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

FORM 10-Q

(Mark One)

|      |                                                                                         
|----- | ----------------------------------------------------------------------------------------
|[X]   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|     
|     
|     
|     
|      | FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001                                            
|     
|     
|     
|     
|      | OR                                                                                      
|     
|     
|     
|     
|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 000-31689

ASIA GLOBAL CROSSING LTD.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


|                                                                     |                                                
|-------------------------------------------------------------------- | -----------------------------------------------
|BERMUDA(STATE OR OTHER JURISDICTION OFINCORPORATION OR ORGANIZATION) | 98-022-4159(I.R.S. EMPLOYER IDENTIFICATION NO.)

WESSEX HOUSE
45 REID STREET
HAMILTON HM12, BERMUDA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(441) 296-8600
(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 [   ]

The number of shares of the Registrants Class A common stock, par value
$0.01 per share, outstanding as of August 10, 2001, was 68,500,000 and Class B
common stock, par value $0.01 per share, was 513,447,683.



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TABLE OF CONTENTS



|                              |                                                                                               |                                                           |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                              |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                    
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS          
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS          
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|                              |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS     
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 2. Changes in Securities and Use of Proceeds                                            
|                              | Item 3. Defaults Upon Senior Securities                                                      
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                              | Item 5. Other Information                                                                    
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                    



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##### Table of Contents



ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

FOR THE QUARTER ENDED JUNE 30, 2001

INDEX

|        |  |                                                                                       |  |  |    |      |  | 
|------- |  | ------------------------------------------------------------------------------------- |  |  | -- | ---- |  | 
|        |  |                                                                                       |  |  |    | Page
|        |  |                                                                                       |  |  |    |     
|        |  | PART I. FINANCIAL INFORMATION                                                         |  |  |    |     
|       
|       
|       
|       
|Item 1. |  | Financial Statements:                                                                 |  |  |    |     
|       
|       
|       
|       
|        |  | Condensed Consolidated Balance Sheets                                                 |  |  | 3  |     
|       
|       
|       
|       
|        |  | Condensed Consolidated Statements of Operations                                       |  |  | 4  |     
|       
|       
|       
|       
|        |  | Condensed Consolidated Statements of Cash Flows                                       |  |  | 5  |     
|       
|       
|       
|       
|        |  | Condensed Consolidated Statements of Comprehensive Income                             |  |  | 6  |     
|       
|       
|       
|       
|        |  | Notes to Condensed Consolidated Financial Statements                                  |  |  | 7  |     
|       
|       
|       
|       
|Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  |  | 13 |     
|       
|       
|       
|       
|Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |  | 20 |     
|       
|       
|       
|       
|        |  | PART II. OTHER INFORMATION                                                            |  |  |    |     
|       
|       
|       
|       
|Item 1. |  | Legal Proceedings                                                                     |  |  | 21 |     
|       
|       
|       
|       
|Item 2. |  | Changes in Securities and Use of Proceeds                                             |  |  | 21 |     
|       
|       
|       
|       
|Item 3. |  | Defaults Upon Senior Securities                                                       |  |  | 21 |     
|       
|       
|       
|       
|Item 4. |  | Submission of Matters to A Vote of Security Holders                                   |  |  | 21 |     
|       
|       
|       
|       
|Item 5. |  | Other Information                                                                     |  |  | 22 |     
|       
|       
|       
|       
|Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |  | 23 |     
|       
|       
|       
|       
|        |  | Signature                                                                             |  |  | 24 |     

2



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##### Table of Contents






PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share information)

|                      |                                                                                                                             |                                          |                                            |           |             |           |              |           |         |           | 
|--------------------- | --------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------------------------ | --------- | ----------- | --------- | ------------ | --------- | ------- | --------- | 
|                      |                                                                                                                             |                                          |                                            |           | June 30,    |           | December 31,
|                      |                                                                                                                             |                                          |                                            |           | 2001        |           | 2000        
|                      |                                                                                                                             |                                          |                                            |           |             |           |             
|                      |                                                                                                                             |                                          |                                            |           | (Unaudited) |           |              |           |        
|ASSETS:               |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                     
|                     
|                     
|                     
|                      | Current assets:                                                                                                             |                                          |                                            |           |             |           |              |           |        
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Cash and cash equivalents                |                                            | $         | 667,164     |           |              | $         | 705,161 |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Restricted cash and cash equivalents     |                                            |           | 136,161     |           |              |           | 145,862 |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Accounts receivable, net                 |                                            |           | 11,228      |           |              |           | 12,066  |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Receivable from affiliates               |                                            |           | 63,251      |           |              |           | 108,720 |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Other assets and prepaid costs           |                                            |           | 55,995      |           |              |           | 10,921  |          
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                      |                                                                                                                             |                                          | Total current assets                       |           |             | 933,799   |              |           |         | 982,730   | 
|                     
|                     
|                     
|                     
|                      | Property and equipment, net                                                                                                 |                                          |                                            | 2,398,443 |             |           |              | 1,914,018 |        
|                     
|                     
|                     
|                     
|                      | Deferred finance fees, net                                                                                                  |                                          |                                            | 33,564    |             |           |              | 37,090    |        
|                     
|                     
|                     
|                     
|                      | Other assets                                                                                                                |                                          |                                            | 35,558    |             |           |              | 38,023    |        
|                     
|                     
|                     
|                     
|                      | Loans receivable from affiliate                                                                                             |                                          |                                            | 40,094    |             |           |              | 40,049    |        
|                     
|                     
|                     
|                     
|                      | Investments in affiliates                                                                                                   |                                          |                                            | 590,458   |             |           |              | 620,628   |        
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                      |                                                                                                                             |                                          | Total assets                               |           | $           | 4,031,916 |              |           | $       | 3,632,538 | 
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|LIABILITIES:          |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                     
|                     
|                     
|                     
|                      | Current liabilities:                                                                                                        |                                          |                                            |           |             |           |              |           |        
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Accrued construction costs               |                                            | $         | 229,646     |           |              | $         | 168,286 |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Accounts payable and accrued liabilities |                                            |           | 46,387      |           |              |           | 26,450  |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Current portion of long-term debt        |                                            |           | 58,614      |           |              |           | 41,630  |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Deferred revenue                         |                                            |           | 33,386      |           |              |           | 6,602   |          
|                     
|                     
|                     
|                     
|                      |                                                                                                                             | Income taxes payable                     |                                            |           | 9,620       |           |              |           | 8,161   |          
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                      |                                                                                                                             |                                          | Total current liabilities                  |           |             | 377,653   |              |           |         | 251,129   | 
|                     
|                     
|                     
|                     
|                      | Long-term debt                                                                                                              |                                          |                                            | 1,101,329 |             |           |              | 1,159,704 |        
|                     
|                     
|                     
|                     
|                      | Deferred revenue                                                                                                            |                                          |                                            | 760,234   |             |           |              | 282,443   |        
|                     
|                     
|                     
|                     
|                      | Other long-term liabilities                                                                                                 |                                          |                                            | 8,205     |             |           |              | 2,825     |        
|                     
|                     
|                     
|                     
|                      | Loans payable to affiliate                                                                                                  |                                          |                                            | 9,428     |             |           |              | 9,993     |        
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                      |                                                                                                                             |                                          | Total liabilities                          |           |             | 2,256,849 |              |           |         | 1,706,094 | 
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|MINORITY INTEREST     |                                                                                                                             |                                          | 140,788                                    |           |             |           | 162,720      |          
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|SHAREHOLDERS EQUITY: |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                     
|                     
|                     
|                     
|                      | Preferred stock, par value $0.01 per share, 120,000,000 shares authorized;
no shares issued and outstanding                 |                                          |                                            |          |             |           |              |          |        
|                     
|                     
|                     
|                     
|                      | Class A common stock, par value $0.01 per share, 1,200,000,000 shares authorized;
68,500,000 shares issued and outstanding  |                                          |                                            | 685       |             |           |              | 685       |        
|                     
|                     
|                     
|                     
|                      | Class B common stock, par value $0.01 per share, 1,200,000,000 shares authorized;
486,625,125 shares issued and outstanding |                                          |                                            | 4,866     |             |           |              | 4,866     |        
|                     
|                     
|                     
|                     
|                      | Additional paid-in capital                                                                                                  |                                          |                                            | 1,888,662 |             |           |              | 1,888,662 |        
|                     
|                     
|                     
|                     
|                      | Accumulated deficit                                                                                                         |                                          |                                            | (253,836  | )           |           |              | (130,636  | )      
|                     
|                     
|                     
|                     
|                      | Accumulated other comprehensive income (loss)                                                                               |                                          |                                            | (6,098    | )           |           |              | 147       |        
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                      |                                                                                                                             |                                          | Total shareholders equity                 |           |             | 1,634,279 |              |           |         | 1,763,724 | 
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          
|                      |                                                                                                                             |                                          | Total liabilities and shareholders equity |           | $           | 4,031,916 |              |           | $       | 3,632,538 | 
|                      |                                                                                                                             |                                          |                                            |           |             |           |              |          

See accompanying notes to condensed consolidated financial statements.

3



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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share information)
(Unaudited)

|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |             |         |  
|-------------------------------------- | -------------------------------------------------------------------- | -------------- | ------- | ------------------ | ------- | ---------------- | ------- | ----------- | ------- | -------- | -------- | ----------- | -------- | - | ------- | ----------- | ------- | -
|                                       |                                                                      |                |         | Three Months Ended |         | Six Months Ended
|                                       |                                                                      |                |         |                    |         |                 
|                                       |                                                                      |                |         | June 30,           |         | June 30,         |         | June 30,    |         | June 30,
|                                       |                                                                      |                |         | 2001               |         | 2000             |         | 2001        |         | 2000    
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |         
|Revenues                               |                                                                      | $              | 17,913  |                    |         | $                | 33,667  |             |         | $        | 27,425   |             |          | $ | 109,471 |            
|                                      
|                                      
|                                      
|                                      
|Operating expenses:                    |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|                                      
|                                      
|                                      
|                                      
|                                       | Cost of access and maintenance                                       |                |         | 17,990             |         |                  |         | 11,714      |         |          |          | 33,314      |          |   |         | 24,198      |        
|                                      
|                                      
|                                      
|                                      
|                                       | Other operating expenses                                             |                |         | 34,395             |         |                  |         | 12,367      |         |          |          | 59,360      |          |   |         | 18,567      |        
|                                      
|                                      
|                                      
|                                      
|                                       | Depreciation and amortization                                        |                |         | 21,864             |         |                  |         | 58,029      |         |          |          | 42,123      |          |   |         | 92,876      |        
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|                                       |                                                                      |                | 74,249  |                    |         |                  | 82,110  |             |         |          | 134,797  |             |          |   | 135,641 |            
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|                                       |                                                                      | Operating loss |         |                    | (56,336 | )                |         |             | (48,443 | )        |          |             | (107,372 | ) |         |             | (26,170 | )
|                                      
|                                      
|                                      
|                                      
|Other income (expense):                |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|                                      
|                                      
|                                      
|                                      
|                                       | Minority interest                                                    |                |         | 16,430             |         |                  |         | (1,457      | )       |          |          | 31,609      |          |   |         | (12,118     | )      
|                                      
|                                      
|                                      
|                                      
|                                       | Equity in loss of affiliates                                         |                |         | (17,291            | )       |                  |         | (12,719     | )       |          |          | (32,590     | )        |   |         | (26,734     | )      
|                                      
|                                      
|                                      
|                                      
|                                       | Interest income                                                      |                |         | 9,060              |         |                  |         | 4,192       |         |          |          | 20,649      |          |   |         | 8,191       |        
|                                      
|                                      
|                                      
|                                      
|                                       | Interest expense                                                     |                |         | (12,923            | )       |                  |         | (72         | )       |          |          | (29,254     | )        |   |         | (1,088      | )      
|                                      
|                                      
|                                      
|                                      
|                                       | Other expense, net                                                   |                |         | (895               | )       |                  |         | (46         | )       |          |          | (3,242      | )        |   |         | (305        | )      
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|Loss before provision for income taxes |                                                                      |                | (61,955 | )                  |         |                  | (58,545 | )           |         |          | (120,200 | )           |          |   | (58,224 | )          
|                                      
|                                      
|                                      
|                                      
|                                       | Provision for income taxes                                           |                |         | (500               | )       |                  |         |            |         |          |          | (3,000      | )        |   |         |            |        
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|Net loss                               |                                                                      | $              | (62,455 | )                  |         | $                | (58,545 | )           |         | $        | (123,200 | )           |          | $ | (58,224 | )          
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|Net loss per common share:             |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|                                      
|                                      
|                                      
|                                      
|                                       | Basic and diluted net loss per common share                          |                | $       | (0.11              | )       |                  | $       | (0.12       | )       |          | $        | (0.22       | )        |   | $       | (0.12       | )      
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            
|                                       | Shares used in computing basic and diluted net loss
per common share |                |         | 555,125,125        |         |                  |         | 486,625,125 |         |          |          | 555,125,125 |          |   |         | 486,625,125 |        
|                                       |                                                                      |                |         |                    |         |                  |         |             |         |          |          |             |          |   |         |            

See accompanying notes to condensed consolidated financial statements.

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##### Table of Contents






ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |          |           |        |          |  
|------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------- | ------------------------------------------------- | -------------------------------------------- | --------------------------------------------------- | -------- | ---------------- | -------- | -------- | --------- | ------ | -------- | -
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          | Six Months Ended
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                 
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          | June 30,         |          | June 30,
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          | 2001             |          | 2000    
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                    |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Net loss                                                                                 |                                                   | $                                            | (123,200                                            | )        |                  | $        | (58,224  | )        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |                                                   |                                              |                                                     |          |                  |          |          |          
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   | Depreciation and amortization                |                                                     |          | 42,123           |          |          |           | 92,876 |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   | Amortization of deferred finance fees        |                                                     |          | 2,195            |          |          |           |       |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   | Provision for doubtful accounts              |                                                     |          | 1,424            |          |          |           | 791    |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   | Equity in loss of affiliates                 |                                                     |          | 32,590           |          |          |           | 26,734 |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   | Minority interest                            |                                                     |          | (31,609          | )        |          |           | 11,944 |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   | Changes in operating assets and liabilities: |                                                     |          |                  |          |          |           |        |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   |                                              | Accounts receivable                                 |          |                  | (699     | )        |           |        | (18,379  | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   |                                              | Receivable from affiliates                          |          |                  | 41,018   |          |           |        | 56,408   |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   |                                              | Other assets                                        |          |                  | (45,614  | )        |           |        | (45,000  | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   |                                              | Deferred revenue                                    |          |                  | 504,706  |          |           |        | 89,133   |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   |                                              | Accounts payable and accrued liabilities            |          |                  | 21,637   |          |           |        | 1,035    |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   |                                              | Income taxes payable                                |          |                  | (46      | )        |           |        |         |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          |                                                   |                                              | Loans payable to affiliates                         |          |                  | (565     | )        |           |        | (97,913  | )
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         |                                                                                          |                                                   |                                              | Net cash provided by operating activities           |          |                  | 443,960  |          |           |        | 59,405   |  
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                    |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Cash acquired from consolidating Pacific Crossing Ltd.                                   |                                                   |                                              |                                                    |          |                  |          | 606      |          
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Change in restricted cash and cash equivalents                                           |                                                   |                                              | 9,701                                               |          |                  |          | 61,695   |          
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Purchase of property and equipment                                                       |                                                   |                                              | (457,662                                            | )        |                  |          | (267,830 | )        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Acquisition of minority share in affiliate                                               |                                                   |                                              |                                                    |          |                  |          | (20,585  | )        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Cash paid for investments                                                                |                                                   |                                              | (2,420                                              | )        |                  |          |         |          
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         |                                                                                          |                                                   |                                              | Net cash used in investing activities               |          |                  | (450,381 | )        |           |        | (226,114 | )
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                    |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Proceeds from capital contribution                                                       |                                                   |                                              |                                                    |          |                  |          | 280,032  |          
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Net repayments under Pacific Crossing -1 credit facility                                 |                                                   |                                              | (41,595                                             | )        |                  |          |         |          
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Minority interest investment in affiliates                                               |                                                   |                                              | 9,677                                               |          |                  |          | 73,192   |          
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         |                                                                                          |                                                   |                                              | Net cash provided by (used in) financing activities |          |                  | (31,918  | )        |           |        | 353,224  |  
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|Exchange Rate Effect on Cash and Cash Equivalents                        |                                                                                          |                                                   | 342                                          |                                                     |          |                  | 434      |         
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|Net Increase (Decrease) in Cash and Cash Equivalents                     |                                                                                          |                                                   | (37,997                                      | )                                                   |          |                  | 186,949  |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Cash and Cash Equivalents, beginning of period                           |                                                                                          |                                                   | 705,161                                      |                                                     |          |                  | 9,784    |         
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|Cash and Cash Equivalents, end of period                                 |                                                                                          | $                                                 | 667,164                                      |                                                     |          | $                | 196,733  |         
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|SUPPLEMENTAL INFORMATION ON NON-CASH INVESTING
AND FINANCING ACTIVITIES: |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Increase (decrease) in accrued construction costs |                                              | $                                                   | 61,747   |                  |          | $        | (18,167   | )     
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Amortization of deferred finance costs            |                                              |                                                     | 1,535    |                  |          |          | 2,273     |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Increase in payable to affiliates                 |                                              |                                                     | 6,591    |                  |          |          |          |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Increase in interest payable                      |                                              |                                                     | 1,140    |                  |          |          |          |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Other non-cash item                               |                                              |                                                     | (762     | )                |          |          |          |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Costs incurred for property and equipment         |                                              |                                                     | (527,913 | )                |          |          | (251,936  | )     
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         |                                                                                          | Cash paid for property and equipment              |                                              | $                                                   | (457,662 | )                |          | $        | (267,830  | )     
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                        |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Cash paid for interest and income taxes                                                  |                                                   |                                              |                                                     |          |                  |          |          |          
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Interest paid and capitalized                     |                                              | $                                                   | 57,630   |                  |          | $        | 34,077    |       
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         |                                                                                          | Interest paid (net of capitalized interest)       |                                              | $                                                   | 27,043   |                  |          | $        | 892       |       
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         |                                                                                          | Cash paid for taxes                               |                                              | $                                                   | 459      |                  |          | $        |          |       
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         | Details of consolidating Pacific Crossing Ltd.                                           |                                                   |                                              |                                                     |          |                  |          |          |          
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Assets consolidated                               |                                              | $                                                   |         |                  |          | $        | 1,124,138 |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                          | Liabilities consolidated                          |                                              |                                                     |         |                  |          |          | (945,903  | )     
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         
|                                                                         |                                                                                          | $                                                 |                                             |                                                     |          | $                | 178,235  |         
|                                                                         |                                                                                          |                                                   |                                              |                                                     |          |                  |          |         

See accompanying notes to condensed consolidated financial statements.

5



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##### Table of Contents






ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

|                   |                                                |   |                    |        |                  |   |               |      |               |   |          |        |   |   |         |     | 
|------------------ | ---------------------------------------------- | - | ------------------ | ------ | ---------------- | - | ------------- | ---- | ------------- | - | -------- | ------ | - | - | ------- | --- | 
|                   |                                                |   | Three Months Ended |        | Six Months Ended
|                   |                                                |   |                    |        |                 
|                   |                                                |   | June 30, 2001      |        | June 30, 2000    |   | June 30, 2001 |      | June 30, 2000
|                   |                                                |   |                    |        |                  |   |               |      |              
|Net loss           |                                                | $ | (62,455            | )      |                  | $ | (58,545       | )    |               | $ | (123,200 | )      |   | $ | (58,224 | )  
|                  
|                  
|                  
|                  
|                   | Change in fair value of derivative instruments |   |                    | (497   | )                |   |               |     |               |   |          | (2,207 | ) |   |         |    | 
|                  
|                  
|                  
|                  
|                   | Foreign currency translation adjustment        |   |                    | (1,079 | )                |   |               | (963 | )             |   |          | (4,038 | ) |   |         | 434 | 
|                   |                                                |   |                    |        |                  |   |               |      |               |   |          |        |   |   |         |    
|Comprehensive loss |                                                | $ | (64,031            | )      |                  | $ | (59,508       | )    |               | $ | (129,445 | )      |   | $ | (57,790 | )  
|                   |                                                |   |                    |        |                  |   |               |      |               |   |          |        |   |   |         |    

See accompanying notes to condensed consolidated financial statements.

6



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##### Table of Contents






ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001
(Unaudited)

(1) Organization and Background

Nature of Business

Asia Global Crossing Ltd., a Bermuda company (together with its
consolidated subsidiaries, the Company or Asia Global Crossing), is a
leading pan-Asian telecommunications carrier providing telecommunications
services, including data and web-hosting services, to wholesale and business
customers. Asia Global Crossing owns 64.5% of Pacific Crossing-1, a 21,000
kilometer undersea cable that connects Japan and the United States. The Company
is constructing East Asia Crossing, a 19,500 kilometer undersea fiber optic
cable that connects Japan, Hong Kong and Taiwan. The Company expects to extend
East Asia Crossing to Korea in the third quarter of 2001, to Singapore in the
fourth quarter of 2001, to the Philippines in the first quarter of 2002, and to
China, if and when regulations permit. Both of these systems will be seamlessly
connected to the Global Crossing network, which, when completed and when
combined with Pacific Crossing-1 and East Asia Crossing, will consist of
162,544 announced route kilometers which will serve four continents, 27
countries and more than 200 major cities.

Business Strategy

The Company intends to use its competitive position, including its
connectivity to the Global Crossing network, to exploit the growing demand for
bandwidth, Internet services and other advanced communication services for
connectivity to Asia. To accomplish this goal, the Company is pursuing a
strategy which includes capitalizing on its early-mover advantage, expanding
its portfolio of services to meet its customers needs and forming strategic
alliances and joint ventures with strong local partners in Asia.

Joint Ventures

The Company currently has joint ventures in Hong Kong, Japan, Taiwan,
Korea, Singapore, and the Philippines. In Hong Kong, the Company owns 50% of
Hutchison Global Crossing, a joint venture with Hutchison Whampoa; In Japan,
the Company owns 49% of Global Access Limited, a joint venture with Vectant,
Inc.; In Taiwan, the Company owns 60% of Asia Global Crossing Taiwan Inc., a
joint venture with Microelectronics Technology Inc.; In Korea, the Company owns
49% of Dacom Crossing, a joint venture with DACOM Corporation; In Singapore,
the Company owns 50% of StarHub Crossing Pte Ltd., a joint venture with StarHub
Pte Ltd.; and in the Philippines, the Company owns 48% of Digitel Crossing, a
joint venture with Digital Telecommunications Phils., Inc.

Initial Public Offering

In the fourth quarter of 2000, the Company completed its initial public
offering (IPO), in which it sold 68.5 million shares of its Class A common
stock at a price of $7.00 per share. The net proceeds of the IPO, after
deducting underwriting discounts, commissions and costs, were approximately
$455.1 million. Upon completion of the IPO, Global Crossing Ltd. (Global
Crossing), Softbank Corp. (Softbank) and Microsoft Corporation (Microsoft)
owned 56.9%, 15.4% and 15.4%, respectively, of the Company.

Concurrent with the Companys IPO, Global Crossing, Microsoft and Softbank
contributed to the Company their aggregate interest of 50% in Hutchison Global
Crossing Holdings Limited and subsidiaries (HGC). HGCs offerings include
international services, local fixed network services, and multimedia services
in Hong Kong. At the same time, Global Crossing contributed its 49% interest in
Global Access Limited (GAL) to the Company. GAL constructs and operates a
terrestrial digital fiber optic cable system connecting Tokyo, Osaka and Nagoya
with Pacific Crossing-1, providing communication network services.

7



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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(2) Basis of Presentation

The accompanying unaudited interim condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles (GAAP) for interim financial reporting and Securities and Exchange
Commission (SEC) regulations. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with GAAP have
been condensed or omitted pursuant to such rules and regulations. In the
opinion of management, the unaudited interim consolidated financial statements
reflect all adjustments necessary to fairly present the results of operations,
financial position and cash flows for the periods presented. The results of
operations for any interim period are not necessarily indicative of results for
the full year. These financial statements should be read in conjunction with
the audited financial statements and notes thereto included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2000.

Concurrent with the IPO in October 2000, HGC and GAL were contributed to
the Company. These contributions were accounted for by the Company similar to
the pooling-of-interests method of accounting because HGC, GAL and the Company
were entities under common control of Global Crossing. Prior to these
contributions, Global Crossing accounted for its investments in HGC and GAL
under the equity method of accounting. In preparing these condensed
consolidated financial statements, GAL and HGCs statements of operations for
the three months and six months ended June 30, 2000 have been retroactively
combined with the Companys consolidated statement of operations for the three
months and six months ended June 30, 2000, respectively, under the equity
method of accounting.

(3) Significant Accounting Policies

Revenue Recognition

Services.Revenues derived from telecommunication and maintenance
services, including sales of capacity under operating-type leases, are
recognized as services are provided. Payments received from customers before
the relevant criteria for revenue recognition are satisfied are included in
deferred revenue in the accompanying condensed consolidated balance sheets.

Operating Leases.In addition, the Company offers customers flexible
bandwidth products to multiple destinations and many of the contracts for
subsea circuits entered into are part of a service offering. Consequently, the
Company defers revenue related to operating leases and amortizes the revenue
over the appropriate term of the contract. Accordingly, the Company treats cash
received prior to the completion of the earnings process as deferred revenue.

Sales-Type Leases.Revenues from Capacity Purchase Agreements (CPAs)
that meet the criteria of sales-type lease accounting are recognized in the
period that the rights and obligations of ownership transfer to the purchaser,
which occurs when (i) the purchaser obtains the right to use the capacity,
which can only be suspended if the purchaser fails to pay the full purchase
price or fulfill its contractual obligations, (ii) the purchaser is obligated
to pay Operations, Administration and Maintenance (OA&M) costs and (iii) the
segment of a system related to the capacity purchased is available for service.
Certain customers who have entered into CPAs for capacity have paid deposits
toward the purchase price which have been included as deferred revenue in the
accompanying condensed consolidated balance sheets. The Company follows the
criteria set forth in Statement of Financial Accounting Standards (SFAS) No.
66, Accounting for Sales of Real Estate for transactions which qualify for
sales-type lease accounting.

There was no sales-type lease revenue recognized in the three months and
six months ended June 30, 2001, respectively. For the three months and six
months ended June 30, 2000, the Company recognized $31.2 million and $106.2
million sales-type lease revenue, respectively.

Operating Expenses

Operating Leases.Costs of the network relating to capacity contracts
accounted for as operating leases are treated as fixed assets and, accordingly,
are depreciated over the estimated useful life of the capacity.

Sales-Type Leases  Non-Cash Cost of Capacity Sold.At the date each
segment of a system becomes operational, the related amounts included in
construction in progress are reclassified as transmission equipment, and
depreciation commences. For contracts that meet the criteria for sales-type
lease accounting, the Companys policy provides for recording non-cash cost of
capacity sold through depreciation and amortization in the period in which the
related revenue was recognized. The amount charged to non-cash

8



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##### Table of Contents



ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

cost of capacity sold relating to subsea capacity is calculated by
determining the estimated net book value of the specific subsea capacity at the
time of the sale. The estimated net book value includes expected costs of
capacity the Company has the intent and ability to add through upgrades of that
system, provided the need for such upgrades is supported by a third-party
consultants revenue forecast.

There was no non-cash cost of capacity sold for the three months and six
months ended June 30, 2001, respectively. For the three months and six months
ended June 30, 2000, the non-cash cost of capacity sold was $54.1 million and
$84.9 million, respectively, included in depreciation and amortization expense
in the accompanying condensed consolidated statements of operations.

Derivative Instruments

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments
and Hedging Activities, as amended by SFAS 137, Accounting for Derivative
Instruments and Hedging Activities  Deferral of the Effective Date of FASB
Statement No. 133, and SFAS No. 138, Accounting for Certain Derivatives
Instruments and Certain Hedging Activities. SFAS 133 establishes standards of
accounting and reporting for derivatives instruments and hedging activities,
and requires that all derivatives be recognized on the balance sheet at fair
value. Changes in the fair value of derivatives that do not meet the hedge
treatment, as well as the ineffective portion of any hedges, are to be reported
in earnings. The cumulative effect of adopting these new standards did not have
a material effect of the Companys results of operations or its financial
position for the period presented in the financial statements included herein.

The Company utilizes certain derivative financial instruments to enhance
its ability to manage risk, including interest rate risk and foreign currency
exchange risk, which exist as part of ongoing business operations. Derivative
instruments are entered into for periods consistent with related underlying
exposures and do not constitute positions independent of these exposures. These
risks are managed through interest risk swap agreements and foreign currency
forward contracts.

The Company designates derivatives as either fair value hedges or cash
flow hedges. If the derivative is designated as a fair value hedge, the changes
in the fair value of the derivative and of the hedged item attributable to the
hedged risk are recognized in earnings. If the derivative is designated as a
cash flow hedge, the effective portions of changes in the fair value of the
derivative are recorded in other comprehensive income or loss (OCI or OCL)
and are recognized in the income statement when the hedged transaction affects
earnings. Ineffective portions of changes in the fair value of cash flow hedges
are recognized in earnings. For the six months ended June 30, 2001, the Company
had cash flow hedges related to interest rate swaps with an aggregate change in
fair value of $2.2 million recorded in OCL.

Non-Monetary Transactions

The Company may exchange capacity with other capacity or service
providers. These transactions are accounted for in accordance with Accounting
Principles Board Opinion No. 29 Accounting for Non-monetary Transactions,
where an exchange for similar capacity is recorded at a historical carryover
basis and dissimilar capacity is accounted for at fair market value with
recognition of any gain or loss.

Reclassifications

Certain prior year amounts have been reclassified in the accompanying
condensed consolidated financial statements to conform to current year
presentation.

Recent Accounting Pronouncements

In June 2001 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS
141 requires all business combinations initiated after June 30, 2001 to be
accounted for using the purchase method of accounting. SFAS 142, which will be
adopted by the Company on January 1, 2002, requires goodwill and certain
intangible assets resulting from business combinations entered into prior to
June 30, 2001 no longer be amortized, but instead be reviewed for impairment.
Any write-down of goodwill would be charged to results of operations in the
periods in which the recorded value of goodwill and certain intangibles is more
than its fair value. The adoption of SFAS 142 will reduce the amortization of
existing goodwill and intangibles commencing January 1, 2002; however,
impairment reviews may result in periodic write-downs subsequent to the date of
adoption.

9



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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(4) Acquisition

On July 10, 2001, the Company completed its acquisition of the Asian
operations of IXnet, Inc. (IXnet) and IPC Information Systems, Inc. (IPC)
as well as the territorial rights to conduct telecommunications service
businesses in Australia and New Zealand from its parent company Global
Crossing, in exchange for approximately 26.8 million shares of Class B common
stock of the Company. This acquisition will be accounted for by the Company
similar to the pooling-of-interests method of accounting because IXnet, IPC and
the Company were entities under common control of Global Crossing. Accordingly,
as required by GAAP, the Company will restate its financial statements to
reflect the operating results and financial positions of the Asian operations
of IXnet and IPC from the third quarter of 2000 forward, the date IXnet and IPC
were acquired by Global Crossing.

The following unaudited pro forma supplemental financial information of
the Company has been prepared to demonstrate how it might have looked if the
acquisition of the Asian operations of IXnet/IPC transaction had been completed
at the beginning of the periods presented. The pro forma information does not
attempt to show how the Company, after effecting the transaction described
above, would actually have performed if the transaction occurred prior to the
commencement of these periods. If the transaction had actually occurred in
prior periods, the financial performance of the Company and its constituent
businesses would likely have been different. The pro forma financial
information is not necessarily indicative of the future results that the
Company will experience after the completion of this transaction.

|                                                                     |  |                                                        |             |                  |  |          |             |          |  |   |             |   |  |   |             |  
|-------------------------------------------------------------------- |  | ------------------------------------------------------ | ----------- | ---------------- |  | -------- | ----------- | -------- |  | - | ----------- | - |  | - | ----------- | -
|                                                                     |  | Three Months Ended                                     |             | Six Months Ended
|                                                                     |  |                                                        |             |                 
|                                                                     |  | June 30,                                               |             | June 30,         |  | June 30, |             | June 30,
|                                                                     |  | 2001                                                   |             | 2000             |  | 2001     |             | 2000    
|                                                                     |  |                                                        |             |                  |  |          |             |         
|                                                                     |  | (in thousands, except share and per share information)
|Revenues                                                             |  | $                                                      | 25,811      |                  |  | $        | 39,034      |          |  | $ | 43,260      |   |  | $ | 120,342     |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Operating loss                                                       |  |                                                        | (68,053     | )                |  |          | (55,080     | )        |  |   | (127,628    | ) |  |   | (38,944     | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Net loss                                                             |  |                                                        | (74,429     | )                |  |          | (65,187     | )        |  |   | (143,790    | ) |  |   | (71,003     | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Basic and diluted net loss per common share                          |  | $                                                      | (0.13       | )                |  | $        | (0.13       | )        |  | $ | (0.25       | ) |  | $ | (0.14       | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Shares used in computing basic and diluted net loss
per common share |  |                                                        | 581,947,683 |                  |  |          | 513,447,683 |          |  |   | 581,947,683 |   |  |   | 513,447,683 |  

(5) Property and Equipment

Property and equipment consist of the following (in thousands):

|                                  |                              |   |             |           |              |   |           |           | 
|--------------------------------- | ---------------------------- | - | ----------- | --------- | ------------ | - | --------- | --------- | 
|                                  |                              |   | June 30,    |           | December 31,
|                                  |                              |   | 2001        |           | 2000        
|                                  |                              |   |             |           |             
|                                  |                              |   | (Unaudited) |           |              |   |          
|Terrestrial capacity              |                              | $ | 144,698     |           |              | $ | 69,390    |          
|                                 
|                                 
|                                 
|                                 
|Subsea transmission equipment     |                              |   | 1,628,807   |           |              |   | 1,404,962 |          
|                                 
|                                 
|                                 
|                                 
|Leasehold improvements            |                              |   | 7,584       |           |              |   | 7,308     |          
|                                 
|                                 
|                                 
|                                 
|Furniture, fixtures and equipment |                              |   | 15,948      |           |              |   | 13,712    |          
|                                  |                              |   |             |           |              |   |           |          
|                                  | Total property and equipment |   |             | 1,797,037 |              |   |           | 1,495,372 | 
|                                 
|                                 
|                                 
|                                 
|Less: accumulated depreciation    |                              |   | (192,034    | )         |              |   | (147,537  | )        
|                                  |                              |   |             |           |              |   |           |          
|                                  |                              |   | 1,605,003   |           |              |   | 1,347,835 |          
|                                 
|                                 
|                                 
|                                 
|Construction in progress          |                              |   | 793,440     |           |              |   | 566,183   |          
|                                  |                              |   |             |           |              |   |           |          
|Property and equipment, net       |                              | $ | 2,398,443   |           |              | $ | 1,914,018 |          
|                                  |                              |   |             |           |              |   |           |          

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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(6) Investments in Affiliates

The Companys investments in affiliates consist of the following (in
thousands):

|                                   |                           |   |          |         |              |   |         |         | 
|---------------------------------- | ------------------------- | - | -------- | ------- | ------------ | - | ------- | ------- | 
|                                   |                           |   | June 30, |         | December 31,
|                                   |                           |   | 2001     |         | 2000        
|                                   |                           |   |          |         |             
|Investment in GAL                  |                           | $ | 10,176   |         |              | $ | 14,454  |        
|                                  
|                                  
|                                  
|                                  
|Investment in HGC                  |                           |   | 577,935  |         |              |   | 606,174 |        
|                                  
|                                  
|                                  
|                                  
|Investment in other joint ventures |                           |   | 2,347    |         |              |   |        |        
|                                   |                           |   |          |         |              |   |         |        
|                                   | Investments in affiliates |   | $        | 590,458 |              |   | $       | 620,628 | 
|                                   |                           |   |          |         |              |   |         |        

The summarized combined statements of operations data of GAL are as
follows (the average exchange rates of approximately JPY¥123=$1.00 and
JPY¥107=$1.00 have been used to translate GALs financial information in
Japanese yen into U.S. dollars for the three months ended June 30, 2001 and
2000, respectively) (in thousands):

|               |  |                    |        |                  |  |               |        |               |  |   |        |   |  |   |        |  
|-------------- |  | ------------------ | ------ | ---------------- |  | ------------- | ------ | ------------- |  | - | ------ | - |  | - | ------ | -
|               |  | Three Months Ended |        | Six Months Ended
|               |  |                    |        |                 
|               |  | June 30, 2001      |        | June 30, 2000    |  | June 30, 2001 |        | June 30, 2000
|               |  |                    |        |                  |  |               |        |              
|Revenues       |  | $                  | 10,096 |                  |  | $             | 5,062  |               |  | $ | 17,925 |   |  | $ | 8,089  |  
|              
|              
|              
|              
|Operating loss |  |                    | (4,707 | )                |  |               | (2,206 | )             |  |   | (7,327 | ) |  |   | (7,420 | )
|              
|              
|              
|              
|Net loss       |  | $                  | (5,376 | )                |  | $             | (2,699 | )             |  | $ | (8,198 | ) |  | $ | (8,128 | )

The summarized combined statements of operations data of HGC are as
follows (the average exchange rate of approximately HK$7.80=$1.00 has been used
to translate HGCs financial information in Hong Kong dollars into U.S.
dollars) (in thousands):

|               |  |                    |         |                  |  |               |        |               |  |   |         |   |  |   |         |  
|-------------- |  | ------------------ | ------- | ---------------- |  | ------------- | ------ | ------------- |  | - | ------- | - |  | - | ------- | -
|               |  | Three Months Ended |         | Six Months Ended
|               |  |                    |         |                 
|               |  | June 30, 2001      |         | June 30, 2000    |  | June 30, 2001 |        | June 30, 2000
|               |  |                    |         |                  |  |               |        |              
|Revenues       |  | $                  | 33,511  |                  |  | $             | 30,782 |               |  | $ | 66,224  |   |  | $ | 59,795  |  
|              
|              
|              
|              
|Operating loss |  |                    | (12,314 | )                |  |               | (8,465 | )             |  |   | (24,986 | ) |  |   | (17,170 | )
|              
|              
|              
|              
|Net loss       |  | $                  | (13,727 | )                |  | $             | (8,450 | )             |  | $ | (27,210 | ) |  | $ | (16,816 | )

(7) Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the reporting
period. Diluted net loss per share are computed similar to basic net loss per
share while giving effect to all potentially diluted common shares that were
outstanding during the period. Dilutive options did not have an effect on the
computation of diluted net loss per share for the three and six months ended
June 30, 2001 and 2000, respectively, since they were anti-dilutive.

(8) Related Party Transactions

During the normal course of business, the Company has entered into various
transactions with certain related parties. The following information should be
read in conjunction with the footnote 10  Related Party Transactions in the
audited consolidated financial statements and notes thereto contained in the
Companys Annual Report on Form 10-K for the year ended December 31, 2000.

Revenues generated from sales to third-party customers through Global
Crossing were approximately $6.5 million and $28.8 million for the three months
ended June 30, 2001 and 2000, respectively. Such sales were approximately $9.8
million and $74.6 million for the six months ended June 30, 2001 and 2000,
respectively.

For the three months ended June 30, 2001 and 2000, the Company purchased
network capacity of approximately $16.9 million and $20.6 million,
respectively, from its non-consolidated joint ventures. During the six months
ended June 30, 2001 and 2000, such capacity purchases were $25.3 million and
$35.3 million, respectively. During the three months ended June 30, 2001 and
2000, the

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##### Table of Contents



ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

Company also purchased network capacity of approximately $0.6 million and
$12.1 million, respectively, from Global Crossing. During the six months ended
June 30, 2001 and 2000, such purchases were $3.1 million and $18.5 million,
respectively.

For the three months ended June 30, 2001 and 2000, the corporate shared
service charges from Global Crossing were $1.5 million and $1.0 million,
respectively. During the six months ended June 30, 2001 and 2000, such charges
from Global Crossing were $5.0 million and $2.3 million, respectively.

12



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

This information should be read in conjunction with the unaudited
condensed consolidated financial statements and the notes thereto included in
this Quarterly Report on Form 10-Q, and the audited consolidated financial
statements and notes thereto and Managements Discussion and Analysis of
Financial Condition and Results of Operations contained in our Annual Report on
Form 10-K for the year ended December 31, 2000.

General

We were formed in November 1999 and have a limited operating history. In
the fourth quarter of 2000, we completed our initial public offering (IPO) in
which we sold 68.5 million shares of our Class A common stock at a price of
$7.00 per share. Upon completion of the IPO, Global Crossing, Ltd. (Global
Crossing), Softbank Corp. (Softbank) and Microsoft Corporation (Microsoft)
owned 56.9%, 15.4% and 15.4%, respectively, of us.

Concurrent with our IPO, Global Crossing, Microsoft and Softbank
contributed their aggregate interest of 50% in Hutchison Global Crossing
Holdings Limited and subsidiaries (HGC) to us. At the same time, Global
Crossing contributed its 49% interest in Global Access Limited (GAL) to us.
These contributions were accounted for by us similar to the
pooling-of-interests method of accounting. In preparing these condensed
consolidated financial statements, GAL and HGCs statements of operations for
the three months and six months ended June 30, 2000 have been retroactively
combined with our consolidated statement of operations for the three months and
six months ended June 30, 2000, respectively, under the equity method of
accounting.

Concurrent with the closing of the IPO, the Company issued a series of
senior unsecured notes (Senior Notes). The Senior Notes were issued in an
original principal amount of $408 million, mature on October 15, 2010 and bear
interest at the rate of 13.375% per annum. Interest on the Senior Notes is
payable on April 15 and October 15 of each year.

In December 1999, the first segment of Pacific Crossing-1 commenced
service, and the full ring was completed in December 2000. In January 2001, the
first segment of East Asia Crossing connecting Hong Kong and Japan commenced
service. During the quarter, East Asia Crossing landed in Taiwan. Now Japan,
Hong Kong and Taiwan are connected.

Our revenue through the end of year 2000 was primarily derived from the
sale of wholesale bandwidth capacity on Pacific Crossing-1. In year
2001, a significant portion of our revenue is expected to be derived
from the sale of data and maintenance services to wholesale and
business customers and the sale of wholesale bandwidth capacity on
Pacific Crossing-1 and East Asia Crossing.

Since Pacific Crossing1 commenced service, wholesale bandwidth pricing in
the trans-Pacific market has significantly declined. We expect that wholesale
bandwidth pricing in the trans-Pacific market will continue to decline in
future years, as the supply of trans-Pacific bandwidth capacity increases.
Likewise, we expect prices to decline in other markets in which we will
operate.

Results of Operations

We monitor our financial performance using certain metrics which reflect
our performance and liquidity on a consolidated basis, and on a proportionate
ownership basis, reflecting our interests in consolidated and non-consolidated
joint ventures. These metrics should not be considered as an alternative to any
measure of performance as promulgated under generally accepted accounting
principles (GAAP).

We define Cash Revenue as revenue plus the cash portion of the change in
deferred revenue. We present Cash Revenue because it is a financial indicator
used by investors and analysts to compare companies on the basis of cash
receipts from sales of capacity and services.

We define Adjusted EBITDA as operating income (loss) plus goodwill and
intangible amortization, depreciation and amortization, which includes non-cash
cost of capacity sold, stock-related expenses and the cash portion of the
change in deferred revenue. We track Adjusted EBITDA because it is a financial
indicator used by investors and analysts to analyze and compare companies on
the basis of operating performance and because we believe that Adjusted EBITDA
is an additional, meaningful measure

13



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##### Table of Contents



of our performance and liquidity. Our definition and calculation of
Adjusted EBITDA may be different from the definitions and calculations used by
other companies and, therefore, comparability may be limited.

We define Proportionate Cash Revenue as the sum of our ownership
percentage of the Cash Revenue allocated to us and our non-consolidated joint
ventures plus incremental Cash Revenue contributions from these joint ventures.

We define Proportionate Adjusted EBITDA as Proportionate Cash Revenue
less proportionate Cash Operating Expenses, which represents our ownership
percentage of the Cash Operating Expenses of Asia Global Crossing and our
non-consolidated joint ventures. We define Cash Operating Expense as
operating expenses excluding goodwill and intangible amortization, depreciation
and amortization including non-cash cost of capacity sold, and stock-related
expenses.

We believe these proportionate metrics reflect the economic results of our
business given that we conduct our business through a number of joint ventures,
many of which, in conformity with U.S. GAAP, are not consolidated. In
calculating Proportionate Cash Revenue, cash received by Asia Global Crossing
and its affiliates for capacity purchases on specific systems is treated as
cash received by the companies which provide the capacity. In addition,
management makes certain estimates and assumptions in determining Proportionate
Cash Revenue associated with Cash Revenue recognized. Differences, if any,
between Proportionate Cash Revenue recognized and the actual amounts of
Proportionate Cash Revenue are the results of the systems eventually selected
by the customers, and are recognized at the time such customer choices are
made.

Three months ended June 30, 2001 compared to the three months ended June 30, 2000

The following table represents the selected unaudited consolidated
financial data for the three months ended June 30, 2001 and 2000, respectively
(in thousands):

|                                                             |                                                |                                                                    |         |         |                    |   |               |         |         |   | 
|------------------------------------------------------------ | ---------------------------------------------- | ------------------------------------------------------------------ | ------- | ------- | ------------------ | - | ------------- | ------- | ------- | - | 
|                                                             |                                                |                                                                    |         |         | Three Months Ended
|                                                             |                                                |                                                                    |         |         |                   
|                                                             |                                                |                                                                    |         |         | June 30, 2001      |   | June 30, 2000
|                                                             |                                                |                                                                    |         |         |                    |   |              
|Revenues                                                     |                                                | $                                                                  | 17,913  |         |                    | $ | 33,667        |        
|                                                            
|                                                            
|                                                            
|                                                            
|Proportionate Cash Revenue                                   |                                                |                                                                    | 192,000 |         |                    |   | 55,540        |        
|                                                            
|                                                            
|                                                            
|                                                            
|Proportionate Adjusted EBITDA                                |                                                |                                                                    | 122,970 |         |                    |   | 15,691        |        
|                                                            
|                                                            
|                                                            
|                                                            
|Revenues:                                                    |                                                |                                                                    |         |         |                    |   |               |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Sales-type leases                              |                                                                    | $       |        |                    |   | $             | 31,193  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Services (1)                                   |                                                                    |         | 16,104  |                    |   |               | 1,979   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Amortization of prior period IRUs             |                                                                    |         | 1,809   |                    |   |               | 495     |        
|                                                             |                                                |                                                                    |         |         |                    |   |               |        
|                                                             | Total Revenues                                 |                                                                    | $       | 17,913  |                    |   | $             | 33,667  |        
|                                                             |                                                |                                                                    |         |         |                    |   |               |        
|Adjusted EBITDA:                                             |                                                |                                                                    |         |         |                    |   |               |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Operating income (loss)                        |                                                                    | $       | (56,336 | )                  |   | $             | (48,443 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Depreciation and amortization                  |                                                                    |         | 21,864  |                    |   |               | 58,029  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Cash portion of the change in deferred revenue |                                                                    |         | 223,037 |                    |   |               | 45,933  |        
|                                                             |                                                |                                                                    |         |         |                    |   |               |        
|                                                             | Adjusted EBITDA                                |                                                                    | $       | 188,565 |                    |   | $             | 55,519  |        
|                                                             |                                                |                                                                    |         |         |                    |   |               |        
|Proportionate Cash Revenue and Proportionate Adjusted EBITDA |                                                |                                                                    |         |         |                    |   |               |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Cash Revenue                                   |                                                                    | $       | 240,950 |                    |   | $             | 79,600  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Less:                                          | Cash Revenue proportionately owned by other companies (2)          |         |         | (67,340            | ) |               |         | (39,451 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Add:                                           | Incremental contributions from non-consolidated joint ventures (3) |         |         | 18,390             |   |               |         | 15,391  |  
|                                                             |                                                |                                                                    |         |         |                    |   |               |        
|                                                             |                                                | Proportionate Cash Revenue                                         |         | $       | 192,000            |   |               | $       | 55,540  |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Less:                                          | Proportionate cash operating expense (4)                           |         |         | (69,030            | ) |               |         | (39,849 | )
|                                                             |                                                |                                                                    |         |         |                    |   |               |        
|                                                             |                                                | Proportionate Adjusted EBITDA                                      |         | $       | 122,970            |   |               | $       | 15,691  |  
|                                                             |                                                |                                                                    |         |         |                    |   |               |        

14



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##### Table of Contents





---

|(1) |  | Service revenue includes revenue from telecommunications services and
maintenance services.                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | This amount represents other companies ownership percentage in our Cash
Revenue.                                                                   
|   
|   
|   
|   
|(3) |  | This amount represents our ownership percentage in Cash Revenue generated
by business between our non-consolidated joint ventures and third parties.
|   
|   
|   
|   
|(4) |  | This amount represents our ownership percentage in Cash Operating
Expenses of Asia Global Crossing and our affiliates.                              

Revenues. Revenues for the second quarter of 2001 were $17.9 million,
compared to $33.7 million in the second quarter of 2000, a decrease of $15.8
million, or 47%. Revenue in the second quarter of 2000 included $31.2 million
sales-type lease revenue. In accounting for a sales-type lease, revenue is
recognized upon payment and activation of the circuits rather than amortized
over the life of the lease. We have de-emphasized such type of transactions
with our customers. Excluding the impact of $31.2 million sales-type lease
revenue, revenues for the second quarter of 2001 increased $15.4 million,
primarily due to a $14.1 million increase in revenue from services generated by
our data and maintenance service business and a $1.3 million increase in the
amortization of Indefeasible Right to Use (IRU) deferred revenues.

Proportionate Cash Revenue.Proportionate Cash Revenue for the second
quarter of 2001 increased to $192.0 million from $55.5 million in the second
quarter of 2000, an increase of $136.5 million, or 246%. The growth was
primarily attributable to an increase of $42.0 million in capacity sales on
Pacific Crossing-1 and East Asia Crossing systems, and an increase of $62.4
million in service revenue, of which $50.1 million represented prepayments
received from customers during the second quarter of 2001 primarily for services to be provided by us in the future.
Included in Proportionate Cash Revenue was
$127.0 million received from carrier customers to whom Global Crossing and we
made purchase commitments during the quarter. Payments made by us to such
carriers during the quarter totaled approximately $82.0 million (see Liquidity
and Capital Resources).

Cost of access and maintenance. Cost of access and maintenance mainly
includes third party and affiliates operating, administration and maintenance
(OA&M) costs incurred in connection with maintaining our systems and cable
landing stations, and costs of off-net capacity. For the three months ended
June 30, 2001, cost of access and maintenance increased to $18.0 million from
$11.7 million in the same period of 2000, an increase of $6.3 million, or 54%,
due to the additional OA&M expenses of $2.2 million incurred for East Asia
Crossing, which became operational in the first quarter of 2001, and
approximately $4.0 million of off-net capacity costs. In the second quarter of
2000, only Pacific Crossing-1 was operational and the off-net capacity costs
were immaterial.

Other operating expenses. Other operating expenses consist principally of
salaries and employee benefits, marketing and promotional costs, occupancy
costs, travel costs, professional fees, and corporate shared service charges
from Global Crossing. Other operating expenses for the second quarter of 2001
was $34.4 million, compared to $12.4 million in the second quarter of 2000, an
increase of $22.0 million, or 177%, primarily a result of increased headcount
and growing operating activities.

Depreciation and amortization. Depreciation and amortization expense for
the second quarter of 2001 decreased to $21.9 million from $58.0 million in the
comparable prior year period, a decrease of $36.1 million. Depreciation and
amortization expense includes non-cash cost of capacity sold resulting from
capacity sales that meet the qualifications of sales-type lease accounting. For
the quarter ended June 30, 2001, there was no non-cash cost of capacity sold
because we have de-emphasized sales-type leases with customers. For the second
quarter of 2000, the non-cash cost of capacity sold included in depreciation
and amortization expense was approximately $54.1 million. Excluding the impact
of non-cash cost of capacity sold, depreciation and amortization expense for
the second quarter of 2001 increased $18.0 million, due primarily to additional
depreciation expense incurred for Pacific Crossing-1, of which the full ring
became fully operational at the end of 2000, but only the first segment was
operational in the first quarter of 2000. In 2001, depreciation began on a
portion of East Asia Crossing, which became operational at the beginning of the
year. The depreciation of capacity purchased from affiliates also contributed
to a small portion of the increase.

Minority interest. Minority interest represents the minority partners
interest in the income or loss of our consolidated joint ventures, primarily
Pacific Crossing Ltd. For the second quarter of 2001, minority interest was
$16.4 million, compared to $(1.5) million in the comparable prior year period.
Pacific Crossing Ltd. incurred larger losses in the second quarter of 2001, due
primarily to the decrease in sales-type lease revenue, and increases of
depreciation and amortization, and interest expense as a result of the
completion of PC-1 construction at the end of 2000. Upon completion of system
construction, interest costs are no longer capitalized and depreciation
commences.

15



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##### Table of Contents



Equity in loss of affiliates.Equity in loss of affiliates for the three
months ended June 30, 2001 increased to $17.3 million from $12.7 million in the
comparable prior year period, an increase of $4.6 million, or 36%, primarily
due to an increase of $2.7 million and $1.3 million in equity in loss of HGC
and GAL, respectively.

Interest income. Interest income increased to $9.1 million in the second
quarter of 2001 from $4.2 million for the second quarter of 2000, an increase
of $4.9 million, or 117%. The significant increase was primarily due to
investment returns on cash received from our initial public offering and senior
notes offering in October 2000.

Interest expense. For the second quarter of 2001, interest expense
increased to $12.9 million from $0.1 million in the comparable prior year
period, an increase of $12.8 million, due primarily to interest incurred under
the Pacific Crossing-1 credit facility not being capitalized in the second
quarter of 2001.

Provision for income taxes. Bermuda does not impose a statutory income tax
and consequently the provision for income taxes of $0.5 million recorded in the
second quarter of 2001 related to income earned by certain subsidiaries which
are located in jurisdictions which impose or may impose income taxes.

Proportionate Adjusted EBITDA. For the three months ended June 30, 2001,
Proportionate Adjusted EBITDA increased to $123.0 million from $15.7 million in
the same period of 2000, an increase of $107.3 million, or 683%, due primarily
to a $136.5 million increase in Proportionate Cash Revenue, partially offset by
a $29.2 million increase in proportionate operating expenses due to growing
operating activities.

Six months ended June 30, 2001 compared to the six months ended June 30, 2000

The following table represents the selected unaudited consolidated
financial data for the six months ended June 30, 2001 and 2000, respectively
(in thousands):

|                                                             |  |                                                |                                                                    |                               |          |                  |         |               |         |         |         | 
|------------------------------------------------------------ |  | ---------------------------------------------- | ------------------------------------------------------------------ | ----------------------------- | -------- | ---------------- | ------- | ------------- | ------- | ------- | ------- | 
|                                                             |  |                                                |                                                                    |                               |          | Six Months Ended
|                                                             |  |                                                |                                                                    |                               |          |                 
|                                                             |  |                                                |                                                                    |                               |          | June 30, 2001    |         | June 30, 2000
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              
|Revenues                                                     |  | $                                              | 27,425                                                             |                               |          | $                | 109,471 |              
|                                                            
|                                                            
|                                                            
|                                                            
|Proportionate Cash Revenue                                   |  |                                                | 397,520                                                            |                               |          |                  | 151,738 |              
|                                                            
|                                                            
|                                                            
|                                                            
|Proportionate Adjusted EBITDA                                |  |                                                | 270,550                                                            |                               |          |                  | 77,605  |              
|                                                            
|                                                            
|                                                            
|                                                            
|Revenues:                                                    |  |                                                |                                                                    |                               |          |                  |         |              
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Sales-type leases                              |                                                                    | $                             |         |                  |         | $             | 106,152 |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Services (1)                                   |                                                                    |                               | 24,635   |                  |         |               | 2,797   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Amortization of prior period IRUs             |                                                                    |                               | 2,790    |                  |         |               | 522     |        
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              
|                                                             |  | Total Revenues                                 |                                                                    | $                             | 27,425   |                  |         | $             | 109,471 |        
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              
|Adjusted EBITDA:                                             |  |                                                |                                                                    |                               |          |                  |         |              
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Operating income (loss)                        |                                                                    | $                             | (107,372 | )                |         | $             | (26,170 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Depreciation and amortization                  |                                                                    |                               | 42,123   |                  |         |               | 92,876  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Cash portion of the change in deferred revenue |                                                                    |                               | 493,085  |                  |         |               | 66,113  |        
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              
|                                                             |  | Adjusted EBITDA                                |                                                                    | $                             | 427,836  |                  |         | $             | 132,819 |        
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              
|Proportionate Cash Revenue and Proportionate Adjusted EBITDA |  |                                                |                                                                    |                               |          |                  |         |              
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Cash Revenue                                   |                                                                    | $                             | 520,510  |                  |         | $             | 175,584 |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Less:                                          | Cash Revenue proportionately owned by other companies (2)          |                               |          | (158,730         | )       |               |         | (53,743 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Add:                                           | Incremental contributions from non-consolidated joint ventures (3) |                               |          | 35,740           |         |               |         | 29,897  |        
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              
|                                                             |  |                                                |                                                                    | Proportionate Cash Revenue    |          | $                | 397,520 |               |         | $       | 151,738 | 
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |  | Less:                                          | Proportionate cash operating expense (4)                           |                               |          | (126,970         | )       |               |         | (74,133 | )      
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              
|                                                             |  |                                                |                                                                    | Proportionate Adjusted EBITDA |          | $                | 270,550 |               |         | $       | 77,605  | 
|                                                             |  |                                                |                                                                    |                               |          |                  |         |              

16



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##### Table of Contents





---

|(1) |  | Service revenue includes revenue from telecommunications services and
maintenance services.                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | This amount represents other companies ownership percentage in our Cash
Revenue.                                                                   
|   
|   
|   
|   
|(3) |  | This amount represents our ownership percentage in Cash Revenue generated
by business between our non-consolidated joint ventures and third parties.
|   
|   
|   
|   
|(4) |  | This amount represents our ownership percentage in Cash Operating
Expenses of Asia Global Crossing and our affiliates.                              

Revenues. Revenues for the first half of 2001 were $27.4 million, compared
to $109.5 million in the first half of 2000, a decrease of $82.1 million, or
75%. Revenue in the first half of 2000 included $106.2 million sales-type lease
revenue. In accounting for a sales-type lease, revenue is recognized upon
payment and activation of the circuit rather than amortized over the life of
the lease. We have de-emphasized such type of transactions with our customers.
Excluding the impact of $106.2 million sales-type lease revenue, revenues for
the first half of 2001 increased $24.1 million, primarily due to a $21.8
million increase in revenue from services generated by our data and maintenance
service business and a $2.3 million increase in the amortization of IRU
deferred revenues.

Proportionate Cash Revenue.Proportionate Cash Revenue for the first half
of 2001 increased to $397.5 million from $151.7 million in the same period of
2000, an increase of $245.8 million, or 162%. The growth was primarily
attributable to an increase of $126.0 million in capacity sales on Pacific
Crossing-1 and East Asia Crossing systems, and an increase of $70.9 million in
service revenue, of which $50.1 million represented prepayments received from
customers during the second quarter of 2001 primarily for services to be provided by us in the future. Included in Proportionate Cash Revenue were $148.0
million and $127.0 million, respectively, during the first and second quarter
of 2001, received from carrier customers to whom Global Crossing and we made
purchase commitments. Payments made by us to such carriers during the first and
second quarter of 2001 totaled approximately $0 and $82.0 million,
respectively.

Cost of access and maintenance. For the six months ended June 30, 2001,
cost of access and maintenance increased to $33.3 million from $24.2 million in
the same period of 2000, an increase of $9.1 million, or 38%, due to the
additional OA&M expenses of $5.0 million incurred for East Asia Crossing, which
became operational in the first quarter of 2001, and approximately $4.8 million
of off-net capacity costs. In the first half of 2000, only Pacific Crossing-1
was operational and the off-net capacity costs were immaterial.

Other operating expenses. Other operating expenses consist principally of
salaries and employee benefits, marketing and promotional costs, occupancy
costs, travel costs, professional fees, and corporate shared service charges
from Global Crossing. Other operating expenses for the six months ended June
30, 2001 was $59.4 million, compared to $18.6 million in the same period of
2000, an increase of $40.8 million, or 219%, primarily a result of increased
headcount and growing operating activities.

Depreciation and amortization. Depreciation and amortization expense for
the first half of 2001 decreased to $42.1 million from $92.9 million in the
comparable prior year period, a decrease of $50.8 million. Depreciation and
amortization expense includes non-cash cost of capacity sold resulting from
capacity sales that meet the qualifications of sales-type lease accounting. For
the six months ended June 30, 2001, there was no non-cash cost of capacity sold
because we have de-emphasized sales-type leases with customers. For the first
half of 2000, the non-cash cost of capacity sold included in depreciation and
amortization expense was approximately $84.9 million. Excluding the impact of
non-cash cost of capacity sold, depreciation and amortization expense for the
first half of 2001 increased $34.1 million, due primarily to additional
depreciation expense incurred for Pacific Crossing-1, of which the full ring
became fully operational at the end of 2000, but only the first segment was
operational in the first quarter of 2000. In 2001, depreciation began on a
portion of East Asia Crossing, which became operational at the beginning of the
year. The depreciation of capacity purchased from affiliates also contributed
to a small portion of the increase.

Minority interest. For the first half of 2001, minority interest was $31.6
million, compared to $(12.1) million in the comparable prior year period.
Pacific Crossing Ltd. incurred larger losses in 2001, primarily due to the
decrease in sales-type lease revenue and the increases in depreciation and
amortization and interest expense as a result of the completion of PC-1
construction at the end of 2000. Interest costs are not capitalized and
depreciation commences upon completion of system construction.

Equity in loss of affiliates.Equity in loss of affiliates for the six
months ended June 30, 2001 increased to $32.6 million from $26.7 million in the
comparable prior year period, an increase of $5.9 million, or 22%, primarily
due to an increase of $5.2 million in equity in loss of HGC.

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Interest income. Interest income increased to $20.6 million in the first
half of 2001 from $8.2 million for the same period of 2000, an increase of
$12.4 million, or 151%. The significant increase was primarily due to
investment returns on cash received from our initial public offering and senior
notes offering in October 2000, as well as capacity sales.

Interest expense. For the first half of 2001, interest expense increased
to $29.3 million from $1.1 million in the comparable prior year period, an
increase of $28.2 million, due primarily to interest incurred under the Pacific
Crossing-1 credit facility was not capitalized in 2001.

Provision for income taxes. Bermuda does not impose a statutory income tax
and consequently the provision for income taxes of $3.0 million recorded in the
first half of 2001 related to income earned by certain subsidiaries which are
located in jurisdictions which impose or may impose income taxes.

Proportionate Adjusted EBITDA. For the six months ended June 30, 2001,
Proportionate Adjusted EBITDA increased to $270.6 million from $77.6 million in
the same period of 2000, an increase of $193.0 million, due primarily to a
$245.8 million increase in Proportionate Cash Revenue, partially offset by a
$52.8 million increase in proportionate operating expenses due to growing
operating activities.

Liquidity and Capital Resources

The Companys principal sources of capital and liquidity for the remainder
of 2001 are expected to be existing cash balances, cash flows from operations
and a $400 million subordinated standby credit facility provided by Global
Crossing (the Parent Credit Facility).

Under the Parent Credit Facility, Global Crossing has agreed to lend us up
to $400 million on a subordinated basis. Global Crossing has committed to keep
half of this facility available for borrowings until December 31, 2002, and has
committed to keep the remainder of this facility available for borrowings until
we achieve certain performance targets. We are permitted to use the proceeds of
the Parent Credit Facility to build out our network, to pay operating expenses,
interest on the Senior Notes, the Parent Credit Facility and other indebtedness
and for general corporate purposes. Borrowings under the Parent Credit
Facility will bear interest at a rate of 14.875%. The Parent Credit Facility
will mature six months after the maturity date of the Senior Notes, and no
principal will be payable until maturity. As of June 30, 2001, there was no
outstanding balance under the Parent Credit Facility.

As of June 30, 2001, we had $667.2 million in cash and cash equivalents
and $136.2 million in restricted cash and cash equivalents. In addition, we
had $45.6 million in unused borrowing capacity under the Pacific Crossing1
credit facility and $400 million in unused borrowing capacity under the Parent
Credit Facility. As a result, we entered the second half of the year with
approximately $1,249 million in liquid resources.

Net cash provided by operating activities was $444.0 million for the first
half of 2001, compared to $59.4 million for the comparable period of 2000. The
$384.6 million increase in cash flow from operating activities is mainly
attributable to cash received from capacity sales, partially offset by
increased cash operating expenses and prepayments for purchased capacity.

Net cash used in investing activities was $450.4 million in the first half
of 2001, compared to $226.1 million for the same period of 2000. The increase
of $224.3 million was primarily due to construction of East Asia Crossing and
capacity purchases.

Net cash provided (used in) financing activities was $(31.9) million and
$353.2 million in the first half of 2001 and 2000, respectively. The decrease
was primarily due to capital contributions in the first six months of 2000 from
our founding shareholders prior to our IPO in October 2000.

We estimate the cost to complete Pacific Crossing 1, including the first
two upgrades, to be approximately $110.0 million, which is being financed
through shareholder loans, operating cash flows and $45.6 million in unused
borrowing capacity under the $850.0 million Pacific Crossing-1 credit facility.

We estimate the remaining cost to complete East Asia Crossing to be
approximately $675.0 million through the end of 2002.

Our consolidated cash paid for capital expenditures for 2001 is expected
to be $900.0 million to $1.0 billion, of which $457.0 million was incurred
during the first half of 2001. We increased our capital expenditure guidance
range slightly from a previously

18



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##### Table of Contents



announced range of $850.0 million to $925.0 million to reflect the
acceleration of service offerings, the acquisition of capacity on other
carriers networks, the addition of Australia and New Zealand to our territory
and the integration of the Asian operations of IXnet and IPC.

Pacific Crossing Ltd. is a party to an OA&M agreement with Global Crossing
Network Center, Ltd. The agreement is for an initial term of eight years with
two renewal periods of five years each at Pacific Crossing Ltd.s option. The
amounts payable under the agreement are $43.0 million and $42.2 million for
year 2001 and 2002, respectively. These fees will increase by 3.0% each year
starting in the year ended December 31, 2003, through the end of the agreement
in 2007.

Under another OA&M agreement, Pacific Crossing Ltd. is committed to paying
GAL JPY600 million (approximately $4.8 million based on the exchange rate at
June 30, 2001) each year through 2002, increasing by 3.0% thereafter through
2007.

The OA&M services on East Asia Crossing are provided by Global Crossing.
For the six months ended June 30, 2001, the aggregate OA&M expense was
approximately $5.0 million. We expect this expense will increase as more
segments of East Asia Crossing are completed.

We have formed a joint venture company, Exodus Asia Pacific, owned 33% by
us and 67% by Exodus, to offer a full range of Internet operations outsourcing
services to customers in Asia, including web-hosting services, managed service
offerings, professional services and content distribution. Pursuant to the
joint venture agreement, we can be required to contribute $33 million in cash
and all of our data center and related assets to the joint venture. In
addition, the board of directors of the joint venture may require us to make
additional capital contributions of up to $167 million over the three-year
period following formation of the joint venture. To date, neither we nor
Exodus has contributed capital or data center or related assets to the joint
venture.

We have a substantial amount of indebtedness. Based upon managements
current expectations, we believe that our existing cash balances, cash flows
from operations, unused borrowing capacity under Pacific Crossing-1 credit
facility and the Parent Credit Facility will be adequate to meet our
anticipated requirements for working capital, capital expenditures,
discretionary investments, interest payments and scheduled principal payments
for the foreseeable future. There can be no assurance, however, that the
business will continue to generate cash flow at or above current levels or that
currently anticipated improvements will be achieved. Also, there can be no
assurance that our business and our continued ability to raise capital will be
adequate to meet our anticipated requirements for working capital, capital
expenditures, discretionary investments, interest payments and scheduled
principal payments for the foreseeable future. If we are unable to meet current
capital needs, we may be required to reduce capital expenditures, refinance all
or a portion of our existing debt or obtain additional financing.

Inflation

We do not believe that our business is impacted by inflation to a
significantly different extent than the general economy.

Information Regarding Forward-Looking Statements

We have included forward-looking statements throughout this Quarterly
Report on Form 10-Q. These forward-looking statements describe managements
intentions, beliefs, expectations or predictions for the future. We use the
words believe, anticipate, expect, intend and similar expressions to
identify forward-looking statements. Such forward-looking statements are
subject to a number of risks, assumptions and uncertainties that could cause
our actual results to differ materially from those projected in such
forward-looking statements. These risks, assumptions and uncertainties include:



| |  |  | the ability to complete systems within the currently estimated time frames and budgets;               
| | - |  | ------------------------------------------------------------------------------------------------------
|
| |  |  | the ability to compete effectively in a rapidly evolving and price competitive marketplace;           
|
| |  |  | changes in business strategy;                                                                         
|
| |  |  | changes in the nature of telecommunications regulation in the United States, Asia and other countries;
|
| |  |  | the successful integration of newly-acquired businesses; and                                          
|
| |  |  | the impact of technological change.                                                                   

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This list is only an example of some of the risks, uncertainties and
assumptions that may affect our forward-looking statements. We undertake no
obligation to update any forward-looking statements made by it.

Reference is made to our Annual Report on Form 10-K for a more complete
discussion of the risks, uncertainties and other factors that may affect our
business.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

The table below provides information about our market sensitive financial
instruments and constitutes a forward-looking statement. Our major market
risk exposure is changing interest rates. Our policy is to manage interest
rates through the use of a combination of fixed and floating rate debt.
Interest rate swaps may be used to adjust interest rate exposures when
appropriate, based upon market conditions, and we do not engage in transactions
for speculative or trading purposes.

|                                      |                                   |   |                           |    |            |   |        |    |      |   |         |    |            |   |         |         |      |   |         |    |   |   |         |       |   |   |         |         |  |   |         |        |  
|------------------------------------- | --------------------------------- | - | ------------------------- | -- | ---------- | - | ------ | -- | ---- | - | ------- | -- | ---------- | - | ------- | ------- | ---- | - | ------- | -- | - | - | ------- | ----- | - | - | ------- | ------- |  | - | ------- | ------ | -
|                                      |                                   |   | Expected Year of Maturity |    | Fair Value
|                                      |                                   |   |                           |    | June 30,  
|                                      |                                   |   | 2001                      |    | 2002       |   | 2003   |    | 2004 |   | 2005    |    | Thereafter |   | Total   |         | 2001
|                                      |                                   |   |                           |    |            |   |        |    |      |   |         |    |            |   |         |         |     
|                                      |                                   |   | (In thousands)           
|DEBT:                                 |                                   |   |                           |    |            |   |        |    |      |   |         |    |            |   |         |         |      |   |         |    |   |   |         |       |   |   |         |         |  |   |         |       
|                                     
|                                     
|                                     
|                                     
|Pacific Crossing - 1 Credit Facility  |                                   | $ | 63,136                    |    |            | $ | 88,260 |    |      | $ | 103,260 |    |            | $ | 115,760 |         |      | $ | 115,195 |    |   | $ | 274,248 |       |   | $ | 759,859 |         |  | $ | 759,859 |       
|                                     
|                                     
|                                     
|                                     
|                                      | Average interest rates  variable |   |                           | (1 | )          |   |        | (1 | )    |   |         | (1 | )          |   |         | (1      | )    |   |         | (1 | ) |   |         | (1    | ) |   |         |         |  |   |         |        |  
|                                     
|                                     
|                                     
|                                     
|Senior Notes due 2010                 |                                   |   |                          |    |            |   |       |    |      |   |        |    |            |   |        |         |      |   |        |    |   | $ | 408,000 |       |   | $ | 408,000 |         |  | $ | 452,085 |       
|                                     
|                                     
|                                     
|                                     
|                                      | Average interest rates  fixed    |   |                           |    |            |   |        |    |      |   |         |    |            |   |         |         |      |   |         |    |   |   |         | 13.38 | % |   |         |         |  |   |         |        |  
|                                     
|                                     
|                                     
|                                     
|DERIVATIVE INSTRUMENTS:               |                                   |   |                           |    |            |   |        |    |      |   |         |    |            |   |         |         |      |   |         |    |   |   |         |       |   |   |         |         |  |   |         |       
|                                     
|                                     
|                                     
|                                     
|Interest rate swap floating for fixed |                                   |   |                           |    |            |   |        |    |      |   |         |    |            |   |         |         |      |   |         |    |   |   |         |       |   |   |         |         |  |   |         |       
|                                     
|                                     
|                                     
|                                     
|                                      | Contract notional amount          |   |                           |   |            |   |        |   |      |   |         |   |            |   | $       | 500,000 |      |   |         |   |   |   |         |      |   |   | $       | 500,000 |  |   | $       | (2,207 | )
|                                     
|                                     
|                                     
|                                     
|                                      | Fixed rate paid by counterparty   |   |                           |    |            |   |        |    |      |   |         |    |            |   |         | (2      | )    |   |         |    |   |   |         |       |   |   |         |         |  |   |         |        |  
|                                     
|                                     
|                                     
|                                     
|                                      | Floating rate paid by the Company |   |                           |    |            |   |        |    |      |   |         |    |            |   |         | 5.00    | %    |   |         |    |   |   |         |       |   |   |         |         |  |   |         |        |  



---

|(1) |  | The interest rates are one-month US dollar LIBOR + 2.00  2.25%, which
were 5.8  6.0% as of June 30, 2001.
|--- |  | -----------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | The interest rate is one-month United States dollar LIBOR, which was 3.8%
as of June 30, 2001.             

A hypothetical 10% change in interest rate would result in an increase or
decrease of approximately $4.6 million to the fair value of financial
instruments with exposures to interest rate risk as of June 30, 2001.

Foreign Currency Risk

We transact business in various foreign currencies, and are subject to
certain foreign exchange risks. We have established a foreign currency hedging
program utilizing foreign currency forward exchange contracts to hedge certain
of our foreign currency transaction exposures. Under this program, we seek to
offset foreign currency transaction gains and losses with gains and losses on
the forward contracts, so as to mitigate our overall risk of foreign currency
transaction gains and losses. We do not enter into forward contracts for
speculative or trading purposes. In April 2001, we entered into a foreign
exchange forward contract in Japanese yen. The contract has a notional value of
$23.8 million and matures in July 2001. Notional amounts do not quantify market
or credit exposure or represent our assets or liabilities, but are used in the
calculation of cash settlements under the contracts.

20



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##### Table of Contents






PART II. OTHER INFORMATION




Item 1. Legal Proceedings

The Company is not presently subject to any material legal claims or
proceedings.




Item 2. Changes in Securities and Use of Proceeds

Not applicable.




Item 3. Defaults Upon Senior Securities

Not applicable.




Item 4. Submission of Matters to a Vote of Security Holders

The Annual General Meeting of Shareholders of the Company was held on June
13, 2001. All of the Director nominees were elected at the Annual General
Meeting pursuant to Proposal No. 1. The names of the nominees and the results
of the voting were as follows:

|                       |  |           |               |                |  |  |         | 
|---------------------- |  | --------- | ------------- | -------------- |  |  | ------- | 
|Nominee                |  | Votes For |               | Votes Withheld
|                       |  |           |               |               
|Gary Winnick           |  |           | 4,916,062,234 |                |  |  | 198,217 | 
|                      
|                      
|                      
|                      
|Lodwrick M. Cook       |  |           | 4,916,220,609 |                |  |  | 39,842  | 
|                      
|                      
|                      
|                      
|John J.Legere          |  |           | 4,916,210,129 |                |  |  | 50,322  | 
|                      
|                      
|                      
|                      
|Thomas J.Casey         |  |           | 4,916,224,884 |                |  |  | 35,567  | 
|                      
|                      
|                      
|                      
|John M.Scanlon         |  |           | 4,916,224,261 |                |  |  | 36,190  | 
|                      
|                      
|                      
|                      
|Mark L. Attanasio      |  |           | 4,916,219,449 |                |  |  | 41,002  | 
|                      
|                      
|                      
|                      
|Norman Brownstein      |  |           | 4,916,219,974 |                |  |  | 40,477  | 
|                      
|                      
|                      
|                      
|Joseph P. Clayton      |  |           | 4,916,221,334 |                |  |  | 39,117  | 
|                      
|                      
|                      
|                      
|William E. Conway, Jr. |  |           | 4,916,223,276 |                |  |  | 37,175  | 
|                      
|                      
|                      
|                      
|William S. Cohen       |  |           | 4,916,216,649 |                |  |  | 43,802  | 
|                      
|                      
|                      
|                      
|Steven J. Green        |  |           | 4,916,214,044 |                |  |  | 46,407  | 
|                      
|                      
|                      
|                      
|Eric Hippeau           |  |           | 4,916,223,259 |                |  |  | 37,192  | 
|                      
|                      
|                      
|                      
|Geoffrey J. W. Kent    |  |           | 4,916,217,674 |                |  |  | 42,777  | 
|                      
|                      
|                      
|                      
|Pieter Knook           |  |           | 4,916,222,559 |                |  |  | 37,892  | 
|                      
|                      
|                      
|                      
|Maria Elena Lagomasino |  |           | 4,916,220,396 |                |  |  | 40,055  | 

Each of the other proposals submitted for shareholder approval at the
Annual General Meeting was approved. The results of the voting of Class A and
Class B shares of the Company were as follows:

|                                |  |                                                                                                                                                                                              |  |               |               |             |  |           |            |  |  |  |         |        |  |  |            | 
|------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------------- | ----------- |  | --------- | ---------- |  |  |  | ------- | ------ |  |  | ---------- | 
|                                |  |                                                                                                                                                                                              |  |               |               |             |  |           |            |  |  |  |         | Broker
|Proposal Number and Description |  | Votes For                                                                                                                                                                                    |  | Votes Against |               | Abstentions |  | Non-Votes
|                                |  |                                                                                                                                                                                              |  |               |               |             |  |          
|2.                              |  | Proposal to appoint Arthur Andersen
as independent auditors of the Company
for 2001 and approve the authority of
the Board of Directors of the
Company to determine the remuneration thereof |  |               | 4,916,220,161 |             |  |           | 28,816     |  |  |  | 11,474  |        |  |  | 0          | 
|                               
|                               
|                               
|                               
|3.                              |  | Proposal to approve the Asia Global
Crossing Senior Executive Incentive
Compensation Plan                                                                                                    |  |               | 4,879,266,149 |             |  |           | 17,327,177 |  |  |  | 126,058 |        |  |  | 19,541,067 | 
|                               
|                               
|                               
|                               
|4.                              |  | Proposal to approve the Asia Global
Crossing Ltd. 2000 Stock Option Plan                                                                                                                     |  |               | 4,895,464,813 |             |  |           | 1,115,730  |  |  |  | 138,841 |        |  |  | 19,541,067 | 

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Item 5. Other Information

On July 10, 2001, Asia Global Crossing Ltd. (AGC) entered into a Stock
Purchase Agreement (the Stock Purchase Agreement) pursuant to which it
purchased the Asian operations of IXnet, Inc. (IXnet) and IPC Information
Systems, Inc. (IPC) from Global Crossing Ltd. (GCL). On the same date, the
Subscription and Shareholders Agreement dated October 12, 2000 (the
Shareholders Agreement) among AGC, GCL, Softbank Corp. and Microsoft
Corporation was amended (the First Amendment) by the parties thereto to
transfer the territorial rights to conduct telecommunications service
businesses in Australia and New Zealand to AGC. Also, on July 10, 2001, AGC and
GCL entered into a Non-Competition Agreement (the Non-Competition Agreement),
pursuant to which GCL agreed not to engage in the business conducted by IPC
within the Territory (as defined below), except through AGC and subject to
certain exceptions. These transactions are more fully described in a joint
press release dated June 18, 2001 of GCL and AGC and which was filed by AGC on
a Current Report on Form 8-K on June 19, 2001.

As consideration for the sale of the Asian operations of IXnet and IPC,
AGC delivered to GCL and certain of its wholly owned subsidiaries an aggregate
of 20,000,000 newly issued shares of Class B common stock, par value $0.01 per
share (Class B Stock), of AGC. As consideration for the transfer of the
territorial rights to conduct telecommunications service businesses in
Australia and New Zealand (including the entry by the parties into the
Non-Competition Agreement), AGC delivered to GCL an aggregate of 6,822,558
newly issued shares of Class B Stock of AGC. Prior to the transactions effected
on July 10, 2001, GCL beneficially owned 56.9% of the outstanding aggregate
voting shares of AGC, and after the transactions beneficially owns 58.9% of the
aggregate voting shares of AGC. Also, prior to these transactions, each of
Microsoft Corporation and Softbank Corp. beneficially owned 15.4% of the
aggregate voting shares of AGC, and after the transactions beneficially owns
14.7% of the aggregate voting shares.

Stock Purchase Agreement

On July 10, 2001, AGC and GCL entered into the Stock Purchase Agreement.
Pursuant to the Stock Purchase Agreement, GCL and certain of its wholly owned
subsidiaries transferred to AGC all of the capital stock of certain entities
comprising the Asian operations of IPC and IXnet. The Stock Purchase Agreement
contains various mutual representations, warranties and covenants (including a
limited indemnity by each of the parties to the other for liabilities arising
from the parties respective representations as to due organization and
ownership of shares).

Shareholders Agreement (including First Amendment)

On July 10, 2001, the Shareholders Agreement was amended to add Australia
and New Zealand to the Territory. The Shareholders Agreement provides for,
among other things: the composition of AGCs board of directors; actions
requiring approval of AGC directors appointed by Microsoft Corporation and
Softbank Corp.; preparation of strategic plans; and transfer restrictions on
AGCs common stock. As long as each party to the Shareholders Agreement,
together with its affiliates, owns at least 5% of the outstanding common shares
of AGC, each party has agreed to vote its shares together for each others AGC
board nominees and against any other AGC board nominees. The Shareholders
Agreement also contains non-competition provisions which grant exclusive
operating rights to AGC (subject to certain exceptions) in a specified
territory that consists of Brunei, Burma, Cambodia, China (including Hong
Kong and Macau), Fiji, Indonesia, Japan, Kiribati, Laos, Malaysia, Marshall
Islands, Federated States of Micronesia, Mongolia, Nauru, North Korea, Palau,
Papua New Guinea, the Philippines, Samoa, Singapore, Solomon Islands, South
Korea, Taiwan, Thailand, Tonga, Tuvalu, Vanuatu, and Vietnam and now Australia
and New Zealand (collectively, the Territory).

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Non-Competition Agreement

On July 10, 2001, GCL and AGC entered into the Non-Competition Agreement
whereby GCL and its subsidiaries agreed not to engage in the business conducted
by IPC within the Territory, except through AGC and subject to certain
exceptions. The Non-Competition Agreement expires on July 10, 2003.




Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits
|--- |  | --------

|        |  |                                                                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                      
|Number  |  | Description                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                      
|10.1    |  | First Amendment to Subscription and Shareholders Agreement dated
July 10, 2001 among Global Crossing Ltd., Microsoft Corporation,
Softbank Corp. and Asia Global Crossing Ltd. (incorporated by
reference to Exhibit 3 of Global Crossing Ltd.s Schedule 13D
filed on July 10, 2001 (the GCL 13D))
|       
|       
|       
|       
|10.2    |  | Non-Competition Agreement dated July 10, 2001 between Global
Crossing Ltd. and Asia Global Crossing Ltd. (incorporated by
reference to Exhibit 5 of the GCL 13D)                                                                                                                                     
|       
|       
|       
|       
|10.3    |  | Stock Purchase Agreement dated July 10, 2001 among Global Crossing
Ltd., IXnet, Inc., International Exchange Networks, Ltd. and Asia
Global Crossing Ltd. (incorporated by reference to Exhibit 6 of
the GCL 13D)                                                                                    



|(b) |  | Reports on Form 8-K.
|--- |  | --------------------

During the quarter ended June 30, 2001, Asia Global Crossing Ltd. filed
the following Current Report on Form 8-K:

Current Report on Form 8-K dated June 18, 2001 (date of earliest even
reported), filed on June 19, 2001, for the purpose of reporting, under item 5
and 7, the announcement of Asia Global Crossing agreeing to acquire the Asian
operations of IXnet and IPC as well as the territorial rights to Australia and
New Zealand from its parent company Global Crossing in exchange for
approximately 26.8 million shares of Asia Global Crossing Ltd.

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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.

| |                                                           |                         
| | --------------------------------------------------------- | ------------------------
| | ASIA GLOBAL CROSSING LTD.                                
|
| | By:                                                       | /s/ Stefan C. Riesenfeld
| |                                                          
| | Name: Stefan C. Riesenfeld
Title: Chief Financial Officer

August 14, 2001

24