Weekly CLEC Financial Report
May 23, 2000

KMC Telecom Holdings reported financial and operational results for the three month period ended March 31, 2000. Total revenue increased 163 percent to $29.2 million on a year-over-year basis from $11.1 million in the first quarter of 1999, and 32 percent on a sequential quarterly basis from $22.0 million in the fourth quarter of 1999. For the three months ended March 31, 2000, the adjusted EBITDA deficit was $39.0 million. This compares to deficits of $20.6 million and $27.2 million for the three month periods ended March 31, 1999 and December 31, 1999, respectively. 

e.spire Communications announced revenues of $66 million for the quarter ended March 31, 2000, a 14% increase over the prior quarter and 13% improvement over the year ago quarter. EBITDA for the quarter ended March 31, 2000, was a loss of $(24) million, a 29% improvement over the prior quarter.Net loss applicable to common stockholders was $(118.1) million, or $(2.29) per common share, for the first quarter of 2000 compared to $(99.8) million, or $(1.96) per common share, for the fourth quarter of 1999. Excluding this charge, net loss applicable to common stockholders would have been $(93.5) million, or $(1.82) per common share.

Electric Lightwave announced financial results for the first quarter of 2000. Revenue for the quarter ended March 31, 2000 was $56.8 million, or 49% above revenue of $38.2 million in the first quarter of 1999. The company's EBITDA loss, including operating lease expense, was $6.7 million in the first quarter of this year, compared to $22.8 million in the first quarter a year ago. The net loss in the 2000 first quarter was $35.1 million or $0.70 per share, compared to a net loss of $35.0 million or $0.70 per share in the prior year's first quarter. 

BTI Telecom announced financial results for first quarter 2000. BTI's revenue for the quarter was $66.7 million, an 18.8 percent increase over first quarter 1999, which was primarily the result of increases in integrated retail voice and data revenues. EBITDA for the quarter was negative at $1.3 million.

Birch Telecom reported unaudited results for the first quarter 2000. Revenue for the period increased 123.8% to $23.8 million, compared to $10.6 million for the first quarter 1999, a 25.9% increase from the fourth quarter 1999. EBITDA was a $14.7 million loss for the quarter, virtually unchanged from fourth quarter 1999 and up from a first quarter 1999 loss of $5.6 million.

Madison River Communications announced the results for its first quarter of 2000. Revenues grew to $31.6 million in the first quarter of 2000 from $16.5 million reported for the same period in 1999, reflecting an increase of 91.7%. The growth in revenues came primarily from reporting a full quarter of operating results in 2000 for Gulf Coast Services, which was acquired in September 1999. Excluding the effect of the Gulf Coast Services acquisition, the company saw a 7.6% increase in revenues over the prior year. EBITDA increased 32.2% to $9.3 million in the first quarter of 2000 from $7.0 million in the same period of 1999.

Jazztel p.l.c., a facilities-based telecommunications and Internet services provider that plans to be the first nationwide CLEC in Spain and Portugal, announced results for the first quarter ended March 31, 2000. Amounts are presented in Euros and in accordance with US GAAP. The Jazztel Group had total revenues of Euro 23.2 million for the first quarter 2000, up from Euro 12.9 million for the last quarter of 1999, representing a growth of 80%. The group also has substantially improved its gross margins, with a loss of Euro 1.96 million for the first quarter, improving from a loss of Euro 2.5 million. Gross margin as percentage of sales therefore improved from a negative 19.3% to a negative 8.5%. EBITDA losses for the first quarter have decreased modestly to Euro 44.9 million, compared to Euro 45.5 million for the fourth quarter 1999.

GST Telecommunications announced that it filed in the U.S. Bankruptcy Court for the District of Delaware for protection under Chapter 11 of the U.S. Bankruptcy Code. In addition, the company executed a Letter of Intent with Time Warner Telecom for the sale of substantially all the assets of GST for $450 million in cash, subject to the approval of the bankruptcy court, the execution and delivery of a definitive purchase agreement, satisfactory completion of due diligence, state and federal regulatory approval, and other customary terms and conditions.

The Hawaii assets of GST Telecommunications could come under local ownership and control if plans by a Maui company come through. MBN Communications, based in Maui, entered an agreement on April 27, 2000, with GST Telecommunications, Inc. to acquire its Hawaii subsidiaries, GST Telecom Hawaii, Inc. and GST Hawaii OnLinefor $76 million in cash, a price equal to the book value of GST's total Hawaii assets.

CTC Communications Group announced that funding is complete for its previously announced $200 million preferred stock financing with Bain Capital Inc., Thomas H. Lee Partners, L.P. and CSFB Private Equity. Following certain regulatory and legal approvals, the parties executed closing documents. The investment is in the form of 8.25% Series B convertible preferred stock which converts to common stock at $50.00 per share. Bain Capital and Thomas Lee have each invested $75 million and CSFB Private Equity has invested $50 million. Toronto Dominion Securities acted as exclusive advisor and placement agent to CTC Communications Group Inc. and its Board of Directors in this transaction. CTC officials noted that the $200 million would be used to fund strategic marketing and technology initiatives that form the cornerstones of the company's accelerated business plan which includes, the purchase of dark fiber and optronics, branch sales office and Integrated Communications Network (ICN) expansion and new ICN product and application development.

2nd Century Communications announced investments from Dell, Intel and Microsoft. These investments, coupled with repeat backing from Accel Partners, North Bridge Venture Partners, Venrock Associates and a large increase in funding from Meritech Capital Partners brings 2nd Century's total funding to $155 million in 20 months.

GST Telecommunications announced that its wholly-owned subsidiary, GST USA, has completed its planned assumption of the 13 1/4% Senior Secured Notes due 2007 issued by GST Equipment Funding. This assumption was required by the indenture governing the 13 1/4% Notes.

BTI has completed the acquisition of US Datacom. Under the terms of the agreement, BTI purchased 100 percent of US Datacom stock in a combination of cash and stock. US Datacom will continue to operate under the same name as a business unit of BTI.