Company had
               previously  agreed to  guarantee  the Slough data center lease of
               its U.K.  subsidiary  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   non-cash   income  from
               discontinued operations of, $7.7 million in the second quarter of
               2002.

                 In addition,  we completed  the sale of our  remaining  carrier
         business, Telenational Communications, Inc. ("TNC") in October 2001 for
         $0.4 million.

                As a result of these  transactions,  the  Company had exited all
         three of its  operating  segments as of March 31, 2002 and is currently
         operating with only a minimal headquarters staff. Accordingly,  results
         of these  operations  have been classified as  discontinued,  and prior
         periods have been restated in order to conform to the new presentation.

               The operating results of discontinued operations were as follows:

<TABLE>

                                                      Three Months Ended        Nine Months Ended
                                                        September 30,             September 30,
                                                        -------------             -------------
                                                      2002         2001         2002         2001
                                                      ----         ----         ----         ----
         <S>                                         <C>        <C>           <C>          <C>
         Net revenue                                 $   --     $   3,156     $    291     $   8,998
         Restructuring costs (see Note 4)            $ (1,611)  $    --       $    672     $    --
         Gain (loss) before income taxes             $  1,604   $ (31,745)    $ (4,350)    $ (56,274)
         Income tax benefit                          $   --     $   4,640     $  5,597     $   4,784

         Net income (loss) from discontinued
            operations                               $  1,604   $ (27,105)    $  1,247     $ (51,490)

</TABLE>

                Assets and liabilities related to the discontinued operations as
         of September 30, 2002 and December 31, 2001 consist of the following:

<TABLE>

                                                               September 30,    December 31,
                                                                   2002             2001
                                                                   ----             ----
                <S>                                            <C>              <C>
                Current assets                                 $      3         $  3,733
                Noncurrent assets                                   503            6,347
                Current liabilities                             (26,695)         (30,313)
                Long-term liabilities                            (1,559)          (3,433)
                                                               --------         --------
                Net liabilities of discontinued operations     $(27,748)        $(23,666)
                                                               ========         ========

</TABLE>


<PAGE>

(4)      RESTRUCTURING ACTIVITIES

               In the fourth  quarter  ended  December 31, 2001 and in the first
         quarter  ended  March 31,  2002,  the  Company  recorded  restructuring
         charges of $101.5 million and $10.0 million, respectively,  relating to
         the actions described in Note 3. These restructuring  charges primarily
         included severance, facility exit costs, bandwidth contract termination
         costs,  and the write down of assets to their  expected net  realizable
         value  and  have  been   primarily   included  in  Income  (Loss)  from
         Discontinued Operations.

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

               Facility  exit  costs  of $9.3  million  and  $7.9  million  were
         recorded in the fourth  quarter of 2001 and the first  quarter of 2002,
         respectively.  These facility exit costs  represented  rent payments on
         the  Company's  U.K.,  Ireland  and German  facilities,  net of certain
         estimated sublease recoveries.  As discussed in Note 3, 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  has  recognized
         non-cash  income 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 costs.

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

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

               Other costs of $1.4 million and $1.6 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,
         2002 (in thousands):

<TABLE>

                                           Balance At                                              Balance At
                                            December                     Cash        Non-cash       September
                                            31, 2001     Additions     Payments     Adjustments    30, 2002
                                            --------     ---------     --------     -----------    --------
       <S>                                     <C>          <C>            <C>        <C>               <C>
       Facility exit costs                     $ 9,213      $ 7,936        $(297)     $ (11,251)        $5,601
       Bandwidth contract termination            4,329          418            --          (697)         4,050
       Asset impairment                             --           --            --                           --
       Severance                                   761           --         (761)            --             --
       Other costs                               1,257        1,646         (412)        (2,244)           247
                                               -------      -------        -----      ---------         ------
       Total                                   $15,560     $ 10,000     $ (1,470)     $ (14,192)       $ 9,898
                                               =======     ========     =========     ==========       =======

</TABLE>

               The non-cash  adjustments of $14.2 million  primarily  consist of
         $7.7 million  related to the Slough,  U.K.,  lease  liability  that the
         Company was released from in August 2002 (as discussed  above) and $6.9
         million  of  liabilities   related  to  the  U.K.,  German,  and  Irish
         subsidiaries that, along with the other assets and liabilities of those
         subsidiaries, have been deconsolidated into a separate line item on the
         Company's  balance  sheet  called  Net  Liabilities  of  Non-controlled
         Subsidiaries (see Note 5).

               The Company's  management is currently  seeking  opportunities to
         further  reduce its  liabilities  related to the exited  businesses and
         evaluating the possible sale or  disposition  of the remaining  assets,
         including   potentially   subleasing  the  facilities  remaining  under
         operating lease agreements.  All remaining  restructuring costs are due
         to be paid by December  31, 2010,  with $3.3 million due in 2002,  $0.9

<PAGE>

         million in 2003,  $0.9  million  in 2004,  $0.9  million in 2005,  $0.8
         million in 2006 and $3.1 million thereafter.

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


(5)      NET LIABILITIES OF NON-CONTROLLED SUBSIDIARIES

                As  described  in Note  3,  we  placed  our  German  subsidiary,
         Hostmark GmbH, into receivership  under German law in December 2001 and
         a receiver was appointed for this  subsidiary.  In March 2002, our 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,
         our 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,  our Swedish  subsidiary,  Hostmark AB was placed into
         liquidation  and a liquidator was appointed for this  subsidiary.  As a
         result of these  actions,  the Company no longer has control over these
         subsidiaries' assets.

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

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

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

               As discussed  in Note 3, a new third party tenant was  identified
         for the Slough,  U.K., data center by the U.K.  administrator in August
         2002. The third party paid  approximately 5.7 million British pounds to
         the U.K.  administrator,  in  addition to the  assumption  of the lease
         liability, for the Slough data center operation and related assets. The
         5.7 million  British  pounds  proceeds  may be used to satisfy all or a
         portion of the Net Liabilities of  Non-controlled  Subsidiaries for the
         U.K.  entities,  and  accordingly,  the Company may recognize  non-cash

<PAGE>

         gains  in  future  periods  as a  result  of  this  transaction.  Since
         Worldport  Inc.  had  agreed  to  guarantee  this  lease,  the  related
         liability  was  not  included  in  Net  Liabilities  of  Non-controlled
         Subsidiaries,  and the  assumption  of  that  liability  by the  tenant
         resulted in the recognition of a gain from  discontinued  operations in
         the second quarter of 2002.

               Also  discussed  in Note 3,  based  on its  understanding  of the
         German proceedings,  the Company believed that it will not be 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  non-cash  income from  discontinued  operations  of, $1.4
         million relating to the net liabilities of the Germany subsidiary.

               In  addition to the third party  creditors  of our  subsidiaries,
         Worldport  Inc. from time to time made  advances to these  subsidiaries
         prior  to our  subsidiaries  entering  into the  relevant  proceedings.
         Therefore,  Worldport Inc. is also a creditor of these  subsidiaries in
         these  proceedings.  We are not  able to  determine  at this  time  the
         priority of Worldport  Inc.'s claim in such  proceedings  or whether or
         not  Worldport  Inc.  will be able to  recover  any  portion  of  these
         advances.  If Worldport Inc. is successful in collecting any portion of
         these  advances,  we 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  $22.5 million
         of liabilities  reflected on the Company's  September 30, 2002, balance
         sheet attributable to Worldport Inc. and the remaining subsidiaries not
         in Administration,  receivership or liquidation.  We have assumed,  for
         purposes of calculating these liabilities,  that we 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.


(6)      CAPITAL STOCK

                In May 2002,  the Company  issued 1.0  million  shares of common
         stock pursuant to the terms of the purchase  agreement  entered into by
         the Company in April 2001 in connection with the Hostmark  acquisition.
         These  shares  represented  the balance of the  purchase  price for the
         Hostmark companies.


(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.

                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.

<PAGE>

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


(8)      CONTINGENCIES

               Since July 14, 1999, Worldport and certain of its former officers
         have been named as  defendants  in multiple  shareholder  class  action
         lawsuits  filed in the United  States  District  Court for the Northern
         District  of  Georgia.  On or about  March  21,  2000,  a  Consolidated
         Complaint was filed which adds The Heico Companies,  LLC and Michael E.
         Heisley,  Sr. as  defendants.  The plaintiffs in these lawsuits seek to
         represent a class of  individuals  who purchased or otherwise  acquired
         the Company's  common stock from January 4, 1999 through June 28, 1999.
         Among other things,  the plaintiffs  allege that the  defendants  spoke
         positively about the Heico financing  without  disclosing the risk that
         non-compliance  with  certain  Nasdaq  rules  in  connection  with  the
         financing  might  cause  Worldport  to be  delisted  from  Nasdaq.  The
         plaintiffs  further  allege the  subsequent  disclosure  that Worldport
         might be  delisted  from  Nasdaq  adversely  affected  the value of the
         Company's  common stock. The plaintiffs  allege  violations of Sections
         10(b)  and  20(a)  of the  Securities  Exchange  Act of 1934  and  seek
         unspecified compensatory damages,  interest,  attorneys' fees and costs
         of  litigation.  A proposed  settlement  was  reached by the parties on
         terms  reflected in a Stipulation of Compromise  and  Settlement  dated
         July 20, 2001. This settlement was approved by the Court on October 19,
         2001 and has been entirely  funded by  insurance.  No appeal was taken,
         but  there  can be no  assurance  that  additional  claims  will not be
         asserted by any class member who opted out of the settlement.  However,
         the outcome of this matter is not  expected to have a material  adverse
         effect on the consolidated  financial position or results of operations
         of the Company.

               In March 2002,  Sturm Group  Inc.,  Donald L. Sturm and  Hostmark
         World  Holdings,  LLC,  filed a  complaint  against the Company and its
         wholly owned subsidiary,  Worldport  Holdings Inc. in the Circuit Court
         For the Nineteenth Judicial Circuit,  Lake County,  Illinois - Chancery
         Division.  This  claim  relates to the April  2001  acquisition  of the
         Company's  Hostmark  subsidiaries  (the "Hostmark  Subsidiaries").  The
         Hostmark  Subsidiaries  were  acquired by Worldport  Holdings Inc. from
         Hostmark World Holdings, LLC pursuant to a Stock Purchase Agreement. In
         connection  with  these  transactions,  the  Company  agreed to use its
         reasonable efforts to obtain the release of the plaintiffs from certain
         guarantees  that the  plaintiffs  had  entered  into on  behalf  of the
         Hostmark Subsidiaries prior to the acquisition.  The reasonable efforts
         of the Company were to include,  if required,  the Company providing to
         the landlord of the property  located in Slough,  U.K. a rent indemnity
         and keeping such rent  indemnity in place until  November 20, 2008.  If
         required in order to obtain such rent indemnity,  the Company agreed to
         deposit funds with a commercial bank (or provide such other  collateral
         or security  required by the bank).  If required by the  landlord,  the
         reasonable  efforts of the  Company  were also to include  providing  a
         one-year rent indemnity  after November 2008 until the lease expires in
         November  2015. In this action,  the  plaintiffs  originally  sought an
         injunction  ordering  the  Company  to  comply  with the terms of these
         agreements.  In August  2002,  the Company  obtained the release of the
         plaintiffs from the related guarantees.  Therefore, the Company expects
         that  this  portion  of  the  suit  will  be  dismissed.  However,  the
         plaintiffs are continuing to seek damages for the  defendants'  alleged
         breach of these agreements. The Company does not expect to pay material
         damages in this suit.

               One of the Company's subsidiaries, Hostmark World Limited, is 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 has been stayed by the appointment of an Administrator  for
         Hostmark World.

               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  $3.9 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 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

<PAGE>

         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 the  fourth  quarter  of 2001,  the  SuperCentre  in  Dublin,
         Ireland operated by our Irish  subsidiary,  Worldport  Ireland Limited,
         was closed;  substantially all of the assets of our Swedish subsidiary,
         Hostmark   AB,  were  sold  and  that   subsidiary   retained   certain
         liabilities; and our German subsidiary,  Hostmark GmBh, was placed into
         preliminary   receivership  under  German  law  by  the  order  of  the
         Bankruptcy  Court in Darmstadt.  In addition,  we ceased funding of our
         U.K.  subsidiaries,  Hostmark  World and  Hostmark  U.K.,  in the first
         quarter of 2002. On March 28, 2002, an Administrator  was appointed for
         the U.K.  subsidiaries  by an order of the  Companies  Court,  Chancery
         Division  of High Court  under the United  Kingdom  Insolvency  Act. In
         April 2002, the Irish subsidiary,  Worldport Ireland Limited, was given
         notice that a petition  for winding up was filed and would be presented
         to the Irish High Court on behalf of Global Crossing  Ireland  Limited.
         The  petition  was heard by the Irish High Court on May 13,  2002 and a
         liquidator  was appointed  for this  subsidiary to act on behalf of the
         creditors.  As a result of this action, the liquidator has control over
         this subsidiary's  assets.  We believe that each of these  subsidiaries
         has potential liabilities that exceed the value of its assets.  Certain
         creditors  of these  subsidiaries  have made  claims  directly  against
         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  addition  to  the  aforementioned  claims,  the  Company  is
         involved in various  lawsuits or claims arising in the normal course of
         business.  In the  opinion of  management,  none of these  lawsuits  or
         claims  will  have  a  material  adverse  effect  on  the  consolidated
         financial position or results of operations of the Company.



<PAGE>



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,  and Section 21E
         of the Securities  Exchange Act of 1934, as amended,  including,  among
         others,   (i)   expected   changes  in  the   Company's   revenues  and
         profitability,  (ii) prospective  business  opportunities and (iii) the
         Company's  strategy for  redirecting  and financing  its  business;  as
         further explained in Item 1 of the Company's Annual Report on Form 10-K
         for the year ended  December 31, 2001.  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 for future operations. 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 of its business and operations, in light of the risks and
         uncertainties  inherent in all future  projections,  the  inclusion  of
         forward-looking  statements  in this report should not be regarded as a
         representation  by the Company or any other person that the  objectives
         or plans of the Company will be achieved.

                During 2001, we acquired and sold numerous operating  companies,
         which   significantly   affects  the  comparability  of  the  following
         information.  In addition,  in the fourth quarter of 2001 and the first
         quarter  of  2002,  we  either  sold  or  ceased  operating  all of our
         operating  businesses.  Therefore,  our historical  results will not be
         indicative of future performance.  The Company undertakes no obligation
         to release  publicly the results of any future revisions it may make to
         forward-looking statements to reflect events or circumstances after the
         date hereof or to reflect the occurrence of unanticipated events.

                The following  discussion should be read in conjunction with the
         Condensed  Consolidated Financial Statements and Notes thereto included
         under Item 1 of this Form 10-Q. In addition,  the Financial  Statements
         and Notes thereto and related  Management's  Discussion and Analysis of
         Financial Condition and Results of Operations included in the Company's
         Annual  Report on Form 10-K for the year ended  December 31, 2001,  and
         the Company's  Current Report on Form 8-K dated June 6, 2002, should be
         read in conjunction with this Form 10-Q.


         OVERVIEW
         --------

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

               In November  1999,  we entered into a series of  agreements  with
         Energis to sell our 85% stake in the issued and  outstanding  shares of
         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 on the
         gain of approximately $57 million.  Additionally, the Company completed
         the sale of IIC in March 2000.

               In the  second  quarter  of  2000  we  announced  a new  business
         strategy,  focused on the delivery of Internet managed hosting services
         to  global  companies  doing  business  in  the  European  marketplace.
         Pursuant to this strategy,  we invested over $40 million to construct a
         new Internet  solutions  SuperCentre in Dublin,  Ireland,  which became
         operational in October 2000. In September 2000, we purchased  VIS-able,
         a Swedish  professional  services firm  specializing in complex systems
         development and consulting,  for approximately  $17.7 million. In April

<PAGE>

         2001,  we 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 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 we completed the  transaction,  and only one ISC was open
         for business.

               Following the acquisition of hostmark, we initiated an aggressive
         integration  program to rapidly identify and eliminate  operational and
         system  redundancies in the two companies and to further streamline the
         combined business. Additionally, we shut down the unprofitable U.S. and
         U.K.  professional  services  operations  and took steps toward further
         cost alignment in our Swedish Professional  Services operation.  By the
         end of the third quarter of 2001, we had reduced our total workforce by
         approximately 41 percent and reduced total monthly  operating  expenses
         by over 50 percent.  Our statement of operations  for the third quarter
         of 2001 included $1.3 million of expenses related to employee severance
         costs,  termination  penalties for excess bandwidth contracts and lease
         disposition   costs  associated  with  this  integration   activity  to
         streamline the combined business.

               After the  completion  of the  hostmark  acquisition,  we did not
         achieve the revenue growth in our Managed Hosting  business that we had
         anticipated.  We also  experienced  a decline in revenue in our 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, our 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.

               Therefore,  the Company began a review of various alternatives to
         its  existing  business  plan.  As  part of this  review,  the  Company
         considered,  among  other  alternatives,  partnering  with a  strategic
         investor,   taking   additional   actions  to  reduce   its   operating
         expenditures,  closing one or more facilities or selling all or part of
         the  Company's  assets or  operations.  At the  beginning  of the third
         quarter of 2001, the Company engaged  Schroder  Salomon Smith Barney to
         assist the  Company in its  efforts to  explore  and  evaluate  various
         strategic and financial  alternatives.  Following the  exploration  and
         review  of  the  strategic  alternatives,  we  determined  that  it was
         necessary to dramatically  reduce the rate at which our operations were
         using  cash  and  to  minimize   our  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,  we took
         the  following  actions  in the fourth  quarter of 2001 and  recorded a
         $101.5 million  restructuring  charge in that quarter  related to these
         actions:

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

          --   In December  2001, we sold the assets and certain  liabilities of
               our  Managed  Services  business  in  Stockholm,  Sweden,  to  OM
               Technology  AB  for  approximately  10  million  Swedish  kronor,
               subject to the resolution of a final working capital  adjustment.
               The parties agreed to a final sales price of 7.5 million  Swedish
               kronor (approximately $0.8 million) in July 2002, which was fully
               collected by August 2002.  OM also agreed to assume the ownership
               of  Worldport's   Stockholm  Internet  solution  center  and  the
               operations at that center, and all customers' contracts.

          --   In December 2001, we also sold our 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
               for.

<PAGE>

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

          --   We also took steps to reduce  corporate  expenses  at our Buffalo
               Grove,   Illinois,   headquarters   in   connection   with  these
               transactions.

               In  addition,  we  completed  the sale of our  remaining  carrier
         business, Telenational Communications, Inc. ("TNC") in October 2001 for
         $0.4 million.

              After completing these fourth quarter activities,  we continued to
         operate our Managed  Hosting center in the U.K.,  where we believed the
         greatest opportunities for the European Managed Hosting market existed.
         However,  during the first quarter of 2002,  the U.K.  Managed  Hosting
         market continued to develop at a much slower rate than anticipated.  In
         addition,   increasing  industry  consolidations  and  the  closure  or
         bankruptcy of competitors in the industry led us to believe that market
         conditions  would not improve in the near  future,  bringing  increased
         risk to the financial requirements for this business.

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

               During 2002, we have operated with a minimal  headquarters  staff
         while  we  complete  the  activities   related  to  exiting  our  prior
         businesses.  Following is a summary of the significant  exit activities
         that have occurred to date in 2002.

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

          --   In August  2002,  the U.K.  administrator  identified a new third
               party tenant for the Slough,  U.K., data center.  The Company had
               previously  agreed to  guarantee  the Slough data center lease of
               its U.K.  subsidiary  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   non-cash   income  from
               discontinued operations of, $7.7 million in the second quarter of
               2002.

          --   In  September  2002,  the  liquidator  for our  Irish  subsidiary
               disclaimed the leases for the two facilities  previously  used by
               the Irish  subsidiary.  We had provided a letter of credit to the
               landlord of these facilities  equal to approximately  0.5 million
               Euros to support  the lease of one of the  facilities.  A partial
               draw of approximately  0.2 million Euros was made in October 2002
               and paid to the  landlord  under the letter of credit.  We expect
               that the full  amount of the letter of credit  will be drawn out.
               This  letter  of  credit  is  reflected  in Other  Assets  on the
               Company's  balance sheet. We provided a guarantee with respect to
               the  lease  of  the  other  facility.  Under  the  terms  of  our
               guarantee,  in  the  event  of a  disclaimer  of the  lease  by a
               liquidator,  the landlord  may, by written  notice  within twelve
               months after such disclaimer,  compel us, as guarantor,  to enter
               into a new  lease on the same  terms.  If the  landlord  does not
               require us to enter into a new lease,  the lease  requires  us to
               pay to the  landlord,  upon  demand,  a sum equal to the rent and
               other amounts payable under the lease for the twelve month period
               following  the  disclaimer  or for such shorter  period until the
               landlord has granted a lease of the property to a third party. On

<PAGE>

               October 29, 2002, we received a letter from legal counsel for the
               landlord with respect to our  guarantee.  This letter demands the
               payment within 14 days of approximately 0.9 million Euros and the
               confirmation  of our liabilities as guarantor under the lease. We
               are  attempting  to  determine  the  validity  of the  landlord's
               demand.  This  demand  of 0.9  million  Euro may not  necessarily
               represent our entire liability under the guarantee.

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

          --   In the third  quarter of 2002,  the Company  was  informed by its
               German attorneys that the receiver terminated the Frankfurt lease
               effective  December 31, 2002 under the  provisions of German law.
               As a  result,  Hostmark  GmbH is no  longer  obligated  for lease
               payments  due  after  the  effective  date   (approximately  $1.6
               million). The lease liability had originally been recorded by the
               Company as part of the $101.5 million  restructuring charge taken
               on the  discontinued  businesses  in the fourth  quarter of 2001.
               Additionally,  we were  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 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  non-cash income from  discontinued
               operations  of, $1.4 million  relating to the net  liabilities of
               the German subsidiary.


               As a result of the  transactions  described  above,  we no longer
         have active business operations. 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.


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

                As  described  above,  the  Company  has exited all three of its
         operating segments as of March 31, 2002. Accordingly,  results of these
         operations have been classified as discontinued, and prior periods have
         been restated in order to conform to the new presentation.

                There  were no  revenues  or cost of  services  from  continuing
         operations  for the three months and nine months  ending  September 30,
         2002 and 2001.

                Selling,  general and administrative ("SG&A") expenses were $0.7
         million and $1.4 million for the three months ended  September 30, 2002
         and 2001,  respectively  and were $2.6 million and $4.8 million for the
         nine  months  ended  September  30, 2002 and 2001,  respectively.  SG&A
         expenses  primarily  consisted  of  corporate  salaries  and  benefits,
         professional  service fees,  corporate governance expenses and facility
         costs.   The  decrease  from  the  prior  year  expenses  is  primarily
         attributable to the steps taken at the end of 2001 to reduce  corporate
         expenses at our Buffalo  Grove,  Illinois,  headquarters  in connection
         with the transactions described above.

                Depreciation and amortization  expense represented  depreciation
         on the  corporate  office and related  computer  hardware and software.
         Depreciation  and  amortization  expense was less than $0.1 million for
         the three months ended September 30, 2002 and 2001 and was $0.1 million
         and $0.2 million for the nine months ended September 30, 2002 and 2001,
         respectively.

<PAGE>

                Interest income, which was earned on the Company's cash and cash
         equivalents,  was $0.5  million and $1.0  million for the three  months
         ended September 30, 2002 and 2001,  respectively,  and was $1.4 million
         and $4.1 million for the nine months ended September 30, 2002 and 2001,
         respectively.  The  decrease in interest  income in the current year is
         primarily a result of a lower  average  yield on invested cash due to a
         decline  in  market  interest  rates  and the  Company's  move to lower
         yielding   instruments  in  2002,  including  money  market  funds  and
         government  securities.  The Company's interest expense of $0.1 million
         in the current and prior year primarily  related to equipment  financed
         under capital leases.  The Company  incurred a $0.3 million loss in the
         second quarter of 2001 on the sale of a Virginia  residence  originally
         purchased in October 2000 in connection with an employment  arrangement
         with a former chief executive officer of the Company.

                Net loss from  continuing  operations  was $0.1 million and $0.5
         million  for the  three  months  ended  September  30,  2002 and  2001,
         respectively  and was $1.3 million and $1.4 million for the nine months
         ended September 30, 2002 and 2001, respectively.

                The  Company  had income from  discontinued  operations  of $1.6
         million in the third quarter of 2002. As discussed above,  $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 $1.2
         million for the nine months ended September 30, 2002 that was comprised
         of the following:

          --   $1.6 million income from  discontinued  operations in the current
               quarter as detailed above.
          --   $7.7  million  gain  recorded in the second  quarter of 2002 as a
               result  of  the  Company's  release  from  its  underlying  lease
               guarantee on the Slough,  U.K.  data center  lease (as  described
               above).
          --   $1.1  million  asset  impairment  charge  recorded  in the second
               quarter  of  2002   related  to   certain   equipment   from  the
               discontinued businesses.
          --   $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.
          --   $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.
          --   $10.0 million  restructuring charge recorded in the first quarter
               of 2002 on the U.K. business.
          --   $3.0 million of operating losses incurred in the first quarter of
               2002 from the U.K. business prior to it being discontinued.
          --   $5.6 million tax benefit recorded in the first quarter of 2002 as
               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.

              Losses from discontinued  operations for the three months and nine
         months ended  September 30, 2001 were $27.1 million and $51.5  million,
         respectively,  and primarily  represent  operating  losses on the U.K.,
         Ireland, German and Sweden entities.

               The following table summarizes the significant  components of the
         restructuring  reserve  included in Accrued  Expenses at September  30,
         2002 (in thousands):

<TABLE>

                                           Balance At                                              Balance At
                                            December                     Cash        Non-cash       September
                                            31, 2001     Additions     Payments     Adjustments    30, 2002
                                            --------     ---------     --------     -----------    --------
       <S>                                     <C>          <C>            <C>        <C>             <C>
       Facility exit costs                     $ 9,213      $ 7,936        $(297)     $ (11,251)      $5,601
       Bandwidth contract termination            4,329          418            --          (697)       4,050
       Asset impairment                             --           --            --             --          --
       Severance                                   761           --         (761)            --           --
       Other costs                               1,257        1,646         (412)        (2,244)         247
                                               -------      -------        -----      ---------       ------
       Total                                   $15,560     $ 10,000     $ (1,470)     $ (14,192)     $ 9,898
                                               =======     ========     =========     ==========     =======
</TABLE>

<PAGE>

               The non-cash  adjustments of $14.2 million  primarily  consist of
         $7.7 million  related to the Slough,  U.K.,  lease  liability  that the
         Company was released from in August 2002 (as discussed  above) and $6.9
         million  of  liabilities   related  to  the  U.K.,  German,  and  Irish
         subsidiaries that, along with the other assets and liabilities of those
         subsidiaries, have been deconsolidated into a separate line item on the
         Company's  balance  sheet  called  Net  Liabilities  of  Non-controlled
         Subsidiaries (see Note 5).

                As a result,  the Company had net income of $1.5  million in the
         third quarter of 2002, as compared to net loss of $27.6 million for the
         third  quarter of 2001.  The Company had a net loss of $0.1 million for
         the nine months ended  September 30, 2002, as compared to a net loss of
         $52.6 million for the same period in 2001.


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

              Operations used $0.3 million and $2.8 million during the three and
         nine months  ending  September 30, 2002,  respectively,  as compared to
         $4.7  million and $6.7  million  during the three and nine months ended
         September 30, 2001, respectively. These expenditures were primarily for
         salaries,  legal  fees and  other  expenses  related  to the  Company's
         minimal  corporate  operations  remaining  after the shut down and sale
         transactions described above.

                The Company had no cash flows from investing  activities  during
         the three and nine months ended  September  30, 2002.  The Company used
         $11.0  million  in the  third  quarter  of  2001  for the  purchase  of
         marketable securities and generated  approximately $1.3 million in cash
         in the second  quarter  of 2001 from the sale of a  Virginia  residence
         originally  purchased in October 2000 in connection  with an employment
         arrangement with a former chief executive officer of the Company.

              Financing activities used $1.2 million and $0.4 million during the
         nine  months  ended  September  30,  2002 and 2001,  respectively,  for
         principal payments on capital leases.

              Discontinued operations used $0.9 million during the third quarter
         ended September 30, 2002, primarily for payments on capital leases from
         the discontinued  businesses.  Discontinued  operations  provided $50.9
         million  for the  nine  months  ended  September  30,  2002,  and  were
         primarily  attributable  to the receipt of our $57.6 million income tax
         refund in April 2002.  Discontinued  operations  used $20.1 million and
         $43.2 million during the three and nine months ended September 30, 2001
         relating to the discontinued U.K., Ireland, German and Sweden entities.


               We had approximately  $108.4 million in cash and cash equivalents
         and $10.6 million in marketable  securities as of November 1, 2002. Our
         cash equivalents  currently  consist of highly rated money market funds
         and government securities.

               Our cash  balance  includes the $57.6  million  income tax refund
         received in April 2002.  Receipt of this refund does not indicate  that
         the Internal  Revenue  Service  agrees with the positions  taken by the
         Company in its tax  returns.  The refund is still  subject to review by
         the Internal Revenue Service of the Company's 2001 tax return. It would
         not be  unusual  for the  Internal  Revenue  Service  to audit a return
         resulting in a refund of this magnitude.  The Internal  Revenue Service
         could  require the  Company to return all or a portion of this  refund.
         The  statute  of  limitations  for  the  notification  of an  audit  is
         generally  three  years from the filing of the  applicable  tax return,
         although this period can be extended by agreement.

               Our September 30, 2002 consolidated balance sheet reflected total
         liabilities of approximately $32.2 million. Included in this amount are
         $9.7 million of Net Liabilities of Non-Controlled  Subsidiaries for the
         U.K., Irish and Swedish  operations (see Note 5). We believe the parent
         company, Worldport Communications, Inc. ("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.

<PAGE>

               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 our 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.  We are
         not able to determine  at this time the  priority of  Worldport  Inc.'s
         claim in such proceedings or whether or not Worldport Inc. will be able
         to  recover  any  portion  of these  advances.  If  Worldport  Inc.  is
         successful  in  collecting  any  portion  of these  advances,  we 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  $22.5 million of liabilities  reflected on the Company's
         September 30, 2002,  balance sheet  attributable  to Worldport Inc. and
         the  remaining  subsidiaries  not in  Administration,  receivership  or
         liquidation.  Approximately  $2.2  million  of that  amount  represents
         normal  operating  accruals  and  reserves  related  to the  continuing
         operations.  The  remaining  $20.3  million  consist  of the  following
         obligations related to the exited businesses:

          --   $5.3  million  of future  rent  payments  and  early  termination
               penalties  on the Dublin data center  lease  expiring in 2010 for
               which Worldport Inc. had provided a guarantee,

          --   $4.5 million of obligations under capital leases, which expire in
               2004,

          --   $4.3 million accrued for the potential  exposure  (including VAT)
               related to the litigation by Cable & Wireless described below,

          --   $3.7  million  of  obligations  related  to  bandwidth  contracts
               entered into in Ireland,

          --   $1.4    million   of    obligations    relating    to   the   old
               telecommunications business, and

          --   $1.1 million of other Worldport Inc.  obligations  related to the
               Irish operations.

               We have assumed,  for purposes of calculating these  liabilities,
         that we 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.

               In March 2002,  Sturm Group  Inc.,  Donald L. Sturm and  Hostmark
         World  Holdings,  LLC,  filed a  complaint  against the Company and its
         wholly owned subsidiary,  Worldport  Holdings Inc. in the Circuit Court
         For the Nineteenth  Judicial Circuit,  Lake County,  Illinois -Chancery
         Division.  This  claim  relates to the April  2001  acquisition  of the
         Company's  Hostmark  subsidiaries  (the "Hostmark  Subsidiaries").  The
         Hostmark  Subsidiaries  were  acquired by Worldport  Holdings Inc. from
         Hostmark World Holdings, LLC pursuant to a Stock Purchase Agreement. In
         connection  with  these  transactions,  the  Company  agreed to use its
         reasonable efforts to obtain the release of the plaintiffs from certain
         guarantees  that the  plaintiffs  had  entered  into on  behalf  of the
         Hostmark Subsidiaries prior to the acquisition.  The reasonable efforts
         of the Company were to include,  if required,  the Company providing to
         the landlord of the property located in Slough,  U.K., a rent indemnity
         and keeping such rent  indemnity in place until  November 20, 2008.  If
         required in order to obtain such rent indemnity,  the Company agreed to
         deposit funds with a commercial bank (or provide such other  collateral
         or security  required by the bank).  If required by the  landlord,  the
         reasonable  efforts of the  Company  were also to include  providing  a
         one-year rent indemnity  after November 2008 until the lease expires in
         November  2015. In this action,  the  plaintiffs  originally  sought an
         injunction  ordering  the  Company  to  comply  with the terms of these
         agreements.  In August  2002,  the Company  obtained the release of the
         plaintiffs from the related guarantees.  Therefore, the Company expects
         that  this  portion  of  the  suit  will  be  dismissed.  However,  the
         plaintiffs are continuing to seek damages for the  defendants'  alleged
         breach of these agreements. The Company does not expect to pay material
         damages in this suit.

               In June 2002, the High Court of Ireland issued a Summary  Summons

<PAGE>

         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  (representing
         approximately  $3.9 million  excluding  VAT).  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 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.

               After  completing  the  activities  related to the exiting of our
         Irish, Swedish, German and U.K. subsidiaries and satisfying the related
         liabilities,  we expect to continue to have significant cash resources.
         We are currently  operating with a minimal  headquarters staff while we
         complete the  activities  related to exiting our prior  businesses  and
         determine  how  to  use  these  cash  resources.  We  will  have  broad
         discretion  in  determining  how and when to use these cash  resources.
         Alternatives  being  considered  include  potential   acquisitions,   a
         recapitalization   which  might  provide   liquidity  to  some  or  all
         shareholders, and a full or partial liquidation.

               Since  ceasing  our  business  operations,  we  have  sought  and
         reviewed acquisition  opportunities.  However, we have not yet actively
         pursued any of these opportunities since we did not believe that any of
         them were in the best interests of our  shareholders.  Although we will
         continue to consider potential acquisition  opportunities,  we have not
         identified a specific  industry on which we intend to focus and have no
         present plans,  proposals,  arrangements or understandings with respect
         to the acquisition of any specific business.

               We are also continuing to analyze a potential  liquidation of the
         Company  and  its  effects  on the  Company's  stockholders.  Upon  any
         liquidation,  dissolution or winding up of the Company,  the holders of
         our   outstanding   preferred   stock  would  be  entitled  to  receive
         approximately  $68 million prior to any  distribution to the holders of
         our common stock.


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

               In June 2001, the Financial  Accounting  Standards Board ("FASB")
         issued Statement of Financial  Accounting  Standards  ("SFAS") No. 141,
         "Business   Combinations,"  and  SFAS  No.  142,  "Goodwill  and  Other
         Intangible Assets." SFAS No. 141 prospectively prohibits the pooling of
         interests  method of  accounting  for business  combinations  initiated
         after June 30, 2001. Under SFAS No. 142, goodwill  amortization  ceases
         when the new  standard is adopted.  In the three and nine months  ended
         September 30, 2001, the Company recorded goodwill  amortization of $0.8
         million and $2.5 million,  respectively.  No goodwill  amortization was
         recorded  in 2002.  SFAS No.  142 also  requires  an  initial  goodwill
         impairment  assessment in the year of adoption and an  impairment  test
         both on an annual basis and upon the  occurrence of any event or change
         in  circumstances  that would reduce the fair value of a reporting unit
         below its  carrying  value.  SFAS No. 142 also  requires the Company to
         complete a transitional  goodwill  impairment  test six months from the
         date of adoption. The Company adopted this standard at the beginning of
         its 2002 fiscal year. As the Company had no goodwill or  intangibles at
         December 31, 2001,  the adoption of this statement had no impact on the
         Company's consolidated financial statements.

               In August 2001, the FASB issued SFAS No. 144, "Accounting for the
         Impairment or Disposal of Long-Lived  Assets." The statement provides a
         single  accounting  model for long-lived  assets to be disposed of. The
         Company  adopted SFAS No. 144 at the beginning of its 2002 fiscal year.
         The  adoption  of  this  statement  had  no  impact  on  the  Company's
         consolidated financial statements.

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

<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

               The majority of the Company's  exited  businesses were in Europe,
         and many of the remaining  assets and  liabilities of those  businesses
         are denominated in local currencies.  Due to the volatility of currency
         exchange  rates,  among other factors,  we cannot predict the effect of
         exchange rate  fluctuations on the ultimate  settlement of these assets
         and liabilities.  The Company has used derivative  instruments to hedge
         its  foreign  currency  exposure  only on a limited  basis,  and had no
         foreign  currency  hedge  contracts  outstanding at September 30, 2002.
         Other foreign exchange gains and losses recorded in income were minimal
         for the  three  and nine  months  ended  September  30,  2002 and 2001,
         respectively.



ITEM 4.  CONTROLS AND PROCEDURES

               Kathleen A. Cote,  our Chief  Executive  Officer and acting Chief
         Financial Officer, has evaluated our disclosure controls and procedures
         within  90  days  of the  filing  date of  this  report.  Based  on her
         evaluation,   she  has  concluded  that  our  disclosure  controls  and
         procedures  are  effective  to ensure that  information  required to be
         disclosed in the reports  that we file or submit  under the  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.

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

<PAGE>


               PART II. OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS


                Since  July  14,  1999,  Worldport  and  certain  of its  former
         officers have been named as defendants  in multiple  shareholder  class
         action  lawsuits  filed in the  United  States  District  Court for the
         Northern   District  of  Georgia.   On  or  about  March  21,  2000,  a
         Consolidated  Complaint was filed which adds The Heico  Companies,  LLC
         and Michael E.  Heisley,  Sr. as  defendants.  The  plaintiffs in these
         lawsuits  seek to  represent a class of  individuals  who  purchased or
         otherwise  acquired  the  Company's  common  stock from January 4, 1999
         through June 28, 1999. Among other things,  the plaintiffs  allege that
         the  defendants  spoke  positively  about the Heico  financing  without
         disclosing  the risk that  non-compliance  with certain Nasdaq rules in
         connection with the financing might cause Worldport to be delisted from
         Nasdaq.  The plaintiffs  further allege the subsequent  disclosure that
         Worldport might be delisted from Nasdaq adversely affected the value of
         the  Company's  common  stock.  The  plaintiffs  allege  violations  of
         Sections  10(b) and 20(a) of the  Securities  Exchange  Act of 1934 and
         seek unspecified  compensatory damages,  interest,  attorneys' fees and
         costs of litigation.  A proposed  settlement was reached by the parties
         on terms reflected in a Stipulation of Compromise and Settlement  dated
         July 20, 2001. This settlement was approved by the Court on October 19,
         2001 and has been entirely  funded by  insurance.  No appeal was taken,
         but  there  can be no  assurance  that  additional  claims  will not be
         asserted by any class member who opted out of the settlement.  However,
         the outcome of this matter is not  expected to have a material  adverse
         effect on the consolidated  financial position or results of operations
         of the Company.


               In March 2002,  Sturm Group  Inc.,  Donald L. Sturm and  Hostmark
         World  Holdings,  LLC,  filed a  complaint  against the Company and its
         wholly owned subsidiary,  Worldport  Holdings Inc. in the Circuit Court
         For the Nineteenth  Judicial Circuit,  Lake County,  Illinois -Chancery
         Division.  This  claim  relates to the April  2001  acquisition  of the
         Company's  Hostmark  subsidiaries  (the "Hostmark  Subsidiaries").  The
         Hostmark  Subsidiaries  were  acquired by Worldport  Holdings Inc. from
         Hostmark World Holdings, LLC pursuant to a Stock Purchase Agreement. In
         connection  with  these  transactions,  the  Company  agreed to use its
         reasonable efforts to obtain the release of the plaintiffs from certain
         guarantees  that the  plaintiffs  had  entered  into on  behalf  of the
         Hostmark Subsidiaries prior to the acquisition.  The reasonable efforts
         of the Company were to include,  if required,  the Company providing to
         the landlord of the property located in Slough,  U.K., a rent indemnity
         and keeping such rent  indemnity in place until  November 20, 2008.  If
         required in order to obtain such rent indemnity,  the Company agreed to
         deposit funds with a commercial bank (or provide such other  collateral
         or security  required by the bank).  If required by the  landlord,  the
         reasonable  efforts of the  Company  were also to include  providing  a
         one-year rent indemnity  after November 2008 until the lease expires in
         November  2015. In this action,  the  plaintiffs  originally  sought an
         injunction  ordering  the  Company  to  comply  with the terms of these
         agreements.  In August  2002,  the Company  obtained the release of the
         plaintiffs from the related guarantees.  Therefore, the Company expects
         that  this  portion  of  the  suit  will  be  dismissed.  However,  the
         plaintiffs are continuing to seek damages for the  defendants'  alleged
         breach of these agreements. The Company does not expect to pay material
         damages in this suit.

               One of the Company's subsidiaries, Hostmark World Limited, is 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 has been stayed by the appointment of an Administrator  for
         Hostmark World.

               In June 2002, the High Court of Ireland issued a Summary  Summons
         to the  parent  company,  Worldport  Communications,  Inc.  ("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 $3.9
         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 believes that the claims, to the extent valid, are
         obligations  of the  Company's  Irish  subsidiary  and not of Worldport

<PAGE>

         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 the fourth  quarter of 2001,  the  Managed  Hosting  center in
         Dublin,  Ireland operated by our Irish  subsidiary,  Worldport  Ireland
         Limited,  was  closed;  substantially  all of the assets of our Swedish
         subsidiary, Hostmark AB, were sold and that subsidiary retained certain
         liabilities; and our German subsidiary,  Hostmark GmBh, was placed into
         preliminary   receivership  under  German  law  by  the  order  of  the
         Bankruptcy  Court in Darmstadt.  In addition,  we ceased funding of our
         U.K.  subsidiaries,  Hostmark  World and  Hostmark  U.K.,  in the first
         quarter of 2002. On March 28, 2002, an Administrator  was appointed for
         the U.K.  subsidiaries  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
         credits.  As a result of this action,  the  liquidator has control over
         this subsidiary's  assets.  We believe that each of these  subsidiaries
         has potential liabilities that exceed the value of its assets.  Certain
         creditors of these  subsidiaries  have made claims directly against the
         parent company, Worldport Communications,  Inc. ("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.  See  Management's  Discussion  and Analysis of Financial
         Condition and Results of Operation - Liquidity  and Capital  Resources"
         for a more detailed  discussion of the liabilities of our  subsidiaries
         and how we have  accounted for those  liabilities  on our  consolidated
         financial statements.

               In addition to the aforementioned claims, the Company is involved
         in various lawsuits or claims arising in the normal course of business.
         In the  opinion of  management,  none of these  lawsuits or claims will
         have a material adverse effect on the consolidated  financial  position
         or results of operations of the Company.



ITEM 2.  CHANGES IN SECURITIES

                None.



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (A)  EXHIBITS

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



         (B)  REPORTS ON FORM 8-K

               The  Company  filed a Current  Report  on Form 8-K on August  16,
         2002. The Form 8-K was dated August 16, 2002, and reported  information
         under Item 4 related to the Company's change in certifying  accountants
         from Arthur Andersen LLP to Deloitte & Touche LLP.




<PAGE>




                                    SIGNATURE


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


                         WORLDPORT COMMUNICATIONS, INC.


         Date:    November 11, 2002                  By:   /s/ Kathleen A. Cote
                                                         -----------------------
                                                         Kathleen A. Cote
                                                         Chief Executive Officer




                                 CERTIFICATIONS

         I, Katheen A. Cote, certify that:

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

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

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

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

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

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

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

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

                           a) all  significant  deficiencies  in the  design  or
                  operation of internal  controls which could  adversely  affect
                  the  registrant's  ability to record,  process,  summarize and
                  report financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

                           b) any fraud, whether or not material,  that involves
<PAGE>

                  management or other  employees who have a significant  role in
                  the registrant's internal controls; and

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

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


         November 11, 2002