content: <PAGE>
  
                        SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549
                                  _______________
  
  
  
                                     FORM 8-K
  
  
  
                  Current Report Pursuant to Section 13 or 15(d)
                      of the Securities Exchange Act of 1934
  
  
  
                                 January 10, 2001
                                 ----------------
                 Date of Report (Date of Earliest Event Reported)
  
  
  
                            Exodus Communications, Inc.
                            ---------------------------
              (Exact name of Registrant as specified in its charter)
  
  
  
            Delaware                  0-23795                 77-0403076
            --------                  -------                 ----------
    (State of Incorporation)   (Commission file number)      (I.R.S. Employer
                                                            Identification No.)
  
  
                          2831 Mission College Boulevard
                           Santa Clara, California 95054
                           -----------------------------
           (Address of principal executive offices, including zip code)
  
  
  
                                  (408) 346-2200
                                  --------------
               (Registrant's telephone number, including area code)
  <PAGE>
  
  ITEM 2:  ACQUISITION OR DISPOSITION OF ASSETS.
  
       Acquisition of GlobalCenter Holding Co.
       ---------------------------------------
  
       On January 10, 2001, Exodus Communications, Inc. ("Exodus" or the
  "Company") completed the acquisition of GlobalCenter Holding Co.
  ("GlobalCenter"), through the merger of a wholly-owned subsidiary of Exodus with
  and into GlobalCenter, with GlobalCenter surviving as a wholly-owned subsidiary
  of Exodus (the "Merger"). GlobalCenter was an indirect wholly-owned subsidiary
  of Global Crossing Ltd. ("Global Crossing"). The Merger is intended to be a tax-
  free reorganization and will be accounted for under the purchase method of
  accounting.
  
       In connection with the Merger, a total of approximately 108 million shares
  of Exodus common stock were exchanged for all of the outstanding shares of
  GlobalCenter common stock. As a result, Global Crossing acquired beneficial
  ownership of approximately 20% of Exodus' common stock outstanding after the
  Merger. Exodus also assumed all outstanding GlobalCenter stock options, and
  granted new options to purchase shares of Exodus common stock to replace certain
  options held by GlobalCenter employees to purchase shares of Global Crossing
  common stock that were cancelled in the Merger. Also in connection with the
  Merger, the size of the Exodus board of directors was increased to 11 and Thomas
  J. Casey, the Chief Executive Officer of Global Crossing, was appointed to the
  board of directors of Exodus.
  
       A press release announcing the completion of the transaction is attached as
  Exhibit 99.01 to this report. The foregoing description is qualified in its
  entirety by reference to the full text of such exhibit.
  
       As a result of the acquisition of GlobalCenter, Exodus has added to its
  business the resources of a leading provider of Internet infrastructure
  services, including complex Web hosting, Internet Protocol network services,
  hardware and software procurement and installation, content distribution,
  integration and management services, systems applications, and professional
  services. As of September 30, 2000, GlobalCenter provided services to over 600
  customers, including Akamai, NBCi, Novell, Viacom and ZDNet, and operated 11
  data centers strategically located near major business centers in northern and
  southern California, New York City, Washington, D.C., London, and Melbourne. In
  addition, as of that same date, GlobalCenter was developing nine data centers in
  the United States, Europe and the Asia-Pacific region, which would, after
  completion, bring the total gross square footage of GlobalCenter's data centers
  to approximately one million. As of September 30, 2000, GlobalCenter employed
  approximately 720 full-time employees.
  
       The acquisition was accompanied by the addition of significant strategic
  agreements and other rights designed to protect and enhance the Company's
  competitive advantage generally and specifically in Asia and the Pacific Rim,
  and to secure long term capacity, connectivity and other related network
  services. The following descriptions of such agreements are qualified in their
  entirety by reference to the full text of these agreements which were filed with
  the Securities and
  
                                         1
  <PAGE>
  
  Exchange Commission on October 13, 2000 as exhibits to the Company's Current
  Report on Form 8-K.
  
       Network Services, Marketing and Cooperation Agreements. In September 2000,
  Exodus signed a ten-year Network Services, Marketing and Cooperation Agreement
  with Global Crossing Ltd. and a similar agreement with Asia Global Crossing Ltd.
  
       Under the Network Services, Marketing and Cooperation Agreement with Global
  Crossing Ltd., Exodus committed to purchase at least 50% of its network needs
  worldwide other than Asia, from Global Crossing Ltd.  In addition, for a period
  of two years after the completion of the Merger, Global Crossing Ltd. agreed to
  use Exodus as its exclusive provider of Internet Web hosting services and agreed
  for the same two year period not to engage in or own, manage or control an
  entity involved in Internet Web hosting, all subject to limited exceptions.
  Global Crossing Ltd. and its controlled affiliates also agreed to make their
  telecommunications services available to Exodus and its controlled affiliates,
  other than the joint venture described below, on an equal access basis, and
  Exodus agreed to promote Global Crossing Ltd. as its primary provider of network
  services for its network operations.  The agreement provides that Global
  Crossing Ltd. may resell Exodus services and also obligates Global Crossing Ltd.
  to create a new network for Exodus in order to more easily scale the network
  services available to Exodus to meet anticipated future demands.
  
       Under the Network Services, Marketing and Cooperation Agreement with Asia
  Global Crossing Ltd., Exodus agreed to purchase from Asia Global Crossing Ltd.
  at least 60% of its network services requirements in parts of Asia and the
  Pacific Rim, not including Australia or New Zealand. In addition, Exodus will
  give Asia Global Crossing Ltd. the opportunity to provide at least 67% of
  Exodus' network services requirements in that territory and use reasonable
  efforts consistent with its business objectives to exceed this 67% commitment.
  Asia Global Crossing Ltd. and its controlled affiliates agreed to make all Asia
  Global Crossing Ltd. telecommunications services available to Exodus and its
  controlled affiliates, including the joint venture described below, on an equal
  access basis.  Subject to limited exceptions, for two years following the
  Merger, Asia Global Crossing Ltd. agreed to use Exodus as its exclusive provider
  of Web hosting services in the covered territory and Exodus agreed to promote
  Asia Global Crossing Ltd. as its primary provider of network services for its
  network operations. The agreement provides that that Asia Global Crossing Ltd.
  may resell Exodus services and also obligates Asia Global Crossing Ltd. to
  extend the broadband telecommunications system within each city served by the
  Asia Global Crossing Ltd. network to provide connectivity between the joint
  venture Internet Data Centers and the Asia Global Crossing Ltd. network in order
  to enable Exodus to meet anticipated future demands.
  
       Joint Venture.  In addition to the Network Services, Marketing and
  Cooperation Agreements, Exodus and Asia Global Crossing Ltd. entered into a
  joint venture agreement to form a company to be called Exodus Asia-Pacific Ltd.
  in order to provide complex Web hosting and managed services in Asia. The
  agreement provides that the shares of Exodus Asia-Pacific Ltd. will be owned 67%
  by Exodus and 33% by Asia Global Crossing Ltd. with four members of
                                         2
  <PAGE>
  
  the board of directors to be appointed by Exodus and two of the directors to be
  appointed by Asia Global Crossing Ltd.
  
       Under the terms of the agreement, the business of the joint venture will be
  identical to Exodus' existing Web hosting and managed services business. The
  territory covered by the joint venture will be limited to parts of Asia and the
  Pacific Rim, not including Australia and New Zealand, and, subject to limited
  exceptions, will be the exclusive means for Exodus and Asia Global Crossing Ltd.
  to conduct such business in the covered territory. Capital contributions will be
  in cash and in kind. Cash contributions in the aggregate amount of up to $750
  million may be required without unanimous shareholder approval during the first
  three years of operations, including initial contributions of $67 million and
  $33 million from Exodus and Asia Global Crossing, Ltd, respectively. In
  addition, Exodus agreed to contribute its interest in Exodus Japan and Asia
  Global Crossing Ltd. agreed to contribute its interest in GlobalCenter Japan and
  either its interest in the Web hosting business of Hutchison Global Crossing, a
  Web hosting joint venture in Hong Kong, or the fair market value equivalent of
  its interest in the Web hosting assets of Hutchison Global Crossing, up to a
  maximum of $25 million.
  
       Stockholder Agreement.  Pursuant to the terms of a Stockholder agreement
  executed in connection with the Merger, Global Crossing has rights to appoint a
  designee to the Exodus board of directors for as long as Global Crossing owns in
  the aggregate at least 10% of the outstanding voting stock of Exodus. Any such
  nominee must be approved by the Exodus board of directors, and the board's
  approval will not be withheld unless, based on the advice of counsel, its
  approval would be inconsistent with the fiduciary obligations of the directors.
  Thomas J. Casey, the Chief Executive Officer of Global Crossing, was appointed
  to the board of directors of Exodus upon the closing of the Merger. In addition,
  Global Crossing has agreed that it will vote its shares of Exodus stock either
  as recommended by the Exodus board or in the same proportion as all votes cast
  by disinterested stockholders. These voting obligations continue until the
  earlier of five years after the closing of the Merger, the date Global Crossing
  owns less than 10% of the voting stock of Exodus, or at such time as there is a
  change of control of Exodus. During the period that Global Crossing is under
  obligation to Exodus relating to the voting of its Exodus shares, Global
  Crossing may not, unless there is a change of control of Exodus, increase its
  percentage ownership of outstanding Exodus voting stock by more than 1%.  For
  one year after the completion of the Merger, Global Crossing agreed not to
  transfer its Exodus shares except under limited circumstances, such as transfers
  among affiliates and limited hedging transactions. And from the first to the
  fifth anniversaries of the closing of the Merger, Global Crossing agreed not to
  transfer its Exodus shares except in underwritten offerings or other sales
  pursuant to its registration rights, pursuant to Rule 144, in private sales or
  among its affiliates and in limited hedging transactions.
  
       Registration Rights Agreement.  Global Crossing will be entitled to offer
  for sale the shares of Exodus common stock it acquired in the Merger pursuant to
  a shelf registration statement that Exodus agreed to file with the Securities
  and Exchange Commission within four months of the closing of the Merger. Global
  Crossing may also, upon 30 days advance written notice, require Exodus to
  conduct an underwritten public offering under the shelf registration statement
  if the total gross proceeds from the sale of the shares is at least $10 million
  and the
  
                                         3
  <PAGE>
  
  offering includes at least 500,000 shares. Global Crossing may also resell its
  shares of Exodus common stock under the registration statement without an
  underwritten offering and may piggyback onto registration statements filed by
  Exodus for the sale of Exodus shares in an underwritten offering.
  
                                         4
  <PAGE>
  
  ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
  
  (a) Financial Statements of Business Acquired.
  
       GlobalCenter Holding Co. - Consolidated Financial Statements
       ------------------------------------------------------------
  
       The following Financial Statements are filed herewith:
  
       Report of Independent Public Accountants
       Consolidated Balance Sheets as of December 31, 1998 and December 31, 1999,
            and as of September 30, 2000
       Consolidated Statements of Operations and Comprehensive Income for the
            years ended December 31, 1997 and 1998, for the three months ended
            December 31, 1999, and for the nine months ended September 30, 1999
            and 2000
       Consolidated Statements of Shareholder's Equity
       Consolidated Statements of Cash Flows for the years ended December 31, 1997
            and 1998, for the three months ended December 31, 1999, and for the
            nine months ended September 30, 1999 and 2000
       Notes to Consolidated Financial Statements
  
  (b) Pro Forma Financial Information.
  
       Exodus Unaudited Pro Forma Combined Condensed Financial Statements
       ------------------------------------------------------------------
  
       The following Financial Statements are filed herewith:
  
       Unaudited Pro Forma Combined Condensed Balance Sheet dated September 30,
       2000
       Unaudited Pro Forma Combined Condensed Statement of Operations
       Notes to Unaudited Pro Forma Combined Condensed Financial Statements
  
  (c)  Exhibits.
  
       The following exhibits are filed herewith:
  
       23.01  Consent of Arthur Andersen LLP, Independent Public Accountants
  
       99.01  Press release of the Company dated January 10, 2001.
  
                                         5
  <PAGE>
  
           GLOBALCENTER HOLDING CO. - CONSOLIDATED FINANCIAL STATEMENTS
           ------------------------------------------------------------
  
                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
  
  To Global Crossing Ltd.:
  
       We have audited the accompanying consolidated balance sheet of GlobalCenter
  Holding Co. ("GlobalCenter"), an indirect wholly owned subsidiary of Global
  Crossing Ltd., as of December 31, 1999 and of GlobalCenter Inc. ("Predecessor")
  as of December 31, 1998, and the related consolidated statements of operations
  and comprehensive income, shareholder's equity and cash flows for the periods
  from October 1, 1999 to December 31, 1999 ("GlobalCenter period") and from
  January 1, 1999 to September 30, 1999 and for each of the two years ended
  December 31, 1998 and 1997 ("Predecessor periods"). These financial statements
  are the responsibility of management of GlobalCenter and Predecessor. Our
  responsibility is to express an opinion on these financial statements based on
  our audits.
  
       We conducted our audits in accordance with auditing standards generally
  accepted in the United States. Those standards require that we plan and perform
  the audit to obtain reasonable assurance about whether the financial statements
  are free of material misstatement. An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements. An
  audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial
  statement presentation. We believe our audits provide a reasonable basis for our
  opinion.
  
       In our opinion, the GlobalCenter consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  GlobalCenter as of December 31, 1999 and the results of its operations and its
  cash flows for the GlobalCenter period in conformity with accounting principles
  generally accepted in the United States. Further, in our opinion, the
  consolidated financial statements of Predecessor referred to above present
  fairly, in all material respects, the financial position of Predecessor as of
  September 30, 1999 and December 31, 1998, and the results of its operations and
  its cash flows for the Predecessor periods in conformity with accounting
  principles generally accepted in the United States.
  
  
                                         /s/ ARTHUR ANDERSEN LLP
  
  San Jose, California
  November 1, 2000
  
                                         6
  <PAGE>
  
                             GLOBALCENTER HOLDING CO.
  
                            CONSOLIDATED BALANCE SHEETS
              (Amounts in thousands except share and per share data)
  
  <TABLE>
  <CAPTION>
                                                                                    Predecessor           GlobalCenter
                                                                                    -----------    --------------------------
                                                                                           December 31,
                                                                                    ------------------------    September 30,
                                                                                        1998          1999          2000
                                                                                    -----------    ---------    -------------
                                                                                                                 (Unaudited)
  <S>                                                                                 <C>        <C>             <C>
                                      ASSETS
                                      ------
  Current assets:
    Cash............................................................................  $     --   $       --      $   11,210
    Accounts receivable, net of allowance for doubtful accounts of
      $975, $1,379 and $7,149, respectively.........................................     6,492       18,811          57,601
    Equipment held for resale.......................................................       773        6,941           5,287
    Prepaid expenses and other current assets.......................................       300        2,825          11,548
    Deferred tax asset..............................................................     2,393        2,926           4,155
                                                                                      --------   ----------      ----------
       Total current assets.........................................................     9,958       31,503          89,801
                                                                                      --------   ----------      ----------
  Property and equipment, net.......................................................    30,372      116,315         358,149
  Goodwill and intangibles, net.....................................................     7,470    1,411,130       1,188,320
  Investment........................................................................        --           --           3,145
  Other assets......................................................................       221          214             250
  Net assets of discontinued operations.............................................    28,298        4,416              --
                                                                                      --------   ----------      ----------
       Total assets.................................................................  $ 76,319   $1,563,578      $1,639,665
                                                                                      ========   ==========      ==========
  
                       LIABILITIES AND SHAREHOLDER'S EQUITY
                       ------------------------------------
  Current liabilities:
    Capital lease obligations......................................................   $   404    $     374       $      --
    Accounts payable...............................................................     5,996       28,046          87,082
    Other current liabilities......................................................     5,099        8,514          17,538
                                                                                     --------   ----------      ----------
       Total current liabilities...................................................    11,499       36,934         104,620
                                                                                     --------   ----------      ----------
  Capital lease obligations, net of current portion................................       586          194              --
  Long-term deferred tax liability.................................................        --       27,611          22,605
  Other liabilities................................................................        --          494           2,381
                                                                                     --------   ----------      ----------
       Total liabilities...........................................................    12,085       65,233         129,606
                                                                                     --------   ----------      ----------
  Shareholder's equity:
    Common stock, $.01 par value; 300,000,000 shares authorized; 233,500,000
    shares issued and outstanding..................................................     2,335        2,335           2,335
    Other shareholder's equity.....................................................   120,505    1,590,353       1,871,077
    Accumulated net losses.........................................................   (58,606)     (94,343)       (363,353)
                                                                                     --------   ----------      ----------
       Total shareholder's equity..................................................  $ 64,234   $1,498,345      $1,510,059
                                                                                     --------   ----------      ----------
       Total liabilities and shareholder's equity..................................  $ 76,319   $1,563,578      $1,639,665
                                                                                     ========   ==========      ==========
  </TABLE>
  
    The accompanying notes are an integral part of these consolidated financial
                                    statements.
  
                                         7
  <PAGE>
  
                             GLOBALCENTER HOLDING CO.
  
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE INCOME
                              (Amounts in thousands)
  
  <TABLE>
  <CAPTION>
                                                                         Predecessor                       GlobalCenter
                                                             ------------------------------------  -----------------------------
                                                                                     Nine Months    Three Months    Nine Months
                                                                   Year Ended           Ended           Ended          Ended
                                                                  December 31,      September 30,   December 31,   September 30,
                                                             --------------------  --------------  -------------  --------------
                                                               1997       1998            1999           1999            2000
                                                               ----       ----            ----           ----            ----
                                                                                                                      (Unaudited)
  <S>                                                        <C>          <C>      <C>             <C>            <C>
  Revenues:
    Service revenues.......................................  $  6,511   $ 19,600        $ 29,951       $ 17,753       $  97,774
    Equipment revenues.....................................     1,228      3,640          17,228          5,971          38,821
                                                             --------   --------        --------       --------       ---------
       Total revenues......................................     7,739     23,240          47,179         23,724         136,595
  Costs and expenses:
    Cost of service revenues...............................     5,257     14,804          36,451         17,328          93,026
    Cost of equipment revenues.............................       995      3,208          15,573          5,365          36,986
    Sales and marketing....................................     1,966      8,948           9,531          6,088          25,213
    General and administrative.............................     2,044      4,694           6,897          3,067          44,294
    Depreciation and amortization..........................       912      4,023           4,242          1,913          16,236
    Amortization of intangibles............................       325      1,294             974         74,270         222,810
    Merger costs...........................................        --      2,060              --             --              --
                                                             --------   --------        --------       --------       ---------
       Total costs and expenses............................    11,499     39,031          73,668        108,031         438,565
                                                             --------   --------        --------       --------       ---------
  Operating loss...........................................    (3,760)   (15,791)        (26,489)       (84,307)       (301,970)
  Other income (expense), net..............................        45         55             (44)           114            (229)
                                                             --------   --------        --------       --------       ---------
  Loss from continuing operations before
   income taxes............................................    (3,715)   (15,736)        (26,533)       (84,193)       (302,199)
  Income tax benefit.......................................       941      4,911           9,742          5,038          33,189
                                                             --------   --------        --------       --------       ---------
  Loss from continuing operations..........................    (2,774)   (10,825)        (16,791)       (79,155)       (269,010)
  Loss from discontinued operations, net of
   income tax benefit of $4,504, $7,146,
   $9,600, $8,599 and $0, respectively.....................
                                                              (10,638)   (13,380)        (16,985)       (15,188)             --
                                                             --------   --------        --------       --------       ---------
  Net loss.................................................  $(13,412)  $(24,205)       $(33,776)      $(94,343)      $(269,010)
                                                             --------   --------        --------       --------       ---------
  Other comprehensive earnings, net of taxes:
  Unrealized holding losses arising during
   period..................................................        --         --              --             --          (4,109)
                                                             --------   --------        --------       --------       ---------
  Comprehensive loss.......................................  $(13,412)  $(24,205)       $(33,776)      $(94,343)      $(273,119)
                                                             ========   ========        ========       ========       =========
  </TABLE>
  
  
    The accompanying notes are an integral part of these consolidated financial
                                    statements.
  
                                         8
  <PAGE>
  
                              GLOBALCENTER HOLDING CO.
  
                  CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
              (Amounts in thousands, except share and per share data)
  
  <TABLE>
  <CAPTION>
                                               Common Stock              Other Shareholders Equity
                                           --------------------  ------------------------------------------
                                                                 Additional                      Other                      Total
                                                                   Paid-In      Deferred     Comprehensive   Accumulated Shareholder's
                                             Shares     Amount     Capital    Compensation       Income       Net Losses    Equity
                                             ------     ------     -------    ------------       ------       ----------    ------
  <S>                                      <C>          <C>      <C>          <C>           <C>             <C>          <C>
  Predecessor
   Balance at January 1, 1997............  178,085,647   $1,781   $   24,608  $         --   $          --     $ (20,989)  $    5,400
    Issuance of common stock.............   33,080,271      331        8,700            --              --            --        9,031
    Net loss.............................           --       --           --            --              --       (13,412)     (13,412)
    Deferred compensation................           --       --        4,727        (2,766)             --            --        1,961
    Acquisition of Voyager...............   22,334,082      223        9,305            --              --            --        9,528
    Capital contributed by Frontier
     Corporation, net....................           --       --        3,086            --              --            --        3,086
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at December 31, 1997..........  233,500,000    2,335       50,426        (2,766)             --       (34,401)      15,594
    Net loss.............................           --       --           --            --              --       (24,205)     (24,205)
    Deferred compensation................           --       --           --           948              --            --          948
    Capital contributed by Frontier
     Corporation, net....................           --       --       71,897            --              --            --       71,897
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at December 31, 1998..........  233,500,000    2,335      122,323        (1,818)             --       (58,606)      64,234
    Net loss.............................           --       --           --            --              --       (33,776)     (33,776)
    Deferred compensation................           --       --           --           711              --            --          711
    Capital contributed by Frontier
     Corporation, net....................           --       --       81,754            --              --            --       81,754
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at September 30, 1999.........  233,500,000   $2,335   $  204,077       $(1,107)  $          --     $ (92,382)  $  112,923
                                           ===========   ======   ==========  ============   =============     =========   ==========
  GlobalCenter
    Contribution by Global Crossing Ltd..           --    2,335    1,499,510            --              --            --    1,501,845
    Net loss.............................           --       --           --            --              --       (94,343)     (94,343)
    Capital contributed by Global
     Crossing Ltd., net..................           --       --       90,843            --              --            --       90,843
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at December 31, 1999..........  233,500,000    2,335   $1,590,353  $         --   $          --     $ (94,343)  $1,498,345
    Unrealized loss on available for sale
     securities, net of $2,746 tax
     (unaudited).........................           --       --           --            --          (4,109)           --       (4,109)
    Net loss (unaudited).................           --       --           --            --              --      (269,010)    (269,010)
    Capital contributed by Global
     Crossing Ltd., net (unaudited)......           --       --      284,833            --              --            --      284,833
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance September 30, 2000
    (unaudited)..........................  233,500,000   $2,335   $1,875,186  $         --   $      (4,109)    $(363,353)  $1,510,059
                                           ===========   ======   ==========  ============   =============     =========   ==========
  </TABLE>
  
   The accompanying notes are an integrated part of these consolidated financial
                                     statements
  
                                         9
  <PAGE>
  
                             GLOBALCENTER HOLDING CO.
  
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Amounts in thousands)
  
  <TABLE>
  <CAPTION>
                                                                              Predecessor                     GlobalCenter
                                                                              -----------
                                                                                        Nine Months    Three Months   Nine Months
                                                                      Year Ended           Ended          Ended          Ended
                                                                     December 31,      September 30,   December 31,  September 30,
                                                                     ------------
                                                                   1997       1998           1999          1999           2000
                                                                   ----       ----           ----          ----           ----
                                                                                                                      (Unaudited)
  <S>                                                          <C>        <C>         <C>             <C>            <C>
  Operating activities:
   Net loss..................................................   $(13,412)   $(24,205)       $(33,776)   $  (94,343)      $(269,010)
   Adjustments to reconcile net loss to net
   cash used in operating activities:
       Loss from discontinued operations.....................     10,638      13,380          16,985        15,188              --
  Depreciation and amortization..............................        912       4,023           4,242         1,913          16,236
  Amortization of intangibles................................        325       1,294             974        74,270         222,810
  Deferred income taxes......................................       (888)     (2,049)            983        (2,984)         (3,489)
  Changes in operating assets and liabilities
    net of the effects of acquisitions
          Accounts receivable, net...........................       (949)     (4,047)        (11,346)         (973)        (38,790)
          Prepaid expenses and other assets..................        (93)        335          (1,602)         (923)         (8,759)
          Equipment held for resale..........................         --        (704)            177        (6,345)          1,654
          Accounts payable and accrued liabilities...........        320       6,221          13,306        (3,974)         15,206
                                                                --------    --------        --------    ----------       ---------
  Net cash used in operating activities......................     (3,147)     (5,752)        (10,057)      (18,171)        (64,142)
                                                                --------    --------        --------    ----------       ---------
  Investing activities:
   Purchases of property and equipment.......................     (1,853)    (28,978)        (20,871)      (52,771)       (203,329)
   Purchase of available for sale investments................         --          --              --            --         (10,000)
    Cash from acquisition....................................        568          --              --            --              --
                                                                --------    --------        --------    ----------       ---------
   Net cash used in investing activities.....................     (1,285)    (28,978)        (20,871)      (52,771)       (213,329)
                                                                --------    --------        --------    ----------       ---------
  Financing activities:
    Payments on capital leases and debt......................        (90)     (2,573)           (339)          (83)           (568)
    Proceeds from issuance of debt...........................      1,937          --              --            --              --
    Capital contributions by Frontier
      Corporation/Global Crossing Ltd., net..................      3,086      71,897          81,754        90,843         284,833
                                                                --------    --------        --------    ----------       ---------
   Net cash provided by financing activities.................      4,933      69,324          81,415        90,760         284,265
                                                                --------    --------        --------    ----------       ---------
  Cash provided by (used in) discontinued
   operations................................................     (3,086)    (35,086)        (50,487)      (19,818)          4,416
  Net increase (decrease) in cash............................     (2,585)       (492)             --            --          11,210
  Cash at beginning of period................................      3,077         492              --            --              --
                                                                --------    --------        --------    ----------       ---------
  Cash at end of period......................................   $    492    $     --        $     --    $       --       $  11,210
                                                                ========    ========        ========    ==========       =========
  Supplemental schedule on non-cash activities:
    Contribution of GlobalCenter, net........................   $     --    $     --        $     --    $1,451,432       $      --
    Assets acquired under capital leases.....................   $  1,031    $    215        $     --    $       --       $      --
  </TABLE>
  
    The accompanying notes are an integral part of these consolidated financial
                                    statements.
  
                                         10
  <PAGE>
  
                             GLOBALCENTER HOLDING CO.
  
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
  (1)  Organization and Operations
  
       GlobalCenter Holding Co. is an indirect wholly owned subsidiary of Global
  Crossing Ltd. GlobalCenter Holding Co. owns GlobalCenter Inc. and all of its
  subsidiaries, including those operating in Australia and the United Kingdom.
  GlobalCenter is a provider of Internet infrastructure solutions, including
  computer Web hosting, network connectivity and value added services to
  enterprises with mission critical Internet operations. GlobalCenter Holding Co.
  was incorporated in April 2000 and full ownership of GlobalCenter Inc. was
  transferred at that time from another Global Crossing subsidiary. In accordance
  with accounting standards applicable to transfers between entities under common
  control, the transfer was made at book value and the financial statements
  reflect the transfer as of October 1, 1999.
  
       GlobalCenter Inc. was acquired by Frontier Corporation ("Frontier") in
  February 1998. Frontier accounted for its acquisition of GlobalCenter Inc. using
  the pooling-of-interests method. GlobalCenter Inc. recorded approximately $2
  million of transaction costs related to the merger with Frontier in the year
  ended December 31, 1998. On September 28, 1999, Global Crossing Ltd. acquired
  Frontier. For financial reporting purposes, the acquisition of Frontier by
  Global Crossing Ltd. was deemed to have occurred on September 30, 1999. In
  connection with the Frontier acquisition, the assets and liabilities of
  GlobalCenter Inc. were adjusted to their respective fair values pursuant to the
  purchase method of accounting. For periods prior to October 1, 1999, the
  consolidated assets and liabilities of GlobalCenter Inc. and the related
  consolidated results of operations and cash flows are referred to below as
  "Predecessor," and for periods subsequent to September 30, 1999, the
  consolidated assets and liabilities of GlobalCenter Holding Co. and the related
  consolidated results of operations and cash flows are referred to as
  "GlobalCenter." Global Crossing Ltd. and its subsidiaries other than
  GlobalCenter are referred to as "Global Crossing." GlobalCenter has received
  assurance from Global Crossing that Global Crossing intends to provide the
  necessary funding to support continued operations of GlobalCenter through at
  least January 1, 2001.
  
       On April 12, 2000, GlobalCenter Inc. entered into an agreement to sell its
  Internet Service Provider ("ISP") business segment to Global Crossing Internet
  Dial-Up, Inc., a wholly owned subsidiary of Global Crossing, for book value on
  the transfer date of March 31, 2000. In connection with this transaction,
  GlobalCenter's financial statements reflect the financial position and results
  of operations of the ISP business as discontinued operations for all periods
  presented through December 31, 1999 (the measurement date). For accounting
  purposes, the sale was effective March 31, 2000. In connection with the sale of
  the ISP business, GlobalCenter Inc. agreed to indemnify Global Crossing Internet
  Dial-Up, Inc. for any claims prior to the sale in an amount not to exceed the
  purchase price. GlobalCenter management does not believe any amounts to be paid
  under this indemnity will be material to GlobalCenter's financial statements.
  
                                         11
  <PAGE>
  
       On September 28, 2000, Global Crossing entered into a merger agreement with
  Exodus Communications, Inc. ("Exodus"). Under the merger agreement, a wholly
  owned subsidiary of Exodus will be merged with and into GlobalCenter Holding Co.
  When the merger is completed, each share of common stock of GlobalCenter Holding
  Co. will be converted into and exchanged for shares of Exodus common stock. The
  number of shares of Exodus common stock to be issued at the completion of the
  merger will be based on an exchange ratio that will depend on a number of
  different factors. The merger is subject to customary regulatory and Exodus'
  stockholders' approval.
  
  
  (2)  Significant Accounting Policies
  
  Principles of Consolidation
  
       The consolidated financial statements include GlobalCenter Holding Co. and
  its wholly owned subsidiaries. All significant intercompany transactions have
  been eliminated.
  
  
  Unaudited Interim Financial Data
  
       The consolidated financial statements for the nine months ended September
  30, 2000 and the related amounts in the Notes to Consolidated Financial
  Statements are unaudited but, in the opinion of GlobalCenter management, reflect
  all normal and recurring adjustments necessary for a fair presentation of the
  results of those periods. Operating results for the nine months ended September
  30, 2000 are not necessarily an indication of the results that may be expected
  for the year ended December 31, 2000.
  
  
  Use of Estimates
  
       The preparation of financial statements in conformity with accounting
  principles generally accepted in the United States ("U.S.") requires management
  to make estimates and assumptions that affect the reported amounts of assets and
  liabilities and disclosure of contingent assets and liabilities at the date of
  the financial statements, as well as the reported amounts of revenue and
  expenses during the reporting period. Significant estimates made in preparing
  the consolidated financial statements include depreciation and amortization
  periods, the allowance for doubtful accounts and income tax valuation
  allowances. Actual amounts and results could differ from those estimates.
  
       GlobalCenter's operations and ability to grow may be affected by numerous
  factors, including changes in customer requirements, new laws, technological
  advances, entry of new competitors and changes in the willingness of Global
  Crossing and other potential lenders to finance operations. GlobalCenter cannot
  predict which, if any, of these or other factors might have a significant impact
  on GlobalCenter in the future, nor can it predict what impact, if any, the
  occurrence of these or other events might have on GlobalCenter's operations.
  
                                         12
  <PAGE>
  
  Property and Equipment, Net
  
       Property and equipment are stated at cost. Depreciation is computed using
  the straight-line method over the estimated useful lives of the property and
  equipment, generally two to five years for network and computer equipment, four
  years for furniture and fixtures, and seven years for leasehold improvements.
  Equipment acquired under capital leases is amortized using the straight-line
  method over the shorter of the lease term or the estimated useful life of the
  asset. Property and equipment under construction is capitalized and depreciation
  commences when the asset is placed in service.
  
  
  Goodwill and Other Intangibles
  
       Costs in excess of tangible assets acquired and liabilities assumed are
  recorded as goodwill and intangibles. Goodwill and intangibles are amortized on
  a straight-line basis over five to seven years.
  
  
  Investment
  
       As of September 30, 2000, GlobalCenter's investment consisted of a single
  investment in marketable equity securities classified as available for sale.
  Accordingly, the investment is recorded at its fair value with any unrealized
  holding gains or losses reported as other comprehensive income. Any decline in
  value, which is other than a temporary decline, will be charged immediately to
  earnings in the period in which the impairment occurs. As of September 30, 2000,
  GlobalCenter's investment had a fair value of $3.1 million, a cost basis of $10
  million and an unrealized loss before tax benefit of $6.9 million. As of
  November 24, 2000, the investment had a fair value of $1.0 million.
  
  
  Impairment of Long-lived Assets
  
       GlobalCenter periodically reviews the carrying amounts of property and
  equipment, intangible assets and goodwill to determine whether current events or
  changes in circumstances indicate that the carrying amount may not be
  recoverable. GlobalCenter recognizes an impairment of long-lived assets when the
  net book value of such assets exceeds the future undiscounted cash flows
  attributable to such assets. If an impairment adjustment is deemed necessary,
  such loss is measured by the amount that the carrying value of such assets
  exceeds their fair value. Fair value is based on the expected future discounted
  cash flows to be generated from the assets. Considerable management judgment is
  necessary to estimate the fair value of assets. Accordingly, actual results
  could vary significantly from such estimates. Assets to be disposed of are
  carried at the lower of their financial statement carrying amount or fair value
  less costs to sell.
  
                                         13
  <PAGE>
  
  Fair Value of Financial Instruments
  
       The estimated fair value of financial instruments has been determined by
  GlobalCenter using available market information and valuation methodologies.
  Considerable judgment is required in estimating fair values. Accordingly, the
  estimates may not be indicative of the amounts GlobalCenter could realize in a
  current market exchange. The carrying amounts for accounts receivable,
  construction in progress, investment, accounts payable, accrued liabilities, and
  capital leases approximate their fair value.
  
  
  Equipment Held For Resale
  
       GlobalCenter obtains computers, computer equipment, peripherals and
  networking equipment from third parties and resells the equipment to its
  customers. Equipment that has been purchased on behalf of customers but not yet
  transferred to customers or installed is recorded at the lower of cost or net
  realizable value as equipment held for resale.
  
  
  Other Current Liabilities
  
       Other current liabilities consist of the following:
  
  <TABLE>
  <CAPTION>
                                                                      Predecessor        GlobalCenter
                                                                      -----------   ----------------------
                                                                           December 31,        Unaudited
                                                                      --------------------   September 30,
                                                                          1998       1999         2000
                                                                      ------------  ------   -------------
                                                                               (Amounts in thousands)
  <S>                                                                    <C>         <C>      <C>
  Accrued professional fees............................................  $1,250      $2,000      $ 2,500
  Accrued benefits, compensation and related taxes.....................   1,596       3,627        5,209
  Deferred income......................................................      --          --        1,773
  Other................................................................   2,253       2,887        8,056
                                                                         ------      ------      -------
    Total other current liabilities....................................  $5,099      $8,514      $17,538
                                                                         ======      ======      =======
  </TABLE>
  
  
  Income Taxes
  
       Beginning with the acquisition by Frontier of GlobalCenter Inc.,
  Predecessor and GlobalCenter are included in the consolidated federal income tax
  return of Global Crossing North America, Inc. (formerly Frontier Corporation)
  for federal and state purposes. The income tax provision has been calculated on
  a pro rata return basis taking account of the increase or decrease in the tax
  liability of the Global Crossing North America, Inc. consolidated group
  resulting from the inclusion of Predecessor and GlobalCenter in the Global
  Crossing North America, Inc. consolidated tax return.
  
                                         14
  <PAGE>
  
  Stock-Based Compensation
  
       Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
  for Stock-Based Compensation," permits the use of either a fair value-based
  method or the method defined in Accounting Principles Board Opinion No. 25,
  "Accounting for Stock Issued to Employees" ("APB 25"), to account for stock-
  based compensation arrangements. GlobalCenter accounts for stock option grants
  in accordance with APB 25 and, accordingly, recognizes compensation expense for
  stock option grants to the extent that the estimated fair value of the stock
  exceeds the exercise price of the option at the measurement date. The
  compensation expense is charged against operations ratably over the vesting
  period of the options.
  
  
  Segment Reporting
  
       SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
  Information," establishes standards for disclosure about operating segments,
  products, services, geographic areas and major customers. Following the
  treatment of the ISP business segment as discontinued operations, when applying
  the management approach defined in SFAS No. 131, GlobalCenter now operates in a
  single segment, namely the provision of complex Web hosting, Internet protocol
  network services, content distribution, systems applications and professional
  services.
  
  Concentration of Credit Risk
  
       Financial instruments that potentially subject GlobalCenter to
  concentrations of credit risk consist primarily of trade receivables. The
  concentration of credit risk is limited due to the large number of customers
  comprising GlobalCenter's customer base.
  
  
  Revenue Recognition
  
       Service revenues consist of fees from customers for complex Web hosting,
  Internet protocol network services, content distribution, systems applications
  and professional services. Service revenues are recognized as the monthly
  service is provided. Service revenues also include fees for equipment
  installation.
  
       Equipment revenues consist of revenue derived from the resale of computers,
  computer peripherals and networking equipment from third parties. Equipment
  revenues are recognized when equipment is delivered to the customer or, if
  installation is required, when installation of the equipment is complete.
  
       In December 1999, the Securities and Exchange Commission issued Staff
  Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
  Statements," which is required to be adopted by GlobalCenter in the quarter
  ending December 31, 2000. SAB No. 101 provides additional guidance on revenue
  recognition as well as criteria for when revenue is generally realized and
  earned. GlobalCenter has chosen to adopt SAB No. 101 during the quarter ended
  June 30, 2000. Based on the guidance provided by SAB No. 101, GlobalCenter has
  deferred
  
                                         15
  <PAGE>
  
  approximately $1.8 million of revenues as of September 30, 2000 for one-time
  fees related to customer installation and set-up. These revenues will be
  recognized over the term of the customer contracts, which are generally for a
  one year term. No cumulative effect has been recorded for the periods prior to
  implementation as the amounts were not material.
  
  
  Cost of Service Revenues
  
       Cost of service revenues is comprised of telecommunications costs for the
  network provided by Global Crossing and Frontier and costs for connecting to
  other networks and telecommunications providers. Other expenses in cost of
  service revenues include salaries, benefits, rents and other expenses for
  operation of the Internet Data Centers, customer service and network engineering
  personnel.
  
  
  Foreign Currency
  
       As of December 31, 1999, the functional currency of GlobalCenter is the
  U.S. dollar. The functional currency of GlobalCenter's foreign operations is
  also the U.S. dollar. Foreign currency transactions are recorded based on
  exchange rates at the time such transactions arise. Subsequent changes in
  exchange rates result in transaction gains and losses which are reflected in the
  accompanying consolidated statements of operations as unrealized (based on the
  applicable period end exchange rate) or realized upon settlement of the
  transactions. Foreign currency gains (losses) from GlobalCenter's existing
  operations were not material in any period presented.
  
  
  Recent Accounting Pronouncements
  
       In June 1999, the Financial Accounting Standards Board issued SFAS No. 137,
  "Accounting for Derivative Instruments and Hedging Activities--Deferral of the
  Effective Date of SFAS No. 133," which deferred SFAS No. 133's effective date to
  fiscal quarters beginning after June 15, 2000. This statement, as amended by
  SFAS No. 137 and No. 138, standardizes the accounting for derivatives and
  hedging activities and requires that all derivatives be recognized in the
  statement of financial position as either assets or liabilities at fair value.
  Changes in the fair value of derivatives that do not meet the hedge accounting
  criteria are to be reported in earnings. GlobalCenter management expects that
  the adoption of SFAS No. 133 will not have a material impact on GlobalCenter's
  financial position, results of operations or cash flows.
  
                                         16
  <PAGE>
  
  Vendor Concentration
  
       GlobalCenter relies primarily on Global Crossing for network services
  pursuant to a network services agreement. Global Crossing operates its own
  global network. If the Global Crossing network experiences disruption or if
  GlobalCenter's network services agreement with Global Crossing were terminated,
  GlobalCenter's business, operating results and financial condition could be
  materially adversely affected.
  
  
  Basic and Diluted Loss Per Share
  
       GlobalCenter has applied the provisions of SFAS No. 128, "Earnings Per
  Share," which establishes standards for computing and presenting earnings per
  share. Basic earnings per share is computed by dividing net loss by the weighted
  average number of common shares outstanding for the period. The calculation of
  diluted earnings is the same as basic net loss per share as the effect of common
  stock equivalents is antidilutive.
  
       Basic and diluted loss per share:
  
  <TABLE>
  <CAPTION>
  
                                                                                   Nine Months      Three Months     Nine Months
                                                       Year Ended December 31,        Ended            Ended            Ended
                                                    ----------------------------   September 30,    December 31,    September 30,
                                                        1997            1998            1999            1999             2000
                                                    ------------    ------------    ------------    ------------     ------------
  <S>                                               <C>             <C>            <C>              <C>             <C>
  Loss from continuing operations.................  $       0.01    $       0.04    $       0.07    $       0.34     $       1.15
  Loss from discontinued operations...............  $       0.06    $       0.06    $       0.08    $       0.06               --
                                                    ------------    ------------    ------------    ------------     ------------
  Net loss........................................  $       0.07    $       0.10    $       0.15    $       0.40     $       1.15
                                                    ============    ============    ============    ============     ============
  Shares used in computing basic and
   diluted net loss per share......................  198,348,000     233,500,000     233,500,000     233,500,000      233,500,000
  </TABLE>
  
  
  (3)  Related Party Transactions
  
  Revenues
  
       During the nine months ended September 30, 2000, GlobalCenter recognized
  approximately $2.6 million of revenue for services provided to other Global
  Crossing subsidiaries. GlobalCenter and Predecessor had no intercompany sales
  prior to this period.
  
  
  Cash Management
  
       Prior to the merger with Frontier, GlobalCenter Inc. maintained its own
  cash management function. After its merger with Frontier, GlobalCenter Inc.
  utilized the central cash management systems of Frontier. Since the acquisition
  of Frontier by Global Crossing, GlobalCenter has utilized the central cash
  management of Global Crossing. As a subsidiary of Global Crossing, GlobalCenter
  maintains no cash balances and no cash has been allocated to GlobalCenter in the
  accompanying consolidated financial statements. Historically, Global Crossing
  and Frontier have
  
                                         17
  <PAGE>
  
  determined the amount of funding provided to GlobalCenter based on actual cash
  used for capital and operating expenses, net of GlobalCenter cash receipts. Such
  funding has been recorded as capital contributed by Frontier and Global Crossing
  in the accompanying consolidated financial statements. Funds required by
  GlobalCenter are subject to the ongoing approval and budgeting processes of
  Global Crossing. As of September 30, 2000, subsidiaries of GlobalCenter had cash
  balances of $11.2 million that were not part of the centralized cash management
  system of Global Crossing.
  
  Corporate Allocations
  
       The direct operating expenses of GlobalCenter, such as network costs, are
  charged directly to GlobalCenter. GlobalCenter is allocated a portion of
  corporate overhead costs. For the year ended December 31, 1997, GlobalCenter
  operated on a standalone basis and no corporate allocation costs were recorded
  in the statement of operations.
  
       The following table summarizes corporate charges and allocations included
  in the accompanying consolidated financial statements.
  
  <TABLE>
  <CAPTION>
                                                                             Predecessor                    GlobalCenter
                                                                             -----------                    ------------
                                                                                                                     Unaudited
                                                                                     Nine Months    Three Months    Nine Months
                                                                      Year Ended        Ended          Ended           Ended
                                                                     December 31,   September 30,   December 31,   September 30,
                                                                         1998           1999            1999           2000
                                                                         ----           ----            ----           ----
                                                                                       (Amounts in thousands)
       <S>                                                           <C>            <C>             <C>            <C>
       Statement of Operations caption:
          Cost of service revenues................................        $    --         $ 4,722        $ 1,978         $10,711
          General and administrative..............................          1,284           1,740            867           4,794
                                                                          -------         -------        -------         -------
                  Total corporate charges and
                    allocations...................................        $ 1,284         $ 6,462        $ 2,845         $15,505
                                                                          =======         =======        =======         =======
  </TABLE>
  
       GlobalCenter management believes that the allocation methodologies applied
  are reasonable. However, it was not practicable to determine whether the
  allocated amounts represent amounts that would have been incurred on a
  standalone basis. GlobalCenter management believes that the historical corporate
  charges and allocations are comparable to the expected future allocations.
  Explanations of the composition and the method of allocation for the above
  captions are described below.
  
  
  Cost of Service Revenues
  
       Allocated costs within this caption include the costs of the
  telecommunications network provided by Global Crossing or Frontier to
  GlobalCenter. These costs were allocated to GlobalCenter based upon circuit
  usage, rate and capacity information.
  
                                         18
  <PAGE>
  
  General and Administrative
  
       Allocated costs within this caption include the costs of information
  systems services, tax return preparation and advisory services, payroll and
  benefits administration, purchasing and certain other accounting and
  administrative services. These costs were allocated based upon headcount, square
  footage and revenue, depending on the type of cost to be allocated.
  
  
  Tanning Technology Corporation
  
       The chief executive officer of GlobalCenter was a member of the Board of
  Directors of Tanning Technology Corporation ("Tanning"). On February 1, 2000,
  GlobalCenter acquired approximately 229,000 shares of Tanning common stock for
  an aggregate purchase price of $10 million based on the fair market value of
  Tanning's common stock on that date. This investment represents approximately 1%
  of the outstanding shares of Tanning common stock as of October 27, 2000. In
  addition, GlobalCenter and Tanning entered into a preferred marketing agreement
  to create, market, sell and deliver combined service offerings to customers and
  also entered into an additional arrangement where GlobalCenter has agreed to pay
  $10 million for consulting services to be provided by Tanning over a twelve-
  month period commencing in February 2000.
  
  (4)  Property and Equipment, Net
  
       Property and equipment consists of the following:
  
  <TABLE>
  <CAPTION>
                                                                                      Predecessor              GlobalCenter
                                                                                     -------------    -----------------------------
                                                                                              December 31,              Unaudited
                                                                                     -----------------------------    September 30,
                                                                                          1998           1999             2000
                                                                                     -------------    ------------    -------------
                                                                                                  (Amounts in thousands)
     <S>                                                                               <C>              <C>            <C>
     Network and computer equipment..................................................    $ 13,410       $ 16,200         $ 50,611
     Furniture and fixtures..........................................................         307          2,143            8,110
     Leasehold improvements..........................................................       2,179         20,759           94,142
                                                                                         --------       --------         --------
                                                                                           15,896         39,102          152,863
     Accumulated depreciation and amortization.......................................      (5,096)        (1,913)         (18,149)
                                                                                         --------       --------         --------
                                                                                           10,800         37,189          134,714
     Construction in progress........................................................      19,572         79,126          223,435
                                                                                         --------       --------         --------
     Total property and equipment, net...............................................    $ 30,372       $116,315         $358,149
                                                                                         ========       ========         ========
  </TABLE>
  
       Included in property and equipment are assets acquired under capital lease
  obligations with an original cost of approximately $1.5 million. Accumulated
  amortization on the leased assets was approximately $0.8 million, $1.3 million
  and $1.5 million at December 31, 1998 and 1999, and September 30, 2000,
  respectively. Interest paid on capital lease obligations is not material to the
  consolidated financial statements for all periods presented.
  
                                         19
  <PAGE>
  
  (5)  Goodwill and Intangibles, Net
  
       In connection with the acquisition of Frontier by Global Crossing,
  approximately $1.5 billion of the purchase price was determined to be the fair
  value of net assets, goodwill and intangibles related to GlobalCenter.
  Approximately $43.9 million was the fair value of the tangible net assets
  acquired and liabilities assumed of GlobalCenter at the acquisition date. The
  remaining purchase price was assigned to goodwill and intangibles and a related
  deferred tax liability. The amounts and estimated lives of the goodwill and
  intangibles are as follows:
  
  <TABLE>
  
                                                                                                                          Unaudited
                                                                                         Estimated      December 31,    September 30,
                                                                                           Life             1999            2000
                                                                                           ----             ----            ----
                                                                                                    (Amounts in thousands)
  <S>                                                                                    <C>            <C>             <C>
     Customer lists...................................................................    5 years        $   78,000      $   78,000
     Goodwill.........................................................................    5 years         1,407,400       1,407,400
                                                                                                         ----------      ----------
                                                                                                          1,485,400       1,485,400
     Less: Accumulated amortization...................................................                      (74,270)       (297,080)
                                                                                                         ----------      ----------
     Goodwill and intangibles, net....................................................                   $1,411,130      $1,188,320
                                                                                                         ==========      ==========
  </TABLE>
  
       In October 1997, GlobalCenter Inc. acquired Voyager Networks, Inc.
  ("Voyager") in a business combination accounted for as a purchase. After
  allocation of the purchase price to the tangible and specifically identifiable
  intangible assets acquired and liabilities assumed, the excess purchase price of
  approximately $9.1 million was allocated to goodwill. The Voyager goodwill was
  amortized using the straight-line method over seven years until the acquisition
  of Frontier by Global Crossing. As of December 31, 1998, the accumulated
  amortization related to the Voyager goodwill was approximately $1.6 million. Pro
  forma combined revenues and net loss from continuing operations before benefit
  for income taxes for the year ended December 31, 1997, assuming Voyager was
  acquired on January 1, 1997, was $10.5 million and $4.2 million, respectively.
  
  
  (6)  Income Taxes
  
       The following table shows the principal reasons for the difference between
  the effective income tax rate and the U.S federal statutory income tax rate:
  
  <TABLE>
  <CAPTION>
                                                                                        Predecessor                     GlobalCenter
                                                                                        -----------                     ------------
                                                                                                       Nine Months      Three Months
                                                                                Year Ended                Ended            Ended
                                                                               December 31,           September 30,     December 31,
                                                                               ------------
                                                                           1997            1998           1999             1999
                                                                           ----            ----           ----             ----
                                                                                          (Amounts in thousands)
    <S>                                                                  <C>             <C>            <C>              <C>
    Federal income tax at statutory rate (35%).......................    $ (1,300)       $ (5,508)      $ (9,286)        $(29,468)
    State and local income taxes, net of federal effect..............        (118)            125           (449)            (212)
    Amortization of goodwill.........................................         114             453            341           24,630
    Change in valuation allowance and other
      estimates......................................................         361              --           (361)              --
    Other differences................................................           2              19             13               12
                                                                         --------        --------       --------        ---------
    Benefit for income taxes.........................................    $   (941)       $ (4,911)      $ (9,742)        $ (5,038)
                                                                         ========        ========       ========        =========
  </TABLE>
  
                                         20
  <PAGE>
  
  The benefit for income taxes consists of the following:
  
  <TABLE>
  <CAPTION>
                                                                                  Predecessor                        GlobalCenter
                                                                                  -----------                        -------------
                                                                                                Nine Months          Three Months
                                                                           Year Ended              Ended                 Ended
                                                                          December 31,         September 30,         December 31,
                                                                          ------------
                                                                        1997         1998          1999                  1999
                                                                        ----         ----          ----                  ----
                                                                                   (Amounts in thousands)
  <S>                                                                   <C>        <C>            <C>                   <C>
    Benefit for income taxes from continuing operations
    Current:
       Federal....................................................      $  --      $(3,307)       $(10,126)             $(1,979)
       State and local............................................         --           --            (514)                (133)
                                                                        -----      -------        --------              -------
          Subtotal................................................         --       (3,307)        (10,640)              (2,112)
    Deferred:
       Federal....................................................       (760)      (1,797)          1,074               (2,733)
       State and local............................................       (181)         193            (176)                (193)
                                                                        -----      -------        --------              -------
          Subtotal................................................       (941)      (1,604)            898               (2,926)
                                                                        -----      -------        --------              -------
    Benefit for income taxes from continuing
      operations..................................................      $(941)     $(4,911)       $ (9,742)             $(5,038)
                                                                        =====      =======        ========              =======
  </TABLE>
  
       Deferred income taxes reflect the net tax effect of temporary differences
  between the carrying amounts of assets and liabilities for financial reporting
  purposes and amounts used for income tax purposes.
  
       The following is a summary of the significant items giving rise to
  components of GlobalCenter's deferred tax assets and liabilities:
  
  <TABLE>
  <CAPTION>
                                                                                 Predecessor          GlobalCenter
                                                                                 -----------    --------------------------
                                                                                         December 31,         Unaudited
                                                                                 -------------------------   September 30,
                                                                                     1998          1999          2000
                                                                                 -----------    ----------   -------------
                                                                                           (Amounts in thousands)
  <S>                                                                               <C>           <C>          <C>
  Long-term deferred income tax assets (liabilities)
    Intangibles.................................................................    $   --        $(27,825)    $(23,547)
    Property and equipment......................................................       221             214         (558)
    Net operating losses from continuing operations.............................       515           1,412        2,912
                                                                                    ------        --------     --------
                                                                                       736         (26,199)     (21,193)
  Less: Valuation allowance.....................................................      (515)         (1,412)      (1,412)
                                                                                    ------        --------     --------
       Net long-term deferred income tax assets (liabilities)...................    $  221        $(27,611)    $(22,605)
                                                                                    ======        ========     ========
  Current deferred income tax assets
    Accrued benefits and compensation...........................................    $  688        $    168     $    168
    Reserves and allowances.....................................................     1,594           1,681        3,505
    Other.......................................................................       111           1,077          482
                                                                                    ------        --------     --------
       Total current deferred income tax assets.................................    $2,393        $  2,926     $  4,155
                                                                                    ======        ========     ========
  </TABLE>
  
       GlobalCenter established a valuation allowance of approximately $1.4
  million as of December 31, 1999 against net operating losses. The valuation
  allowance relates to the uncertainty of realizing the full benefit of the net
  operating loss carryforwards. In evaluating the amount of valuation allowance
  needed, GlobalCenter considers the prior operating results and future plans and
  expectations. The utilization period of the net operating loss carryforwards and
  the turnaround period of other temporary differences are also considered. The
  GlobalCenter's net operating losses begin to expire in 2001. The realization of
  the current net deferred income tax asset is dependent on the consolidated
  group, of which GlobalCenter and Predecessor are a component, generating taxable
  income. Although realization is not assured, management believes it is more
  likely than not that the deferred income tax asset at December 31, 1999 will
  
                                         21
  <PAGE>
  
  be realized. The amount of the deferred tax asset considered realizable,
  however, could be reduced in the near term if estimates of taxable income in
  future years are reduced.
  
  (7) Commitments and Contingencies
  
  Lease Commitments
  
       GlobalCenter has entered into various lease agreements for office space and
  Internet Data Center facilities. Rent expense was $9.9 million, $2.3 million,
  $3.7 million, $1.3 million and $1.0 million for the nine months ended September
  30, 2000, three months ended December 31, 1999, nine months ended September 30,
  1999 and the years ended December 31, 1998 and 1997, respectively. GlobalCenter
  leases certain electronic and computer equipment under capital lease
  arrangements.
  
       A summary of future minimum lease payments under capital and noncancelable
  operating lease agreements as of December 31, 1999 are as follows:
  
  <TABLE>
  <CAPTION>
                                                                                                        Capital      Operating
                                                                                                        Leases         Leases
                                                                                                     -------------  ------------
                                                                                                             (Amounts in
                                                                                                             thousands)
       <S>                                                                                           <C>            <C>
       Years ending December 31,
          2000.....................................................................................         $ 423       $ 12,509
          2001.....................................................................................           211         12,133
          2002.....................................................................................            --         12,026
          2003.....................................................................................            --         12,361
          2004.....................................................................................            --         12,843
          Thereafter...............................................................................            --         84,354
                                                                                                            -----       --------
                                                                                                              634       $146,226
                                                                                                                        ========
       Less: Amount representing interest..........................................................           (66)
                                                                                                            -----
       Present value of lease payments.............................................................           568
       Current portion of capital leases...........................................................          (374)
                                                                                                            -----
       Noncurrent portion of capital leases........................................................         $ 194
                                                                                                            =====
  </TABLE>
  
       It is expected that in the normal course of business, leases that expire
  generally will be renewed or replaced by leases on other properties.
  Accordingly, it is anticipated that future minimum lease commitments will not be
  less than the amount shown for 2000.
  
       Subsequent to December 31, 1999, GlobalCenter entered into a number of
  additional operating lease commitments to secure future data center locations.
  The aggregate additional commitments as of September 30, 2000 were approximately
  $210 million.
  
  
  Other
  
       Management believes that there are no pending or threatened legal
  proceedings that would have a material adverse effect on GlobalCenter.
  
                                         22
  <PAGE>
  
  (8) Shareholder's Equity
  
       On September 28, 2000, the shareholders of GlobalCenter Holding Co. and
  GlobalCenter Inc. approved an increase in the total number of shares of common
  stock with par value of $0.01 to 300 million. On September 28, 2000, the
  GlobalCenter Holding Co. and GlobalCenter Inc. Boards of Directors approved a
  stock split, in the form of a stock dividend, of 2,335,000 to 1. The stock
  dividend will be effected prior to the completion of the acquisition of
  GlobalCenter by Exodus. Accordingly, all outstanding shares have been
  retroactively adjusted to reflect the effect of the stock dividend.
  
  
  Management Stock Plan
  
       The Board of Directors and the shareholder of GlobalCenter Inc. adopted the
  GlobalCenter Management Stock Plan ("Management Stock Plan") in January 2000.
  The Management Stock Plan was approved by the compensation committee of the
  Global Crossing Ltd. Board of Directors on March 2, 2000 and by the Global
  Crossing Ltd. Board of Directors on April 12, 2000. The Management Stock Plan
  provides for grants of stock options to purchase shares of GlobalCenter Inc.
  stock and grants restricted shares of GlobalCenter Inc. stock. Options granted
  under the Management Stock Plan may be incentive stock options or non-statutory
  stock options. The options expire ten years from the date of the grant and vest
  over a three-year period. The total number of shares of such GlobalCenter Inc.
  stock available for grant under the Management Stock Plan is approximately 27.5
  million.
  
       The Management Stock Plan imposes individual limits on the amount of awards
  that a participant can receive in any fiscal year. The Management Stock Plan is
  administered by the compensation committee of the Global Crossing Ltd. Board of
  Directors. The exercise price per share for a Management Stock Plan option will
  typically be the fair market value of GlobalCenter Inc. stock on the date of
  grant. As of December 31, 1999, stock options to purchase 12.8 million shares of
  GlobalCenter Inc. stock had been approved for grant under the Management Stock
  Plan. The weighted average exercise price is $110 million. As of December 31,
  1999, no shares of restricted stock have been awarded under the Management Stock
  Plan.
  
       As of September 30, 2000, stock options to purchase approximately 22.3
  million shares of GlobalCenter Inc. common stock had been approved for grant
  under the Management Stock Plan. The aggregate exercise price of such options is
  approximately $191 million. Management believes the options were all granted at
  the fair market value on date of grant.
  
  
  Global Crossing Ltd. Stock Option Plans
  
       Employees of GlobalCenter participate in the stock option plans of Global
  Crossing Ltd. Global Crossing Ltd. maintains a stock option plan under which
  options to acquire shares may be granted to directors, officers, employees and
  consultants. Global Crossing Ltd. accounts for this plan under APB 25, under
  which compensation cost is recognized only to the extent that the
  
                                         23
  <PAGE>
  
  market price at that date of grant exceeds the exercise price. Terms and
  conditions of Global Crossing Ltd. options, including exercise price and the
  period in which options are exercisable, generally are at the discretion of the
  compensation committee of the Global Crossing Ltd. Board of Directors, however,
  no options are exercisable more than ten years after the date of grant. Certain
  employees of GlobalCenter own stock options to acquire Global Crossing Ltd
  stock.
  
    Prior to its merger with Global Crossing, Frontier maintained stock option
  plans for its directors, executives, and certain employees. The exercise price
  for options under all Frontier plans was the fair market value of the stock on
  the date of grant. The stock options expire ten years from the date of the grant
  and vest over a period from one to three years. The Frontier plans provided for
  discretionary grants of stock options which were subject to the passage of time
  and continued employment restrictions. In connection with the Frontier merger,
  Global Crossing exchanged all of the outstanding Frontier stock options for
  Global Crossing Ltd. stock options which vested immediately at the date of the
  Frontier merger.
  
    As of December 31, 1999, 2.4 million stock options held by GlobalCenter
  employees under the Global Crossing Ltd.'s stock option plans are exercisable.
  During 1997, GlobalCenter Inc. deferred compensation of $4.7 million which
  relates to the difference between the exercise price of the options and the fair
  market value at the time of issuance. Related compensation expense of $2
  million, $0.9 million, and $0.7 million was recognized in 1997, 1998 and the
  nine month period ended September 30, 1999, respectively.
  
    The following table summarizes the stock option activity of GlobalCenter
  employees who hold options under Frontier and Global Crossing stock option
  plans:
  
  <TABLE>
  <CAPTION>
                                                                                          Number of    Weighted Average
                                                                                           Shares      Exercise Price
                                                                                          ---------    ----------------
  Predecessor
  <S>                                                                                     <C>          <C>
    Outstanding Frontier Corporation options at January 1, 1997.....................        156,924            $ 1.02
       Granted......................................................................      1,155,129              5.47
       Exercised....................................................................         30,616              1.00
       Canceled.....................................................................        157,718              2.17
                                                                                          ---------            ------
    Outstanding Frontier Corporation options at December 31, 1997...................      1,123,719              5.44
       Granted......................................................................        910,120             27.90
       Exercised....................................................................        305,570              1.98
       Canceled.....................................................................        661,427             18.15
                                                                                          ---------            ------
    Outstanding Frontier Corporation options at December 31, 1998...................      1,066,842             17.71
       Granted......................................................................      1,528,549             46.43
       Exercised....................................................................        527,505             19.22
       Canceled.....................................................................        118,577             30.52
                                                                                          ---------            ------
    Outstanding Frontier Corporation options at September 30, 1999..................      1,949,309            $39.04
                                                                                          =========            ======
    GlobalCenter
    Outstanding Global Crossing Ltd. options at October 1, 1999.....................      1,949,309            $19.04
       Granted......................................................................      2,131,175             45.00
       Exercised....................................................................      1,211,355             12.43
       Canceled.....................................................................        343,285             26.25
                                                                                          ---------            ------
    Outstanding Global Crossing Ltd. options at December 31, 1999...................      2,525,844             22.10
       Granted (unaudited)..........................................................      3,949,756             30.63
       Exercised (unaudited)........................................................        791,626             15.38
       Canceled (unaudited).........................................................      1,301,414             31.10
                                                                                          ---------            ------
    Outstanding Global Crossing Ltd. options at September 30, 2000
      (unaudited)...................................................................      4,382,560            $28.33
                                                                                          =========            ======
  </TABLE>
  
                                         24
  <PAGE>
  
  As permitted by SFAS No. 123, the employee stock options are being accounted for
  under APB 25 and compensation expense is recognized over the vesting period to
  the extent that the fair value of the stock on the date the options were granted
  exceeded the exercise price. Had compensation cost for the stock-based
  compensation plans been determined consistent with the SFAS No. 123 fair value
  approach, the impact on Predecessor and GlobalCenter's loss applicable to common
  shareholders using the Black-Scholes option valuation model, would be as
  follows:
  
  <TABLE>
  <CAPTION>
                                                  Predecessor                    GlobalCenter
                                                  -----------                    ------------
                                                                                           Unaudited
                                                            Nine Months   Three Months    Nine Months
                                           Year Ended          Ended         Ended           Ended
                                          December 31,     September 30,  December 31,   September 30,
                                       -----------------
                                         1997     1998         1999          1999           2000
                                       -------   -------      -------       -------       --------
  <S>                                  <C>       <C>          <C>           <C>            <C>
  Pro forma net loss.................  $13,633   $26,147      $42,289       $94,452       $269,060
  </TABLE>
  
  
  The following table summarizes the significant assumptions used in developing
  the pro forma information:
  
  
  <TABLE>
  <CAPTION>
                                                                             Predecessor                      GlobalCenter
                                                                             -----------                      ------------
                                                                                                                       Unaudited
                                                                                       Nine Months    Three Months    Nine Months
                                                                      Year Ended          Ended           Ended          Ended
                                                                     December 31,     September 30,   December 31,   September 30,
                                                                  ------------------
                                                                     1997      1998        1999           1999            2000
                                                                     ----      ----        ----           ----            ----
    <S>                                                           <C>       <C>       <C>             <C>            <C>
    Risk free interest rate.....................................      6.2%      5.5%        6.6%           6.6%            6.0%
    Volatility factor...........................................     33.2%     42.0%       40.0%          40.0%           40.0%
    Dividend yield..............................................       --        --          --             --              --
    Weighted average life.......................................  4 years   2 years      1 year        3 years         3 years
  </TABLE>
  
       The weighted average fair value of the options granted during the years
  ended December 31, 1997 and 1998, the nine-month period ended September 30,
  1999, the three-month period ended December 31, 1999 and the nine-month period
  ended September 30, 2000 is $1.44, $7.72, $4.96, $15.55 and $10.38,
  respectively.
  
  
  (9)  Discontinued Operations
  
       As of December 31, 1999, GlobalCenter decided to discontinue its ISP
  business segment. GlobalCenter Inc. entered into an agreement to sell the
  business segment to Global Crossing Internet Dial-Up, Inc., a wholly owned
  subsidiary of Global Crossing Ltd., for book value on the date of transfer. In
  connection with this transaction, GlobalCenter's financial statements reflect
  the financial position and results of operations of the ISP business as
  discontinued operations for all periods presented. For accounting purposes, the
  sale was effective March 31, 2000. In connection with the sale of the ISP
  business, GlobalCenter agreed to indemnify Global Crossing Internet Dial-Up,
  Inc. for any claims prior to the sale in an amount not to exceed the purchase
  price. Included in the liabilities from discontinued operations in the table
  below is an accrual for losses between the measurement date of December 31, 1999
  and the disposal date of March 31, 2000 of $6.4 million, net of a $3.6 million
  tax benefit. Summary financial information of the ISP business segment is as
  follows:
  
                                         25
  <PAGE>
  
  <TABLE>
  <CAPTION>
                                                                                             Predecessor   GlobalCenter
                                                                                             -----------   ------------
                                                                                                 As of December 31,
                                                                                                 -----------------
                                                                                                1998            1999
                                                                                                ----            ----
                                                                                                (Amounts in thousands)
    <S>                                                                                       <C>              <C>
    Balance Sheet Data:
       Assets...............................................................................  $36,038          $17,546
       Liabilities..........................................................................    7,740           13,130
                                                                                              -------          -------
       Net assets of discounted operations..................................................  $28,298          $ 4,416
                                                                                              =======          =======
  </TABLE>
  
  <TABLE>
  <CAPTION>
                                                                                             Predecessor               GlobalCenter
                                                                                             -----------               -------------
                                                                                                        Nine Months    Three Months
                                                                                      Year Ended           Ended           Ended
                                                                                     December 31,      September 30,   December 31,
                                                                                     ------------
                                                                                   1997       1998          1999           1999
                                                                                   ----       ----          ----           ----
  <S>                                                                            <C>        <C>        <C>             <C>
    Statement of Operations Data:
       Revenue.................................................................  $ 16,786   $ 20,183        $ 15,949       $  4,186
       Expenses................................................................   (31,423)   (40,709)        (42,534)       (17,910)
                                                                                 --------   --------        --------       --------
       Operating loss..........................................................   (14,637)   (20,526)        (26,585)       (13,724)
       Other expenses..........................................................      (505)        --              --             --
       Accrued losses from measurement date....................................        --         --              --        (10,063)
                                                                                 --------   --------        --------       --------
       Income tax benefit......................................................     4,504      7,146           9,600          8,599
       Loss from discontinued operations.......................................  $(10,638)  $(13,380)       $(16,985)      $(15,188)
                                                                                 ========   ========        ========       ========
  </TABLE>
  
  (10) Subsequent Events (Unaudited)
  
  Merger Agreement with Exodus
  
    On September 28, 2000, Global Crossing entered into an agreement with Exodus
  to merge GlobalCenter Holding Co. with a wholly owned subsidiary of Exodus. The
  merger was completed on January 10, 2001.  Each share of common stock of
  GlobalCenter Holding Co. was converted into and exchanged for shares of Exodus
  common stock. The number of shares of Exodus common stock issued at the
  completion of the merger was approximately 108 million shares.
  
    At the time of the signing of the merger agreement, Exodus signed a Networking
  Services, Marketing and Cooperation Agreement with Global Crossing and a similar
  agreement with Asia Global Crossing, Ltd. ("AGC"). AGC is a publicly traded
  company with Global Crossing, Softbank Corp. and Microsoft Corporation as
  principal shareholders. These agreements commit Exodus to obtain at least 50% of
  its network needs for all areas of the world other than Asia and the Pacific Rim
  from Global Crossing and at least 60% of its network needs in Asia and the
  Pacific Rim, other than Australia and New Zealand, from AGC.
  
  
  GlobalCenter Asia Joint Venture
  
    In May 2000, GlobalCenter Inc. entered into a Master Joint Venture Agreement
  with AGC. The purpose of the joint venture will be to exploit the GlobalCenter
  business in Asia.
  
                                         26
  <PAGE>
  
    Exodus has agreed to form a joint venture with AGC to provide complex Web
  hosting and managed services in Asia. Exodus will own 67% of the joint venture
  and AGC will own 33%. Exodus and AGC will contribute all Asia region Web hosting
  assets to the joint venture. AGC will be the primary network provider for the
  joint venture in Asia, and Exodus will manage and operate the joint venture.
  
                                         27
  <PAGE>
  
  EXODUS UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
  ------------------------------------------------------------------
  
    The following unaudited pro forma combined condensed financial statements are
  presented for illustrative purposes only and are not necessarily indicative of
  the combined results of operations for future periods or the results of
  operations that actually would have been realized had Exodus, Cohesive and
  GlobalCenter Holding Co. been combined companies during the specified periods.
  The unaudited pro forma combined condensed financial statements, including the
  related notes, are qualified in their entirety by reference to, and should be
  read in conjunction with, the historical consolidated financial statements and
  related notes of Exodus and the historical consolidated financial statements and
  related notes of Cohesive, which are contained in the Prospectus filed by Exodus
  with the Securities and Exchange Commission on February 14, 2000 (File No. 333-
  95937) (the "Prospectus"), and the historical consolidated financial statements
  and related notes of GlobalCenter Holding Co. which are included elsewhere in
  the Prospectus.
  
    On July 27, 1999, Exodus completed its acquisition of Cohesive in a
  transaction accounted for as a purchase. Exodus issued as consideration for
  Cohesive 3,201,592 shares of Exodus common stock, options to purchase a total of
  817,424 shares of Exodus common stock, and $46,530,000 in cash for a total
  purchase price of $111,440,000. The pro forma adjustments related to the
  Cohesive acquisition that are reflected in the accompanying unaudited pro forma
  combined condensed statement of operations for the year ended December 31, 1999
  are based on the actual value of the tangible and intangible assets acquired by
  Exodus as well as management's estimates of the useful lives of those acquired
  assets.
  
    In February 1998, GlobalCenter Inc. completed a merger with Frontier
  Corporation in a transaction accounted for as a pooling of interests. On
  September 28, 1999, Global Crossing Ltd. acquired Frontier Corporation in a
  merger transaction accounted for as a purchase. For financial reporting
  purposes, the acquisition of Frontier Corporation by Global Crossing Ltd. was
  deemed to have occurred on September 30, 1999. The historical consolidated
  statement of operations of GlobalCenter Holding Co. for the nine months ended
  September 30, 1999 is included under the heading "Predecessor" in the
  accompanying pro forma statement of operations for the year ended December 31,
  1999. The consolidated statements of operations of GlobalCenter Holding Co. for
  the three months ended December 1999 and for the nine months ended September 30,
  2000 are included under the heading "GlobalCenter."
  
    In September 2000, Exodus entered into an agreement to acquire GlobalCenter
  Holding Co. in a transaction to be accounted for as a purchase.  The transaction
  was completed on January 10, 2001. Based on the average closing price of Exodus
  common stock during the three trading days ended December 5, 2000, the
  GlobalCenter Holding Co. purchase price was estimated to be approximately $3.111
  billion consisting of Exodus common stock valued at approximately $2.777
  billion, Exodus stock options valued at approximately $298 million, and merger
  related expenses estimated at approximately $36 million.
  
                                         28
  <PAGE>
  
    In connection with the acquisition of GlobalCenter Holding Co., Exodus expects
  to record an accrual in the first quarter of 2001 for certain restructuring
  activities related to the integration of the two companies, the amount of which
  is currently not estimable.
  
    The unaudited pro forma combined condensed statement of operations for the
  year ended December 31, 1999 gives effect to the merger between a wholly owned
  subsidiary of Exodus and Cohesive and to the merger between a wholly owned
  subsidiary of Exodus and GlobalCenter Holding Co. as if both mergers had taken
  place on January 1, 1999. The unaudited pro forma combined condensed statement
  of operations for the year ended December 31, 1999 combines Exodus' audited
  historical consolidated statement of operations for the year ended December 31,
  1999, Cohesive's unaudited historical statement of operations for the period
  from January 1, 1999 through July 27, 1999, Predecessor's audited historical
  consolidated statement of operations for the period from January 1, 1999 to
  September 30, 1999, and GlobalCenter Holding Co.'s audited historical
  consolidated statement of operations for the period from October 1, 1999 to
  December 31, 1999.
  
    The unaudited pro forma combined condensed statement of operations for the
  nine months ended September 30, 2000 gives effect to the merger between a wholly
  owned subsidiary of Exodus and GlobalCenter Holding Co. as if it had taken place
  on January 1, 1999. The unaudited pro forma combined condensed statement of
  operations for the nine months ended September 30, 2000 combines Exodus'
  unaudited historical consolidated statement of operations for the nine months
  ended September 30, 2000 and GlobalCenter Holding Co.'s unaudited historical
  consolidated statement of operations for the nine months ended September 30,
  2000.
  
    The unaudited pro forma combined condensed balance sheet gives effect to the
  GlobalCenter Holding Co. acquisition as if it had taken place on September 30,
  2000 and combines Exodus' unaudited historical consolidated balance sheet as of
  September 30, 2000 and GlobalCenter Holding Co.'s unaudited historical
  consolidated balance sheet as of September 30, 2000. The acquisition of Cohesive
  has already been reflected in Exodus' unaudited consolidated balance sheet as of
  September 30, 2000.
  
    The unaudited pro forma combined condensed financial statements have been
  prepared on the basis of assumptions described in the related notes and include
  assumptions relating to the allocation of consideration paid for the assets and
  liabilities of GlobalCenter Holding Co. based on preliminary estimates of their
  respective fair values. The purchase price reflected in the unaudited pro forma
  combined condensed financial statements is based on the average closing price of
  Exodus common stock during the three trading days ended December 5, 2000. In the
  opinion of management, all adjustments necessary to present fairly such
  unaudited pro forma combined condensed financial statements have been made based
  on the terms and structure of the GlobalCenter Holding Co. acquisition.
  
                                         29
  <PAGE>
  
               Unaudited Pro Forma Combined Condensed Balance Sheet
                                September 30, 2000
                                  (in thousands)
  
  <TABLE>
  <CAPTION>
                                                                               Historical                      Pro Forma
                                                                               ----------                      ---------
                                                                         Exodus     Global Center      Adjustments       Combined
                                                                         ------     -------------      -----------       --------
  <S>                                                                  <C>          <C>             <C>                 <C>
  Assets
  Current assets:
    Cash and cash equivalents....................................      $1,246,550      $   11,210   $       --          $1,257,760
    Accounts receivable, net.....................................         134,417          57,601           --             192,018
    Prepaid expenses and other current assets....................          38,219          16,835           --              55,054
    Deferred tax asset...........................................              --           4,155       (4,155)(a)              --
                                                                       ----------      ----------   ----------          ----------
  
       Total current assets......................................       1,419,186          89,801       (4,155)          1,504,832
  Property and equipment, net....................................       1,262,446         358,149           --           1,620,595
  Restricted cash equivalents....................................          73,051              --           --              73,051
  Goodwill and other intangible assets...........................         191,003       1,188,320    1,649,491(a)(b)(c)  3,028,814
  Other assets...................................................         709,666           3,395           --             713,061
                                                                       ----------      ----------   ----------          ----------
                                                                       $3,655,352      $1,639,665   $1,645,336          $6,940,353
                                                                       ==========      ==========   ==========          ==========
  
  Liabilities and Stockholders' Equity
  Current liabilities:
    Current portion of equipment loans and line
      of credit facilities.......................................      $    7,149      $       --   $       --          $    7,149
    Current portion of capital lease
      obligations................................................          38,183              --           --              38,183
    Accounts payable.............................................         324,929          87,082           --             412,011
    Accrued expenses.............................................          82,063          17,538           --              99,601
    Accrued interest payable.....................................          65,056              --           --              65,056
    Accrued liability, acquisition costs.........................              --              --       36,000 (b)          36,000
                                                                       ----------      ----------   ----------          ----------
       Total current liabilities.................................         517,380         104,620       36,000             658,000
  Equipment loans and line of credit facilities, less
   current portion...............................................          11,834              --           --              11,834
  Capital lease obligations, less current portion................          52,339              --           --              52,339
  Convertible subordinated notes.................................         562,494              --           --             562,494
  Senior notes...................................................       1,936,062              --           --           1,936,062
  Long-term deferred tax liabilities.............................              --          22,605       44,395 (a)(c)       67,000
  Other non-current liabilities..................................           7,599           2,381           --               9,980
                                                                       ----------      ----------   ----------          ----------
       Total liabilities.........................................       3,087,708         129,606       80,395           3,297,709
  Stockholders' equity:
    Common stock.................................................             424           2,335       (2,228)(b)             531
    Additional paid-in capital...................................         915,227       1,871,077    1,203,816 (b)       3,990,120
    Deferred stock compensation..................................          (1,261)             --           --              (1,261)
    Accumulated deficit..........................................        (407,342)       (363,353)     363,353 (a)        (407,342)
    Accumulated other comprehensive
      income.....................................................          60,596              --           --              60,596
                                                                       ----------      ----------   ----------          ----------
       Total stockholders' equity................................         567,644       1,510,059    1,564,941           3,642,644
                                                                       ----------      ----------   ----------          ----------
                                                                       $3,655,352      $1,639,665   $1,645,336          $6,940,353
                                                                       ==========      ==========   ==========          ==========
  </TABLE>
  
                                         30
  <PAGE>
  
          Unaudited Pro Forma Combined Condensed Statements of Operations
                       (in thousands, except per share data)
  
  <TABLE>
  <CAPTION>
                                                                                     Nine Months Ended September 30, 2000
                                                                                     ------------------------------------
                                                                                     Historical                           Pro Forma
                                                                                     ----------
                                                                               Exodus     GlobalCenter   Adjustments       Combined
                                                                               ------     ------------   -----------       --------
  <S>                                                                        <C>          <C>            <C>           <C>
  Revenue...............................................................       $ 543,331      $ 136,595   $        --     $  679,926
  Costs and expenses:
    Cost of revenues....................................................         378,101        141,377 (j)    (1,631) (i)   517,847
    Marketing and sales.................................................         123,315         25,213            --        148,528
    General and administrative..........................................          97,498         49,165 (j)      (699) (i)   145,964
    Product development.................................................          10,573             --            --         10,573
    Amortization of goodwill and other intangible assets................          25,412        222,810       127,527  (b)    375,749
                                                                               ---------      ---------   -----------     ----------
    Total costs and expenses............................................         634,899        438,565       125,197      1,198,661
    Operating loss......................................................         (91,568)      (301,970)     (125,197)      (518,735)
  Other income (expense), net...........................................                           (229)           --           (229)
  Interest income (expense), net........................................         (87,558)            --            --        (87,558)
                                                                               ---------      ---------     ---------     ----------
  Loss from continuing operations before taxes..........................        (179,126)      (302,199)     (125,197)      (606,522)
  Income tax benefit....................................................              --         33,189       (33,189  (e)        --
                                                                               ---------      ---------   -----------     ----------
  Loss from continuing operations.......................................       $(179,126)     $(269,010)    $(158,386)    $ (606,522)
                                                                               =========      =========     =========     ==========
  Basic and diluted loss per share from continuing operations...........       $   (0.45)                                 $    (1.20)
  Shares used to compute basic and diluted loss per share from
  continuing operations.................................................         398,512                      108,181 (f)    506,693
  </TABLE>
  
  <TABLE>
  <CAPTION>
                                                                                  Year Ended December 31, 1999
                                                                                  ----------------------------
                                                                                            Historical
                                                                                            ---------
                                                                                  Predecessor   GlobalCenter
                                                                                  -----------   ------------
                                                                       Pro Forma   Nine Months  Three Months                Pro Forma
                                        Historical                      Exodus/      Ended          Ended                     Exodus/
                                        ----------                     Cohesive   September 30  December 31,              GlobalCenter
                                   Exodus     Cohesive    Adjustments  Combined       1999          1999     Adjustments    Combined
                                   ------     --------    -----------  --------       ----          ----     -----------    --------
  <S>                             <C>         <C>       <C>            <C>        <C>           <C>          <C>             <C>
  Revenue.......................  $ 242,140   $ 29,191  $        --    $ 271,331    $ 47,179    $ 23,724     $      --        342,234
  
  Costs and expenses:
    Cost of revenues............    197,231     20,896           --      218,127      54,993      24,032 (j)      (666)(i)    296,486
    Marketing and sales.........     75,809      3,594           --       79,403       9,531       6,088            --         95,022
    General and
     administrative.............     42,951      5,223           --       48,174       8,170       3,641 (j)      (285)(i)     59,700
    Product development.........      8,869         --           --        8,869                                    --          8,869
    Amortization of goodwill
     and other intangible
     assets.....................      9,438      4,994        3,492 (d)   17,924         974      74,270       391,872 (d)    485,040
    Merger costs................      5,058         --           --        5,058          --          --            --          5,058
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
    Total costs and
     expenses...................    339,356     34,707        3,492      377,555      73,668     108,031       390,921        950,175
    Operating loss..............    (97,216)    (5,516)      (3,492)    (106,224)    (26,489)    (84,307)     (390,921)      (607,941)
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
  Interest and other income
   (expense), net...............    (33,107)      (565)      (1,464)(g)  (35,136)        (44)        114            --        (35,066)
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
    Loss from continuing
     operations before
     taxes......................   (130,323)    (6,081)      (4,956)    (141,360)    (26,533)    (84,193)     (390,921)      (643,007)
  Income tax benefit............         --        450         (450)(e)       --       9,742       5,038       (14,780)(e)
    Loss from continuing
     operations.................   (130,323)    (5,631)      (5,406)    (141,360)    (16,791)    (79,155)     (405,701)      (643,007)
  Cumulative dividends and
   accretion on redeemable
   preferred stock..............         --       (738)         738 (h)       --          --          --            --             --
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
  Loss from continuing
   operations attributable to
   common stockholders..........  $(130,323)  $ (6,369)     $(4,668)   $(141,360)   $(16,791)   $(79,155)    $(405,701)     $(643,007)
                                  =========   ========      =======    =========    ========    ========     =========      =========
  Basic and diluted loss per
   share from continuing
   operations...................  $   (0.39)                                                                                $   (1.44)
  Shares used to compute basic
   and diluted loss per share
   from continuing
   operations...................    335,848                   1,600 (f)                                        108,181 (f)    445,629
  </TABLE>
  
                                        31
  <PAGE>
  
       Notes To Unaudited Pro Forma Combined Condensed Financial Statements
  
       On September 28, 2000, Exodus entered into a merger agreement under which
  all outstanding capital stock of GlobalCenter Holding Co. was exchanged for
  Exodus common stock. Based on the average closing price of Exodus common stock
  during the three trading days ended December 5, 2000, Exodus common stock issued
  in the merger was valued for purposes of the unaudited pro forma combined
  condensed financial statements at approximately $2.777 billion. The merger was
  completed on January 10, 2001. In addition, Exodus assumed all of the options
  outstanding to purchase shares of common stock of GlobalCenter Inc., including
  the Global Crossing Ltd. options that were deemed to be equivalent to
  GlobalCenter Inc. options, and issued new options to purchase Exodus common
  stock for the Global Crossing Ltd. options that were cancelled as a result of
  the merger.
  
       Under purchase accounting, the total purchase price will be allocated to
  GlobalCenter Holding Co.'s tangible and identifiable intangible assets acquired
  and liabilities assumed based on their relative fair values. The total purchase
  price reflected below is based on the average closing price of Exodus common
  stock during the three trading days ended December 5, 2000 (in thousands):
  
  <TABLE>
  <S>                                                                     <C>            <C>
  Fair value of Exodus common stock to be issued......................     $2,777,000
  Fair value of GlobalCenter options to be assumed....................        280,000
  Fair value of Exodus options to be issued...........................         18,000
  Estimated transaction costs.........................................         36,000
                                                                           ----------
  Total purchase price................................................     $3,111,000
                                                                           ==========
  
                                                                                          Life (yrs)
                                                                                          ---------
  Net tangible assets acquired (primarily fixed assets)...............     $  340,000        2-10
  Deferred tax liability..............................................        (67,000)
  Developed technology................................................        255,000           3
  Customer lists......................................................        230,000           5
  Goodwill............................................................      2,353,000           7
                                                                           ----------
  Net assets acquired.................................................     $3,111,000
                                                                           ==========
  </TABLE>
  
       Exodus intends to consider the fair value of the network services
  agreements in the final purchase price allocation. Exodus is currently engaged
  in determining the value of the network services agreements and the unaudited
  pro forma combined condensed financial statements currently do not reflect any
  fair value associated with the network services agreements. Exodus believes that
  any purchase price allocable to the network services agreements would not have a
  material effect to the final purchase price allocation.
  
       The final purchase price allocation will be based on the actual purchase
  price and the final valuation of the assets acquired and the liabilities assumed
  in the merger. Consequently, the actual allocation of the purchase price could
  differ from that presented above.
  
  (1)  Unaudited Pro Forma Combined Condensed Balance Sheet
  
       The unaudited pro forma combined condensed balance sheet as of September
  30, 2000 gives effect to the merger as if it had occurred on September 30, 2000.
  
                                         32
  <PAGE>
  
       The following adjustments have been reflected in the unaudited pro forma
  combined condensed balance sheet:
  
  (a)  To eliminate GlobalCenter Holding Co.'s historical goodwill and intangible
       assets, deferred tax assets and liabilities and deferred income.
  
  (b)  To record the purchase of GlobalCenter Holding Co. by Exodus through the
       issuance of Exodus common stock and options, and to eliminate GlobalCenter
       Holding Co.'s historical equity balances. In accordance with Emerging
       Issues Task Force Issue No. 95-19, the value of Exodus common stock to be
       issued is based on the average closing price of Exodus common stock during
       the three trading days ended December 5, 2000.
  
  (c)  To record deferred tax liabilities attributable to identifiable intangible
       assets acquired.
  
  (2)  Unaudited Pro Forma Combined Condensed Statements of Operations
  
       The unaudited pro forma combined condensed statements of operations give
  effect to the merger as if it had occurred on January 1, 1999.
  
       The following adjustments have been reflected in the unaudited pro forma
  combined condensed statements of operations:
  
  (d)  To remove amortization of historical goodwill and other intangible assets
       previously recorded by GlobalCenter Holding Co. and Cohesive (Cohesive for
       1999 only) to record amortization of goodwill and intangible assets
       resulting from the allocation of the GlobalCenter Holding Co. and Cohesive
       purchase prices (Cohesive for 1999 only). The pro forma adjustments assume
       goodwill and other intangible assets acquired from GlobalCenter Holding Co.
       will be amortized on a straight-line basis over an estimated life of three
       to seven years and reflect amortization of goodwill and other intangible
       assets acquired from Cohesive over estimated lives of five to eight years
       (Cohesive for 1999 only). The ultimate lives assigned to goodwill and other
       intangible assets acquired from GlobalCenter Holding Co. will be determined
       at the date of acquisition based on the facts and circumstances existing at
       that date.
  
  (e)  To remove tax benefits previously recorded by GlobalCenter Holding Co. and
       Cohesive (Cohesive for 1999 only).
  
  (f)  To reflect the estimated number of shares to be issued as consideration for
       the GlobalCenter Holding Co. merger based on an exchange ratio calculated
       using average closing prices of Global Crossing Ltd. common stock and
       Exodus common stock for the ten trading days ending two trading days before
       November 27, 2000. The exchange ratio depends on a number of different
       factors, including the average closing price of Exodus common stock over
       the ten trading days ending two days before completion of the merger,
       subject to a minimum price of $56.41 and a maximum price of $65.55. To also
       reflect the shares issued as consideration for the Cohesive merger.
  
                                         33
  <PAGE>
  
  (g)  To eliminate interest income earned by Exodus on cash paid to Cohesive's
       shareholders at the date of the merger assuming a 5% interest rate which
       approximates Exodus' actual rate of return during 1999.
  
  (h)  To remove Cohesive's historical cumulative dividends and accretion on
       redeemable preferred stock which were settled in cash at the date of the
       Cohesive merger.
  
  (i)  To reclassify GlobalCenter Holding Co.'s depreciation expense to conform
       with Exodus' classification and to adjust GlobalCenter Holding Co.'s
       depreciation expense in accordance with Exodus' depreciation policy.
  
  (j)  The historical consolidated statements of operations of GlobalCenter
       Holding Co. for the nine months ended September 30, 2000 and the year ended
       December 31, 1999 present depreciation and amortization as a separate line
       item. For comparative purposes, GlobalCenter Holding Co.'s depreciation and
       amortization expenses have been reclassified to conform with Exodus'
       classification as follows:
  
  <TABLE>
  <CAPTION>
       Nine months ended September 30, 2000
       ------------------------------------
       <S>                                                                                       <C>
       Cost of revenues.......................................................................   $11,365
       General and administrative.............................................................     4,871
                                                                                                 -------
       Total depreciation and amortization expenses in
           GlobalCenter Holding Co.'s historical financial statements.........................   $16,236
                                                                                                 =======
  
  
       Year ended December 31, 1999
       ----------------------------
       Cost of revenues.......................................................................   $ 4,308
           General and administrative.........................................................     1,847
                                                                                                 -------
       Total depreciation and amortization expenses in
         GlobalCenter Holding Co.'s historical financial statements.........................     $ 6,155
                                                                                                 =======
  </TABLE>
  
  
                                         34
  <PAGE>
  
                                    SIGNATURES
  
       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 hereunto duly authorized.
  
       Date: January 23, 2001
  
  
                                 EXODUS COMMUNICATIONS, INC.
  
  
                                 By: /s/ Adam W. Wegner
                                     --------------------------------------------
                                     Adam W. Wegner, Senior Vice President,
                                     Legal and Corporate Affairs, General Counsel
                                     and Secretary
  
                                         35
  <PAGE>
  
                                   EXHIBIT INDEX
                                   -------------
  
  Exhibit   Description
  -------   -----------
  23.01     Consent of Arthur Andersen LLP, Independent Public Accountants
  
  99.01     Press release of the Company dated January 10, 2001.
  
                                        36
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text: SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549
                                  _______________
  
                                     FORM 8-K
  
                  Current Report Pursuant to Section 13 or 15(d)
                      of the Securities Exchange Act of 1934
  
                                 January 10, 2001
                                 ----------------
                 Date of Report (Date of Earliest Event Reported)
  
                            Exodus Communications, Inc.
                            ---------------------------
              (Exact name of Registrant as specified in its charter)
  
            Delaware                  0-23795                 77-0403076
            --------                  -------                 ----------
    (State of Incorporation)   (Commission file number)      (I.R.S. Employer
                                                            Identification No.)
  
                          2831 Mission College Boulevard
                           Santa Clara, California 95054
                           -----------------------------
           (Address of principal executive offices, including zip code)
  
                                  (408) 346-2200
                                  --------------
               (Registrant's telephone number, including area code)
  ITEM 2:  ACQUISITION OR DISPOSITION OF ASSETS.
  
       Acquisition of GlobalCenter Holding Co.
       ---------------------------------------
  
       On January 10, 2001, Exodus Communications, Inc. ("Exodus" or the
  "Company") completed the acquisition of GlobalCenter Holding Co.
  ("GlobalCenter"), through the merger of a wholly-owned subsidiary of Exodus with
  and into GlobalCenter, with GlobalCenter surviving as a wholly-owned subsidiary
  of Exodus (the "Merger"). GlobalCenter was an indirect wholly-owned subsidiary
  of Global Crossing Ltd. ("Global Crossing"). The Merger is intended to be a tax-
  free reorganization and will be accounted for under the purchase method of
  accounting.
  
       In connection with the Merger, a total of approximately 108 million shares
  of Exodus common stock were exchanged for all of the outstanding shares of
  GlobalCenter common stock. As a result, Global Crossing acquired beneficial
  ownership of approximately 20% of Exodus' common stock outstanding after the
  Merger. Exodus also assumed all outstanding GlobalCenter stock options, and
  granted new options to purchase shares of Exodus common stock to replace certain
  options held by GlobalCenter employees to purchase shares of Global Crossing
  common stock that were cancelled in the Merger. Also in connection with the
  Merger, the size of the Exodus board of directors was increased to 11 and Thomas
  J. Casey, the Chief Executive Officer of Global Crossing, was appointed to the
  board of directors of Exodus.
  
       A press release announcing the completion of the transaction is attached as
  Exhibit 99.01 to this report. The foregoing description is qualified in its
  entirety by reference to the full text of such exhibit.
  
       As a result of the acquisition of GlobalCenter, Exodus has added to its
  business the resources of a leading provider of Internet infrastructure
  services, including complex Web hosting, Internet Protocol network services,
  hardware and software procurement and installation, content distribution,
  integration and management services, systems applications, and professional
  services. As of September 30, 2000, GlobalCenter provided services to over 600
  customers, including Akamai, NBCi, Novell, Viacom and ZDNet, and operated 11
  data centers strategically located near major business centers in northern and
  southern California, New York City, Washington, D.C., London, and Melbourne. In
  addition, as of that same date, GlobalCenter was developing nine data centers in
  the United States, Europe and the Asia-Pacific region, which would, after
  completion, bring the total gross square footage of GlobalCenter's data centers
  to approximately one million. As of September 30, 2000, GlobalCenter employed
  approximately 720 full-time employees.
  
       The acquisition was accompanied by the addition of significant strategic
  agreements and other rights designed to protect and enhance the Company's
  competitive advantage generally and specifically in Asia and the Pacific Rim,
  and to secure long term capacity, connectivity and other related network
  services. The following descriptions of such agreements are qualified in their
  entirety by reference to the full text of these agreements which were filed with
  the Securities and
  
                                         1
  Exchange Commission on October 13, 2000 as exhibits to the Company's Current
  Report on Form 8-K.
  
       Network Services, Marketing and Cooperation Agreements. In September 2000,
  Exodus signed a ten-year Network Services, Marketing and Cooperation Agreement
  with Global Crossing Ltd. and a similar agreement with Asia Global Crossing Ltd.
  
       Under the Network Services, Marketing and Cooperation Agreement with Global
  Crossing Ltd., Exodus committed to purchase at least 50% of its network needs
  worldwide other than Asia, from Global Crossing Ltd.  In addition, for a period
  of two years after the completion of the Merger, Global Crossing Ltd. agreed to
  use Exodus as its exclusive provider of Internet Web hosting services and agreed
  for the same two year period not to engage in or own, manage or control an
  entity involved in Internet Web hosting, all subject to limited exceptions.
  Global Crossing Ltd. and its controlled affiliates also agreed to make their
  telecommunications services available to Exodus and its controlled affiliates,
  other than the joint venture described below, on an equal access basis, and
  Exodus agreed to promote Global Crossing Ltd. as its primary provider of network
  services for its network operations.  The agreement provides that Global
  Crossing Ltd. may resell Exodus services and also obligates Global Crossing Ltd.
  to create a new network for Exodus in order to more easily scale the network
  services available to Exodus to meet anticipated future demands.
  
       Under the Network Services, Marketing and Cooperation Agreement with Asia
  Global Crossing Ltd., Exodus agreed to purchase from Asia Global Crossing Ltd.
  at least 60% of its network services requirements in parts of Asia and the
  Pacific Rim, not including Australia or New Zealand. In addition, Exodus will
  give Asia Global Crossing Ltd. the opportunity to provide at least 67% of
  Exodus' network services requirements in that territory and use reasonable
  efforts consistent with its business objectives to exceed this 67% commitment.
  Asia Global Crossing Ltd. and its controlled affiliates agreed to make all Asia
  Global Crossing Ltd. telecommunications services available to Exodus and its
  controlled affiliates, including the joint venture described below, on an equal
  access basis.  Subject to limited exceptions, for two years following the
  Merger, Asia Global Crossing Ltd. agreed to use Exodus as its exclusive provider
  of Web hosting services in the covered territory and Exodus agreed to promote
  Asia Global Crossing Ltd. as its primary provider of network services for its
  network operations. The agreement provides that that Asia Global Crossing Ltd.
  may resell Exodus services and also obligates Asia Global Crossing Ltd. to
  extend the broadband telecommunications system within each city served by the
  Asia Global Crossing Ltd. network to provide connectivity between the joint
  venture Internet Data Centers and the Asia Global Crossing Ltd. network in order
  to enable Exodus to meet anticipated future demands.
  
       Joint Venture.  In addition to the Network Services, Marketing and
  Cooperation Agreements, Exodus and Asia Global Crossing Ltd. entered into a
  joint venture agreement to form a company to be called Exodus Asia-Pacific Ltd.
  in order to provide complex Web hosting and managed services in Asia. The
  agreement provides that the shares of Exodus Asia-Pacific Ltd. will be owned 67%
  by Exodus and 33% by Asia Global Crossing Ltd. with four members of
                                         2
  the board of directors to be appointed by Exodus and two of the directors to be
  appointed by Asia Global Crossing Ltd.
  
       Under the terms of the agreement, the business of the joint venture will be
  identical to Exodus' existing Web hosting and managed services business. The
  territory covered by the joint venture will be limited to parts of Asia and the
  Pacific Rim, not including Australia and New Zealand, and, subject to limited
  exceptions, will be the exclusive means for Exodus and Asia Global Crossing Ltd.
  to conduct such business in the covered territory. Capital contributions will be
  in cash and in kind. Cash contributions in the aggregate amount of up to $750
  million may be required without unanimous shareholder approval during the first
  three years of operations, including initial contributions of $67 million and
  $33 million from Exodus and Asia Global Crossing, Ltd, respectively. In
  addition, Exodus agreed to contribute its interest in Exodus Japan and Asia
  Global Crossing Ltd. agreed to contribute its interest in GlobalCenter Japan and
  either its interest in the Web hosting business of Hutchison Global Crossing, a
  Web hosting joint venture in Hong Kong, or the fair market value equivalent of
  its interest in the Web hosting assets of Hutchison Global Crossing, up to a
  maximum of $25 million.
  
       Stockholder Agreement.  Pursuant to the terms of a Stockholder agreement
  executed in connection with the Merger, Global Crossing has rights to appoint a
  designee to the Exodus board of directors for as long as Global Crossing owns in
  the aggregate at least 10% of the outstanding voting stock of Exodus. Any such
  nominee must be approved by the Exodus board of directors, and the board's
  approval will not be withheld unless, based on the advice of counsel, its
  approval would be inconsistent with the fiduciary obligations of the directors.
  Thomas J. Casey, the Chief Executive Officer of Global Crossing, was appointed
  to the board of directors of Exodus upon the closing of the Merger. In addition,
  Global Crossing has agreed that it will vote its shares of Exodus stock either
  as recommended by the Exodus board or in the same proportion as all votes cast
  by disinterested stockholders. These voting obligations continue until the
  earlier of five years after the closing of the Merger, the date Global Crossing
  owns less than 10% of the voting stock of Exodus, or at such time as there is a
  change of control of Exodus. During the period that Global Crossing is under
  obligation to Exodus relating to the voting of its Exodus shares, Global
  Crossing may not, unless there is a change of control of Exodus, increase its
  percentage ownership of outstanding Exodus voting stock by more than 1%.  For
  one year after the completion of the Merger, Global Crossing agreed not to
  transfer its Exodus shares except under limited circumstances, such as transfers
  among affiliates and limited hedging transactions. And from the first to the
  fifth anniversaries of the closing of the Merger, Global Crossing agreed not to
  transfer its Exodus shares except in underwritten offerings or other sales
  pursuant to its registration rights, pursuant to Rule 144, in private sales or
  among its affiliates and in limited hedging transactions.
  
       Registration Rights Agreement.  Global Crossing will be entitled to offer
  for sale the shares of Exodus common stock it acquired in the Merger pursuant to
  a shelf registration statement that Exodus agreed to file with the Securities
  and Exchange Commission within four months of the closing of the Merger. Global
  Crossing may also, upon 30 days advance written notice, require Exodus to
  conduct an underwritten public offering under the shelf registration statement
  if the total gross proceeds from the sale of the shares is at least $10 million
  and the
  
                                         3
  offering includes at least 500,000 shares. Global Crossing may also resell its
  shares of Exodus common stock under the registration statement without an
  underwritten offering and may piggyback onto registration statements filed by
  Exodus for the sale of Exodus shares in an underwritten offering.
  
                                         4
  ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
  
  (a) Financial Statements of Business Acquired.
  
       GlobalCenter Holding Co. - Consolidated Financial Statements
       ------------------------------------------------------------
  
       The following Financial Statements are filed herewith:
  
       Report of Independent Public Accountants
       Consolidated Balance Sheets as of December 31, 1998 and December 31, 1999,
            and as of September 30, 2000
       Consolidated Statements of Operations and Comprehensive Income for the
            years ended December 31, 1997 and 1998, for the three months ended
            December 31, 1999, and for the nine months ended September 30, 1999
            and 2000
       Consolidated Statements of Shareholder's Equity
       Consolidated Statements of Cash Flows for the years ended December 31, 1997
            and 1998, for the three months ended December 31, 1999, and for the
            nine months ended September 30, 1999 and 2000
       Notes to Consolidated Financial Statements
  
  (b) Pro Forma Financial Information.
  
       Exodus Unaudited Pro Forma Combined Condensed Financial Statements
       ------------------------------------------------------------------
  
       The following Financial Statements are filed herewith:
  
       Unaudited Pro Forma Combined Condensed Balance Sheet dated September 30,
       2000
       Unaudited Pro Forma Combined Condensed Statement of Operations
       Notes to Unaudited Pro Forma Combined Condensed Financial Statements
  
  (c)  Exhibits.
  
       The following exhibits are filed herewith:
  
       23.01  Consent of Arthur Andersen LLP, Independent Public Accountants
  
       99.01  Press release of the Company dated January 10, 2001.
  
                                         5
  GLOBALCENTER HOLDING CO. - CONSOLIDATED FINANCIAL STATEMENTS
           ------------------------------------------------------------
  
                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
  
  To Global Crossing Ltd.:
  
       We have audited the accompanying consolidated balance sheet of GlobalCenter
  Holding Co. ("GlobalCenter"), an indirect wholly owned subsidiary of Global
  Crossing Ltd., as of December 31, 1999 and of GlobalCenter Inc. ("Predecessor")
  as of December 31, 1998, and the related consolidated statements of operations
  and comprehensive income, shareholder's equity and cash flows for the periods
  from October 1, 1999 to December 31, 1999 ("GlobalCenter period") and from
  January 1, 1999 to September 30, 1999 and for each of the two years ended
  December 31, 1998 and 1997 ("Predecessor periods"). These financial statements
  are the responsibility of management of GlobalCenter and Predecessor. Our
  responsibility is to express an opinion on these financial statements based on
  our audits.
  
       We conducted our audits in accordance with auditing standards generally
  accepted in the United States. Those standards require that we plan and perform
  the audit to obtain reasonable assurance about whether the financial statements
  are free of material misstatement. An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements. An
  audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial
  statement presentation. We believe our audits provide a reasonable basis for our
  opinion.
  
       In our opinion, the GlobalCenter consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  GlobalCenter as of December 31, 1999 and the results of its operations and its
  cash flows for the GlobalCenter period in conformity with accounting principles
  generally accepted in the United States. Further, in our opinion, the
  consolidated financial statements of Predecessor referred to above present
  fairly, in all material respects, the financial position of Predecessor as of
  September 30, 1999 and December 31, 1998, and the results of its operations and
  its cash flows for the Predecessor periods in conformity with accounting
  principles generally accepted in the United States.
  
                                         /s/ ARTHUR ANDERSEN LLP
  
  San Jose, California
  November 1, 2000
  
                                         6
  GLOBALCENTER HOLDING CO.
  
                            CONSOLIDATED BALANCE SHEETS
              (Amounts in thousands except share and per share data)
  Predecessor           GlobalCenter
                                                                                    -----------    --------------------------
                                                                                           December 31,
                                                                                    ------------------------    September 30,
                                                                                        1998          1999          2000
                                                                                    -----------    ---------    -------------
                                                                                                                 (Unaudited)
  ASSETS
                                      ------
  Current assets:
    Cash............................................................................  $     --   $       --      $   11,210
    Accounts receivable, net of allowance for doubtful accounts of
      $975, $1,379 and $7,149, respectively.........................................     6,492       18,811          57,601
    Equipment held for resale.......................................................       773        6,941           5,287
    Prepaid expenses and other current assets.......................................       300        2,825          11,548
    Deferred tax asset..............................................................     2,393        2,926           4,155
                                                                                      --------   ----------      ----------
       Total current assets.........................................................     9,958       31,503          89,801
                                                                                      --------   ----------      ----------
  Property and equipment, net.......................................................    30,372      116,315         358,149
  Goodwill and intangibles, net.....................................................     7,470    1,411,130       1,188,320
  Investment........................................................................        --           --           3,145
  Other assets......................................................................       221          214             250
  Net assets of discontinued operations.............................................    28,298        4,416              --
                                                                                      --------   ----------      ----------
       Total assets.................................................................  $ 76,319   $1,563,578      $1,639,665
                                                                                      ========   ==========      ==========
  
                       LIABILITIES AND SHAREHOLDER'S EQUITY
                       ------------------------------------
  Current liabilities:
    Capital lease obligations......................................................   $   404    $     374       $      --
    Accounts payable...............................................................     5,996       28,046          87,082
    Other current liabilities......................................................     5,099        8,514          17,538
                                                                                     --------   ----------      ----------
       Total current liabilities...................................................    11,499       36,934         104,620
                                                                                     --------   ----------      ----------
  Capital lease obligations, net of current portion................................       586          194              --
  Long-term deferred tax liability.................................................        --       27,611          22,605
  Other liabilities................................................................        --          494           2,381
                                                                                     --------   ----------      ----------
       Total liabilities...........................................................    12,085       65,233         129,606
                                                                                     --------   ----------      ----------
  Shareholder's equity:
    Common stock, $.01 par value; 300,000,000 shares authorized; 233,500,000
    shares issued and outstanding..................................................     2,335        2,335           2,335
    Other shareholder's equity.....................................................   120,505    1,590,353       1,871,077
    Accumulated net losses.........................................................   (58,606)     (94,343)       (363,353)
                                                                                     --------   ----------      ----------
       Total shareholder's equity..................................................  $ 64,234   $1,498,345      $1,510,059
                                                                                     --------   ----------      ----------
       Total liabilities and shareholder's equity..................................  $ 76,319   $1,563,578      $1,639,665
                                                                                     ========   ==========      ==========
  The accompanying notes are an integral part of these consolidated financial
                                    statements.
  
                                         7
  GLOBALCENTER HOLDING CO.
  
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE INCOME
                              (Amounts in thousands)
  Predecessor                       GlobalCenter
                                                             ------------------------------------  -----------------------------
                                                                                     Nine Months    Three Months    Nine Months
                                                                   Year Ended           Ended           Ended          Ended
                                                                  December 31,      September 30,   December 31,   September 30,
                                                             --------------------  --------------  -------------  --------------
                                                               1997       1998            1999           1999            2000
                                                               ----       ----            ----           ----            ----
                                                                                                                      (Unaudited)
  Revenues:
    Service revenues.......................................  $  6,511   $ 19,600        $ 29,951       $ 17,753       $  97,774
    Equipment revenues.....................................     1,228      3,640          17,228          5,971          38,821
                                                             --------   --------        --------       --------       ---------
       Total revenues......................................     7,739     23,240          47,179         23,724         136,595
  Costs and expenses:
    Cost of service revenues...............................     5,257     14,804          36,451         17,328          93,026
    Cost of equipment revenues.............................       995      3,208          15,573          5,365          36,986
    Sales and marketing....................................     1,966      8,948           9,531          6,088          25,213
    General and administrative.............................     2,044      4,694           6,897          3,067          44,294
    Depreciation and amortization..........................       912      4,023           4,242          1,913          16,236
    Amortization of intangibles............................       325      1,294             974         74,270         222,810
    Merger costs...........................................        --      2,060              --             --              --
                                                             --------   --------        --------       --------       ---------
       Total costs and expenses............................    11,499     39,031          73,668        108,031         438,565
                                                             --------   --------        --------       --------       ---------
  Operating loss...........................................    (3,760)   (15,791)        (26,489)       (84,307)       (301,970)
  Other income (expense), net..............................        45         55             (44)           114            (229)
                                                             --------   --------        --------       --------       ---------
  Loss from continuing operations before
   income taxes............................................    (3,715)   (15,736)        (26,533)       (84,193)       (302,199)
  Income tax benefit.......................................       941      4,911           9,742          5,038          33,189
                                                             --------   --------        --------       --------       ---------
  Loss from continuing operations..........................    (2,774)   (10,825)        (16,791)       (79,155)       (269,010)
  Loss from discontinued operations, net of
   income tax benefit of $4,504, $7,146,
   $9,600, $8,599 and $0, respectively.....................
                                                              (10,638)   (13,380)        (16,985)       (15,188)             --
                                                             --------   --------        --------       --------       ---------
  Net loss.................................................  $(13,412)  $(24,205)       $(33,776)      $(94,343)      $(269,010)
                                                             --------   --------        --------       --------       ---------
  Other comprehensive earnings, net of taxes:
  Unrealized holding losses arising during
   period..................................................        --         --              --             --          (4,109)
                                                             --------   --------        --------       --------       ---------
  Comprehensive loss.......................................  $(13,412)  $(24,205)       $(33,776)      $(94,343)      $(273,119)
                                                             ========   ========        ========       ========       =========
  The accompanying notes are an integral part of these consolidated financial
                                    statements.
  
                                         8
  GLOBALCENTER HOLDING CO.
  
                  CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
              (Amounts in thousands, except share and per share data)
  Common Stock              Other Shareholders Equity
                                           --------------------  ------------------------------------------
                                                                 Additional                      Other                      Total
                                                                   Paid-In      Deferred     Comprehensive   Accumulated Shareholder's
                                             Shares     Amount     Capital    Compensation       Income       Net Losses    Equity
                                             ------     ------     -------    ------------       ------       ----------    ------
  Predecessor
   Balance at January 1, 1997............  178,085,647   $1,781   $   24,608  $         --   $          --     $ (20,989)  $    5,400
    Issuance of common stock.............   33,080,271      331        8,700            --              --            --        9,031
    Net loss.............................           --       --           --            --              --       (13,412)     (13,412)
    Deferred compensation................           --       --        4,727        (2,766)             --            --        1,961
    Acquisition of Voyager...............   22,334,082      223        9,305            --              --            --        9,528
    Capital contributed by Frontier
     Corporation, net....................           --       --        3,086            --              --            --        3,086
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at December 31, 1997..........  233,500,000    2,335       50,426        (2,766)             --       (34,401)      15,594
    Net loss.............................           --       --           --            --              --       (24,205)     (24,205)
    Deferred compensation................           --       --           --           948              --            --          948
    Capital contributed by Frontier
     Corporation, net....................           --       --       71,897            --              --            --       71,897
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at December 31, 1998..........  233,500,000    2,335      122,323        (1,818)             --       (58,606)      64,234
    Net loss.............................           --       --           --            --              --       (33,776)     (33,776)
    Deferred compensation................           --       --           --           711              --            --          711
    Capital contributed by Frontier
     Corporation, net....................           --       --       81,754            --              --            --       81,754
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at September 30, 1999.........  233,500,000   $2,335   $  204,077       $(1,107)  $          --     $ (92,382)  $  112,923
                                           ===========   ======   ==========  ============   =============     =========   ==========
  GlobalCenter
    Contribution by Global Crossing Ltd..           --    2,335    1,499,510            --              --            --    1,501,845
    Net loss.............................           --       --           --            --              --       (94,343)     (94,343)
    Capital contributed by Global
     Crossing Ltd., net..................           --       --       90,843            --              --            --       90,843
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance at December 31, 1999..........  233,500,000    2,335   $1,590,353  $         --   $          --     $ (94,343)  $1,498,345
    Unrealized loss on available for sale
     securities, net of $2,746 tax
     (unaudited).........................           --       --           --            --          (4,109)           --       (4,109)
    Net loss (unaudited).................           --       --           --            --              --      (269,010)    (269,010)
    Capital contributed by Global
     Crossing Ltd., net (unaudited)......           --       --      284,833            --              --            --      284,833
                                           -----------   ------   ----------  ------------   -------------     ---------   ----------
   Balance September 30, 2000
    (unaudited)..........................  233,500,000   $2,335   $1,875,186  $         --   $      (4,109)    $(363,353)  $1,510,059
                                           ===========   ======   ==========  ============   =============     =========   ==========
  The accompanying notes are an integrated part of these consolidated financial
                                     statements
  
                                         9
  GLOBALCENTER HOLDING CO.
  
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Amounts in thousands)
  Predecessor                     GlobalCenter
                                                                              -----------
                                                                                        Nine Months    Three Months   Nine Months
                                                                      Year Ended           Ended          Ended          Ended
                                                                     December 31,      September 30,   December 31,  September 30,
                                                                     ------------
                                                                   1997       1998           1999          1999           2000
                                                                   ----       ----           ----          ----           ----
                                                                                                                      (Unaudited)
  Operating activities:
   Net loss..................................................   $(13,412)   $(24,205)       $(33,776)   $  (94,343)      $(269,010)
   Adjustments to reconcile net loss to net
   cash used in operating activities:
       Loss from discontinued operations.....................     10,638      13,380          16,985        15,188              --
  Depreciation and amortization..............................        912       4,023           4,242         1,913          16,236
  Amortization of intangibles................................        325       1,294             974        74,270         222,810
  Deferred income taxes......................................       (888)     (2,049)            983        (2,984)         (3,489)
  Changes in operating assets and liabilities
    net of the effects of acquisitions
          Accounts receivable, net...........................       (949)     (4,047)        (11,346)         (973)        (38,790)
          Prepaid expenses and other assets..................        (93)        335          (1,602)         (923)         (8,759)
          Equipment held for resale..........................         --        (704)            177        (6,345)          1,654
          Accounts payable and accrued liabilities...........        320       6,221          13,306        (3,974)         15,206
                                                                --------    --------        --------    ----------       ---------
  Net cash used in operating activities......................     (3,147)     (5,752)        (10,057)      (18,171)        (64,142)
                                                                --------    --------        --------    ----------       ---------
  Investing activities:
   Purchases of property and equipment.......................     (1,853)    (28,978)        (20,871)      (52,771)       (203,329)
   Purchase of available for sale investments................         --          --              --            --         (10,000)
    Cash from acquisition....................................        568          --              --            --              --
                                                                --------    --------        --------    ----------       ---------
   Net cash used in investing activities.....................     (1,285)    (28,978)        (20,871)      (52,771)       (213,329)
                                                                --------    --------        --------    ----------       ---------
  Financing activities:
    Payments on capital leases and debt......................        (90)     (2,573)           (339)          (83)           (568)
    Proceeds from issuance of debt...........................      1,937          --              --            --              --
    Capital contributions by Frontier
      Corporation/Global Crossing Ltd., net..................      3,086      71,897          81,754        90,843         284,833
                                                                --------    --------        --------    ----------       ---------
   Net cash provided by financing activities.................      4,933      69,324          81,415        90,760         284,265
                                                                --------    --------        --------    ----------       ---------
  Cash provided by (used in) discontinued
   operations................................................     (3,086)    (35,086)        (50,487)      (19,818)          4,416
  Net increase (decrease) in cash............................     (2,585)       (492)             --            --          11,210
  Cash at beginning of period................................      3,077         492              --            --              --
                                                                --------    --------        --------    ----------       ---------
  Cash at end of period......................................   $    492    $     --        $     --    $       --       $  11,210
                                                                ========    ========        ========    ==========       =========
  Supplemental schedule on non-cash activities:
    Contribution of GlobalCenter, net........................   $     --    $     --        $     --    $1,451,432       $      --
    Assets acquired under capital leases.....................   $  1,031    $    215        $     --    $       --       $      --
  The accompanying notes are an integral part of these consolidated financial
                                    statements.
  
                                         10
  GLOBALCENTER HOLDING CO.
  
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
  (1)  Organization and Operations
  
       GlobalCenter Holding Co. is an indirect wholly owned subsidiary of Global
  Crossing Ltd. GlobalCenter Holding Co. owns GlobalCenter Inc. and all of its
  subsidiaries, including those operating in Australia and the United Kingdom.
  GlobalCenter is a provider of Internet infrastructure solutions, including
  computer Web hosting, network connectivity and value added services to
  enterprises with mission critical Internet operations. GlobalCenter Holding Co.
  was incorporated in April 2000 and full ownership of GlobalCenter Inc. was
  transferred at that time from another Global Crossing subsidiary. In accordance
  with accounting standards applicable to transfers between entities under common
  control, the transfer was made at book value and the financial statements
  reflect the transfer as of October 1, 1999.
  
       GlobalCenter Inc. was acquired by Frontier Corporation ("Frontier") in
  February 1998. Frontier accounted for its acquisition of GlobalCenter Inc. using
  the pooling-of-interests method. GlobalCenter Inc. recorded approximately $2
  million of transaction costs related to the merger with Frontier in the year
  ended December 31, 1998. On September 28, 1999, Global Crossing Ltd. acquired
  Frontier. For financial reporting purposes, the acquisition of Frontier by
  Global Crossing Ltd. was deemed to have occurred on September 30, 1999. In
  connection with the Frontier acquisition, the assets and liabilities of
  GlobalCenter Inc. were adjusted to their respective fair values pursuant to the
  purchase method of accounting. For periods prior to October 1, 1999, the
  consolidated assets and liabilities of GlobalCenter Inc. and the related
  consolidated results of operations and cash flows are referred to below as
  "Predecessor," and for periods subsequent to September 30, 1999, the
  consolidated assets and liabilities of GlobalCenter Holding Co. and the related
  consolidated results of operations and cash flows are referred to as
  "GlobalCenter." Global Crossing Ltd. and its subsidiaries other than
  GlobalCenter are referred to as "Global Crossing." GlobalCenter has received
  assurance from Global Crossing that Global Crossing intends to provide the
  necessary funding to support continued operations of GlobalCenter through at
  least January 1, 2001.
  
       On April 12, 2000, GlobalCenter Inc. entered into an agreement to sell its
  Internet Service Provider ("ISP") business segment to Global Crossing Internet
  Dial-Up, Inc., a wholly owned subsidiary of Global Crossing, for book value on
  the transfer date of March 31, 2000. In connection with this transaction,
  GlobalCenter's financial statements reflect the financial position and results
  of operations of the ISP business as discontinued operations for all periods
  presented through December 31, 1999 (the measurement date). For accounting
  purposes, the sale was effective March 31, 2000. In connection with the sale of
  the ISP business, GlobalCenter Inc. agreed to indemnify Global Crossing Internet
  Dial-Up, Inc. for any claims prior to the sale in an amount not to exceed the
  purchase price. GlobalCenter management does not believe any amounts to be paid
  under this indemnity will be material to GlobalCenter's financial statements.
  
                                         11
  On September 28, 2000, Global Crossing entered into a merger agreement with
  Exodus Communications, Inc. ("Exodus"). Under the merger agreement, a wholly
  owned subsidiary of Exodus will be merged with and into GlobalCenter Holding Co.
  When the merger is completed, each share of common stock of GlobalCenter Holding
  Co. will be converted into and exchanged for shares of Exodus common stock. The
  number of shares of Exodus common stock to be issued at the completion of the
  merger will be based on an exchange ratio that will depend on a number of
  different factors. The merger is subject to customary regulatory and Exodus'
  stockholders' approval.
  
  (2)  Significant Accounting Policies
  
  Principles of Consolidation
  
       The consolidated financial statements include GlobalCenter Holding Co. and
  its wholly owned subsidiaries. All significant intercompany transactions have
  been eliminated.
  
  Unaudited Interim Financial Data
  
       The consolidated financial statements for the nine months ended September
  30, 2000 and the related amounts in the Notes to Consolidated Financial
  Statements are unaudited but, in the opinion of GlobalCenter management, reflect
  all normal and recurring adjustments necessary for a fair presentation of the
  results of those periods. Operating results for the nine months ended September
  30, 2000 are not necessarily an indication of the results that may be expected
  for the year ended December 31, 2000.
  
  Use of Estimates
  
       The preparation of financial statements in conformity with accounting
  principles generally accepted in the United States ("U.S.") requires management
  to make estimates and assumptions that affect the reported amounts of assets and
  liabilities and disclosure of contingent assets and liabilities at the date of
  the financial statements, as well as the reported amounts of revenue and
  expenses during the reporting period. Significant estimates made in preparing
  the consolidated financial statements include depreciation and amortization
  periods, the allowance for doubtful accounts and income tax valuation
  allowances. Actual amounts and results could differ from those estimates.
  
       GlobalCenter's operations and ability to grow may be affected by numerous
  factors, including changes in customer requirements, new laws, technological
  advances, entry of new competitors and changes in the willingness of Global
  Crossing and other potential lenders to finance operations. GlobalCenter cannot
  predict which, if any, of these or other factors might have a significant impact
  on GlobalCenter in the future, nor can it predict what impact, if any, the
  occurrence of these or other events might have on GlobalCenter's operations.
  
                                         12
  Property and Equipment, Net
  
       Property and equipment are stated at cost. Depreciation is computed using
  the straight-line method over the estimated useful lives of the property and
  equipment, generally two to five years for network and computer equipment, four
  years for furniture and fixtures, and seven years for leasehold improvements.
  Equipment acquired under capital leases is amortized using the straight-line
  method over the shorter of the lease term or the estimated useful life of the
  asset. Property and equipment under construction is capitalized and depreciation
  commences when the asset is placed in service.
  
  Goodwill and Other Intangibles
  
       Costs in excess of tangible assets acquired and liabilities assumed are
  recorded as goodwill and intangibles. Goodwill and intangibles are amortized on
  a straight-line basis over five to seven years.
  
  Investment
  
       As of September 30, 2000, GlobalCenter's investment consisted of a single
  investment in marketable equity securities classified as available for sale.
  Accordingly, the investment is recorded at its fair value with any unrealized
  holding gains or losses reported as other comprehensive income. Any decline in
  value, which is other than a temporary decline, will be charged immediately to
  earnings in the period in which the impairment occurs. As of September 30, 2000,
  GlobalCenter's investment had a fair value of $3.1 million, a cost basis of $10
  million and an unrealized loss before tax benefit of $6.9 million. As of
  November 24, 2000, the investment had a fair value of $1.0 million.
  
  Impairment of Long-lived Assets
  
       GlobalCenter periodically reviews the carrying amounts of property and
  equipment, intangible assets and goodwill to determine whether current events or
  changes in circumstances indicate that the carrying amount may not be
  recoverable. GlobalCenter recognizes an impairment of long-lived assets when the
  net book value of such assets exceeds the future undiscounted cash flows
  attributable to such assets. If an impairment adjustment is deemed necessary,
  such loss is measured by the amount that the carrying value of such assets
  exceeds their fair value. Fair value is based on the expected future discounted
  cash flows to be generated from the assets. Considerable management judgment is
  necessary to estimate the fair value of assets. Accordingly, actual results
  could vary significantly from such estimates. Assets to be disposed of are
  carried at the lower of their financial statement carrying amount or fair value
  less costs to sell.
  
                                         13
  Fair Value of Financial Instruments
  
       The estimated fair value of financial instruments has been determined by
  GlobalCenter using available market information and valuation methodologies.
  Considerable judgment is required in estimating fair values. Accordingly, the
  estimates may not be indicative of the amounts GlobalCenter could realize in a
  current market exchange. The carrying amounts for accounts receivable,
  construction in progress, investment, accounts payable, accrued liabilities, and
  capital leases approximate their fair value.
  
  Equipment Held For Resale
  
       GlobalCenter obtains computers, computer equipment, peripherals and
  networking equipment from third parties and resells the equipment to its
  customers. Equipment that has been purchased on behalf of customers but not yet
  transferred to customers or installed is recorded at the lower of cost or net
  realizable value as equipment held for resale.
  
  Other Current Liabilities
  
       Other current liabilities consist of the following:
  Predecessor        GlobalCenter
                                                                      -----------   ----------------------
                                                                           December 31,        Unaudited
                                                                      --------------------   September 30,
                                                                          1998       1999         2000
                                                                      ------------  ------   -------------
                                                                               (Amounts in thousands)
  Accrued professional fees............................................  $1,250      $2,000      $ 2,500
  Accrued benefits, compensation and related taxes.....................   1,596       3,627        5,209
  Deferred income......................................................      --          --        1,773
  Other................................................................   2,253       2,887        8,056
                                                                         ------      ------      -------
    Total other current liabilities....................................  $5,099      $8,514      $17,538
                                                                         ======      ======      =======
  Income Taxes
  
       Beginning with the acquisition by Frontier of GlobalCenter Inc.,
  Predecessor and GlobalCenter are included in the consolidated federal income tax
  return of Global Crossing North America, Inc. (formerly Frontier Corporation)
  for federal and state purposes. The income tax provision has been calculated on
  a pro rata return basis taking account of the increase or decrease in the tax
  liability of the Global Crossing North America, Inc. consolidated group
  resulting from the inclusion of Predecessor and GlobalCenter in the Global
  Crossing North America, Inc. consolidated tax return.
  
                                         14
  Stock-Based Compensation
  
       Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
  for Stock-Based Compensation," permits the use of either a fair value-based
  method or the method defined in Accounting Principles Board Opinion No. 25,
  "Accounting for Stock Issued to Employees" ("APB 25"), to account for stock-
  based compensation arrangements. GlobalCenter accounts for stock option grants
  in accordance with APB 25 and, accordingly, recognizes compensation expense for
  stock option grants to the extent that the estimated fair value of the stock
  exceeds the exercise price of the option at the measurement date. The
  compensation expense is charged against operations ratably over the vesting
  period of the options.
  
  Segment Reporting
  
       SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
  Information," establishes standards for disclosure about operating segments,
  products, services, geographic areas and major customers. Following the
  treatment of the ISP business segment as discontinued operations, when applying
  the management approach defined in SFAS No. 131, GlobalCenter now operates in a
  single segment, namely the provision of complex Web hosting, Internet protocol
  network services, content distribution, systems applications and professional
  services.
  
  Concentration of Credit Risk
  
       Financial instruments that potentially subject GlobalCenter to
  concentrations of credit risk consist primarily of trade receivables. The
  concentration of credit risk is limited due to the large number of customers
  comprising GlobalCenter's customer base.
  
  Revenue Recognition
  
       Service revenues consist of fees from customers for complex Web hosting,
  Internet protocol network services, content distribution, systems applications
  and professional services. Service revenues are recognized as the monthly
  service is provided. Service revenues also include fees for equipment
  installation.
  
       Equipment revenues consist of revenue derived from the resale of computers,
  computer peripherals and networking equipment from third parties. Equipment
  revenues are recognized when equipment is delivered to the customer or, if
  installation is required, when installation of the equipment is complete.
  
       In December 1999, the Securities and Exchange Commission issued Staff
  Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
  Statements," which is required to be adopted by GlobalCenter in the quarter
  ending December 31, 2000. SAB No. 101 provides additional guidance on revenue
  recognition as well as criteria for when revenue is generally realized and
  earned. GlobalCenter has chosen to adopt SAB No. 101 during the quarter ended
  June 30, 2000. Based on the guidance provided by SAB No. 101, GlobalCenter has
  deferred
  
                                         15
  approximately $1.8 million of revenues as of September 30, 2000 for one-time
  fees related to customer installation and set-up. These revenues will be
  recognized over the term of the customer contracts, which are generally for a
  one year term. No cumulative effect has been recorded for the periods prior to
  implementation as the amounts were not material.
  
  Cost of Service Revenues
  
       Cost of service revenues is comprised of telecommunications costs for the
  network provided by Global Crossing and Frontier and costs for connecting to
  other networks and telecommunications providers. Other expenses in cost of
  service revenues include salaries, benefits, rents and other expenses for
  operation of the Internet Data Centers, customer service and network engineering
  personnel.
  
  Foreign Currency
  
       As of December 31, 1999, the functional currency of GlobalCenter is the
  U.S. dollar. The functional currency of GlobalCenter's foreign operations is
  also the U.S. dollar. Foreign currency transactions are recorded based on
  exchange rates at the time such transactions arise. Subsequent changes in
  exchange rates result in transaction gains and losses which are reflected in the
  accompanying consolidated statements of operations as unrealized (based on the
  applicable period end exchange rate) or realized upon settlement of the
  transactions. Foreign currency gains (losses) from GlobalCenter's existing
  operations were not material in any period presented.
  
  Recent Accounting Pronouncements
  
       In June 1999, the Financial Accounting Standards Board issued SFAS No. 137,
  "Accounting for Derivative Instruments and Hedging Activities--Deferral of the
  Effective Date of SFAS No. 133," which deferred SFAS No. 133's effective date to
  fiscal quarters beginning after June 15, 2000. This statement, as amended by
  SFAS No. 137 and No. 138, standardizes the accounting for derivatives and
  hedging activities and requires that all derivatives be recognized in the
  statement of financial position as either assets or liabilities at fair value.
  Changes in the fair value of derivatives that do not meet the hedge accounting
  criteria are to be reported in earnings. GlobalCenter management expects that
  the adoption of SFAS No. 133 will not have a material impact on GlobalCenter's
  financial position, results of operations or cash flows.
  
                                         16
  Vendor Concentration
  
       GlobalCenter relies primarily on Global Crossing for network services
  pursuant to a network services agreement. Global Crossing operates its own
  global network. If the Global Crossing network experiences disruption or if
  GlobalCenter's network services agreement with Global Crossing were terminated,
  GlobalCenter's business, operating results and financial condition could be
  materially adversely affected.
  
  Basic and Diluted Loss Per Share
  
       GlobalCenter has applied the provisions of SFAS No. 128, "Earnings Per
  Share," which establishes standards for computing and presenting earnings per
  share. Basic earnings per share is computed by dividing net loss by the weighted
  average number of common shares outstanding for the period. The calculation of
  diluted earnings is the same as basic net loss per share as the effect of common
  stock equivalents is antidilutive.
  
       Basic and diluted loss per share:
  Nine Months      Three Months     Nine Months
                                                       Year Ended December 31,        Ended            Ended            Ended
                                                    ----------------------------   September 30,    December 31,    September 30,
                                                        1997            1998            1999            1999             2000
                                                    ------------    ------------    ------------    ------------     ------------
  Loss from continuing operations.................  $       0.01    $       0.04    $       0.07    $       0.34     $       1.15
  Loss from discontinued operations...............  $       0.06    $       0.06    $       0.08    $       0.06               --
                                                    ------------    ------------    ------------    ------------     ------------
  Net loss........................................  $       0.07    $       0.10    $       0.15    $       0.40     $       1.15
                                                    ============    ============    ============    ============     ============
  Shares used in computing basic and
   diluted net loss per share......................  198,348,000     233,500,000     233,500,000     233,500,000      233,500,000
  (3)  Related Party Transactions
  
  Revenues
  
       During the nine months ended September 30, 2000, GlobalCenter recognized
  approximately $2.6 million of revenue for services provided to other Global
  Crossing subsidiaries. GlobalCenter and Predecessor had no intercompany sales
  prior to this period.
  
  Cash Management
  
       Prior to the merger with Frontier, GlobalCenter Inc. maintained its own
  cash management function. After its merger with Frontier, GlobalCenter Inc.
  utilized the central cash management systems of Frontier. Since the acquisition
  of Frontier by Global Crossing, GlobalCenter has utilized the central cash
  management of Global Crossing. As a subsidiary of Global Crossing, GlobalCenter
  maintains no cash balances and no cash has been allocated to GlobalCenter in the
  accompanying consolidated financial statements. Historically, Global Crossing
  and Frontier have
  
                                         17
  determined the amount of funding provided to GlobalCenter based on actual cash
  used for capital and operating expenses, net of GlobalCenter cash receipts. Such
  funding has been recorded as capital contributed by Frontier and Global Crossing
  in the accompanying consolidated financial statements. Funds required by
  GlobalCenter are subject to the ongoing approval and budgeting processes of
  Global Crossing. As of September 30, 2000, subsidiaries of GlobalCenter had cash
  balances of $11.2 million that were not part of the centralized cash management
  system of Global Crossing.
  
  Corporate Allocations
  
       The direct operating expenses of GlobalCenter, such as network costs, are
  charged directly to GlobalCenter. GlobalCenter is allocated a portion of
  corporate overhead costs. For the year ended December 31, 1997, GlobalCenter
  operated on a standalone basis and no corporate allocation costs were recorded
  in the statement of operations.
  
       The following table summarizes corporate charges and allocations included
  in the accompanying consolidated financial statements.
  Predecessor                    GlobalCenter
                                                                             -----------                    ------------
                                                                                                                     Unaudited
                                                                                     Nine Months    Three Months    Nine Months
                                                                      Year Ended        Ended          Ended           Ended
                                                                     December 31,   September 30,   December 31,   September 30,
                                                                         1998           1999            1999           2000
                                                                         ----           ----            ----           ----
                                                                                       (Amounts in thousands)
  Statement of Operations caption:
          Cost of service revenues................................        $    --         $ 4,722        $ 1,978         $10,711
          General and administrative..............................          1,284           1,740            867           4,794
                                                                          -------         -------        -------         -------
                  Total corporate charges and
                    allocations...................................        $ 1,284         $ 6,462        $ 2,845         $15,505
                                                                          =======         =======        =======         =======
  GlobalCenter management believes that the allocation methodologies applied
  are reasonable. However, it was not practicable to determine whether the
  allocated amounts represent amounts that would have been incurred on a
  standalone basis. GlobalCenter management believes that the historical corporate
  charges and allocations are comparable to the expected future allocations.
  Explanations of the composition and the method of allocation for the above
  captions are described below.
  
  Cost of Service Revenues
  
       Allocated costs within this caption include the costs of the
  telecommunications network provided by Global Crossing or Frontier to
  GlobalCenter. These costs were allocated to GlobalCenter based upon circuit
  usage, rate and capacity information.
  
                                         18
  General and Administrative
  
       Allocated costs within this caption include the costs of information
  systems services, tax return preparation and advisory services, payroll and
  benefits administration, purchasing and certain other accounting and
  administrative services. These costs were allocated based upon headcount, square
  footage and revenue, depending on the type of cost to be allocated.
  
  Tanning Technology Corporation
  
       The chief executive officer of GlobalCenter was a member of the Board of
  Directors of Tanning Technology Corporation ("Tanning"). On February 1, 2000,
  GlobalCenter acquired approximately 229,000 shares of Tanning common stock for
  an aggregate purchase price of $10 million based on the fair market value of
  Tanning's common stock on that date. This investment represents approximately 1%
  of the outstanding shares of Tanning common stock as of October 27, 2000. In
  addition, GlobalCenter and Tanning entered into a preferred marketing agreement
  to create, market, sell and deliver combined service offerings to customers and
  also entered into an additional arrangement where GlobalCenter has agreed to pay
  $10 million for consulting services to be provided by Tanning over a twelve-
  month period commencing in February 2000.
  
  (4)  Property and Equipment, Net
  
       Property and equipment consists of the following:
  Predecessor              GlobalCenter
                                                                                     -------------    -----------------------------
                                                                                              December 31,              Unaudited
                                                                                     -----------------------------    September 30,
                                                                                          1998           1999             2000
                                                                                     -------------    ------------    -------------
                                                                                                  (Amounts in thousands)
  Network and computer equipment..................................................    $ 13,410       $ 16,200         $ 50,611
     Furniture and fixtures..........................................................         307          2,143            8,110
     Leasehold improvements..........................................................       2,179         20,759           94,142
                                                                                         --------       --------         --------
                                                                                           15,896         39,102          152,863
     Accumulated depreciation and amortization.......................................      (5,096)        (1,913)         (18,149)
                                                                                         --------       --------         --------
                                                                                           10,800         37,189          134,714
     Construction in progress........................................................      19,572         79,126          223,435
                                                                                         --------       --------         --------
     Total property and equipment, net...............................................    $ 30,372       $116,315         $358,149
                                                                                         ========       ========         ========
  Included in property and equipment are assets acquired under capital lease
  obligations with an original cost of approximately $1.5 million. Accumulated
  amortization on the leased assets was approximately $0.8 million, $1.3 million
  and $1.5 million at December 31, 1998 and 1999, and September 30, 2000,
  respectively. Interest paid on capital lease obligations is not material to the
  consolidated financial statements for all periods presented.
  
                                         19
  (5)  Goodwill and Intangibles, Net
  
       In connection with the acquisition of Frontier by Global Crossing,
  approximately $1.5 billion of the purchase price was determined to be the fair
  value of net assets, goodwill and intangibles related to GlobalCenter.
  Approximately $43.9 million was the fair value of the tangible net assets
  acquired and liabilities assumed of GlobalCenter at the acquisition date. The
  remaining purchase price was assigned to goodwill and intangibles and a related
  deferred tax liability. The amounts and estimated lives of the goodwill and
  intangibles are as follows:
  
                                                                                                                          Unaudited
                                                                                         Estimated      December 31,    September 30,
                                                                                           Life             1999            2000
                                                                                           ----             ----            ----
                                                                                                    (Amounts in thousands)
  Customer lists...................................................................    5 years        $   78,000      $   78,000
     Goodwill.........................................................................    5 years         1,407,400       1,407,400
                                                                                                         ----------      ----------
                                                                                                          1,485,400       1,485,400
     Less: Accumulated amortization...................................................                      (74,270)       (297,080)
                                                                                                         ----------      ----------
     Goodwill and intangibles, net....................................................                   $1,411,130      $1,188,320
                                                                                                         ==========      ==========
  In October 1997, GlobalCenter Inc. acquired Voyager Networks, Inc.
  ("Voyager") in a business combination accounted for as a purchase. After
  allocation of the purchase price to the tangible and specifically identifiable
  intangible assets acquired and liabilities assumed, the excess purchase price of
  approximately $9.1 million was allocated to goodwill. The Voyager goodwill was
  amortized using the straight-line method over seven years until the acquisition
  of Frontier by Global Crossing. As of December 31, 1998, the accumulated
  amortization related to the Voyager goodwill was approximately $1.6 million. Pro
  forma combined revenues and net loss from continuing operations before benefit
  for income taxes for the year ended December 31, 1997, assuming Voyager was
  acquired on January 1, 1997, was $10.5 million and $4.2 million, respectively.
  
  (6)  Income Taxes
  
       The following table shows the principal reasons for the difference between
  the effective income tax rate and the U.S federal statutory income tax rate:
  Predecessor                     GlobalCenter
                                                                                        -----------                     ------------
                                                                                                       Nine Months      Three Months
                                                                                Year Ended                Ended            Ended
                                                                               December 31,           September 30,     December 31,
                                                                               ------------
                                                                           1997            1998           1999             1999
                                                                           ----            ----           ----             ----
                                                                                          (Amounts in thousands)
  Federal income tax at statutory rate (35%).......................    $ (1,300)       $ (5,508)      $ (9,286)        $(29,468)
    State and local income taxes, net of federal effect..............        (118)            125           (449)            (212)
    Amortization of goodwill.........................................         114             453            341           24,630
    Change in valuation allowance and other
      estimates......................................................         361              --           (361)              --
    Other differences................................................           2              19             13               12
                                                                         --------        --------       --------        ---------
    Benefit for income taxes.........................................    $   (941)       $ (4,911)      $ (9,742)        $ (5,038)
                                                                         ========        ========       ========        =========
  20
  The benefit for income taxes consists of the following:
  Predecessor                        GlobalCenter
                                                                                  -----------                        -------------
                                                                                                Nine Months          Three Months
                                                                           Year Ended              Ended                 Ended
                                                                          December 31,         September 30,         December 31,
                                                                          ------------
                                                                        1997         1998          1999                  1999
                                                                        ----         ----          ----                  ----
                                                                                   (Amounts in thousands)
  Benefit for income taxes from continuing operations
    Current:
       Federal....................................................      $  --      $(3,307)       $(10,126)             $(1,979)
       State and local............................................         --           --            (514)                (133)
                                                                        -----      -------        --------              -------
          Subtotal................................................         --       (3,307)        (10,640)              (2,112)
    Deferred:
       Federal....................................................       (760)      (1,797)          1,074               (2,733)
       State and local............................................       (181)         193            (176)                (193)
                                                                        -----      -------        --------              -------
          Subtotal................................................       (941)      (1,604)            898               (2,926)
                                                                        -----      -------        --------              -------
    Benefit for income taxes from continuing
      operations..................................................      $(941)     $(4,911)       $ (9,742)             $(5,038)
                                                                        =====      =======        ========              =======
  Deferred income taxes reflect the net tax effect of temporary differences
  between the carrying amounts of assets and liabilities for financial reporting
  purposes and amounts used for income tax purposes.
  
       The following is a summary of the significant items giving rise to
  components of GlobalCenter's deferred tax assets and liabilities:
  Predecessor          GlobalCenter
                                                                                 -----------    --------------------------
                                                                                         December 31,         Unaudited
                                                                                 -------------------------   September 30,
                                                                                     1998          1999          2000
                                                                                 -----------    ----------   -------------
                                                                                           (Amounts in thousands)
  Long-term deferred income tax assets (liabilities)
    Intangibles.................................................................    $   --        $(27,825)    $(23,547)
    Property and equipment......................................................       221             214         (558)
    Net operating losses from continuing operations.............................       515           1,412        2,912
                                                                                    ------        --------     --------
                                                                                       736         (26,199)     (21,193)
  Less: Valuation allowance.....................................................      (515)         (1,412)      (1,412)
                                                                                    ------        --------     --------
       Net long-term deferred income tax assets (liabilities)...................    $  221        $(27,611)    $(22,605)
                                                                                    ======        ========     ========
  Current deferred income tax assets
    Accrued benefits and compensation...........................................    $  688        $    168     $    168
    Reserves and allowances.....................................................     1,594           1,681        3,505
    Other.......................................................................       111           1,077          482
                                                                                    ------        --------     --------
       Total current deferred income tax assets.................................    $2,393        $  2,926     $  4,155
                                                                                    ======        ========     ========
  GlobalCenter established a valuation allowance of approximately $1.4
  million as of December 31, 1999 against net operating losses. The valuation
  allowance relates to the uncertainty of realizing the full benefit of the net
  operating loss carryforwards. In evaluating the amount of valuation allowance
  needed, GlobalCenter considers the prior operating results and future plans and
  expectations. The utilization period of the net operating loss carryforwards and
  the turnaround period of other temporary differences are also considered. The
  GlobalCenter's net operating losses begin to expire in 2001. The realization of
  the current net deferred income tax asset is dependent on the consolidated
  group, of which GlobalCenter and Predecessor are a component, generating taxable
  income. Although realization is not assured, management believes it is more
  likely than not that the deferred income tax asset at December 31, 1999 will
  
                                         21
  be realized. The amount of the deferred tax asset considered realizable,
  however, could be reduced in the near term if estimates of taxable income in
  future years are reduced.
  
  (7) Commitments and Contingencies
  
  Lease Commitments
  
       GlobalCenter has entered into various lease agreements for office space and
  Internet Data Center facilities. Rent expense was $9.9 million, $2.3 million,
  $3.7 million, $1.3 million and $1.0 million for the nine months ended September
  30, 2000, three months ended December 31, 1999, nine months ended September 30,
  1999 and the years ended December 31, 1998 and 1997, respectively. GlobalCenter
  leases certain electronic and computer equipment under capital lease
  arrangements.
  
       A summary of future minimum lease payments under capital and noncancelable
  operating lease agreements as of December 31, 1999 are as follows:
  Capital      Operating
                                                                                                        Leases         Leases
                                                                                                     -------------  ------------
                                                                                                             (Amounts in
                                                                                                             thousands)
  Years ending December 31,
          2000.....................................................................................         $ 423       $ 12,509
          2001.....................................................................................           211         12,133
          2002.....................................................................................            --         12,026
          2003.....................................................................................            --         12,361
          2004.....................................................................................            --         12,843
          Thereafter...............................................................................            --         84,354
                                                                                                            -----       --------
                                                                                                              634       $146,226
                                                                                                                        ========
       Less: Amount representing interest..........................................................           (66)
                                                                                                            -----
       Present value of lease payments.............................................................           568
       Current portion of capital leases...........................................................          (374)
                                                                                                            -----
       Noncurrent portion of capital leases........................................................         $ 194
                                                                                                            =====
  It is expected that in the normal course of business, leases that expire
  generally will be renewed or replaced by leases on other properties.
  Accordingly, it is anticipated that future minimum lease commitments will not be
  less than the amount shown for 2000.
  
       Subsequent to December 31, 1999, GlobalCenter entered into a number of
  additional operating lease commitments to secure future data center locations.
  The aggregate additional commitments as of September 30, 2000 were approximately
  $210 million.
  
  Other
  
       Management believes that there are no pending or threatened legal
  proceedings that would have a material adverse effect on GlobalCenter.
  
                                         22
  (8) Shareholder's Equity
  
       On September 28, 2000, the shareholders of GlobalCenter Holding Co. and
  GlobalCenter Inc. approved an increase in the total number of shares of common
  stock with par value of $0.01 to 300 million. On September 28, 2000, the
  GlobalCenter Holding Co. and GlobalCenter Inc. Boards of Directors approved a
  stock split, in the form of a stock dividend, of 2,335,000 to 1. The stock
  dividend will be effected prior to the completion of the acquisition of
  GlobalCenter by Exodus. Accordingly, all outstanding shares have been
  retroactively adjusted to reflect the effect of the stock dividend.
  
  Management Stock Plan
  
       The Board of Directors and the shareholder of GlobalCenter Inc. adopted the
  GlobalCenter Management Stock Plan ("Management Stock Plan") in January 2000.
  The Management Stock Plan was approved by the compensation committee of the
  Global Crossing Ltd. Board of Directors on March 2, 2000 and by the Global
  Crossing Ltd. Board of Directors on April 12, 2000. The Management Stock Plan
  provides for grants of stock options to purchase shares of GlobalCenter Inc.
  stock and grants restricted shares of GlobalCenter Inc. stock. Options granted
  under the Management Stock Plan may be incentive stock options or non-statutory
  stock options. The options expire ten years from the date of the grant and vest
  over a three-year period. The total number of shares of such GlobalCenter Inc.
  stock available for grant under the Management Stock Plan is approximately 27.5
  million.
  
       The Management Stock Plan imposes individual limits on the amount of awards
  that a participant can receive in any fiscal year. The Management Stock Plan is
  administered by the compensation committee of the Global Crossing Ltd. Board of
  Directors. The exercise price per share for a Management Stock Plan option will
  typically be the fair market value of GlobalCenter Inc. stock on the date of
  grant. As of December 31, 1999, stock options to purchase 12.8 million shares of
  GlobalCenter Inc. stock had been approved for grant under the Management Stock
  Plan. The weighted average exercise price is $110 million. As of December 31,
  1999, no shares of restricted stock have been awarded under the Management Stock
  Plan.
  
       As of September 30, 2000, stock options to purchase approximately 22.3
  million shares of GlobalCenter Inc. common stock had been approved for grant
  under the Management Stock Plan. The aggregate exercise price of such options is
  approximately $191 million. Management believes the options were all granted at
  the fair market value on date of grant.
  
  Global Crossing Ltd. Stock Option Plans
  
       Employees of GlobalCenter participate in the stock option plans of Global
  Crossing Ltd. Global Crossing Ltd. maintains a stock option plan under which
  options to acquire shares may be granted to directors, officers, employees and
  consultants. Global Crossing Ltd. accounts for this plan under APB 25, under
  which compensation cost is recognized only to the extent that the
  
                                         23
  market price at that date of grant exceeds the exercise price. Terms and
  conditions of Global Crossing Ltd. options, including exercise price and the
  period in which options are exercisable, generally are at the discretion of the
  compensation committee of the Global Crossing Ltd. Board of Directors, however,
  no options are exercisable more than ten years after the date of grant. Certain
  employees of GlobalCenter own stock options to acquire Global Crossing Ltd
  stock.
  
    Prior to its merger with Global Crossing, Frontier maintained stock option
  plans for its directors, executives, and certain employees. The exercise price
  for options under all Frontier plans was the fair market value of the stock on
  the date of grant. The stock options expire ten years from the date of the grant
  and vest over a period from one to three years. The Frontier plans provided for
  discretionary grants of stock options which were subject to the passage of time
  and continued employment restrictions. In connection with the Frontier merger,
  Global Crossing exchanged all of the outstanding Frontier stock options for
  Global Crossing Ltd. stock options which vested immediately at the date of the
  Frontier merger.
  
    As of December 31, 1999, 2.4 million stock options held by GlobalCenter
  employees under the Global Crossing Ltd.'s stock option plans are exercisable.
  During 1997, GlobalCenter Inc. deferred compensation of $4.7 million which
  relates to the difference between the exercise price of the options and the fair
  market value at the time of issuance. Related compensation expense of $2
  million, $0.9 million, and $0.7 million was recognized in 1997, 1998 and the
  nine month period ended September 30, 1999, respectively.
  
    The following table summarizes the stock option activity of GlobalCenter
  employees who hold options under Frontier and Global Crossing stock option
  plans:
  Number of    Weighted Average
                                                                                           Shares      Exercise Price
                                                                                          ---------    ----------------
  Predecessor
  Outstanding Frontier Corporation options at January 1, 1997.....................        156,924            $ 1.02
       Granted......................................................................      1,155,129              5.47
       Exercised....................................................................         30,616              1.00
       Canceled.....................................................................        157,718              2.17
                                                                                          ---------            ------
    Outstanding Frontier Corporation options at December 31, 1997...................      1,123,719              5.44
       Granted......................................................................        910,120             27.90
       Exercised....................................................................        305,570              1.98
       Canceled.....................................................................        661,427             18.15
                                                                                          ---------            ------
    Outstanding Frontier Corporation options at December 31, 1998...................      1,066,842             17.71
       Granted......................................................................      1,528,549             46.43
       Exercised....................................................................        527,505             19.22
       Canceled.....................................................................        118,577             30.52
                                                                                          ---------            ------
    Outstanding Frontier Corporation options at September 30, 1999..................      1,949,309            $39.04
                                                                                          =========            ======
    GlobalCenter
    Outstanding Global Crossing Ltd. options at October 1, 1999.....................      1,949,309            $19.04
       Granted......................................................................      2,131,175             45.00
       Exercised....................................................................      1,211,355             12.43
       Canceled.....................................................................        343,285             26.25
                                                                                          ---------            ------
    Outstanding Global Crossing Ltd. options at December 31, 1999...................      2,525,844             22.10
       Granted (unaudited)..........................................................      3,949,756             30.63
       Exercised (unaudited)........................................................        791,626             15.38
       Canceled (unaudited).........................................................      1,301,414             31.10
                                                                                          ---------            ------
    Outstanding Global Crossing Ltd. options at September 30, 2000
      (unaudited)...................................................................      4,382,560            $28.33
                                                                                          =========            ======
  24
  As permitted by SFAS No. 123, the employee stock options are being accounted for
  under APB 25 and compensation expense is recognized over the vesting period to
  the extent that the fair value of the stock on the date the options were granted
  exceeded the exercise price. Had compensation cost for the stock-based
  compensation plans been determined consistent with the SFAS No. 123 fair value
  approach, the impact on Predecessor and GlobalCenter's loss applicable to common
  shareholders using the Black-Scholes option valuation model, would be as
  follows:
  Predecessor                    GlobalCenter
                                                  -----------                    ------------
                                                                                           Unaudited
                                                            Nine Months   Three Months    Nine Months
                                           Year Ended          Ended         Ended           Ended
                                          December 31,     September 30,  December 31,   September 30,
                                       -----------------
                                         1997     1998         1999          1999           2000
                                       -------   -------      -------       -------       --------
  Pro forma net loss.................  $13,633   $26,147      $42,289       $94,452       $269,060
  The following table summarizes the significant assumptions used in developing
  the pro forma information:
  Predecessor                      GlobalCenter
                                                                             -----------                      ------------
                                                                                                                       Unaudited
                                                                                       Nine Months    Three Months    Nine Months
                                                                      Year Ended          Ended           Ended          Ended
                                                                     December 31,     September 30,   December 31,   September 30,
                                                                  ------------------
                                                                     1997      1998        1999           1999            2000
                                                                     ----      ----        ----           ----            ----
  Risk free interest rate.....................................      6.2%      5.5%        6.6%           6.6%            6.0%
    Volatility factor...........................................     33.2%     42.0%       40.0%          40.0%           40.0%
    Dividend yield..............................................       --        --          --             --              --
    Weighted average life.......................................  4 years   2 years      1 year        3 years         3 years
  The weighted average fair value of the options granted during the years
  ended December 31, 1997 and 1998, the nine-month period ended September 30,
  1999, the three-month period ended December 31, 1999 and the nine-month period
  ended September 30, 2000 is $1.44, $7.72, $4.96, $15.55 and $10.38,
  respectively.
  
  (9)  Discontinued Operations
  
       As of December 31, 1999, GlobalCenter decided to discontinue its ISP
  business segment. GlobalCenter Inc. entered into an agreement to sell the
  business segment to Global Crossing Internet Dial-Up, Inc., a wholly owned
  subsidiary of Global Crossing Ltd., for book value on the date of transfer. In
  connection with this transaction, GlobalCenter's financial statements reflect
  the financial position and results of operations of the ISP business as
  discontinued operations for all periods presented. For accounting purposes, the
  sale was effective March 31, 2000. In connection with the sale of the ISP
  business, GlobalCenter agreed to indemnify Global Crossing Internet Dial-Up,
  Inc. for any claims prior to the sale in an amount not to exceed the purchase
  price. Included in the liabilities from discontinued operations in the table
  below is an accrual for losses between the measurement date of December 31, 1999
  and the disposal date of March 31, 2000 of $6.4 million, net of a $3.6 million
  tax benefit. Summary financial information of the ISP business segment is as
  follows:
  
                                         25
  Predecessor   GlobalCenter
                                                                                             -----------   ------------
                                                                                                 As of December 31,
                                                                                                 -----------------
                                                                                                1998            1999
                                                                                                ----            ----
                                                                                                (Amounts in thousands)
  Balance Sheet Data:
       Assets...............................................................................  $36,038          $17,546
       Liabilities..........................................................................    7,740           13,130
                                                                                              -------          -------
       Net assets of discounted operations..................................................  $28,298          $ 4,416
                                                                                              =======          =======
  Predecessor               GlobalCenter
                                                                                             -----------               -------------
                                                                                                        Nine Months    Three Months
                                                                                      Year Ended           Ended           Ended
                                                                                     December 31,      September 30,   December 31,
                                                                                     ------------
                                                                                   1997       1998          1999           1999
                                                                                   ----       ----          ----           ----
  Statement of Operations Data:
       Revenue.................................................................  $ 16,786   $ 20,183        $ 15,949       $  4,186
       Expenses................................................................   (31,423)   (40,709)        (42,534)       (17,910)
                                                                                 --------   --------        --------       --------
       Operating loss..........................................................   (14,637)   (20,526)        (26,585)       (13,724)
       Other expenses..........................................................      (505)        --              --             --
       Accrued losses from measurement date....................................        --         --              --        (10,063)
                                                                                 --------   --------        --------       --------
       Income tax benefit......................................................     4,504      7,146           9,600          8,599
       Loss from discontinued operations.......................................  $(10,638)  $(13,380)       $(16,985)      $(15,188)
                                                                                 ========   ========        ========       ========
  (10) Subsequent Events (Unaudited)
  
  Merger Agreement with Exodus
  
    On September 28, 2000, Global Crossing entered into an agreement with Exodus
  to merge GlobalCenter Holding Co. with a wholly owned subsidiary of Exodus. The
  merger was completed on January 10, 2001.  Each share of common stock of
  GlobalCenter Holding Co. was converted into and exchanged for shares of Exodus
  common stock. The number of shares of Exodus common stock issued at the
  completion of the merger was approximately 108 million shares.
  
    At the time of the signing of the merger agreement, Exodus signed a Networking
  Services, Marketing and Cooperation Agreement with Global Crossing and a similar
  agreement with Asia Global Crossing, Ltd. ("AGC"). AGC is a publicly traded
  company with Global Crossing, Softbank Corp. and Microsoft Corporation as
  principal shareholders. These agreements commit Exodus to obtain at least 50% of
  its network needs for all areas of the world other than Asia and the Pacific Rim
  from Global Crossing and at least 60% of its network needs in Asia and the
  Pacific Rim, other than Australia and New Zealand, from AGC.
  
  GlobalCenter Asia Joint Venture
  
    In May 2000, GlobalCenter Inc. entered into a Master Joint Venture Agreement
  with AGC. The purpose of the joint venture will be to exploit the GlobalCenter
  business in Asia.
  
                                         26
  Exodus has agreed to form a joint venture with AGC to provide complex Web
  hosting and managed services in Asia. Exodus will own 67% of the joint venture
  and AGC will own 33%. Exodus and AGC will contribute all Asia region Web hosting
  assets to the joint venture. AGC will be the primary network provider for the
  joint venture in Asia, and Exodus will manage and operate the joint venture.
  
                                         27
  EXODUS UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
  ------------------------------------------------------------------
  
    The following unaudited pro forma combined condensed financial statements are
  presented for illustrative purposes only and are not necessarily indicative of
  the combined results of operations for future periods or the results of
  operations that actually would have been realized had Exodus, Cohesive and
  GlobalCenter Holding Co. been combined companies during the specified periods.
  The unaudited pro forma combined condensed financial statements, including the
  related notes, are qualified in their entirety by reference to, and should be
  read in conjunction with, the historical consolidated financial statements and
  related notes of Exodus and the historical consolidated financial statements and
  related notes of Cohesive, which are contained in the Prospectus filed by Exodus
  with the Securities and Exchange Commission on February 14, 2000 (File No. 333-
  95937) (the "Prospectus"), and the historical consolidated financial statements
  and related notes of GlobalCenter Holding Co. which are included elsewhere in
  the Prospectus.
  
    On July 27, 1999, Exodus completed its acquisition of Cohesive in a
  transaction accounted for as a purchase. Exodus issued as consideration for
  Cohesive 3,201,592 shares of Exodus common stock, options to purchase a total of
  817,424 shares of Exodus common stock, and $46,530,000 in cash for a total
  purchase price of $111,440,000. The pro forma adjustments related to the
  Cohesive acquisition that are reflected in the accompanying unaudited pro forma
  combined condensed statement of operations for the year ended December 31, 1999
  are based on the actual value of the tangible and intangible assets acquired by
  Exodus as well as management's estimates of the useful lives of those acquired
  assets.
  
    In February 1998, GlobalCenter Inc. completed a merger with Frontier
  Corporation in a transaction accounted for as a pooling of interests. On
  September 28, 1999, Global Crossing Ltd. acquired Frontier Corporation in a
  merger transaction accounted for as a purchase. For financial reporting
  purposes, the acquisition of Frontier Corporation by Global Crossing Ltd. was
  deemed to have occurred on September 30, 1999. The historical consolidated
  statement of operations of GlobalCenter Holding Co. for the nine months ended
  September 30, 1999 is included under the heading "Predecessor" in the
  accompanying pro forma statement of operations for the year ended December 31,
  1999. The consolidated statements of operations of GlobalCenter Holding Co. for
  the three months ended December 1999 and for the nine months ended September 30,
  2000 are included under the heading "GlobalCenter."
  
    In September 2000, Exodus entered into an agreement to acquire GlobalCenter
  Holding Co. in a transaction to be accounted for as a purchase.  The transaction
  was completed on January 10, 2001. Based on the average closing price of Exodus
  common stock during the three trading days ended December 5, 2000, the
  GlobalCenter Holding Co. purchase price was estimated to be approximately $3.111
  billion consisting of Exodus common stock valued at approximately $2.777
  billion, Exodus stock options valued at approximately $298 million, and merger
  related expenses estimated at approximately $36 million.
  
                                         28
  In connection with the acquisition of GlobalCenter Holding Co., Exodus expects
  to record an accrual in the first quarter of 2001 for certain restructuring
  activities related to the integration of the two companies, the amount of which
  is currently not estimable.
  
    The unaudited pro forma combined condensed statement of operations for the
  year ended December 31, 1999 gives effect to the merger between a wholly owned
  subsidiary of Exodus and Cohesive and to the merger between a wholly owned
  subsidiary of Exodus and GlobalCenter Holding Co. as if both mergers had taken
  place on January 1, 1999. The unaudited pro forma combined condensed statement
  of operations for the year ended December 31, 1999 combines Exodus' audited
  historical consolidated statement of operations for the year ended December 31,
  1999, Cohesive's unaudited historical statement of operations for the period
  from January 1, 1999 through July 27, 1999, Predecessor's audited historical
  consolidated statement of operations for the period from January 1, 1999 to
  September 30, 1999, and GlobalCenter Holding Co.'s audited historical
  consolidated statement of operations for the period from October 1, 1999 to
  December 31, 1999.
  
    The unaudited pro forma combined condensed statement of operations for the
  nine months ended September 30, 2000 gives effect to the merger between a wholly
  owned subsidiary of Exodus and GlobalCenter Holding Co. as if it had taken place
  on January 1, 1999. The unaudited pro forma combined condensed statement of
  operations for the nine months ended September 30, 2000 combines Exodus'
  unaudited historical consolidated statement of operations for the nine months
  ended September 30, 2000 and GlobalCenter Holding Co.'s unaudited historical
  consolidated statement of operations for the nine months ended September 30,
  2000.
  
    The unaudited pro forma combined condensed balance sheet gives effect to the
  GlobalCenter Holding Co. acquisition as if it had taken place on September 30,
  2000 and combines Exodus' unaudited historical consolidated balance sheet as of
  September 30, 2000 and GlobalCenter Holding Co.'s unaudited historical
  consolidated balance sheet as of September 30, 2000. The acquisition of Cohesive
  has already been reflected in Exodus' unaudited consolidated balance sheet as of
  September 30, 2000.
  
    The unaudited pro forma combined condensed financial statements have been
  prepared on the basis of assumptions described in the related notes and include
  assumptions relating to the allocation of consideration paid for the assets and
  liabilities of GlobalCenter Holding Co. based on preliminary estimates of their
  respective fair values. The purchase price reflected in the unaudited pro forma
  combined condensed financial statements is based on the average closing price of
  Exodus common stock during the three trading days ended December 5, 2000. In the
  opinion of management, all adjustments necessary to present fairly such
  unaudited pro forma combined condensed financial statements have been made based
  on the terms and structure of the GlobalCenter Holding Co. acquisition.
  
                                         29
  Unaudited Pro Forma Combined Condensed Balance Sheet
                                September 30, 2000
                                  (in thousands)
  Historical                      Pro Forma
                                                                               ----------                      ---------
                                                                         Exodus     Global Center      Adjustments       Combined
                                                                         ------     -------------      -----------       --------
  Assets
  Current assets:
    Cash and cash equivalents....................................      $1,246,550      $   11,210   $       --          $1,257,760
    Accounts receivable, net.....................................         134,417          57,601           --             192,018
    Prepaid expenses and other current assets....................          38,219          16,835           --              55,054
    Deferred tax asset...........................................              --           4,155       (4,155)(a)              --
                                                                       ----------      ----------   ----------          ----------
  
       Total current assets......................................       1,419,186          89,801       (4,155)          1,504,832
  Property and equipment, net....................................       1,262,446         358,149           --           1,620,595
  Restricted cash equivalents....................................          73,051              --           --              73,051
  Goodwill and other intangible assets...........................         191,003       1,188,320    1,649,491(a)(b)(c)  3,028,814
  Other assets...................................................         709,666           3,395           --             713,061
                                                                       ----------      ----------   ----------          ----------
                                                                       $3,655,352      $1,639,665   $1,645,336          $6,940,353
                                                                       ==========      ==========   ==========          ==========
  
  Liabilities and Stockholders' Equity
  Current liabilities:
    Current portion of equipment loans and line
      of credit facilities.......................................      $    7,149      $       --   $       --          $    7,149
    Current portion of capital lease
      obligations................................................          38,183              --           --              38,183
    Accounts payable.............................................         324,929          87,082           --             412,011
    Accrued expenses.............................................          82,063          17,538           --              99,601
    Accrued interest payable.....................................          65,056              --           --              65,056
    Accrued liability, acquisition costs.........................              --              --       36,000 (b)          36,000
                                                                       ----------      ----------   ----------          ----------
       Total current liabilities.................................         517,380         104,620       36,000             658,000
  Equipment loans and line of credit facilities, less
   current portion...............................................          11,834              --           --              11,834
  Capital lease obligations, less current portion................          52,339              --           --              52,339
  Convertible subordinated notes.................................         562,494              --           --             562,494
  Senior notes...................................................       1,936,062              --           --           1,936,062
  Long-term deferred tax liabilities.............................              --          22,605       44,395 (a)(c)       67,000
  Other non-current liabilities..................................           7,599           2,381           --               9,980
                                                                       ----------      ----------   ----------          ----------
       Total liabilities.........................................       3,087,708         129,606       80,395           3,297,709
  Stockholders' equity:
    Common stock.................................................             424           2,335       (2,228)(b)             531
    Additional paid-in capital...................................         915,227       1,871,077    1,203,816 (b)       3,990,120
    Deferred stock compensation..................................          (1,261)             --           --              (1,261)
    Accumulated deficit..........................................        (407,342)       (363,353)     363,353 (a)        (407,342)
    Accumulated other comprehensive
      income.....................................................          60,596              --           --              60,596
                                                                       ----------      ----------   ----------          ----------
       Total stockholders' equity................................         567,644       1,510,059    1,564,941           3,642,644
                                                                       ----------      ----------   ----------          ----------
                                                                       $3,655,352      $1,639,665   $1,645,336          $6,940,353
                                                                       ==========      ==========   ==========          ==========
  30
  Unaudited Pro Forma Combined Condensed Statements of Operations
                       (in thousands, except per share data)
  Nine Months Ended September 30, 2000
                                                                                     ------------------------------------
                                                                                     Historical                           Pro Forma
                                                                                     ----------
                                                                               Exodus     GlobalCenter   Adjustments       Combined
                                                                               ------     ------------   -----------       --------
  Revenue...............................................................       $ 543,331      $ 136,595   $        --     $  679,926
  Costs and expenses:
    Cost of revenues....................................................         378,101        141,377 (j)    (1,631) (i)   517,847
    Marketing and sales.................................................         123,315         25,213            --        148,528
    General and administrative..........................................          97,498         49,165 (j)      (699) (i)   145,964
    Product development.................................................          10,573             --            --         10,573
    Amortization of goodwill and other intangible assets................          25,412        222,810       127,527  (b)    375,749
                                                                               ---------      ---------   -----------     ----------
    Total costs and expenses............................................         634,899        438,565       125,197      1,198,661
    Operating loss......................................................         (91,568)      (301,970)     (125,197)      (518,735)
  Other income (expense), net...........................................                           (229)           --           (229)
  Interest income (expense), net........................................         (87,558)            --            --        (87,558)
                                                                               ---------      ---------     ---------     ----------
  Loss from continuing operations before taxes..........................        (179,126)      (302,199)     (125,197)      (606,522)
  Income tax benefit....................................................              --         33,189       (33,189  (e)        --
                                                                               ---------      ---------   -----------     ----------
  Loss from continuing operations.......................................       $(179,126)     $(269,010)    $(158,386)    $ (606,522)
                                                                               =========      =========     =========     ==========
  Basic and diluted loss per share from continuing operations...........       $   (0.45)                                 $    (1.20)
  Shares used to compute basic and diluted loss per share from
  continuing operations.................................................         398,512                      108,181 (f)    506,693
  Year Ended December 31, 1999
                                                                                  ----------------------------
                                                                                            Historical
                                                                                            ---------
                                                                                  Predecessor   GlobalCenter
                                                                                  -----------   ------------
                                                                       Pro Forma   Nine Months  Three Months                Pro Forma
                                        Historical                      Exodus/      Ended          Ended                     Exodus/
                                        ----------                     Cohesive   September 30  December 31,              GlobalCenter
                                   Exodus     Cohesive    Adjustments  Combined       1999          1999     Adjustments    Combined
                                   ------     --------    -----------  --------       ----          ----     -----------    --------
  Revenue.......................  $ 242,140   $ 29,191  $        --    $ 271,331    $ 47,179    $ 23,724     $      --        342,234
  
  Costs and expenses:
    Cost of revenues............    197,231     20,896           --      218,127      54,993      24,032 (j)      (666)(i)    296,486
    Marketing and sales.........     75,809      3,594           --       79,403       9,531       6,088            --         95,022
    General and
     administrative.............     42,951      5,223           --       48,174       8,170       3,641 (j)      (285)(i)     59,700
    Product development.........      8,869         --           --        8,869                                    --          8,869
    Amortization of goodwill
     and other intangible
     assets.....................      9,438      4,994        3,492 (d)   17,924         974      74,270       391,872 (d)    485,040
    Merger costs................      5,058         --           --        5,058          --          --            --          5,058
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
    Total costs and
     expenses...................    339,356     34,707        3,492      377,555      73,668     108,031       390,921        950,175
    Operating loss..............    (97,216)    (5,516)      (3,492)    (106,224)    (26,489)    (84,307)     (390,921)      (607,941)
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
  Interest and other income
   (expense), net...............    (33,107)      (565)      (1,464)(g)  (35,136)        (44)        114            --        (35,066)
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
    Loss from continuing
     operations before
     taxes......................   (130,323)    (6,081)      (4,956)    (141,360)    (26,533)    (84,193)     (390,921)      (643,007)
  Income tax benefit............         --        450         (450)(e)       --       9,742       5,038       (14,780)(e)
    Loss from continuing
     operations.................   (130,323)    (5,631)      (5,406)    (141,360)    (16,791)    (79,155)     (405,701)      (643,007)
  Cumulative dividends and
   accretion on redeemable
   preferred stock..............         --       (738)         738 (h)       --          --          --            --             --
                                  ---------    -------      -------    ---------    --------    --------     ---------      ---------
  Loss from continuing
   operations attributable to
   common stockholders..........  $(130,323)  $ (6,369)     $(4,668)   $(141,360)   $(16,791)   $(79,155)    $(405,701)     $(643,007)
                                  =========   ========      =======    =========    ========    ========     =========      =========
  Basic and diluted loss per
   share from continuing
   operations...................  $   (0.39)                                                                                $   (1.44)
  Shares used to compute basic
   and diluted loss per share
   from continuing
   operations...................    335,848                   1,600 (f)                                        108,181 (f)    445,629
  31
  Notes To Unaudited Pro Forma Combined Condensed Financial Statements
  
       On September 28, 2000, Exodus entered into a merger agreement under which
  all outstanding capital stock of GlobalCenter Holding Co. was exchanged for
  Exodus common stock. Based on the average closing price of Exodus common stock
  during the three trading days ended December 5, 2000, Exodus common stock issued
  in the merger was valued for purposes of the unaudited pro forma combined
  condensed financial statements at approximately $2.777 billion. The merger was
  completed on January 10, 2001. In addition, Exodus assumed all of the options
  outstanding to purchase shares of common stock of GlobalCenter Inc., including
  the Global Crossing Ltd. options that were deemed to be equivalent to
  GlobalCenter Inc. options, and issued new options to purchase Exodus common
  stock for the Global Crossing Ltd. options that were cancelled as a result of
  the merger.
  
       Under purchase accounting, the total purchase price will be allocated to
  GlobalCenter Holding Co.'s tangible and identifiable intangible assets acquired
  and liabilities assumed based on their relative fair values. The total purchase
  price reflected below is based on the average closing price of Exodus common
  stock during the three trading days ended December 5, 2000 (in thousands):
  Fair value of Exodus common stock to be issued......................     $2,777,000
  Fair value of GlobalCenter options to be assumed....................        280,000
  Fair value of Exodus options to be issued...........................         18,000
  Estimated transaction costs.........................................         36,000
                                                                           ----------
  Total purchase price................................................     $3,111,000
                                                                           ==========
  
                                                                                          Life (yrs)
                                                                                          ---------
  Net tangible assets acquired (primarily fixed assets)...............     $  340,000        2-10
  Deferred tax liability..............................................        (67,000)
  Developed technology................................................        255,000           3
  Customer lists......................................................        230,000           5
  Goodwill............................................................      2,353,000           7
                                                                           ----------
  Net assets acquired.................................................     $3,111,000
                                                                           ==========
  Exodus intends to consider the fair value of the network services
  agreements in the final purchase price allocation. Exodus is currently engaged
  in determining the value of the network services agreements and the unaudited
  pro forma combined condensed financial statements currently do not reflect any
  fair value associated with the network services agreements. Exodus believes that
  any purchase price allocable to the network services agreements would not have a
  material effect to the final purchase price allocation.
  
       The final purchase price allocation will be based on the actual purchase
  price and the final valuation of the assets acquired and the liabilities assumed
  in the merger. Consequently, the actual allocation of the purchase price could
  differ from that presented above.
  
  (1)  Unaudited Pro Forma Combined Condensed Balance Sheet
  
       The unaudited pro forma combined condensed balance sheet as of September
  30, 2000 gives effect to the merger as if it had occurred on September 30, 2000.
  
                                         32
  The following adjustments have been reflected in the unaudited pro forma
  combined condensed balance sheet:
  
  (a)  To eliminate GlobalCenter Holding Co.'s historical goodwill and intangible
       assets, deferred tax assets and liabilities and deferred income.
  
  (b)  To record the purchase of GlobalCenter Holding Co. by Exodus through the
       issuance of Exodus common stock and options, and to eliminate GlobalCenter
       Holding Co.'s historical equity balances. In accordance with Emerging
       Issues Task Force Issue No. 95-19, the value of Exodus common stock to be
       issued is based on the average closing price of Exodus common stock during
       the three trading days ended December 5, 2000.
  
  (c)  To record deferred tax liabilities attributable to identifiable intangible
       assets acquired.
  
  (2)  Unaudited Pro Forma Combined Condensed Statements of Operations
  
       The unaudited pro forma combined condensed statements of operations give
  effect to the merger as if it had occurred on January 1, 1999.
  
       The following adjustments have been reflected in the unaudited pro forma
  combined condensed statements of operations:
  
  (d)  To remove amortization of historical goodwill and other intangible assets
       previously recorded by GlobalCenter Holding Co. and Cohesive (Cohesive for
       1999 only) to record amortization of goodwill and intangible assets
       resulting from the allocation of the GlobalCenter Holding Co. and Cohesive
       purchase prices (Cohesive for 1999 only). The pro forma adjustments assume
       goodwill and other intangible assets acquired from GlobalCenter Holding Co.
       will be amortized on a straight-line basis over an estimated life of three
       to seven years and reflect amortization of goodwill and other intangible
       assets acquired from Cohesive over estimated lives of five to eight years
       (Cohesive for 1999 only). The ultimate lives assigned to goodwill and other
       intangible assets acquired from GlobalCenter Holding Co. will be determined
       at the date of acquisition based on the facts and circumstances existing at
       that date.
  
  (e)  To remove tax benefits previously recorded by GlobalCenter Holding Co. and
       Cohesive (Cohesive for 1999 only).
  
  (f)  To reflect the estimated number of shares to be issued as consideration for
       the GlobalCenter Holding Co. merger based on an exchange ratio calculated
       using average closing prices of Global Crossing Ltd. common stock and
       Exodus common stock for the ten trading days ending two trading days before
       November 27, 2000. The exchange ratio depends on a number of different
       factors, including the average closing price of Exodus common stock over
       the ten trading days ending two days before completion of the merger,
       subject to a minimum price of $56.41 and a maximum price of $65.55. To also
       reflect the shares issued as consideration for the Cohesive merger.
  
                                         33
  (g)  To eliminate interest income earned by Exodus on cash paid to Cohesive's
       shareholders at the date of the merger assuming a 5% interest rate which
       approximates Exodus' actual rate of return during 1999.
  
  (h)  To remove Cohesive's historical cumulative dividends and accretion on
       redeemable preferred stock which were settled in cash at the date of the
       Cohesive merger.
  
  (i)  To reclassify GlobalCenter Holding Co.'s depreciation expense to conform
       with Exodus' classification and to adjust GlobalCenter Holding Co.'s
       depreciation expense in accordance with Exodus' depreciation policy.
  
  (j)  The historical consolidated statements of operations of GlobalCenter
       Holding Co. for the nine months ended September 30, 2000 and the year ended
       December 31, 1999 present depreciation and amortization as a separate line
       item. For comparative purposes, GlobalCenter Holding Co.'s depreciation and
       amortization expenses have been reclassified to conform with Exodus'
       classification as follows:
  Nine months ended September 30, 2000
       ------------------------------------
  Cost of revenues.......................................................................   $11,365
       General and administrative.............................................................     4,871
                                                                                                 -------
       Total depreciation and amortization expenses in
           GlobalCenter Holding Co.'s historical financial statements.........................   $16,236
                                                                                                 =======
  
       Year ended December 31, 1999
       ----------------------------
       Cost of revenues.......................................................................   $ 4,308
           General and administrative.........................................................     1,847
                                                                                                 -------
       Total depreciation and amortization expenses in
         GlobalCenter Holding Co.'s historical financial statements.........................     $ 6,155
                                                                                                 =======
  34
  SIGNATURES
  
       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 hereunto duly authorized.
  
       Date: January 23, 2001
  
                                 EXODUS COMMUNICATIONS, INC.
  
                                 By: /s/ Adam W. Wegner
                                     --------------------------------------------
                                     Adam W. Wegner, Senior Vice President,
                                     Legal and Corporate Affairs, General Counsel
                                     and Secretary
  
                                         35
  EXHIBIT INDEX
                                   -------------
  
  Exhibit   Description
  -------   -----------
  23.01     Consent of Arthur Andersen LLP, Independent Public Accountants
  
  99.01     Press release of the Company dated January 10, 2001.
  
                                        36