GLOBAL CROSSING LTD, 424B4, 1998-08-14

GLOBAL CROSSING LTD
424B4, 1998-08-14
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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<PAGE>

FILED PURSUANT TO
RULE NO. 424(b)(4)
REGISTRATION NO. 333-53393

PROSPECTUS
21,000,000 SHARES

[LOGO OF GLOBAL CROSSING LTD. APPEARS HERE]

COMMON STOCK

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Of the 21,000,000 shares of Common Stock, par value $.01 per share, offered
hereby (the "Shares"), 16,800,000 Shares are being offered by the U.S.
Underwriters (as defined herein) in the United States and Canada (the "U.S.
Offering") and 4,200,000 Shares are being offered by the International
Underwriters (as defined herein) in a concurrent international offering
outside the United States and Canada (the "International Offering" and,
collectively with the U.S. Offering, the "Offerings"), subject to transfers
between the U.S. Underwriters and the International Underwriters
(collectively, the "Underwriters"). The Price to Public and Underwriting
Discount per Share will be identical for the U.S. Offering and the
International Offering. See "Underwriting." The closings of the U.S. Offering
and the International Offering are conditioned upon each other.

Of the 21,000,000 Shares offered hereby, 19,060,000 Shares are being sold by
Global Crossing Ltd., a Bermuda company ("GCL" or the "Issuer" and, together
with its subsidiaries, "Global Crossing" or the "Company"), and 1,940,000
Shares are being sold by certain selling shareholders (the "Selling
Shareholders"). See "Principal and Selling Shareholders." The Company will not
receive any proceeds from the sale of the Shares by the Selling Shareholders.

Prior to the Offerings, there has been no public market for the Common Stock
of the Issuer. See "Underwriting" for information relating to the factors
considered in determining the Price to Public. Upon completion of the
Offerings, purchasers of Shares in the Offerings will own approximately 10.40%
(11.78% if the Underwriters' over-allotment options are exercised in full) and
existing shareholders will own 89.60% (88.22% if the over-allotment options
are exercised in full) of the outstanding Common Stock. See "Principal and
Selling Shareholders."

The Issuer's Common Stock has been approved for listing on the Nasdaq Stock
Market's National Market (the "Nasdaq National Market") under the symbol
"GBLX" and will be listed supplementally on the Bermuda Stock Exchange.

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SEE "RISK FACTORS" BEGINNING ON PAGE 15 FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED
HEREBY.

-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY (2) SHAREHOLDERS
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share $19.00 $1.14 $17.86 $17.86
- -----------------------------------------------------------------------
Total(3) $399,000,000 $23,940,000 $340,411,600 $34,648,400
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities under the Securities Act of
1933. See "Underwriting."
(2) Before deducting expenses estimated at $2,900,000 payable by the Company.
(3) The Company has granted to the U.S. Underwriters and the International
Underwriters 30-day options to purchase up to an aggregate of 3,150,000
additional shares of Common Stock at the Price to Public, less
Underwriting Discounts and Commissions, solely to cover over-allotments,
if any. If the Underwriters exercise such options in full, the total
Price to Public, Underwriting Discounts and Commissions and Proceeds to
Company will be $458,850,000, $27,531,000 and $396,670,600, respectively.
See "Underwriting."

-----------
The Shares are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to such Underwriters' right to reject any
order in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of the Shares will be made at the offices
of Smith Barney Inc. at 333 West 34th Street, New York, New York 10001 or
through the facilities of The Depository Trust Company (the "Depository") on
or about August 19, 1998.

-----------

Joint Book-Running Managers

SALOMON SMITH BARNEY MERRILL LYNCH & CO.

-----------
CIBC OPPENHEIMER
DEUTSCHE BANK SECURITIES
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER

The date of this Prospectus is August 13, 1998.
<PAGE>

CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN THE
COMMON STOCK, EFFECTING SYNDICATE COVERING TRANSACTIONS AND THE IMPOSITION OF
A PENALTY BID, DURING AND AFTER THE OFFERINGS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."

THIS PROSPECTUS HAS BEEN FILED WITH THE REGISTRAR OF COMPANIES IN BERMUDA
PURSUANT TO PART III OF THE COMPANIES ACT, 1981 OF BERMUDA AND THE BERMUDA
MONETARY AUTHORITY ("BMA") HAS GIVEN ITS CONSENT TO THE ISSUE AND TRANSFER OF
UP TO 24,150,000 SHARES OF COMMON STOCK. IN ACCEPTING THE PROSPECTUS FOR
FILING, THE REGISTRAR OF COMPANIES ACCEPTS NO RESPONSIBILITY FOR THE FINANCIAL
SOUNDNESS OF ANY PROPOSALS OR FOR THE CORRECTNESS OF ANY STATEMENTS MADE OR
OPINIONS EXPRESSED WITH REGARD TO THEM. APPROVALS OR PERMISSIONS RECEIVED FROM
THE BMA DO NOT CONSTITUTE A GUARANTEE BY THE BMA AS TO THE PERFORMANCE OF THE
COMPANY OR ITS CREDIT WORTHINESS. ACCORDINGLY, IN GIVING SUCH APPROVALS OR
PERMISSIONS, THE BMA SHALL NOT BE LIABLE FOR THE PERFORMANCE OR THE DEFAULT OF
THE COMPANY OR FOR THE CORRECTNESS OF ANY OPINIONS OR STATEMENTS EXPRESSED IN
THIS PROSPECTUS.

THE BERMUDA STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF THIS
DOCUMENT, MAKES NO REPRESENTATIONS AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING
FROM OR IN RELIANCE UPON ANY PART OF THE CONTENTS OF THIS DOCUMENT.

i
<PAGE>

SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES

The Issuer is organized pursuant to the laws of Bermuda. In addition,
certain of the directors and officers of the Issuer reside outside the United
States and a substantial portion of the assets of the Issuer are located
outside the United States. As a result, it may be difficult for investors to
effect service of process within the United States upon such persons or to
realize against them in courts of the United States upon judgments of courts
of the United States predicated upon civil liabilities under the United States
federal securities laws. The Company has been advised by its legal counsel in
Bermuda, Appleby, Spurling & Kempe, that there is doubt as to the enforcement
in Bermuda, in original actions or in actions for enforcement of judgments of
United States courts, of liabilities predicated upon U.S. federal securities
laws, although Bermuda courts will enforce foreign judgments for liquidated
amounts in civil matters subject to certain conditions and exceptions.

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

In this Prospectus, references to "dollars" and "$" are to United States
dollars, and the terms "United States" and "U.S." mean the United States of
America, its states, its territories, its possessions and all areas subject to
its jurisdiction.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements that include, among
others, statements concerning the Company's plans to effect the design,
construction, and operations of, and sales of capacity on, its planned
telecommunications systems, expectations as to funding its future capital
requirements and other statements of expectations, beliefs, future plans and
strategies, anticipated developments and other matters that are not historical
facts. Management cautions the reader that these forward-looking statements
are subject to risks and uncertainties that could cause actual events or
results to differ materially from those expressed or implied by the
statements. The most important factors that could prevent the Company from
achieving its goals include, but are not limited to, failure by the Company
to: (i) complete its systems within currently estimated time frames and
budgets, (ii) sell capacity on its systems, (iii) make a successful transition
from a system development to an operating company and (iv) effectively compete
in the context of a rapidly evolving market characterized by intense price
competition and unpredictable levels of demand for telecommunication capacity.
See "Risk Factors."

ii
<PAGE>

SUMMARY

The following summary should be read in conjunction with, and is qualified in
its entirety by, the more detailed information and financial information
appearing elsewhere in this Prospectus. For a discussion of certain factors to
be considered in connection with an investment in the Shares, see "Risk
Factors." Unless the context otherwise requires, the term "Company" means GCL
and all of its direct and indirect subsidiaries. A glossary of relevant terms
used in the telecommunications business is included at the end of this
Prospectus.

THE COMPANY

Global Crossing is the world's first independent provider of global Internet
and long distance telecommunications facilities and services utilizing a
network of undersea digital fiber optic cable systems and associated
terrestrial backhaul capacity. As such, the Company believes it is the first to
offer "one-stop shopping" for its customers to multiple destinations worldwide.
The Company operates as a "carriers' carrier", providing tiered pricing and
segmented products to licensed providers of international Internet and
telecommunications services. Capacity on the Company's network is offered to
all customers on an open, equal access basis. The first four cable systems
under development by the Company, together with associated terrestrial backhaul
capacity, will form a state-of-the-art interconnected worldwide high capacity
undersea fiber optic network (the "Global Crossing Network"): Atlantic Crossing
("AC-1"), a system connecting the United States and Europe; Pacific Crossing
("PC-1"), a system connecting the United States and Asia; Mid-Atlantic Crossing
("MAC"), a system connecting the eastern United States and the Caribbean; and
Pan American Crossing ("PAC"), a system connecting the western United States,
Central America and the Caribbean. The undersea component of the Global
Crossing Network initially totals 51,300 km. The Company is in the process of
developing several new cable systems and evaluating other business development
opportunities which will complement the Global Crossing Network.

Global Crossing's business is designed to meet the varying needs of the
global carrier market. The Company offers customers the ability to purchase
capacity on demand, thereby (i) eliminating their need to commit the
substantial capital which would otherwise be required to build undersea cable
capacity and (ii) decreasing the risks associated with forecasting their future
capacity requirements. Compared with traditional undersea cable systems, the
Company offers more comprehensive, flexible and low-cost purchasing
alternatives designed to meet current market requirements of international
carriers, including direct international city-to-city connectivity, the ability
to purchase capacity annually and discounts based upon aggregate volume
purchased on the Global Crossing Network.

The Global Crossing Network is being engineered and constructed to allow
multiple upgrades to its initial circuit capacity at a fraction of the original
network cost. The Company is focusing on expanding the products and services it
offers to customers in order to increase revenues and profits. The Company
anticipates that its future revenues, beyond the sale of the initial capacity
of its first four cable systems, will derive from several sources, including
system upgrades, additional undersea cable projects, the development or
purchase of additional terrestrial fiber capacity and the introduction of new
services.

1
<PAGE>

RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY CERTAIN FACTORS RELATING TO
AN INVESTMENT IN THE SHARES. These risk factors include (i) the Company's
limited operating history, (ii) its leverage and substantial future capital
requirements, (iii) risks relating to the completion of the Company's planned
cable systems and the achievement of its sales and marketing objectives and
(iv) the highly competitive nature of the international telecommunications
industry. See "Risk Factors."

MARKET OPPORTUNITY

The Global Crossing Network is being developed to capitalize on certain
trends in the international telecommunications industry:

Impact of Global Deregulation. The continued deregulation of the global
telecommunications industry has significantly increased the number of
competitors, including traditional carriers, wireless operators, ISPs and new
local exchange service providers, due in large part to: (i) privatization
activity globally and (ii) the ability of new entrants to effectively compete.
This change in the global competitive landscape is generating significant
demand for broadband telecommunications capacity as carriers seek to secure
sufficient capacity for their expansion plans.

Shortage of Available Capacity. The Company believes that while there has
been a significant increase in the demand for global telecommunications
capacity, there has not been a corresponding growth in the number of new
international transport facilities. Furthermore, the construction of competing
undersea cable systems will be limited in the near future due to barriers to
entry, including (i) extensive construction lead times, (ii) the limited number
of major undersea cable supply and construction companies, (iii) the limited
number of qualified and experienced undersea cable personnel and (iv)
significant capital requirements.

Increasing Challenges for Consortia Systems. Historically, the planning and
ownership of undersea cable systems was conducted through large consortia
typically led by the monopoly telecommunications providers. Global Crossing
believes that the consortium approach is becoming less effective as (i)
carriers increasingly view capital investments in capacity to be a suboptimal
utilization of resources, (ii) international deregulation leads to direct
competition among consortia members, (iii) new entrant competition makes
capacity requirements increasingly difficult to predict and (iv) rapid
technological change creates difficulties in the ability of carriers to
accurately forecast telecommunications traffic growth.

Acceptance of Privately Sponsored Cable Systems. Carriers have responded
positively to the Company's ability to offer (i) capacity as and when needed
without incurring significant initial capital investments, (ii) a wide range of
purchasing options, (iii) state-of-the-art system quality combined with cost-
effective high quality operations, administration and maintenance support and
(iv) the absence of direct competition with its customers.

2
<PAGE>

BUSINESS STRATEGY

Global Crossing's mission is to create the world's first independent global
fiber optic network designed to offer the highest quality city-to-city
communications connectivity among approximately 50 of the largest metropolitan
markets worldwide. The principal elements of the Company's business strategy
include:

Create a Worldwide Network. Upon completion, the currently announced undersea
segments of the Global Crossing Network will directly connect Asia, North
America, Europe, Central America and the Caribbean through the major
transoceanic routes utilizing state-of-the-art technology. To increase the
attractiveness of the Global Crossing Network, the Company is making selective
wholesale acquisitions of terrestrial fiber capacity, thereby providing
customers low cost global city-to-city connectivity. The Company also intends
to actively pursue additional opportunities for the expansion of the Global
Crossing Network, including complementary businesses and facilities.

Maintain Position as a Leading Wholesale Service Provider. Global Crossing is
the world's first independent provider of global Internet and long distance
telecommunications facilities and services utilizing a network of undersea
digital fiber optic cable systems and associated terrestrial backhaul capacity.
The Company's products are segmented to meet the varying needs of the global
carrier market, with shore-to-shore capacity, city-to-city capacity and network
purchasing options. Global Crossing also offers a combination of volume-based
purchasing flexibility.

Utilize State-of-the-Art Technology. The Global Crossing Network is being
engineered and constructed using the latest undersea cable technology which the
Company believes will (i) provide a cost advantage over existing alternatives,
(ii) make it more reliable than competing systems, (iii) allow the Company to
offer substantially more capacity than existing cable systems and (iv) enable
the capacity of each of the Company's cable systems to be upgraded rapidly at a
fraction of the initial system cost.

Maintain Position as Low-Cost Provider. Global Crossing believes that its
low-cost position results from a combination of (i) low sales and marketing and
general and administrative costs, (ii) ownership of state-of-the-art
facilities, resulting in lower operating and maintenance costs, and (iii)
leveraging the Company's strong position in the undersea fiber optic facilities
market to obtain low-cost terrestrial connectivity between cable landing
stations and major telecommunications sites.

Provide "One-Stop" Sales and Service. Global Crossing plans to offer one-stop
sales and service to customers worldwide. The Company's 18 marketing
professionals located in its headquarters in Bermuda and in major cities
throughout the world facilitate the sales of its telecommunications capacity
and increase market awareness and name recognition. In addition, Global
Crossing is developing a centralized operations, administration and maintenance
support system to serve the entire Global Crossing Network. Through such
integrated customer support, the Company will enable customers to have a single
point of contact regarding capacity sales and service on the Global Crossing
Network.

Leverage Extensive Management Experience. Global Crossing has assembled and
will continue to build a strong management team comprised of executives with
extensive operating experience in the telecommunications industry and the
undersea cable sector. Prior to joining the Company, Jack Scanlon, the
Company's Chief Executive Officer with over 30 years experience in the
telecommunications industry, including 24 years with AT&T and Bell
Laboratories, was President and General Manager of the Cellular Networks and
Space Sector of Motorola, Inc. In addition, William Carter, the Company's
senior executive in charge of system development with over 30 years experience
at AT&T, was formerly the President and Chief Executive Officer of AT&T
Submarine Systems, Inc. ("SSI"), overseeing the research and development,
engineering, implementation and integration of AT&T's international cable and
satellite facilities. Dan J. Cohrs, the Company's Chief Financial Officer, was
formerly Vice President and Chief Planning and Development Officer at GTE
Corporation ("GTE"), where he was responsible for corporate development
activities, including mergers and acquisitions and strategic transactions, as
well as strategic planning and competitive analysis. See "Management."

3
<PAGE>

THE GLOBAL CROSSING NETWORK

As part of Global Crossing's mission to create an integrated global, high
capacity undersea fiber optic cable network, the initial Global Crossing
Network is being engineered and constructed to connect the two most heavily
trafficked international corridors in the world via AC-1 (United States to
Europe) and PC-1 (United States to Asia). Global Crossing plans to interconnect
these systems with two north-south systems (MAC and PAC), directly connecting
Bermuda, the Caribbean, Central America and, through unaffiliated cable
systems, South America. Of the four undersea fiber optic cable systems
currently being constructed by Global Crossing, AC-1, MAC and PAC are wholly-
owned projects, while PC-1 is being constructed through a joint venture with
one or more partners, including Marubeni Corp. of Japan ("Marubeni"). Global
Crossing will initially have approximately a 58% interest in PC-1 and, in
conjunction with Marubeni, will manage its development, sales and operation.

ATLANTIC CROSSING

The Company commenced operations in March 1997, when it contracted for the
construction of AC-1, a 14,000 km digital fiber optic cable system that will
link the United States, the United Kingdom, The Netherlands and Germany. AC-1
commenced service on its United States-United Kingdom segment on May 26, 1998
and the full system, encompassing a self-healing ring, is scheduled for
completion by February 1999.

AC-1 is equipped with state-of-the-art DWDM and the full ring will initially
offer 40 Gbps of service capacity, significantly increasing the existing fiber
optic cable capacity on this transatlantic route. Capacity on AC-1 is
upgradeable to a minimum of 80 Gbps using DWDM technology. The aggregate costs
of AC-1, which are estimated to be approximately $750 million (excluding
potential future upgrades), have been fully financed prior to the Offerings.

The Company has successfully marketed capacity on AC-1 to licensed
telecommunications providers, including PTTs, Internet service providers and
established and emerging telecommunications companies. As of June 30, 1998, the
Company had entered into capacity purchase agreements and other binding
commitments (collectively, "CPAs") with customers providing for payments to the
Company of $556 million. The Company's AC-1 customers now total more than 22
international telecommunications carriers, including Deutsche Telekom, GTE,
Qwest, Teleglobe, Swisscom, PTT Telecom BV, Telia AB and a number of emerging
telecommunications companies. The timing of payments by purchasers under CPAs
generally depends on when service commences on the segment or segments of AC-1
on which capacity is acquired. All of the foregoing payment amounts assume the
completion of the related segment prior to specified dates falling after the
scheduled ready-for-service ("RFS") date for that segment.

Based upon its current expectations regarding sales of capacity on AC-1, the
Company believes that it will develop and eventually construct Atlantic
Crossing-2 ("AC-2"), an additional four fiber pair cable connecting the United
States to Europe. When combined with AC-1, AC-2 would double the capacity that
Global Crossing would be able to offer customers on the transatlantic route.

PACIFIC CROSSING

PC-1, the Company's first undersea fiber optic cable in the Pacific region,
is being developed as a 21,000 km four fiber pair self-healing ring that, upon
completion, will connect California, Washington and two landing sites in Japan,
providing connectivity to other points in Asia through interconnection with
third party cable systems. PC-1 is designed to operate initially at 80 Gbps of
service capacity and to be upgradeable to a minimum of 160 Gbps, using DWDM
technology.

In April 1998, the Company executed a contract with TSSL for the construction
of PC-1 (the "PC-1 Contract"), which provides for a system completion date of
Summer 2000 at an aggregate cost of approximately

4
<PAGE>

$1.2 billion (excluding potential future upgrades). Equity investments in PC-1
by Global Crossing and its partners are currently estimated at $400 million (of
which $231 million will be provided by the Company), with the remaining $800
million financed through incurrence of non-recourse indebtedness at the PC-1
level. The credit agreement for the financing of such indebtedness was executed
on July 30, 1998. On July 6, 1998, the Company executed a memorandum of
understanding with DDI Corporation, the second largest telephone company in
Japan, to purchase capacity on PC-1 which, if successfully converted to a CPA,
would represent its first sale to an Asian customer of capacity on this system.

MID-ATLANTIC CROSSING

MAC is being developed as a 9,300 km two fiber pair self-healing ring that,
upon completion, will connect New York, Bermuda, the Caribbean and Florida.
Global Crossing intends that MAC will be connected to AC-1 via its cable
station in Brookhaven, New York, providing connectivity between Europe, the
eastern United States, Bermuda, and the Caribbean and, through interconnection
with third party cable systems, South America. MAC is being designed to operate
initially at 20 Gbps of service capacity and to be upgradeable to a minimum of
40 Gbps using DWDM technology.

In June 1998, the Company executed a contract with Alcatel Submarine Networks
("Alcatel") for the construction of MAC, which provides for a system completion
date of December 1999 at an aggregate cost of approximately $350 million
(excluding potential future upgrades and amounts capitalized with respect to
the PCG Warrants (as defined herein)), of which approximately $110 million will
consist of equity contributions by the Company and $240 million is to be
financed through non-recourse indebtedness at the MAC level. The contractual
commitment for the financing of such indebtedness was obtained on June 26,
1998.

PAN AMERICAN CROSSING

PAC is being developed as a 7,000 km two fiber pair cable that, upon
completion, will connect California, Mexico, Panama and the Caribbean. PAC is
being designed to interconnect with PC-1 and with MAC. It is anticipated that
PAC will transverse Panama via an existing terrestrial right-of-way. PAC is
being designed to operate initially at 20 Gbps of service capacity and to be
upgradeable to a minimum of 40 Gbps using DWDM technology.

In July 1998, the Company executed a contract with TSSL for the construction
of this system, which provides for a completion date of February 2000 at a cost
of approximately $475 million (excluding potential future upgrades and amounts
capitalized with respect to the PCG Warrants). Approximately $165 million will
be financed through equity contributions from the Company and $310 million is
to be financed through non-recourse indebtedness at the PAC level. The
contractual commitment for the financing of such indebtedness was obtained on
July 22, 1998.

TERRESTRIAL BACKHAUL SERVICES

In addition to the undersea segments of the Global Crossing Network, the
Company has made and expects to continue to make acquisitions of terrestrial
fiber capacity which complement its core undersea cable business and which
address customer demands for global city-to-city connectivity. The Company has
already entered into contractual arrangements to provide terrestrial backhaul
service between its landing stations in the United States and the United
Kingdom and New York City and London, respectively, as well as other
arrangements to provide backhaul service in Germany and The Netherlands. In
addition, the Company recently entered into an agreement with Qwest
Communications International Inc. ("Qwest") whereby Global Crossing will
receive access to over 25 U.S. metropolitan communications markets on Qwest's
terrestrial network. Through Global Access Limited ("Global Access"), a
Japanese telecommunications carrier owned by Marubeni, the Company will offer
backhaul services to PC-1 customers from the Company's Japanese landing
stations directly to Tokyo at prices substantially lower than existing
alternatives. The Company is also currently negotiating with Marubeni to
acquire a minority investment in Global Access, which is constructing a
domestic terrestrial fiber optic cable network connecting the PC-1 cable
station with Tokyo, Nagoya and Osaka.

5
<PAGE>

ADDITIONAL NETWORK EXPANSION OPPORTUNITIES

The Company is in the process of developing several new cable systems and
evaluating other business development opportunities which will complement the
Global Crossing Network. There can be no assurance that the Company will
ultimately elect to proceed with such opportunities or, if it elects to do so,
that such opportunities will help the Company achieve and sustain operating
profitability.

ORGANIZATION OF THE COMPANY

<TABLE>
<CAPTION>
Global Crossing Ltd.

Global Crossing Holdings Ltd.

<S> <C> <C> <C> <C>
Global Telesystems Pacific Crossing Mid-Atlantic Crossing Pan America Crossing Development
Holdings Ltd. Holdings Ltd. Holdings Ltd. Holdings Ltd. and Marketing
Activities

AC-1 PC-1 MAC PAC
(Wholly-Owned) (Joint Venture*) (Wholly Owned) (Wholly Owned)
</TABLE>

* Approximately 58% interest. All other subsidiaries of the Issuer are wholly-
owned.

The Company's executive offices are located at Wessex House, 45 Reid Street,
Hamilton, Bermuda and its telephone number is (441) 296-8600. The Company's
home page on the Internet is http://www.globalcrossing.bm.

6
<PAGE>

FINANCING PLAN

Of the $750 million in total estimated costs for AC-1 (excluding potential
future upgrades), approximately $660 million has been incurred as of June 30,
1998. All future costs with respect to AC-1 are fully financed with the
remaining availability under the existing $482 million credit facility (the
"AC-1 Credit Facility") of Atlantic Crossing Ltd. ("ACL").

Global Crossing estimates that the total cost of developing and deploying its
other fiber optic cable systems currently under active development is
approximately $2,025 million (excluding potential future upgrades and the
amounts capitalized with respect to the PCG Warrants), which is comprised of
$1,200 million for PC-1, $350 million for MAC and $475 million for PAC. Equity
investments in PC-1 by Global Crossing and its partners will be $400 million
(of which $231 million will be provided by the Company), with the remaining
$800 million of estimated costs to be financed initially through the incurrence
of non-recourse indebtedness at the PC-1 level. With respect to MAC and PAC,
based upon executed debt financing commitments, the Company currently
anticipates making investments of approximately $110 million and $165 million,
respectively, with the remaining $240 million and $310 million, respectively,
of estimated costs expected to be financed through the incurrence of non-
recourse indebtedness at the system level. With respect to AC-2 and other
network expansion opportunities currently under evaluation by the Company, it
is anticipated that additional financing will be required. Global Crossing has
historically been able to secure non-recourse indebtedness for its systems for
at least 65% of system costs and intends to finance its future expansion
opportunities in a similar fashion. The actual amounts of the Company's future
capital requirements will depend on certain factors including the cost of
developing its cable systems, the speed of developing its systems and the
pricing of the Company's services. There can be no assurance that financing for
such systems will be available to the Company or, if available, that such
financing can be obtained on a timely basis and on acceptable terms. See "Risk
Factors--Substantial Future Capital Requirements" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

On May 18, 1998, Global Crossing Holdings Ltd. ("GCH"), the direct wholly-
owned subsidiary of GCL, consummated an $800 million private offering (the
"Note Offering") of 9 5/8% Senior Notes Due 2008 (the "GCH Senior Notes"). GCH
utilized approximately $295 million of the net proceeds of the Note Offering to
refinance certain obligations incurred as part of the initial financing of AC-
1. The balance will be utilized to make equity investments in certain of the
Company's systems and for general corporate purposes.

7
<PAGE>

THE OFFERINGS

Common Stock offered by the Company:

U.S. Offering ............
15,248,000 shares

International Offering.... 3,812,000 shares

Total (1)................. 19,060,000 shares

Common Stock offered by the Selling Shareholders:

U.S. Offering ............
1,552,000 shares

International Offering.... 388,000 shares

Total .................... 1,940,000 shares

Common Stock to be
outstanding after the 201,892,900 shares
Offerings (1)(2) ..........

Net Proceeds to the
Company..................... Approximately $337.5 million (approximately
$393.8 million if the Underwriters' over-
allotment options are exercised in full).

Nasdaq National Market GBLX
symbol......................

Use of Proceeds............. The Company intends to use the net proceeds of
the Offerings as follows: (i) approximately $220
million to make investments in the Global
Crossing Network, (ii) up to $50 million to make
minority investments in telecommunications
companies and Internet service providers, (iii)
up to $25 million to fund the Company's proposed
investment in Global Access Limited and (iv) the
balance for general corporate purposes. The
Company will receive no proceeds from the sale of
Shares by the Selling Shareholders. See "Use of
Proceeds."
- --------
(1) Does not include up to an aggregate of 3,150,000 shares of Common Stock
subject to over-allotment options granted to the U.S. Underwriters and
International Underwriters (see "Underwriting").

(2) After giving effect to the Offerings and the transactions associated
therewith, including the exchange by substantially all of the shareholders
of Global Crossing Ltd., LDC, a Cayman Island limited duration company
("Old GCL"), of equity interests in Old GCL for Common Stock at a rate of
1.5 shares of Common Stock per share of common stock of Old GCL (the "Old
GCL Exchange"), the PCG Warrant Conversion (as defined herein), the
Advisory Services Agreement Termination (as defined herein) and the TDC
Exchange (as defined herein). See "Certain Transactions" and "Description
of Capital Stock." Based on shares outstanding as of August 10, 1998. Does
not include: (i) 16,607,865 shares of Common Stock reserved for issuance
under the Stock Incentive Plan (see "Management--Stock Incentive Plan");
(ii) 2,554,183 shares of Common Stock reserved for issuance under the GCL
Warrants (see "Description of Capital Stock--Old GCL Exchange"); and
(iii) 6,250,006 shares of Common Stock reserved for issuance under the New
PCG Warrants (see "Certain Transactions"). Unless otherwise disclosed
herein, share amounts indicated have been adjusted to give effect to the
Old GCL Exchange.

8
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The summary data presented below under the captions "Statement of Operations
Data" and "Balance Sheet Data" as of December 31, 1997 and for the period from
March 19, 1997 (date of inception) through December 31, 1997 are derived from
the Consolidated Financial Statements of the Company included herein, which
financial statements are prepared in accordance with United States Generally
Accepted Accounting Principles ("U.S. GAAP") and have been audited by Arthur
Andersen & Co., independent public accountants, as indicated in their report
thereon included elsewhere in this Prospectus. The financial data as of and for
the three and six months ended June 30, 1998 are derived from the Company's
unaudited interim financial statements. The unaudited interim financial
statements include all adjustments, consisting of normal recurring adjustments,
that management considers necessary for fair presentation of the financial
position as of June 30, 1998 and results of operations for the interim periods
presented. Results of operations for the interim periods are not necessarily
indicative of the results of operations for a full year. The operating data
presented below are derived from the Company's records. The financial data
presented herein and elsewhere in this Prospectus is not necessarily indicative
of the financial position or results of operations of the Company in the
future. The information set forth below should be read in conjunction with the
discussion under "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Business" and the Consolidated Financial
Statements and the notes thereto appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FOR THE PERIOD
MARCH 19, 1997
THREE MONTHS (DATE OF INCEPTION)
ENDED SIX MONTHS ENDED TO DECEMBER 31,
JUNE 30, 1998 JUNE 30, 1998 1997
-------------- ---------------- -------------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Sales and Operating
Revenues................. $ 101,255,867 $ 101,255,867 $ --
-------------- -------------- ------------
Expenses:
Cost of Capacity Sold.... 41,200,229 41,200,229 --
Operating,
Administrative and
Other (1)............... 183,705,088 187,748,840 3,101,708
-------------- -------------- ------------
224,905,317 228,949,069 3,101,708
-------------- -------------- ------------
Operating Loss............ (123,649,450) (127,693,202) (3,101,708)
Other Income (Expense)
Interest Income.......... 4,327,602 4,673,436 2,941,352
Interest Expense......... (7,403,037) (7,426,271) --
Provision for Income Taxes
(2)...................... (9,000,000) (9,000,000) --
Extraordinary Loss on
Retirement of GTH Senior
Notes (3)................ (19,709,471) (19,709,471) --
-------------- -------------- ------------
Net Loss.................. (155,434,356) (159,155,508) (160,356)
GTH Preference Share Non-
Cash Dividends (4)....... (3,898,203) (8,306,433) (12,689,923)
Redemption of GTH
Preference Shares (5).... (34,140,067) (34,140,067) --
-------------- -------------- ------------
Net Loss Applicable to
Common Shareholders...... $ (193,472,626) $ (201,602,008) $(12,850,279)
============== ============== ============
Basic and Diluted Net Loss
per Common Share before $ (1.05) $ (1.10) $ (0.08)
Extraordinary Item....... ============== ============== ============
Net Loss per Common Share $ (0.12) $ (0.12) $ --
on Extraordinary Item.... ============== ============== ============
Basic and Diluted Net Loss $ (1.17) $ (1.22) $ (0.08)
per Common Share......... ============== ============== ============
Shares used in Computing
Basic and Diluted Net 166,194,035 166,062,697 165,441,150
Loss per Common Share.... ============== ============== ============
<CAPTION>
AS OF
AS OF JUNE 30, 1998 DECEMBER 31, 1997
-------------------------------- -------------------
AS
HISTORICAL ADJUSTED(6) HISTORICAL
-------------- ---------------- -------------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and Restricted Cash
(7)...................... $ 541,610,392 $ 879,121,992 $ 26,727,880
Accounts Receivable, Net
of Allowance for Doubtful
Accounts................. 41,854,617 41,854,617 --
Construction in Progress
and Capacity Available
for Sale (8)............. 779,646,579 804,861,302 518,518,509
Investment in Pacific
Crossing Ltd. (9)........ 126,456,345 163,132,306 --
Deferred Finance and
Organizational Costs, Net
of Accumulated
Amortization............. 44,338,405 44,338,405 25,934,021
Other Assets.............. 30,326,686 30,326,686 1,015,958
-------------- -------------- ------------
Total Assets.............. $1,564,233,024 $1,963,635,308 $572,196,368
============== ============== ============
Long Term Debt and Other
Obligations.............. $1,185,431,817 $1,185,431,817 $315,334,000
GTH Preference Shares..... -- -- 90,643,919
Shareholders' Equity:
Common Stock............ 110 2,018,929 110
Treasury Stock.......... -- (209,414,620) --
Other Shareholders'
Equity................. 397,095,005 1,003,893,090 74,280,922
Accumulated Deficit..... (159,315,864) (159,315,864) (160,356)
-------------- -------------- ------------
Total Shareholders'
Equity................... 237,779,251 637,181,535 74,120,676
-------------- -------------- ------------
Total Capitalization...... $1,423,211,068 $1,822,613,352 $480,098,595
============== ============== ============
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
AS OF
JUNE 30, 1998
--------------
<S> <C>
OPERATING DATA:
Executed CPAs............................................... $556 million
<CAPTION>
ESTIMATED(10)
--------------
<S> <C>
Route Kilometers............................................ 51,300
Fiber Kilometers............................................ 345,200
Estimated System Costs (excluding potential future upgrades
and amounts capitalized with respect to the PCG Warrants)
AC-1 ..................................................... $750 million
Other Systems Under Development........................... $2,025 million
Landing Stations............................................ 14
</TABLE>
- -------
(1) Includes a charge for the Advisory Services Agreement Termination on June
30, 1998. See "Certain Transactions." The Company acquired the rights of
those entitled to fees payable under the Advisory Services Agreements in
consideration for the issuance of Common Stock in the Company having an
aggregate value of $135 million and the cancellation of approximately $2.7
million owed to the Company under a related advance agreement. As a result
of this transaction, the Company has recorded a non-recurring charge in
the approximate amount of $137.7 million. Also, during each of the three
and six months ended June 30, 1998, the Company recognized $21.1 million,
due in part to certain options which vested immediately upon grant, from a
total of $67.1 million of stock-related expense relating to stock options
issued during such period. The remaining $46.0 million will be recognized
as follows: $4.8 million in each of the third and fourth quarters of 1998,
$19.2 million in 1999, $13.5 million in 2000 and $3.7 million in 2001.
(2) Reflects income taxes on profits earned during the three months ended June
30, 1998 attributable to both United States and other foreign
jurisdictions. A significant portion of the Company's operating losses
have been incurred in non-taxable jurisdictions and therefore these
operating losses cannot be applied to offset future taxable earnings of
the Company.
(3) On May 18, 1998, a portion of the proceeds from the issuance of the GCH
Senior Notes was used to repurchase the 12% Senior Notes Due 2004 ("GTH
Senior Notes") of Global Telesystems Holdings Ltd., an indirect subsidiary
of the Company ("GTH"). The Company recognized an extraordinary loss of
$19.7 million on this repurchase, comprising a repurchase premium of
approximately $9.8 million and a write-off of approximately $9.9 million
of unamortized deferred financing costs.
(4) The holders of the 14% senior increasing rate redeemable exchangeable
preference shares of GTH (the "GTH Preference Shares") were entitled to
receive cumulative, compounding dividends at an initial annual rate of
14%. Preference share dividends include cumulative 14% dividends and
amortization of the discount and issuance costs. Effective June 17, 1998,
the Company used proceeds from the GCH Senior Notes to redeem all
outstanding GTH Preference Shares. All dividends prior to the redemption
had been paid through the issuance of additional preference shares and
charged against additional paid-in capital.
(5) As a result of the redemption of the GTH Preference Shares, the Company
incurred a one time $34.1 million charge against Additional Paid-in
Capital. The charge was comprised of: (i) a $15.9 million charge for the
redemption premium and (ii) a write-off of $18.2 million of unamortized
discount and unamortized deferred financing costs.
(6) See the pro forma financial information and the notes thereto on pages 11-
14 for a full description of the adjustments.
(7) The majority of Cash and Restricted Cash is comprised of proceeds from the
issuance of the GCH Senior Notes and funds which have been reserved for
the purpose of funding future interest payable on the GCH Senior Notes.
(8) Construction in Progress and Capacity Available for Sale includes direct
and indirect expenditures for construction of AC-1 and other systems and
is stated at cost. Includes costs incurred under (i) the construction
contracts; (ii) advisory, consulting and legal fees; (iii) interest
(including amortization of debt issuance costs incurred during the
construction phase); and (iv) other costs necessary for developing AC-1
and other systems. This amount also includes backhaul capacity available
for sale. Additionally, the Company granted the PCG Warrants to Pacific
Capital Group, Inc. ("PCG"), a shareholder, for the PC-1, MAC and PAC
systems and related rights. The $213.3 million estimated value of the
Common Stock to be issued under the PCG Warrants has been allocated to
Construction in Progress in the amount of $86.8 million and as Investment
in Pacific Crossing Ltd. in the amount of $126.5 million. Such estimated
values will be adjusted to reflect the Price per Share to Public in the
Offerings in the Company's consolidated financial statements for the three
months ending September 30, 1998. Such adjustment is not expected to be
material.
(9) Includes $126.5 million as of June 30, 1998, as described above,
representing the estimated value of the PCG Warrants applicable to Pacific
Crossing Ltd.
(10) Assumes full completion of AC-1, PC-1, MAC and PAC based upon current
Company estimates, including anticipated financing costs. See "Risk
Factors--Risks Related to Completing the Company's Cable Systems" and
"Risk of Error in Forward-Looking Statements."

10
<PAGE>

PRO FORMA FINANCIAL INFORMATION

The impact of the Offerings, the PCG Warrant Conversion, the Advisory
Services Agreement Termination, the TDC Exchange and the Old GCL Exchange have
all been reflected in the pro forma balance sheet as of June 30, 1998. The pro
forma statement of operations data give effect to recurring items only.
Accordingly, the one time charge resulting from the redemption of the GTH
Preference Shares, the one time extraordinary loss resulting from the
repurchase of the GTH Senior Notes and any impact from the Advisory Services
Agreement (including the Termination) have not been reflected in the pro forma
statement of operations data. These transactions are described in the footnotes
to the pro forma data. The "As Adjusted For the Six Months Ended June 30, 1998"
column gives effect to the pro forma adjustments for the period from January 1,
1998 to June 30, 1998 as if all of the foregoing transactions had occurred on
March 19, 1997. The "As Adjusted For the Period March 19, 1997 (Date of
Inception) to December 31, 1997" column gives effect to the pro forma
adjustments for the period from March 19, 1997 (Date of Inception) to December
31, 1997 as if such transactions had occurred on March 19, 1997. The "As
Adjusted For the Period March 19, 1997 (Date of Inception) to June 30, 1998"
column gives effect to the pro forma adjustments for the period from March 19,
1997 (Date of Inception) to June 30, 1998 as if such transactions had occurred
on March 19, 1997.

PRO FORMA BALANCE SHEET DATA:
<TABLE>
<CAPTION>
ADJUSTED
ADVISORY AS OF
PCG SERVICES OLD JUNE 30, 1998
HISTORICAL AS OF WARRANT AGREEMENT TDC GCL PRIOR TO
JUNE 30, 1998 CONVERSION(1) TERMINATION(2) EXCHANGE(3) EXCHANGE(4) OFFERINGS OFFERINGS(5)
---------------- ------------- -------------- ------------ ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and restricted
cash.............. $ 541,610,392 $ -- $ -- $ -- $ -- $ 541,610,392 $337,511,600
Other current
assets............ 64,281,303 -- -- -- -- 64,281,303 --
Long term accounts
receivable........ 7,900,000 -- -- -- -- 7,900,000 --
Backhaul capacity
available for
sale.............. 54,738,560 -- -- -- -- 54,738,560 --
Undersea capacity
available for
sale.............. 206,271,310 -- -- -- -- 206,271,310 --
Construction in
progress.......... 518,636,709 25,214,723 -- -- -- 543,851,432 --
Investment in
Pacific Crossing
Ltd............... 126,456,345 36,675,961 -- -- -- 163,132,306 --
Deferred finance
and organizational
costs, net of
accumulated
amortization...... 44,338,405 -- -- -- -- 44,338,405 --
-------------- ----------- ------- ------------ ---------- -------------- ------------
Total Assets....... $1,564,233,024 $61,890,684 $ -- $ -- $ -- $1,626,123,708 $337,511,600
============== =========== ======= ============ ========== ============== ============
Deferred revenue... $ 42,747,611 $ -- $ -- $ -- $ -- $ 42,747,611 $ --
Other current
liabilities....... 98,274,345 -- -- -- -- 98,274,345 --
Long term debt..... 367,048,000 -- -- -- -- 367,048,000 --
Senior notes....... 796,277,203 -- -- -- -- 796,277,203 --
Long term deferred
revenue........... 6,916,667 -- -- -- -- 6,916,667 --
Obligations under
inland service
agreements and
capital leases.... 15,189,947 -- -- -- -- 15,189,947 --
-------------- ----------- ------- ------------ ---------- -------------- ------------
Total Liabilities.. 1,326,453,773 -- -- -- -- 1,326,453,773 --
-------------- ----------- ------- ------------ ---------- -------------- ------------
Commitments(6).....
Shareholders'
Equity:...........
Common Stock(7). 110 122,032 71,053 108,669 1,526,465 1,828,329 190,600
Treasury Stock.. -- -- -- (209,414,620) -- (209,414,620)
Other
shareholders'
equity......... 397,095,005 61,768,652 (71,053) 209,305,951 (1,526,465) 666,572,090 337,321,000
Accumulated
Deficit........ (159,315,864) -- -- -- -- (159,315,864) --
-------------- ----------- ------- ------------ ---------- -------------- ------------
Total Shareholders'
Equity............ 237,779,251 61,890,684 -- -- -- 299,669,935 337,511,600
-------------- ----------- ------- ------------ ---------- -------------- ------------
Total Liabilities
and Shareholders'
Equity............ $1,564,233,024 $61,890,684 $ -- $ -- $ -- $1,626,123,708 $337,511,600
============== =========== ======= ============ ========== ============== ============
<CAPTION>
ADJUSTED AS OF
JUNE 30, 1998
---------------
<S> <C>
Cash and restricted
cash.............. $ 879,121,992
Other current
assets............ 64,281,303
Long term accounts
receivable........ 7,900,000
Backhaul capacity
available for
sale.............. 54,738,560
Undersea capacity
available for
sale.............. 206,271,310
Construction in
progress.......... 543,851,432
Investment in
Pacific Crossing
Ltd............... 163,132,306
Deferred finance
and organizational
costs, net of
accumulated
amortization...... 44,338,405
---------------
Total Assets....... $1,963,635,308
===============
Deferred revenue... $ 42,747,611
Other current
liabilities....... 98,274,345
Long term debt..... 367,048,000
Senior notes....... 796,277,203
Long term deferred
revenue........... 6,916,667
Obligations under
inland service
agreements and
capital leases.... 15,189,947
---------------
Total Liabilities.. 1,326,453,773
---------------
Commitments(6).....
Shareholders'
Equity:...........
Common Stock(7). 2,018,929
Treasury Stock.. (209,414,620)
Other
shareholders'
equity......... 1,003,893,090
Accumulated
Deficit........ (159,315,864)
---------------
Total Shareholders'
Equity............ 637,181,535
---------------
Total Liabilities
and Shareholders'
Equity............ $1,963,635,308
===============
</TABLE>

11
<PAGE>

PRO FORMA STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
HISTORICAL AS ADJUSTED HISTORICAL AS ADJUSTED
FOR THE FOR THE FOR THE PERIOD FOR THE PERIOD HISTORICAL AS ADJUSTED
SIX MONTHS SIX MONTHS MARCH 19, 1997 MARCH 19, 1997 FOR THE PERIOD FOR THE PERIOD
ENDED ENDED (DATE OF INCEPTION) (DATE OF INCEPTION) MARCH 19, 1997 MARCH 19, 1997
JUNE 30, JUNE 30, TO DECEMBER 31, TO DECEMBER 31, (DATE OF INCEPTION) (DATE OF INCEPTION)
1998 1998(8) 1997 1997(8) TO JUNE 30, 1998 TO JUNE 30, 1998(8)
------------- ------------ ------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Sales and Operat-
ing Revenues.... $ 101,255,867 $101,255,867 $ -- $ -- $ 101,255,867 $101,255,867
Expenses(2)(11).. 228,949,069 89,279,729 3,101,708 3,101,708 232,050,777 92,381,437
------------- ------------ ------------ ------------ ------------- ------------
Operating Loss... (127,693,202) 11,976,138 (3,101,708) (3,101,708) (130,794,910) 8,874,430
Other Income (Ex-
pense):
Interest In-
come(9)........ 4,673,436 4,673,436 2,941,352 2,941,352 7,614,788 7,614,788
Interest Ex-
pense(10)...... (7,426,271) (22,692,831) -- (42,030,654) (7,426,271) (64,723,485)
Provision for In-
come Taxes...... (9,000,000) (9,000,000) -- -- (9,000,000) (9,000,000)
------------- ------------ ------------ ------------ ------------- ------------
Net Loss before
Non-Recurring
Charges......... (139,446,037) (15,043,257) (160,356) (42,191,010) (139,606,393) (57,234,267)
Preference Share
Dividends....... (8,306,433) -- (12,689,923) -- (20,996,356) --
------------- ------------ ------------ ------------ ------------- ------------
Net Loss Applica-
ble to Common
Shareholders be-
fore Non-Recur-
ring Charges.... $(147,752,470) $(15,043,257) $(12,850,279) $(42,191,010) $(160,602,749) $(57,234,267)
============= ============ ============ ============ ============= ============
Basic and Diluted
Net Loss per
Common Share
before Non-
Recurring
Charges......... $ (0.89) $ (0.07) $ (0.08) $ (0.21) $ (0.97) $ (0.28)
============= ============ ============ ============ ============= ============
Shares Used in
Computing Basic
and Diluted net
loss per common
share........... 166,062,697 201,782,265 165,441,150 201,317,900 165,642,489 201,502,126
============= ============ ============ ============ ============= ============
</TABLE>

(1) Adjustment for the PCG Warrant Conversion which is to occur immediately
preceding the Offerings. Effective January 21, 1998, Old GCL entered into
a warrant agreement with PCG in connection with Old GCL's acquisition from
PCG of the PC-1, MAC and PAC systems (then under development) and related
rights. The warrants issued under the warrant agreement (the "PCG
Warrants") provided PCG with the right to purchase a total of 18,453,185
Class B shares of Old GCL conditioned on an initial public offering of
shares of Old GCL (or any successor of Old GCL) and the achievement of
certain financial performance levels from cable systems other than AC-1.
In June 1998, the Board of Directors of Old GCL amended the terms of the
PCG Warrants so that the PCG Warrants will become exercisable upon the
successful completion of an initial public offering and eliminated their
financial performance conditions. The Board of Directors of Old GCL has
determined that upon completion of the Offerings, the conditions to the
exercise of the PCG Warrants will have been met. In connection with the
Offerings, Old GCL has amended the terms of these warrants to convert them
into Class B shares and new warrants (the "New PCG Warrants") based upon
the price per share of Common Stock in the Offerings (the "PCG Warrant
Conversion"). The Company has agreed to assume the obligations of Old GCL
under the New PCG Warrants. See "Certain Transactions--Transactions with
Pacific Capital Group ("PCG") and its Affiliates--PCG Warrants."

The total estimated value of the PCG Warrant Conversion is approximately
$275.3 million based upon the $19.00 Price per Share to Public in the
Offerings, which is comprised of approximately $231.9 million relating to
the conversion of the PCG Warrants into 12,203,170 Class B shares of Old GCL
and approximately $43.4 million relating to the value of the New PCG
Warrants. Since the PCG Warrants were assumed to be converted to Class B
shares of Old GCL on June 30, 1998, the estimated value of the PCG Warrants
as of June 30, 1998, $213.3 million, was recorded in the Company's
consolidated financial statements at that date. The adjustment for the PCG
Warrant conversion, based upon the $19.00 Price per Share to Public in the
Offerings, results in an increase of $18.6 million over the $213.3 million
already recorded in the Company's consolidated financial statements. The New
PCG Warrants granted to purchase the remaining Class B shares of Old GCL are
also reflected in this adjustment at the estimated value of $6.95 per
warrant for a total value of $43.4 million, which has been allocated to each
of the projects for which the rights were obtained. The portion of the
adjustments of $18.6 million and the $43.4 million related to MAC and PAC
($10.7 million and $14.5 million, respectively) has been capitalized as
construction in progress and the portion of the cost related to PC-1 ($36.8
million) has been capitalized and included as part of the Company's
investment in Pacific Crossing Ltd. since Pacific Crossing Ltd. is not
consolidated. Also included in this adjustment is a $122,032
reclassification from additional paid-in capital to common stock to reflect
the actual issuance of shares of Common Stock at a $.01 par value under the
PCG Warrant Conversion. The $18.6 million increase will be recorded in the
Company's consolidated financial statements for the three months ending
September 30, 1998.

(2) Adjustment for the issuance of Common Stock under the Advisory Services
Agreement Termination, pursuant to which the Advisory Services Agreements
have been terminated. The Advisory Service Agreements had terms of 25
years subject to earlier termination by either party in the event of a
material breach and by PCG Telecom in certain other events. The Advisory
Services Agreements did not contain provisions regarding cancellation fees
or liquidated damages in the event of early termination or breach. The
Advisory Services Agreement Termination was recorded as an increase in
additional paid-in capital and a charge against the statement of
operations in the

12
<PAGE>

amount of $137.7 million. Of this amount, $135 million was determined by
applying the 2% advisory fee to projected revenues for the Company's
systems. The present value of the aggregate advisory fees was then
calculated as $155.5 million, using a discount rate of 12% in respect of
AC-1 and 15% in respect of systems other than AC-1. This amount was
subsequently reduced to $135 million. Both the discount rates and the
ultimate valuation were determined as a result of a negotiation process
including a disinterested director of the Company and the various persons
entitled to fees under the Advisory Services Agreements. The Company has
obtained a fairness opinion from an independent financial advisor in
connection with this transaction. The remaining $2.7 million of the $137.7
million charge reflected the cancellation of $2.7 million advanced by the
Company in respect of amounts expected to be earned under the Advisory
Services Agreements. See "Certain Transactions--Transactions with Pacific
Capital Group ("PCG") and its Affiliates--Advisory Services Agreements."

The adjustment recorded in the pro forma balance sheet data reflects a
$71,053 reclassification from additional paid-in capital to common stock to
record the actual issuance of shares of Common Stock under the Advisory
Services Agreement Termination at a $.01 par value per share.

(3) Adjustment for the repurchase of the Company's shares held by
Telecommunications Development Corporation ("TDC") pursuant to the TDC
Exchange. Prior to the Offerings, the Company will acquire 11,016,879
shares of Common Stock in exchange for 10,866,879 newly-issued shares of
Common Stock, a net acquisition by the Company of 150,000 shares of
Common Stock. The Company will record the treasury stock acquired in the
TDC Exchange at its fair value of $209.4 million.

(4) Adjustment for the Old GCL Exchange. See "Description of Capital Stock--
Old GCL Exchange." In connection with the Old GCL Exchange, each holder
of Class D shares of Old GCL will convert such shares into a fraction of
a Class E share of Old GCL, based upon a valuation at the time of such
conversion, together with a warrant to purchase the remaining fraction of
such Class E share. See "Description of Capital Stock--Old GCL Exchange."
This conversion will reduce shares of Old GCL outstanding by 2,554,183.
The holders of Class E shares of Old GCL will then convert such shares
into an equal number of Class B shares. Subsequent to such conversions,
substantially all of the Shareholders of Old GCL will exchange their
equity interests in Old GCL for Common Stock at a rate of 1.5 Shares of
Common Stock per share of common stock of Old GCL. These transactions
collectively result in an adjustment between additional paid-in capital
and common stock of $1,526,465.

The following table shows (i) the shares of Common Stock of Old GCL
outstanding as of June 30, 1998, (ii) the effects on Old GCL shares of the
PCG Warrant Conversion, the Advisory Services Agreement Termination and the
conversions of Class D and Class E shares, (iii) the effect on the Company
of the Old GCL Exchange and (iv) changes in the number of shares of Common
Stock resulting from the TDC Exchange and the Offerings.

<TABLE>
<CAPTION>
OLD GCL
OLD ADVISORY COMMON
GCL AS OF PCG SERVICES CONVERSION CONVERSION STOCK AS OF OLD
COMMON JUNE 30, WARRANT AGREEMENT OF CLASS OF CLASS JUNE 30, GCL TDC
STOCK 1998 CONVERSION TERMINATION D SHARES E SHARES 1998 EXCHANGE EXCHANGE OFFERINGS
- ---------------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A......... 31,102,950 -- -- -- -- 31,102,950 -- -- --
Class B......... 51,075,000 12,203,170 7,105,263 -- 30,871,517 101,254,950 -- -- --
Class C......... 50,625,000 -- -- -- -- 50,625,000 -- -- --
Class D......... 33,088,200 -- -- (33,088,200) -- -- -- -- --
Class E......... 337,500 -- -- 30,534,017 (30,871,517) -- -- -- --
Company Common
Stock........... -- -- -- -- -- -- 182,982,900 (150,000) 19,060,000
----------- ---------- --------- ----------- ----------- ----------- ----------- -------- ----------
Total........... 166,228,650 12,203,170 7,105,263 (2,554,183) -- 182,982,900 182,982,900 (150,000) 19,060,000
=========== ========== ========= =========== =========== =========== =========== ======== ==========
<CAPTION>
OLD
GCL COMPANY
COMMON PRO FORMA
STOCK JUNE 30, 1998
- ---------------- -------------
<S> <C>
Class A......... --
Class B......... --
Class C......... --
Class D......... --
Class E......... --
Company Common
Stock........... 201,892,900
-------------
Total........... 201,892,900
=============
</TABLE>

(5) Adjustment to reflect the estimated net proceeds of the Offerings ($337.5
million) after deducting underwriting and offering expenses, with a Price
to Public per Share of $19.00.

(6) In June and July, 1998, the Company entered into contracts for the
construction of MAC and PAC, respectively, and at the same time obtained
commitment letters to finance, in part, the construction costs. No effect
has been given to the commitment letters in the pro forma balance sheet.

(7)Pro forma common stock of the Company is as follows:
<TABLE>
<CAPTION>
PRO FORMA
AS OF JUNE 30, 1998
-------------------
<S> <C>
201,892,900 shares issued and outstanding, $.01 par
value per share.................................... $2,018,929
</TABLE>

13
<PAGE>

(8) The "As Adjusted" columns give effect to the May 18, 1998 issuance of the
GCH Senior Notes assuming that the GCH Senior Notes had been issued at
the beginning of the period. The net proceeds from this transaction were
used to repurchase the GTH Senior Notes and to redeem the GTH Preference
Shares.

The "As adjusted" columns do not give effect to non-recurring items such as
the $19.9 million extraordinary loss resulting from the repurchase of the
GTH Senior Notes, the $34.1 million one time charge in connection with the
redemption of the GTH Preference Shares or the $139.7 million charge
related to the Advisory Services Agreement Termination.

(9) The Company has assumed that GCH Senior Notes proceeds not used to redeem
the GTH Preference Shares or repurchase GTH Senior Notes were placed in
non-interest bearing accounts and therefore no interest income has been
reflected in the "As adjusted" columns.

(10) The effect on interest expense resulting from the issuance of the GCH
Senior Notes and the concurrent redemption of the GTH Preference Shares
and repurchase of the GTH Senior Notes has been included in the "As
adjusted" columns. The Company capitalized as construction in progress
only the amount of interest that would be permitted under SFAS 34 had the
GCH Senior Notes been outstanding for the entire period covered on the
actual average qualifying expenditures for such period. The remaining
interest cost attributable to the GCH Senior Notes has been included in
the "As adjusted" columns as interest expense.

The following table presents the calculations used to determine pro forma
interest expense for the periods presented:

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX MARCH 19, 1997 FOR THE PERIOD
MONTHS ENDED (DATE OF INCEPTION) MARCH 19, 1997
JUNE 30, TO DECEMBER (DATE OF INCEPTION)
1998 31, 1997 TO JUNE 30, 1998
------------ ------------------- -------------------
<S> <C> <C> <C>
TOTAL PRO FORMA INTEREST
COST INCURRED
Principal outstanding on
GCH Senior Notes........ $800,000,000 $800,000,000 $800,000,000
Interest rate............ 9.625% 9.625% 9.625%
------------ ------------ ------------
Total interest cost in-
curred.................. $ 38,500,000 $ 61,386,111 $ 99,886,111
============ ============ ============
TOTAL PRO FORMA INTEREST
CAPITALIZED
Actual average qualifying
expenditures for the
period(A)............... $569,000,000 $278,300,000 $391,640,293
Effective Capitalization
rate.................... 9.53% 9.59% 9.56%
------------ ------------ ------------
Total interest
capitalizable........... $ 27,112,850 $ 20,832,224 $ 47,945,074
Less: interest capital-
ized on existing long (11,305,681) (1,476,767) (12,782,448)
term debt............... ------------ ------------ ------------
Total interest capital-
ized on GCH Senior 15,807,169 19,355,457 35,162,626
Notes................... ============ ============ ============
TOTAL PRO FORMA INTEREST
EXPENSE................. $ 22,692,831 $ 42,030,654 $ 64,723,485
============ ============ ============
</TABLE>
- -------
(A) Average qualifying expenditures are taken from actual amounts recorded in
the Company's consolidated financial statements.

(11) During each of the three and six months ended June 30, 1998, the Company
recognized $21.1 million from a total of $67.1 million stock-related
expense relating to stock options issued during such period. The
remaining $46.0 million of stock-related expense will be recognized as
follows: $4.8 million in each of the third and fourth quarters of 1998,
$19.2 million in 1999, $13.5 million in 2000 and $3.7 million in 2001.

14
<PAGE>

RISK FACTORS

In addition to the other information contained in this Prospectus, the
following risk factors should be considered carefully by prospective investors
in evaluating the Company and its business prospects before purchasing the
Shares.

LIMITED OPERATING HISTORY

The Company was organized in March 1997 and was in the development stage
through May 26, 1998, when the United States--United Kingdom segment of AC-1
achieved RFS and began to generate revenues. The Company's financial
information relates principally to a period in which the Company was engaged
in construction and development of AC-1 and, until June 1998, had minimal
revenues and operating costs because the costs of construction had been
capitalized. Despite recognizing approximately $101 million in revenues, the
Company has incurred a net loss applicable to common shareholders of
approximately $214.5 million for the period from March 19, 1997 (date of
inception) through June 30, 1998, due primarily to the Advisory Services
Agreement Termination, awards under the Company's Stock Incentive Plan, the
extraordinary loss on the retirement of the GTH Senior Notes and the
redemption of GTH Preference Shares. Global Crossing to date has financed its
net losses, debt service, capital expenditures and other cash needs through
the proceeds of sales of common and preferred equity and the issuance of debt,
including non-recourse indebtedness of ACL. In addition, the Company will
require substantial additional capital in order to carry out its business
plan. See "--Substantial Future Capital Requirements."

The Company's success will substantially depend on sales of capacity upon
its systems. While the Company has been primarily marketing and selling
capacity on AC-1 during its construction period and this activity has resulted
in executed CPAs as of June 30, 1998 to purchase capacity totaling $556
million, including related sales of terrestrial capacity, there can be no
assurance that the Company will continue to be successful in selling capacity
on AC-1 or its other systems under development. There also can be no assurance
that the Company will be able to realize its business plan or that such
realization will help the Company achieve or sustain operating profitability
or sufficient cash flow to service its indebtedness. See "--Sales of Capacity;
Termination of CPAs," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business."

LEVERAGE

As of June 30, 1998, on a consolidated pro forma basis after giving effect
to the Offerings and the application of the net proceeds therefrom, the
Company would have had $1,326.5 million of total liabilities, including
approximately $1,228.2 million of senior indebtedness, of which $367 million
would have been secured. In addition, the Company has entered into a $850
million non-recourse credit facility with respect to PC-1 (under which $200
million of indebtedness has been incurred as of August 10, 1998), as well as
contractual commitments with respect to MAC and PAC in the amount of $240
million and $310 million, respectively.

The Company's significant debt burden could have important consequences to
the Company, including, but not limited to, the following: (i) the cash
received from operations may be insufficient to meet the principal and
interest payments on the Company's debt as the same become due; (ii) a
significant portion of the Company's cash flow from operations must be used to
service its debt instead of being used in the Company's business; and (iii)
the Company's flexibility to obtain additional financing in the future may be
impaired by the amount of debt outstanding and the restrictions imposed by the
covenants contained in the debt instruments of the Company. See "Description
of Certain Indebtedness."

The ability of the Company to meet its financial obligations will be subject
to financial, business and other factors, many of which are beyond its
control, such as prevailing economic conditions. In addition, the ability of
GCL's operating subsidiaries to pay dividends or to make other payments to GCL
will be restricted by the terms of various credit arrangements expected to be
entered into by such operating subsidiaries, as well as legal restrictions.
The instruments governing existing and future indebtedness contain, or may
contain, covenants that limit the operating and financial flexibility of the
Company. Failure to generate sufficient cash flow may impair the Company's
ability to obtain additional equity or debt financing or to meet its debt
service requirements. In such circumstances, the Company may be required to
renegotiate the terms of the instruments relating to its long term debt or to
refinance all or a portion thereof. There can be no assurance that the Company
would be able to renegotiate successfully such terms or refinance its
indebtedness when required or that satisfactory terms of any

15
<PAGE>

such refinancing would be available. If the Company were unable to refinance
its indebtedness or obtain new financing under these circumstances, it would
have to consider other options such as the sale of certain assets to meet its
debt service obligations, the sale of equity, negotiations with its lenders to
restructure applicable indebtedness or other options available to it under
applicable law.

SUBSTANTIAL FUTURE CAPITAL REQUIREMENTS

Global Crossing will require substantial capital investment to pursue the
implementation of its business plan. Because the Company anticipates that each
of its systems will require separate financing in addition to the equity
investment made by the Company in such system, it intends to raise additional
non-recourse debt or equity capital at the system level to meet these
financing requirements. The Company currently estimates that its capital
resources, together with the additional capital that it intends to raise at
the system level, will be sufficient to fund its currently planned systems.
Failure to generate sufficient funds in the future, whether from operations or
by raising additional debt or equity capital, would have a material adverse
effect on the Company's business prospects. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

RISKS RELATED TO COMPLETING THE COMPANY'S CABLE SYSTEMS

The Company's ability to achieve its strategic objectives will depend in
large part upon the successful, timely and cost-effective completion of the
Company's planned cable systems as well as on achieving substantial capacity
sales on these systems once they become operational. The construction of the
Company's systems will be affected by a variety of factors, uncertainties and
contingencies, many of which are beyond the Company's control. There can be no
assurance that each of these systems will be completed at the cost and in the
time frame currently estimated by Global Crossing, or even at all. Although
the Company will be awarding contracts for construction of its systems to
certain suppliers who in most cases are expected to be bound by a fixed-price
construction cost schedule, and to provide guarantees in respect of completion
dates and system design specifications, there can be no assurance that the
actual construction costs or the time required to complete these systems will
not exceed current Company estimates. Such circumstances could have a material
adverse effect on the Company. See "Business--Suppliers."

The successful completion of the Company's cable systems will depend, among
other things, upon the Company's ability to manage their construction
effectively and to obtain all permits and licenses required for construction.
Successful completion will also depend on the timely performance by third-
party contractors of their obligations. There can be no assurance that
construction will be completed as scheduled or that the required permits and
licenses will be obtained. There are a limited number of suppliers with whom
the Company can negotiate these arrangements. There can be no assurance that
the Company will be able to enter into these contracts. Any of the foregoing
may significantly delay or prevent completion of one or more of the Company's
systems, which could have a material adverse effect on the Company.

SALES OF CAPACITY; REALIZATION OF OTHER REVENUES

The ability of the Company to achieve its business objectives will also
depend in large part upon its sales and marketing capabilities. Through its
wholly-owned subsidiary, Global Crossing International, Ltd. ("GCI"), the
Company has assembled a dedicated sales and marketing force and will be
dependent upon the ability of such employees to effectively market and sell
capacity. There can be no assurance that the Company will be able to
effectively sell capacity on its cable systems. Failure of the Company to
effectively sell capacity on its cable systems would have a material adverse
effect on the Company.

The Company's ability to increase revenues and profits will depend in part
on its ability to expand the products and services it offers to customers. The
Company currently believes that potential sources of these revenues include
potential upgrades of the capacity available on its planned systems, the
development of additional subsea cable projects and the provision of
terrestrial backhaul services to customers acquiring capacity on its undersea
cable systems. See "Business." In the event the Company is unable to effect
these upgrades, develop additional cable projects or obtain required
terrestrial backhaul capacity, the Company's ability to increase its revenues
and profits will be adversely affected.

16
<PAGE>

TERMINATION OF CPAS

A purchaser's payment obligation under a CPA for AC-1 terminates with
capacity on any segment other than the United States-United Kingdom segment
(and, in certain cases, with respect to capacity on the United States-United
Kingdom segment), if the RFS date for the full AC-1 system has not occurred by
June 30, 1999. Performance under certain CPAs for AC-1 is also contingent upon
the obtaining and continuance of such approvals, consents, governmental
authorizations, licenses and permits as may be required or reasonably deemed
necessary by each party thereto for performance by such party thereunder and
as may be satisfactory to it. It is expected that CPAs for the Company's other
systems will contain similar provisions. Termination of a substantial number
of CPAs for any of the foregoing reasons would have a material adverse effect
on the Company. See "Business--Sales and Marketing" and "--Summary of
Principal Terms of Standard Contractual Documentation."

COMPETITION

The international telecommunications industry is highly competitive. The
Company faces competition from existing and planned systems along each of its
planned routes and from satellite providers, including existing geosynchronous
satellites and low-earth orbit systems now under construction. On certain
routes, terrestrial cable systems may also compete with the Global Crossing
Network. The Company competes primarily on the basis of price, availability,
transmission quality and reliability, customer service and the location of its
systems. Traditionally, carriers have made substantial long term investments
in ownership of cable capacity, making lower price and superior service less
determinative in convincing such carriers to acquire additional capacity on
the Company's systems than is the case in industries without such long term
relationships. Accordingly, there can be no assurance that the Company will be
able to compete successfully against systems to which prospective customers
have made long term commitments.

The routes underlying Global Crossing's systems are currently served by
several undersea cables as well as satellites. Primary future sources of
competition for the Company may result from, among others, (i) TAT-14, a
transatlantic cable system which is being developed by its consortium members,
(ii) Gemini, a transatlantic cable system being operated and marketed by
WorldCom and Cable & Wireless, (iii) China-US, a transpacific system being
developed as a "private cable system" by fourteen large carriers, including
SBC, MCI, AT&T and Sprint, most of whom have traditionally sponsored
consortium cables and (iv) the Japan-US Cable Network, a transpacific system
being developed by a consortium of major telecommunications carriers including
Worldcom, AT&T, KDD, NTT, Cable & Wireless and GTE. Other regional and global
systems are being considered by developers, including Project Oxygen, a global
system being evaluated by CTR Group, Ltd. The Company believes that the other
planned transatlantic systems would compete directly with AC-1 and the
commitments of the developers of these systems could substantially reduce
these customers' demand for capacity on AC-1. Although the Company believes
that the other planned transpacific systems will not satisfy the demand for
capacity between the United States and Japan and that there is currently
enough demand projected to accommodate all such systems, the other planned
transpacific systems will receive commitments for capacity that PC-1 could
have received in their absence. In addition, the Company may face competition
from existing and planned regional undersea cable systems and satellites on
its MAC and PAC routes, where entrants are vying for purchases from a small
but rapidly growing customer base. See "--Rapid Growth in a Changing Industry;
Pricing Uncertainties" and "Business--Competition."

RELATIONSHIP WITH PRINCIPAL SHAREHOLDERS; CONFLICTS OF INTEREST

As of August 13, 1998, Pacific Capital Group, Inc. ("PCG") had a 26.85%
beneficial ownership interest in GCL (after giving effect to the Old GCL
Exchange). PCG and its affiliates have entered into certain transactions with
the Company in connection with the development by PCG and its affiliates of
several of Global Crossing's systems, including AC-1, PC-1, PAC and MAC, and
the decision by the Board of Directors of GCL to assume the ongoing
development of systems (other than AC-1) from an affiliate of PCG. PCG and its
subsidiaries are controlled by Mr. Gary Winnick, the Co-Chairman of the Board
of Directors of GCL, and several other officers and directors of GCL are
affiliated with PCG. In addition, through an affiliate, Canadian Imperial Bank
of

17
<PAGE>

Commerce ("CIBC") had a 25.03% beneficial ownership interest in GCL (after
giving effect to the Old GCL Exchange). An affiliate of CIBC is an Underwriter
in the Offerings, and CIBC and its affiliates have also entered into certain
financing transactions with the Company in connection with the development and
construction of the Company's systems. Several members of the Board of
Directors of GCL are affiliated with CIBC. See "Management," "Principal and
Selling Shareholders" and "Certain Transactions."

Upon completion of the Offerings, PCG and CIBC collectively will
beneficially own 47.18% of the outstanding Common Stock (46.46% assuming the
over-allotment option is exercised in full). Accordingly, PCG and CIBC may be
able to determine the vote on matters submitted to a vote of the Company's
stockholders, including the election of directors.

Certain officers and directors of the Company also serve as officers and
directors of other companies and certain officers and directors of the Company
are active investors in the telecommunications industry. See "Management."
Service as a director or officer of the Company and as a director or officer
of another company could create or appear to create conflicts of interest when
the director or officer is faced with decisions that could have different
implications for the Company and such other company. A conflict of interest
could also exist with respect to allocation of time and attention of persons
who are officers of both the Company and another company. The pursuit of these
other business interests could distract these officers and directors from
pursuing opportunities on behalf of the Company. Such conflicts of interest
could have a material adverse affect on the Company.

BENEFICIAL OWNERSHIP BY MANAGEMENT AND AFFILIATES

The Company's executive officers and directors have substantial equity
interests in the Company and have also received amounts from the Company due
to advisory services fees paid to PCG and its affiliates. This advisory fee
arrangement will be terminated prior to the Offerings, with such individuals
receiving Common Stock as a result of such termination, thereby increasing
their significant equity interests in the Company following the Offerings. Set
forth below for each executive officer and director of the Company is the
amount and value of (i) all shares of Common Stock to be sold by such
individual in the Offerings, (ii) all shares of Common Stock to be
beneficially owned by such individual immediately following the Offerings
(determined pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended, except with respect to options, all of which are shown in the column
entitled "Stock Options Held"), (iii) all options to acquire Common Stock held
by such individual, (iv) all warrants held by such individual to purchase
additional Common Stock and (v) all fees paid to such individual indirectly
through the advisory fees paid to PCG. See "Principal and Selling
Shareholders" and "Certain Transactions." The values set forth in the
following table are based upon a price of $19 per share of Common Stock (the
Price to Public per Share of the Offerings).

<TABLE>
<CAPTION>
COMMON COMMON STOCK STOCK ADVISORY
STOCK OWNED AFTER WARRANTS OPTIONS SERVICES
INVESTOR TO BE SOLD VALUE OFFERINGS(1) VALUE HELD(2) VALUE(2) HELD(3) VALUE FEES(4)
- -------- ---------- ----------- ------------ ------------ --------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gary Winnick.... 1,096,463 $20,832,797 46,739,575 $888,051,925 4,282,896 $33,728,493 900,000 $15,600,000 $ 3,191,630
Lodwrick M.
Cook........... -- $ -- 1,731,226 $ 32,893,294 475,001 $ 3,301,257 450,000 $ 7,800,000 $ --
Jack M. Scanlon. -- $ -- -- $ -- -- $ -- 1,800,000 $31,200,000 $ --
Dan J. Cohrs.... -- $ -- -- $ -- -- $ -- 675,000 $ 8,325,000 $ --
David L. Lee.... 306,704 $ 5,827,376 10,102,010 $191,938,190 1,244,229 $ 9,692,335 450,000 $ 7,800,000 $ 481,130
Abbott L. Brown. 230,129 $ 4,372,451 5,690,670 $108,122,730 908,834 $ 6,895,470 450,000 $ 7,800,000 $ 320,754
Barry Porter.... 306,704 $ 5,827,376 9,189,874 $174,607,606 1,217,634 $ 9,423,725 450,000 $ 7,800,000 $ 481,130
James C. Gorton. -- $ -- -- $ -- -- $ -- 750,000 $ 9,250,000 $ --
Jack Finlayson.. -- $ -- -- $ -- -- $ -- 735,000 $ 7,215,000 $ --
K. Eugene
Shutler........ -- $ -- 148,986 $ 2,830,734 -- $ -- 300,000 $ 5,200,000 $ --
Hillel
Weinberger..... -- $ -- 21,330,900 $405,287,100 -- $ -- 60,000 $ 1,040,000 $ --
Jay R. Bloom.... -- $ -- 48,513,400 $921,754,600 -- $ -- 300,000 $ 5,200,000 $ --
Dean C. Kehler.. -- $ -- 48,513,400 $921,754,600 -- $ -- 300,000 $ 5,200,000 $ --
Jay R. Levine... -- $ -- 48,513,400 $921,754,600 -- $ -- 300,000 $ 5,200,000 $ --
William D.
Phoenix........ -- $ -- 48,513,400 $921,754,600 -- $ -- 300,000 $ 5,200,000 $ --
Bruce Raben..... -- $ -- 48,513,400 $921,754,600 -- $ -- 300,000 $ 5,200,000 $ --
Michael R.
Steed.......... -- $ -- 16,590,130 $315,212,470 348,967 $ 3,524,567 60,000 $ 1,040,000 $ 194,696
<CAPTION>
TOTAL
INVESTOR VALUE(5)
- -------- ------------
<S> <C>
Gary Winnick.... $961,404,845
Lodwrick M.
Cook........... $ 43,994,551
Jack M. Scanlon. $ 31,200,000
Dan J. Cohrs.... $ 8,325,000
David L. Lee.... $215,739,031
Abbott L. Brown. $127,511,405
Barry Porter.... $198,139,837
James C. Gorton. $ 9,250,000
Jack Finlayson.. $ 7,215,000
K. Eugene
Shutler........ $ 8,030,734
Hillel
Weinberger..... $406,327,100
Jay R. Bloom.... $926,954,600
Dean C. Kehler.. $926,954,600
Jay R. Levine... $926,954,600
William D.
Phoenix........ $926,954,600
Bruce Raben..... $926,954,600
Michael R.
Steed.......... $319,971,733
</TABLE>
- --------
(1) The amount shown for Mr. Weinberger includes 20,037,585 shares of Common
Stock owned by Continental Casualty Company, an affiliate of Loews/CNA
Holdings Corp. Mr. Weinberger is an officer of Loews/CNA Holdings Corp.
The amounts shown for Messrs. Bloom, Kehler, Levine, Phoenix and Rabin
include 48,513,400 shares of Common Stock owned beneficially by CIBC, an
affiliate of

18
<PAGE>

their employer, CIBC Oppenheimer Corp. ("CIBC Oppenheimer"). The amount
shown for Mr. Steed includes 16,590,130 shares of Common Stock owned by
MRCo, Inc., a wholly-owned subsidiary of Union Labor Life Insurance Company
("ULLICO") and certain fees paid to ULLICO. Mr. Steed is an officer of both
such companies.

(2) Includes New PCG Warrants and GCL Warrants. The value of warrants held is
presented based upon a value of $6.95 per New PCG Warrant and $10.10 per
GCL Warrant, the value assigned to such warrants by the Company based upon
independent appraisals.

(3) Of the 7,380,000 aggregate shares of Common Stock issuable upon the
exercise of options reflected in the table, options in respect of
2,260,000 shares are exercisable within 60 days of August 13, 1998 and
options in respect of 5,120,000 shares are exercisable, subject to various
conditions, following vesting on various dates through July 2001. The
amounts shown for Messrs. Bloom, Kehler, Levine, Phoenix and Raben include
options in respect of 300,000 shares of Common Stock owned beneficially by
CIBC.

(4) The agreements providing for the payment of advisory services fees to PCG
and its affiliates also provided that varying portions of such fees were
payable to ULLICO, CIBC and Messrs. Winnick, Cook, Brown, Lee and Porter.
The Company and the other parties to these agreements have agreed to
terminate these agreements in connection with the Offerings in
consideration for the issuance, through an affiliate of PCG, to the
persons entitled to receive such fees of shares of Common Stock having an
aggregate value of $135 million and the cancellation of $2.7 million owed
to the Company under a related advance agreement. Pursuant to this
termination, shares of Common Stock will be issued to and beneficially
owned by the following persons in the amounts and having the values (based
upon a Price to Public per Share of $19.00) indicated. The net proceeds
from the sale of the Shares to be sold in the Offerings by Messrs.
Winnick, Cook, Lee, Brown and Porter are to be used by such individuals to
fund anticipated income tax liabilities resulting from the termination of
these advisory fee agreements.

<TABLE>
<CAPTION>
RECIPIENT COMMON STOCK VALUE
--------- ------------ ------------
<S> <C> <C>
Gary Winnick (including PCG and PCG Telecom). 3,257,577 $ 61,893,963
CIBC......................................... 670,000 12,730,000
ULLICO....................................... 366,579 6,965,001
Lodwrick M. Cook............................. 304,974 5,794,506
Abbott L. Brown.............................. 683,711 12,990,510
David L. Lee................................. 911,211 17,313,010
Barry Porter................................. 911,211 17,313,010
--------- ------------
Total...................................... 7,105,263 $135,000,000
========= ============
</TABLE>

(5) The amounts shown give effect to the Old GCL Exchange, Advisory Services
Agreement Termination and TDC Exchange. Amounts under "Warrants Held"
include New PCG Warrants and GCL Warrants. See "Principal and Selling
Shareholders," "Certain Transactions" and "Description of Capital Stock--
Old GCL Exchange."

TRANSITION FROM PROJECT MANAGEMENT TO OPERATING COMPANY

The Company must undergo substantial changes in its operations to transition
from being a development stage company primarily involved in the planning and
development of a major telecommunications infrastructure system to one which
operates, markets, supports and services multiple systems. These changes are
expected to be a significant challenge to the Company's managerial,
administrative and operational resources. The Company is in the process of
expanding the management and operational capabilities necessary for this
transition. The Company's ability to manage this transition successfully will
depend on, among other things: (i) expansion, training and management of its
employee base, including attracting, retaining and motivating highly skilled
personnel; (ii) taking over or outsourcing the Company's customer interface
and operations, administration and maintenance systems; (iii) procuring
terrestrial capacity to provide connectivity to inland cities; and (iv)
control of the Company's expenses. There can be no assurance that the Company
will succeed in developing all or any of these capabilities, and any failure
to do so could have a material adverse effect on the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Management."

RAPID GROWTH IN A CHANGING INDUSTRY; PRICING UNCERTAINTIES

Part of the Company's strategy is to rapidly construct several cable systems
in a short time frame in order to take advantage of the supply and demand
imbalance that currently exists and is projected in the global marketplace.
Each of the Company's currently announced systems is expected to be
operational between 1998 and 2000. As a result of the Company's implementation
of the aggressive timing of its strategy, the Company is experiencing rapid
expansion that management expects will continue for the foreseeable future.
This growth has increased the operating complexity of the Company. At the same
time, the international telecommunications industry is changing rapidly due
to, among other things, regulatory liberalization, privatization of
established carriers, the expansion of telecommunications infrastructure, the
globalization of the world's economies and the

19
<PAGE>

changing technology for wireless and satellite communication. Much of the
Company's planned growth is predicated upon the growth in demand for
international telecommunications capacity which will consume the increased
supply of telecommunications capacity from new cables and other technology so
that price declines will not be greater than the price declines anticipated by
the Company in its business plan. There can be no assurance that such
anticipated demand growth will occur.

The undersea fiber optic cable transmission industry has experienced
significant per circuit price declines resulting from technological advances
in fiber optic technology. Recent technological advances have created even
greater per circuit pricing pressure in the industry. A lower than projected
increase in demand or a higher than projected decline in per circuit price
could have a material adverse effect on the Company. There can be no
assurance, even if the Company's projections with respect to such factors are
realized, that the Company will be able to implement its strategy or that its
strategy will be successful in the rapidly evolving telecommunications market.

RAPID TECHNOLOGICAL CHANGE

Recent technological advances, such as the use of DWDM, have greatly
expanded the availability of capacity of new fiber optic cable at constant
construction costs, resulting in a corresponding decrease in the cost per
circuit of capacity. In addition, the introduction of new products or the
emergence of new technologies may enable competitors to install competing
systems at a lower per-circuit cost on routes currently targeted by the
Company or to expand capacity on existing competitive systems, potentially
rendering the Company's systems not cost competitive. While the Company
believes that being the first to market and construct cable systems with
significant capacity on certain routes may prevent competitors from
overbuilding in those situations, Global Crossing cannot predict the behavior
of potential competitors who might otherwise build a system even if it would
be uneconomical for an additional system to be constructed. The Company
believes that for the foreseeable future, technology changes will neither
materially affect the continued use of fiber optic cable nor materially hinder
the Company's ability to deploy the state-of-the-art technology; however, the
effect of such technological changes on the Company's operations cannot be
predicted and could have a material adverse effect on the Company.

OPERATIONS RISKS

Each of Global Crossing's systems will be subject to the risks inherent in a
large-scale, complex undersea fiber optic telecommunications system employing
advanced technology. The operations, administration, maintenance and repair of
these systems requires the coordination and integration of sophisticated and
highly specialized hardware and software technologies and equipment located
throughout the world. There can be no assurance that, even if built to
specifications, the Company's systems will function as expected in a cost-
effective manner. The failure of the hardware or software to function as
required could render a cable system unable to perform at design
specifications.

AC-1 has, and each of the Company's other systems are expected to have, a
design life of not less than 25 years; however, there can be no assurance of
the actual useful life of any of these systems. A number of factors will
affect the useful life of each of the Company's systems, including, among
other things, quality of construction, unexpected deterioration and
technological or economic obsolescence. Failure of any of the Company's
systems to operate for its full design life could have a material adverse
effect on the Company.

DEPENDENCE ON KEY PERSONNEL

The Company's future success depends on the efforts of certain of its
officers and key technical, sales and other employees, some of whom have only
recently joined the Company, as well as its ability to attract, retain and
motivate highly skilled officers and employees. There can be no assurance that
the Company will successfully integrate new management personnel and employees
into its existing operations, or that the Company will be able to attract,
retain and motivate highly skilled management personnel and employees.

20
<PAGE>

Furthermore, the Company does not presently maintain any key person life
insurance policies on any of its management personnel. See "Management--
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements."

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

The Company will derive substantial revenues from international operations.
The Company intends to have substantial physical assets in several
jurisdictions along the routes of its planned systems. International
operations are subject to political, economic and other uncertainties,
including, among other things, risk of war, revolution, border disputes,
expropriation, renegotiation or modification of existing contracts, labor
disputes and other uncertainties arising out of foreign government sovereignty
over the Company's international operations. There can be no assurance that
these factors will not have a material adverse effect on the Company.

FOREIGN EXCHANGE; EXCHANGE CONTROLS

The Company will invoice all sales of capacity in U.S. dollars, and each
customer will incur maintenance and other obligations denominated in U.S.
dollars; however, many actual and prospective customers of the Company derive
their revenues in currencies other than U.S. dollars. The obligations of
customers whose revenues are preponderantly in foreign currencies will be
subject to unpredictable and indeterminate increases in the event that such
currencies devalue relative to U.S. dollars. Furthermore, such customers may
be or may become subject to exchange control regulations which might restrict
or prohibit the conversion of their revenue currencies into dollars. There can
be no assurance that the occurrence of any such factors will not have a
material adverse effect on the Company.

EFFECT OF GOVERNMENT REGULATION

The Company, in the ordinary course of development, construction and
operation of its fiber optic cable systems, will be required to obtain and
maintain various permits, licenses and other authorizations in both the United
States and in foreign jurisdictions where its cables land. In particular,
undersea cable landing or similar licenses will be required in many of the
jurisdictions where Global Crossing's systems will land. Such licenses are
typically issued for a term of years, subject to renewal. Moreover, the
licenses may subject the Company's business and operations to varying forms of
regulation, which could change over the course of time. Failure to obtain or
renew such a license, or a material change in the nature of the regulation to
which the Company's operations are subject, could have a material adverse
effect on the Company's business. In addition, the Company's international
operations may be affected from time to time by political developments and
national and local laws and regulations and may be subject to risks such as
the imposition of governmental controls, license requirements and changes in
tariffs. Specifically, in connection with the construction of each cable
system, the Company must obtain certain permits and licenses with respect to
construction, operations and maintenance. Although Global Crossing intends
that the construction contracts for each of the Company's cable systems will
impose the burden of acquiring and maintaining construction licenses and
permits on the contractor for each of such systems, there can be no assurance
that such contractor will successfully obtain such permits and licenses.
Failure to obtain or maintain any permits or licenses so required could have a
material adverse effect on the Company. See "Business--Regulation."

DEPENDENCE ON THIRD PARTIES

The Company is and will continue to be dependent upon third parties to (i)
provide access to certain origination and termination points of its systems in
various jurisdictions, (ii) construct and operate landing stations in certain
of such jurisdictions, (iii) construct and maintain the Company's systems
pursuant to contractual arrangements with the Company, (iv) provide backhaul
service to the Company's customers through contractual arrangements with such
parties and (v) act as joint venture participants with respect to PC-1 and,
potentially, certain of the Company's future systems. There can be no
assurance that such parties will perform their contractual obligations or that
there will not be political or economic events in relation to such parties
which may have a material adverse effect on the Company.

21
<PAGE>

RISK OF ERROR IN FORWARD-LOOKING STATEMENTS

Until May 26, 1998, the Company was a development stage company.
Accordingly, all statements in this Prospectus that are not clearly historical
in nature are forward-looking. Examples of such forward-looking statements
include the statements concerning the Company's operations, prospects, size of
world telecommunications traffic, size of addressable market, technological
and customer support capabilities, pricing, potential customers and liquidity
and working capital needs, estimated demand forecasts, and information
concerning characteristics of competing systems. These forward-looking
statements are inherently predictive and speculative and no assurance can be
given that any of such statements will prove to be correct. Actual results and
developments may be materially different from those expressed or implied by
such statements. Prospective investors should carefully review the other risk
factors set forth in this section of this Prospectus for a discussion of
certain factors which could result in any of such forward-looking statements
proving to be inaccurate.

TAX MATTERS

The Company believes that a significant portion of its income will not be
subject to tax by any of (i) Bermuda, which currently does not have a
corporate income tax, or (ii) certain other countries in which the Company
conducts activities or in which customers of the Company are located,
including the United States. However, this belief is based upon the
anticipated nature and conduct of the business of the Company, which may
change, and upon the Company's understanding of its position under the tax
laws of the various countries in which the Company has assets or conducts
activities, which position is subject to review and possible challenge by
taxing authorities and to possible changes in law (which may have retroactive
effect). The extent to which certain jurisdictions may require the Company to
pay tax or to make payments in lieu of tax cannot be determined in advance. In
addition, the operations and payments due to the Company may be affected by
changes in taxation, including retroactive tax claims or assessment of
withholding on amounts payable to the Company or other taxes assessed at the
source, in excess of the taxation anticipated by the Company based on business
contacts and practices of the Company and the current tax regimes. There can
be no assurance that any of the foregoing factors would not have a material
adverse effect on the Company. See "Tax Considerations."

FOREIGN PERSONAL HOLDING COMPANY, PASSIVE FOREIGN INVESTMENT COMPANY,
CONTROLLED FOREIGN CORPORATION AND PERSONAL HOLDING COMPANY RULES

It is possible that the Issuer or one of its non-United States subsidiaries
will be classified as a foreign personal holding company (a "FPHC") under the
United States Internal Revenue Code of 1986, as amended (the "Code"). If the
Issuer or one of its non-United States subsidiaries were classified as an
FPHC, all United States Holders (as defined below under "Tax Considerations")
of Common Stock would be required to include in income, as a dividend, their
pro rata share of the Issuer's (or its relevant non-United States
subsidiary's) undistributed FPHC income (generally, taxable income with
certain adjustments). While the Company intends to manage its affairs so as to
attempt to avoid or minimize having income imputed to United States Holders
under these rules, to the extent such management of its affairs is consistent
with its business goals, there can be no assurance that the Company will be
successful in this endeavor.

The Issuer believes that it is not a passive foreign investment company (a
"PFIC") and does not expect to become a PFIC in the future, although there can
be no assurance in this regard. In addition, this belief is based, in part, on
interpretations of existing law that the Issuer believes are reasonable, but
which have not been approved by any taxing authority. If the Issuer were a
PFIC, then each United States Holder of Common Stock would, upon certain
distributions by the Issuer, or upon disposition of the Common Stock at a
gain, be liable to pay tax at the then prevailing rates on ordinary income
plus an interest charge, generally as if the distribution or gain had been
recognized ratably over the United States Holder's holding period (for PFIC
purposes) for the Common Stock, or if a "qualified electing fund" election
were made by a United States Holder of Common Stock, a pro rata share of the
Issuer's ordinary earnings and net capital gain would be required to be
included in such United States Holder's income each year. A United States
Holder may also be able to make a mark to

22
<PAGE>

market election. If the mark to market election is available to a United
States Holder, annual increases and decreases in share value would be included
as ordinary income or deducted from ordinary income by marking-to-market the
value of the shares at the close of each year. See "Tax Considerations."

Furthermore, additional tax considerations would apply if the Issuer or any
of its affiliates were a controlled foreign corporation (a "CFC") or a
personal holding company (a "PHC"). See "Tax Considerations."

DIVIDEND POLICY; RESTRICTION ON PAYMENT OF DIVIDENDS

The Company does not anticipate paying cash dividends in the foreseeable
future. See "Dividend Policy." The Company's ability to pay dividends is
limited by certain of its debt instruments. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and "Description of Certain Indebtedness."

DILUTION

The public offering price is substantially higher than the tangible book
value of the outstanding Common Stock. Purchasers of Shares in the Offerings
will therefore experience immediate and substantial dilution in tangible book
value per share, and existing shareholders of GCL will receive a material
increase in the tangible book value per share of their shares of Common Stock.
The dilution to new investors will be $16.06 per Share (assuming no exercise
of the over-allotment options granted to the Underwriters). See "Dilution."

VOTING AND TRANSFER RESTRICTIONS

The Amended and Restated Bye-Laws of the Company (the "Bye-Laws") will
provide that each share of Common Stock will have one vote. However, if the
Controlled Shares (as defined herein) of any person constitute 9.5% (or, in
the case of CIBC and its affiliates, 35%) of the voting power of the
outstanding shares, the voting rights with respect to such Controlled Shares
will be limited pursuant to the Bye-Laws and the voting rights attached to
such shares allocated to the other holders of Common Stock on a pro rata
basis. The other holders allocated these voting rights may not exceed the
above limitation as a result of this allocation. The Bye-Laws will also
prohibit any transfer of shares of Common Stock that, subject to certain
exceptions, would result in a person beneficially owning Controlled Shares in
excess of 5% of the outstanding shares of Common Stock, in the case of a
natural person, or 9.5% of the outstanding shares of Common Stock, in the case
of a group or any person other than a natural person, without the approval of
a majority of the members of the Board of Directors and stockholders holding
at least 75% of the votes that may be cast by all holders of Common Stock.
Such voting and transfer restrictions will increase the difficulty for any
person or group of persons acting in concert (other than certain existing
stockholders) to acquire a substantial ownership position in, or control of,
the Company. See "Description of Capital Stock--GCL--Voting and Transfer
Restrictions."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offerings, there has been no public market for the Common
Stock. There can be no assurance that an active trading market will develop or
be sustained. The offering price has been determined by negotiations between
the Company and the Underwriters and there can be no assurance that the prices
at which the Common Stock will sell in the public market after the Offerings
will not be lower than the price at which the Common Stock is sold in the
Offerings. See "Underwriting." Historically, the market prices for securities
of emerging companies in the telecommunications industry have been highly
volatile. The trading price of the Common Stock after the Offerings could be
subject to wide fluctuations in response to numerous factors, including, but
not limited to, quarterly variations in operating results, competition,
announcements of technological innovations or new products by the Company or
its competitors, product enhancements by the Company or its competitors,
regulatory changes, any differences in actual results and results expected by
investors and analysts, changes in financial estimates by securities analysts
and other events or factors. In addition, the stock market has

23
<PAGE>

experienced volatility that has affected the market prices of equity
securities of many companies and that often has been unrelated to the
operating performance of such companies. These broad market fluctuations may
adversely affect the market price of the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offerings (assuming no exercise of the over-allotment
options granted to the Underwriters), GCL will have 201,892,900 shares of
Common Stock outstanding, including 21,000,000 Shares of Common Stock offered
hereby and 180,892,900 "restricted" shares of Common Stock. The Shares of
Common Stock offered hereby will be freely tradeable without restriction or
further registration under the Securities Act of 1933, as amended (the
"Securities Act"), by persons other than "affiliates" of the Company within
the meaning of Rule 144 promulgated under the Securities Act. Holders of
restricted shares generally will be entitled to sell these shares in the
public securities market without registration under the Securities Act to the
extent permitted by Rule 144 (or Rule 145, as applicable) promulgated under
the Securities Act or any exemption under the Securities Act. The restricted
shares generally will be eligible for sale under Rule 144, as currently in
effect, beginning as early as 180 days from the date of this Prospectus.

The Company intends to file a registration statement under the Securities
Act after the Offerings to register shares of Common Stock reserved for
issuance under the Stock Incentive Plan, thus permitting the resale of such
shares by non-affiliates upon issuance in the public market without
restriction under the Securities Act. Such registration statement will
automatically become effective immediately upon filing. See "Management--Stock
Incentive Plan."

Subject to certain exceptions, the Company and its shareholders have agreed
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, or announce the offering of any shares of Common Stock, including
any such shares beneficially or indirectly owned or controlled by the Company,
or any securities convertible into, or exchangeable or exercisable for, shares
of Common Stock, for 180 days from the date of this Prospectus, without the
prior written consent of Smith Barney Inc. and Merrill Lynch.

Sales of a substantial amount of Common Stock in the public market, or the
perception that such sales may occur, could adversely affect the market price
of the Common Stock prevailing from time to time in the public market and
could impair the Company's ability to raise additional capital through the
sale of its equity securities. See "Shares Eligible for Future Sale."

24
<PAGE>

USE OF PROCEEDS

The net proceeds from the Offerings to the Company are estimated to be
approximately $337.5 million (after deducting the Underwriters' discount and
estimated Offerings fees and expenses payable by the Company). The Company
intends to use the net proceeds of the Offerings as follows: (i) approximately
$220 million to make investments in the Global Crossing Network, (ii) up to
$50 million to make minority investments in telecommunications companies and
Internet service providers, (iii) up to $25 million to fund the Company's
proposed investment in Global Access Limited and (iv) the balance for general
corporate purposes. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources" and
"Business." Pending the application of the net proceeds of the Offerings as
described above, the Company will invest such proceeds in short-term,
interest-bearing U.S. Government securities and certain other short term,
investment grade securities. The Company will receive no proceeds from the
sale of the Shares by the Selling Shareholders. The net proceeds from the sale
of the Shares by the Selling Shareholders will be used by such Selling
Shareholders to fund anticipated income tax liabilities resulting from the
Company's acquisition of the rights to advisory fees payable under the
Advisory Services Agreements as described under "Certain Transactions."

DIVIDEND POLICY

GCL does not anticipate paying dividends in the foreseeable future. The
terms of certain debt instruments of the Company also place limitations on
GCL's ability to pay dividends. Future dividends, if any, will be at the
discretion of the Board of Directors of GCL and will depend upon, among other
things, the Company's operations, capital requirements and surplus, general
financial condition, contractual restrictions and such other factors as the
Board of Directors of GCL may deem relevant. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Description of
Certain Indebtedness."

DILUTION

At June 30, 1998, the "Pro forma net tangible book value" of the Company
prior to the Offerings was $255.3 million or $1.40 per share of Common Stock.
Pro forma net tangible book value per share prior to the Offerings represents
the Company's net worth less intangible assets of $44.3 million divided by
182,832,900 shares of Common Stock outstanding (after giving effect to the PCG
Warrant Conversion, Advisory Services Agreement Termination, TDC Exchange and
Old GCL Exchange). After giving effect to the sale by the Company of
19,060,000 Shares pursuant to the Offerings at a Price to Public per Share of
$19.00 and after deducting the underwriting discount and expenses of the
Offerings, the pro forma net tangible book value of the Company at June 30,
1998 would have been $592.8 million, or $2.94 per share of Common Stock. Such
amount represents an immediate increase in pro forma net tangible book value
of $1.54 per share of Common Stock to the existing shareholders and an
immediate dilution to new investors of $16.06 per share of Common Stock. The
following table illustrates the dilution in pro forma net tangible book value
per share to new investors:

<TABLE>
<S> <C> <C>
Price to Public per Share...................................... $19.00
Pro Forma net tangible book value per share as of June 30, 1998
prior to the Offerings ....................................... $1.40
Increase in Pro forma net tangible book value per share attrib-
utable to the effects of the Offerings........................ 1.54
-----
Pro forma net tangible book value per share after the Offer-
ings.......................................................... 2.94
------
Dilution per share to new investors............................ $16.06
======
</TABLE>

25
<PAGE>

The following table summarizes, on a pro forma basis after the Offerings,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the cash contribution per share of
existing shareholders and the price per Share to be paid by purchasers of the
Shares offered by the Company hereby (based upon an initial public offering
price of $19.00 per Share before deducting estimated underwriting discounts
and commissions and estimated offering expenses payable by the Company):

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------- -------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing
shareholders(1)........ 182,832,900 90.56% $ 75,000,000 17.16% $ 0.41
Shares sold by the
Company................ 19,060,000 9.44% 362,140,000 82.84% $19.00
----------- ------- ------------ -------
Total................. 201,892,900 100.00% $437,140,000 100.00%
=========== ======= ============ =======
</TABLE>
- --------
(1) Sales by the Selling Shareholders in the Offerings will reduce the number
of shares of Common Stock held by existing shareholders to 180,892,900
shares or 89.60% (88.22% if the Underwriters' over-allotment option is
exercised in full), and will increase the number of shares of Common Stock
held by new investors to 21,000,000 or 10.40% (24,150,000 or 11.78% if the
Underwriters' over-allotment option is exercised in full). See "Principal
and Selling Shareholders."

The foregoing tables assume no exercise of options issued under the
Company's Stock Incentive Plan or outstanding GCL Warrants or New PCG
Warrants. As of June 30, 1998, there were 16,607,865 shares of Common Stock
reserved for issuance under the Company's Stock Incentive Plan, 2,554,183
shares of Common Stock issuable upon the exercise of outstanding GCL Warrants
at an exercise price equal to the Price to Public per Share of the Offerings
and 6,250,006 shares of Common Stock issuable upon the exercise of the New PCG
Warrants at an exercise price equal to $19.00, the Price to Public per Share
of the Offerings. The foregoing tables also assume no exercise of the
Underwriters' over-allotment options. To the extent that any of such shares
are issued in connection with the Stock Incentive Plan, there will be further
dilution to new investors. See "Certain Transactions" and "Description of
Capital Stock."

26
<PAGE>

CAPITALIZATION

The following table sets forth as of June 30, 1998 (i) the historical
consolidated capitalization of the Company and (ii) the capitalization as
adjusted to reflect the Offerings and the application of the net proceeds
therefrom, the TDC Exchange, the Advisory Services Agreement Termination, the
Old GCL Exchange and the PCG Warrant Conversion. This table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements and the
notes thereto appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
------------------------------
ACTUAL AS ADJUSTED(1)
-------------- --------------
(UNAUDITED)
<S> <C> <C>
Long Term Debt:
AC-1 Credit Facility(2)................... $ 367,048,000 $ 367,048,000
Long Term Deferred Revenue................ 6,916,667 6,916,667
Obligations under Inland Services
Agreements(3)............................ 7,628,050 7,628,050
Obligations under Capital Leases(4)....... 7,561,897 7,561,897
GCH Senior Notes(5)....................... 796,277,203 796,277,203
-------------- --------------
Total Long Term Debt.................... 1,185,431,817 1,185,431,817
-------------- --------------
Shareholders' Equity:
Common Stock.............................. 110 2,018,929
Treasury Stock............................ -- (209,414,620)
Additional Paid-in Capital................ 397,095,005 1,003,893,090
Accumulated Deficit....................... (159,315,864) (159,315,864)
-------------- --------------
Total Shareholders' Equity.............. 237,779,251 637,181,535
-------------- --------------
Total Capitalization.................... $1,423,211,068 $1,822,613,352
============== ==============
</TABLE>
- --------
(1) As adjusted to reflect the Offerings, the TDC Exchange, the Advisory
Services Agreement Termination, the Old GCL Exchange and the PCG Warrant
Conversion. For detailed information on these adjustments, see the
footnotes to the pro forma financial information presented on pages 11-14.

(2) The AC-1 Credit Facility provides non-recourse financing at the ACL level
for the construction and development of AC-1. A total of $482.0 million is
available to be borrowed under this facility, of which $367.0 million was
outstanding as of June 30, 1998. See "Description of Certain
Indebtedness--AC-1 Credit Facility."

(3) Net of the $43.5 million current portion of such obligations.

(4) Net of the $6.2 million current portion of such obligations.

(5) The GCH Senior Notes provide funds for refinancing corporate indebtedness
and investments in the Company's PC-1, MAC and PAC systems. See
"Description of Certain Indebtedness--GCH Senior Notes."

27
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The selected data presented below under the captions "Statement of
Operations Data" and "Balance Sheet Data" as of December 31, 1997 and for the
period from March 19, 1997 (date of inception) through December 31, 1997 are
derived from the Consolidated Financial Statements of the Company included
herein, which financial statements are prepared in accordance with U.S. GAAP
and have been audited by Arthur Andersen & Co., independent public
accountants, as indicated in their report thereon included elsewhere in this
Prospectus. The financial data as of and for the three and six months ended
June 30, 1998 are derived from the Company's unaudited interim financial
statements. The unaudited interim financial statements include all
adjustments, consisting of normal recurring adjustments, that management
considers necessary for fair presentation of the financial position as of June
30, 1998 and results of operations for the interim periods presented. Results
of operations for the interim periods are not necessarily indicative of the
results of operations for a full year. The operating data presented below are
derived from the Company's records. The financial data presented herein and
elsewhere in this Prospectus is not necessarily indicative of the financial
position or results of operations of the Company in the future. The
information set forth below should be read in conjunction with the discussion
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations," "Business" and the Consolidated Financial Statements and the
notes thereto appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FOR THE PERIOD
MARCH 19, 1997
SIX MONTHS (DATE OF INCEPTION)
THREE MONTHS ENDED ENDED TO DECEMBER 31,
JUNE 30, 1998 JUNE 30, 1998 1997
------------------ ------------- -------------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA
Sales and Operating
Revenues............... $ 101,255,867 $ 101,255,867 $ --
------------- ------------- ------------
Expenses:
Cost of Capacity Sold. 41,200,229 41,200,229 --
Operating,
Administrative and 183,705,088 187,748,840 3,101,708
Other (1)............ ------------- ------------- ------------
224,905,317 228,949,069 3,101,708
------------- ------------- ------------
Operating Loss.......... (123,649,450) (127,693,202) (3,101,708)
Other Income (Expense):
Interest Income....... 4,327,602 4,673,436 2,941,352
Interest Expense...... (7,403,037) (7,426,271) --
Provision for Income
Taxes (2).............. (9,000,000) (9,000,000) --
Extraordinary Loss on (19,709,471) (19,709,471) --
Retirement of Debt (3). ------------- ------------- ------------
Net Loss................ (155,434,356) (159,155,508) (160,356)
Preference Share Non-
Cash Dividends (4)..... (3,898,203) (8,306,433) (12,689,923)
Redemption of Preference (34,140,067) (34,140,067) --
Shares (5)............. ------------- ------------- ------------
Net Loss Applicable to $(193,472,626) $(201,602,008) $(12,850,279)
Common Shareholders.... ============= ============= ============
Basic and Diluted Net
Loss per Common Share
before Extraordinary $ (1.05) $ (1.10) $ (0.08)
Item................... ============= ============= ============
Net loss per Common
Share on Extraordinary $ (0.12) $ (0.12) $ --
Item................... ============= ============= ============
Basic and Diluted Net
Loss per Common Share $ (1.17) $ (1.22) $ (0.08)
(6).................... ============= ============= ============
Shares used in Computing
Basic and Diluted Net 166,194,035 166,062,697 165,441,150
Loss per Common Share.. ============= ============= ============
</TABLE>

<TABLE>
<CAPTION>
AS OF AS OF
JUNE 30, 1998 DECEMBER 31, 1997
-------------- -----------------
<S> <C> <C>
BALANCE SHEET DATA:
Current Assets Including Cash and Restricted
Cash (7).................................... $ 605,891,695 $ 27,743,838
Long Term Accounts Receivable................ 7,900,000 --
Construction in Progress and Capacity
Available for Sale (8)...................... 779,646,579 518,518,509
Investment in Pacific Crossing Ltd. (9)...... 126,456,345 --
Deferred Finance and Organization Costs, Net 44,338,405 25,934,021
of Accumulated Amortization................. -------------- ------------
$1,564,233,024 $572,196,368
============== ============
Current Liabilities.......................... $ 141,021,956 $ 92,097,773
Long Term Debt............................... 367,048,000 162,325,000
Senior Notes................................. 796,277,203 150,000,000
Long Term Deferred Revenue................... 6,916,667 --
Obligations Under Inland Service Agreements
and Capital Leases (10)..................... 15,189,947 3,009,000
GTH Preference Shares (11)................... -- 90,643,919
Shareholders' Equity.........................
Common Stock............................... 110 110
Other Shareholders' Equity................. 397,095,005 74,280,922
Accumulated Deficit........................ (159,315,864) (160,356)
-------------- ------------
Total Shareholders' Equity................... 237,779,251 74,120,676
-------------- ------------
Total Liabilities and Shareholders' Equity... $1,564,233,024 $572,196,368
============== ============
</TABLE>

28
<PAGE>

<TABLE>
<CAPTION>
AS OF
JUNE
30, 1998
------------
<S> <C>
OPERATING DATA:
Executed CPAs...................................................... $556 million
</TABLE>

<TABLE>
<CAPTION>
ESTIMATED(12)
--------------
<S> <C>
Route Kilometers............................................... 51,300
Fiber Kilometers............................................... 345,200
Estimated System Costs (excluding potential future upgrades and
amounts capitalized with respect to the PCG Warrants)
AC-1 ......................................................... $ 750 million
Other Systems Under Development............................... $2,025 million
Landing Stations............................................... 14
</TABLE>
- --------
(1) Includes a charge for the Advisory Services Agreement Termination on June
30, 1998. See "Certain Transactions." The Company acquired the rights of
those entitled to fees payable under the Advisory Services Agreements in
consideration for the issuance of Common Stock in the Company having an
aggregate value of $135 million and the cancellation of approximately
$2.7 million owed to the Company under a related advance agreement. As a
result of this transaction, the Company has recorded a non-recurring
charge in the approximate amount of $137.7 million. Also, during each of
the three and six months ended June 30, 1998, the Company recognized
$21.1 million from a total of $67.1 million of stock-related expense
relating to stock options issued during such period. The remaining $46.0
million will be recognized as follows: $4.8 million in each of the third
and fourth quarters of 1998, $19.2 million in 1999, $13.5 million in 2000
and $3.7 million in 2001.

(2) Reflects income taxes on profits earned during the three months ended
June 30, 1998 attributable to both United States and foreign
jurisdictions. A significant portion of the Company's operating losses
have been incurred in non-taxable jurisdictions and therefore these
operating losses cannot be applied to future taxable earnings of the
Company.

(3) On May 18, 1998, a portion of the proceeds from the issuance of the GCH
Senior Notes was used to repurchase the GTH Senior Notes. The Company
recognized an extraordinary loss of $19.7 million on repurchase
comprising a premium of approximately $9.8 million and a write-off of
approximately $9.9 million of unamortized deferred financing costs.

(4) The holders of GTH Preference Shares were entitled to receive cumulative,
compounding dividends at an initial annual rate of 14%. Preference share
dividends include cumulative 14% dividends and amortization of the
discount and issuance costs. Effective June 17, 1998, the Company used
proceeds from the GCH Senior Notes to redeem all outstanding GTH
Preference Shares. All dividends prior to the redemption had been paid
through the issuance of additional preference shares and charged against
additional paid-in capital.

(5) As a result of the redemption of the GTH Preference Shares, the Company
incurred a one-time $34.1 million charge recorded against Additional
Paid-in Capital. The charge was comprised of: (i) a $15.9 million charge
for the redemption premium and (ii) a write-off of $18.2 of unamortized
discount and unamortized deferred financing costs.

(6) Basic net loss per share is computed using the weighted average number of
shares of common stock outstanding. Diluted net loss per share is
computed using the weighted average number of shares of common stock
outstanding and common stock equivalents including shares issuable under
options and warrants that are dilutive using the treasury stock method.

(7) The majority of Cash and Restricted Cash is comprised of proceeds from
the issuance of the GCH Senior Notes and funds which have been reserved
for the purpose of funding future interest payable on the GCH Senior
Notes.

(8) Construction in Progress and Capacity Available for Sale includes direct
and indirect expenditures for construction of AC-1 and other Systems and
is stated at cost. Includes costs incurred under (i) the AC-1 Contract;
(ii) advisory, consulting and legal fees; (iii) interest (including
amortization of debt issuance costs incurred during the construction
phase); and (iv) other costs necessary for developing AC-1. This amount
also includes backhaul capacity available for sale. Additionally, the
Company granted the PCG Warrants to PCG, a shareholder, for the PC-1, MAC
and PAC systems and related rights. The $213.3 million estimated value of
the Common Stock to be issued under the PCG Warrants has been recorded as
Construction in Progress in the amount of $86.8 million and Investment in
Pacific Crossing Ltd. in the amount of $126.5 million. Such estimated
values will be adjusted to reflect the Price per Share to Public in the
Offerings in the Company's financial statements for the three months
ending September 30, 1998. Such adjustment is not expected to be
material.

29
<PAGE>

(9) Includes $126.5 million as of June 30, 1998, as described above,
representing the estimated value of the PCG Warrants applicable to
Pacific Crossing Ltd.

(10) Certain contracts to acquire backhaul capacity and certain capital leases
require payments over a 25-year period. The amount shown reflects the
present value of such payments, net of the $49.7 million ($30.2 million
as of December 31, 1997) current portion of such payments, which is
included under "Current Liabilities."

(11) The December 31, 1997 amount is comprised of (i) $100 million of GTH
Preference Shares originally issued, plus (ii) $9.8 million of GTH
Preference Shares issued as dividends thereon, less (iii) $19.2 million
reflecting the unamortized discount and issue costs associated therewith.
The Company has redeemed all of the outstanding GTH Preference Shares
effective as of June 17, 1998.

(12) Assumes full completion of AC-1, PC-1, MAC and PAC based upon current
Company estimates, including anticipated financing costs. See "Risk
Factors--Risks Relating to Completing the Company's Cable Systems" and
"Risk of Error in Forward-Looking Statements."

30
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

This Prospectus contains forward-looking statements that include, among
others, statements concerning the Company's plans to effect the design,
construction, and operations of, and sales of capacity on, its planned
telecommunications systems, expectations as to funding its future capital
requirements and other statements of expectations, beliefs, future plans and
strategies, anticipated developments and other matters that are not historical
facts. Management cautions the reader that these forward-looking statements
are subject to risks and uncertainties that could cause actual events or
results to differ materially from those expressed or implied by the
statements. The most important factors that could prevent the Company from
achieving its goals include, but are not limited to, failure by the Company
to: (i) complete its systems within currently estimated time frames and
budgets, (ii) sell capacity on its systems, (iii) make a successful transition
from a system development and construction company to an operating company and
(iv) effectively compete in the context of a rapidly evolving market
characterized by intense price competition and unpredictable levels of demand
for telecommunication capacity. The Company does not intend to publish updates
or revisions of any forward-looking statements included in this Prospectus to
reflect events or circumstances after the date hereof or to reflect subsequent
market analysis. See "Risk Factors--Risk of Error in Forward-Looking
Statements."

The following discussion and analysis should be read in conjunction with the
Company's audited Consolidated Financial Statements and the notes thereto
contained in this Prospectus.

OVERVIEW

The Company was formed as the world's first independent developer, owner and
operator of undersea digital fiber optic cable systems to capitalize on the
accelerating growth of international Internet and telecommunications traffic.
The Company commenced operations in March 1997, when it entered into a fixed
price contract with Tyco Submarine Systems Ltd. ("TSSL"), formerly AT&T
Submarine Systems, Inc., for the design, development, construction and
installation of AC-1, and obtained commitments for AC-1's initial financing.
AC-1, the first of Global Crossing's planned fiber optic cable systems, is
designed to be a four fiber pair system connecting (i) the United States to
the United Kingdom, (ii) the United Kingdom to The Netherlands and Germany,
(iii) The Netherlands to Germany and (iv) Germany to the United States. The
first segment of AC-1, the United States to United Kingdom route, was
completed and commenced operations on May 26, 1998. The Company currently
anticipates that the full AC-1 system will be completed and commence
operations by February 1999. See "Risk Factors--Risks Related to Completing
the Company's Cable Systems."

Until May 26, 1998, the Company was a development stage company and since
its inception, has been involved in the planning, financing, marketing,
organization, development, design and construction of the AC-1 system. In
addition, the Company has been engaged in the planning, developing and
financing of the three other planned systems currently under active
development by the Company (PC-1, MAC and PAC). The Company has also achieved
a number of significant milestones, including (i) the recruitment of
experienced professionals in undersea cable and telecommunications operations,
(ii) the signing of construction contracts on AC-1, PC-1, MAC and PAC, (iii)
the execution of the AC-1 and PC-1 credit facilities and the execution of
financing commitments with respect to MAC and PAC, (iv) the construction and
activation of the United States to United Kingdom segment of AC-1 and (v) the
execution of over $500 million of CPAs. Effective May 26, 1998, the United
States--United Kingdom segment of AC-1 achieved RFS and the Company began
recognizing revenue from the sale of capacity. Accordingly, the Company is no
longer a development stage company.

On March 18, 1998, Old GCL formed a wholly-owned subsidiary, GCL, a Bermuda
company, and contributed its investment in GTH to GCL. On April 30, 1998, GCL
formed a wholly-owned subsidiary, GCH, a Bermuda company. GCL contributed its
investment in GTH to GCH upon its formation. Prior to the Offerings,
substantially all of the shareholders of Old GCL will exchange their equity
interests in Old GCL for Common Stock of GCL.

31
<PAGE>

The Company, together with other partners, formed a joint venture company,
Pacific Crossing Ltd. ("PCL"), which on April 21, 1998 entered into a contract
with TSSL to construct the PC-1 cable system. The estimated cost of the PC-1
system is approximately $1.2 billion (excluding potential future upgrades) and
will be financed through a $400 million equity contribution by the joint
venture partners and through borrowings under the credit facility discussed
below. PC-1 is an undersea fiber optic cable system connecting California,
Washington and two landing sites in Japan. The Company has approximately a 58%
economic interest in PCL, represented by a 50% direct voting interest in PCL
and, through an equity ownership interest in one of the other joint venture
partners, a further 8% economic (but not voting) interest. The Company's
funding commitment in respect of the $400 million of equity in PCL totals $231
million, which is proportional to its economic interest. PCL has obtained an
$850 million senior secured, non-recourse credit facility from certain lenders
to finance the remaining construction costs of the PC-1 system. Prior to
obtaining such financing, PCL borrowed approximately $104 million under a
promissory note from the underwriters of the $850 million credit facility to
make the initial payments on the PC-1 construction contract. The $850 million
credit facility has been used to repay the $104 million promissory note. The
Company accounts for its investment in PCL on an equity basis.

Effective June 2, 1998, the Company, through its wholly-owned subsidiary
Mid-Atlantic Crossing Ltd. ("MACL"), entered into a contract with Alcatel
Submarine Networks for the construction of MAC, an undersea fiber optic cable
system connecting New York, the Caribbean and Florida. The estimated costs of
the MAC system of approximately $350 million (excluding potential future
upgrades and amounts capitalized with respect to the PCG Warrants) will be
financed through a $110 million equity contribution and through borrowings
under a non-recourse credit facility. On June 26, 1998, MACL entered into a
commitment letter to obtain $240 million of non-recourse indebtedness.

Effective July 21, 1998, the Company, through its wholly owned subsidiary
Pan American Crossing Ltd. ("PACL"), entered into a contract with TSSL to
construct PAC, an undersea fiber optic cable system connecting California with
two landing sites in Mexico, Panama and the Caribbean. The estimated costs of
the PAC system of approximately $475 million (excluding potential future
upgrades and amounts capitalized with respect to the PCG Warrants) will be
financed through a $165 million equity contribution and through borrowings
under a non-recourse credit facility. On July 21, 1998, PACL entered into a
commitment letter to obtain $310 million of non-recourse indebtedness.

Sales of capacity by the Company on its cable systems are effected through
Capacity Purchase Agreements ("CPAs") pursuant to which the Company's
customers obtain an indefeasible right of use ("IRU") for a certain number of
circuits. Each IRU entitles the customer to the use of the related capacity
for a period ending 25 years after the RFS date for the related system. Global
Crossing also sells backhaul capacity on terrestrial cables through Inland
Capacity Purchase Agreements ("ICPAs"), linking certain of the Company's
landing stations with major cities in order to provide city-to-city
connectivity to its customers. This backhaul capacity, which is purchased by
the Company through Inland Services Agreements ("ISAs") from the owners of
terrestrial cable systems, is resold by the Company to its customers through
ICPAs. The CPAs and ICPAs generally provide for a cash deposit upon execution,
followed by full payment upon activation of the related capacity pursuant to
the terms of the CPA.

The Company's basic pricing structure currently provides for volume-based
discounts to its customers as well as discounts for early purchases on a
particular system. Customers are generally provided options in their CPAs to
purchase additional capacity in the future at prices which reflect the
aggregate purchases made by such customers. Consequently, the prices under
such options in the future are often lower than the current price paid by such
customers for their initial capacity.

REVENUES

Revenues from CPAs and ICPAs are recognized in the period during which (i)
the purchaser obtains the right to use the capacity, which can only be
suspended following a failure of the purchaser to pay the full purchase price
or fulfill its contractual obligations, (ii) the purchaser becomes obligated
to pay OA&M costs and (iii) the segment of the system related to the capacity
purchased is ready for service.

32
<PAGE>

CPAs for capacity that do not meet the Company's revenue recognition policy
are not recorded in the Company's consolidated financial statements.

Since the RFS date for the United States--United Kingdom segment of AC-1,
which occurred on May 26, 1998, the Company's revenues have been comprised
principally of revenues from sales of cable capacity on AC-1 and the sale of
associated backhaul capacity.

Pursuant to the CPAs, the Company bills its customers for operations, direct
administration and maintenance costs incurred, plus 10%, subject to certain
annual maximum amounts.

COST OF CAPACITY SOLD; CONSTRUCTION IN PROGRESS; CAPACITY AVAILABLE FOR SALE

Construction costs incurred with respect to each segment of a system are
reflected as "Construction in Progress" in the Company's consolidated balance
sheet until a segment becomes operational, at which time such costs are
reflected as Capacity Available For Sale. Capacity Available For Sale is
recorded at the lower of cost or fair value less cost to sell and is charged
to Cost of Capacity Sold in the period the related revenues are recognized.
Fair value of capacity is derived from a third party consultant's market study
of expected sales of capacity.

The Company capitalizes the cost of acquiring backhaul capacity and records
in Backhaul Capacity Available for Sale amounts equal to the present value of
future payments associated with the acquisition of such backhaul capacity
(excluding from such payments amounts attributable to operations and
maintenance costs).

Construction in Progress includes direct expenditures for construction of
systems, including advisory, consulting and legal fees, interest during
construction and amortized debt issuance costs incurred during the
construction phase.

Amounts charged to Cost of Capacity Sold are calculated based on the ratio
of capacity revenues recognized in a period to total expected capacity
revenues over the life of the system, multiplied by the total cost to
construct the system. Management's forecast of revenues expected over the life
of the system will be supported by an independent consultant's forecast.
Changes in management's estimate of the expected revenues to be derived from
sales of a cable system's capacity will result in adjustments to the
calculations of Cost of Capacity Sold. These adjustments will be recorded on a
prospective basis over future periods commencing with the period when
management revises its estimate. The cost to acquire backhaul capacity is
charged to Cost of Capacity Sold in the period during which the related
revenues are recognized.

OPERATING EXPENSES

In addition to Cost of Capacity Sold, the Company's operating expenses
principally comprise sales and marketing, operations and maintenance, general
and administrative and network development costs. Costs relating to the
Company's evaluation of possible additional systems are expensed as incurred.

RESULTS OF OPERATIONS FOR THE PERIOD FROM MARCH 19, 1997 (DATE OF INCEPTION)
TO DECEMBER 31, 1997

Interest Income. Pursuant to the purchase agreement relating to the sale of
its outstanding $150 million GTH Senior Notes, the Company was required to
maintain certain amounts in restricted cash and cash equivalents accounts to
fund future semi-annual interest payments on such notes. Interest income
earned on this balance, together with interest income earned on cash raised
from financing and cash on CPA deposits, totalled approximately $2.9 million
for the period from March 19, 1997 to December 31, 1997. The Company utilized
a portion of the net proceeds from the Note Offering to repurchase the GTH
Senior Notes. See "--Liquidity and Capital Resources."

Expenses. During the period ended December 31, 1997, the Company incurred
expenses of $3.1 million. Of this amount, approximately $1.4 million was
attributable to sales and marketing expenses, relating principally to AC-1,
$0.1 related to network development and approximately $1.6 million was
attributable to general and administrative expenses.

33
<PAGE>

GTH Preference Share Dividends. The GTH Preference Shares accrued
compounding dividends at an annual rate of 14%. During the period ended
December 31, 1997, the Company recorded preference share dividends of
approximately $12.7 million. This amount is comprised of $11.1 million in
paid-in-kind ("PIK") dividends, $1.0 million in amortization of the discount
on issuance and $0.6 million in amortization of issuance costs. The $11.1
million in PIK dividends includes $1.3 million accrued but unpaid as of
December 31, 1997.

In connection with the issuance of the GTH Preference Shares, the exclusive
placement agent thereof, CIBC Wood Gundy Securities Corp., received a total of
19,852,950 shares of Class A common stock of Global Crossing Ltd., LDC ("Old
GCL") for no additional consideration. The Company has recorded the
$13,235,000 estimated fair value of such shares as a discount in the carrying
value of the GTH Preference Shares, which discount is being amortized over the
term of such shares. See "Certain Transactions--Transactions Regarding Class A
Shares of Old GCL."

The Company utilized a portion of the net proceeds from the Note Offering to
redeem the GTH Preference Shares effective June 17, 1998. See "--Liquidity and
Capital Resources."

Net Loss and Net Loss Applicable to Common Shareholders. During the period
ended December 31, 1997, the Company had a net loss applicable to common
shareholders of $12.9 million, resulting primarily from the $12.7 million of
dividends on the GTH Preference Shares described above.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND JUNE 30,
1997

Revenues

Through June 30, 1998, the Company had executed CPAs totalling approximately
$556 million. Of that amount, the Company recognized revenues of subsea and
backhaul capacity on AC-1 of $100.9 million for the three months ended June
30, 1998, in addition to revenues from operation and maintenance services of
$0.4 million. The remaining $455 million has not yet been reflected in the
financial statements primarily because either the segment has not reached RFS
or the purchaser has not obtained the right to use the capacity. As of June
30, 1998, the Company had entered into CPAs with 22 international
telecommunications carriers and had sold approximately 19% of the minimum
projected sales capacity of 512 circuits on the AC-1 system. There were no
revenues in the three months ended June 30, 1997, as the Company was in its
development stage. As of June 30, 1998, the Company recorded an allowance for
doubtful accounts in the amount of $1.0 million.

Expenses

Cost of Capacity Sold. For the three months ended June 30, 1998, the Company
recognized $41.2 million in costs of capacity sold, resulting in a gross
profit on capacity sales of 59%. The Company calculates cost of capacity sold
for AC-1 as previously described based on the ratio of the period's actual
revenue to total expected revenues given a minimum projected sales capacity of
512 circuits. This calculation of cost of sales matches costs with the
relative sales value of each sale. Cost of capacity sold also includes the
cost of backhaul capacity sold during the three months ended June 30, 1998 of
approximately $9 million. There were no sales or related costs recognized in
the three months ended June 30, 1997.

Operation and Maintenance. The Company incurred OA&M costs on the United
States-United Kingdom segment of AC-1 in the amount of $2.4 million during the
three months ended June 30, 1998. The Company has entered into an agreement
with TSSL relating to operations, administration and maintenance of AC-1 and
related backhaul capacity ("the AC-1 OA&M Agreement"). Following the AC-1 full
system RFS date, the Company anticipates that its costs under the AC-1 OA&M
Agreement will be largely recovered through charges to its customers under the
terms of CPAs.

34
<PAGE>

providing for the payment by the Company of an advisory fee of 2.0% of the
gross revenues of ACL. The Company's Board of Directors also approved similar
advisory fees and authorized the Company to enter into similar agreements in
respect of other cable systems developed by the Company. The Company has
agreed to acquire the rights of the persons entitled to the fees payable under
these agreements in consideration for the issuance by the Company of Common
Stock having an aggregate value of $135 million and the cancellation of
approximately $2.7 million owed to the Company under a related advance
agreement. As a result of this transaction, the Company incurred a charge of
$137.7 million, reflected in the statement of operations for the three month
period ended June 30, 1998. In addition, the Company recognized approximately
$2 million of advisory fees incurred prior to termination of the contract. See
"Certain Transactions." Upon the consummation of this transaction, all
obligations of the Company and ACL in respect of the advisory services
agreements will be terminated.

Sales and Marketing. During the three months ended June 30, 1998, the
Company recognized sales and marketing expenses of $6.5 million, including
commissions of $4.1 million incurred on the capacity sales recognized during
this period. During the three months ended June 30, 1997, the Company incurred
sales and marketing costs of approximately $40,000.

Network Development. The Company incurred network development costs during
the three months ended June 30, 1998 in the amount of $4.3 million relating to
the development of possible new systems. No such costs were incurred during
the three months ended June 30, 1997.

General and Administrative. General and administrative expenses totaled $6.5
million during the three months ended June 30, 1998, comprised principally of
salaries, employee benefits and recruiting fees reflecting the Company's
staffing for multiple systems; travel; insurance costs and rent expenses.
During the three months ended June 30, 1997, the Company incurred general and
administrative costs of approximately $50,000.

Stock-Related Expense. On April 3, 1998 and June 12, 1998, the Board of
Directors of Old GCL approved the issuance of options relating to 5,557,500
shares of common stock of Old GCL and 3,352,950 shares of common stock of Old
GCL, respectively, under the Company's Stock Incentive Plan. The options
granted on April 3, 1998 have exercise prices of $1.67 per share and the
options granted on June 12, 1998 have exercise prices of $6.67 per share and
generally have three-year vesting periods and ten-year expiration periods.
During the three months ended June 30, 1998, the Company recorded $67.1
million of unearned compensation, which is being recognized as an expense over
the vesting period of the options. Of this amount, the Company recognized
approximately $21.1 million of compensation expense during the three months
ended June 30, 1998 for the options issued in April and June, certain of which
vested immediately upon issuance, since the exercise price was less than the
estimated fair market value of the stock on the date of grant. Additionally,
$1.6 million in stock-related expense was recorded in respect of shares issued
during the period.

Interest Expense and Interest Income

During the three months ended June 30, 1998, the Company incurred $21.3
million in interest costs, including the amortization of debt discount and
expense. Of this amount, the Company capitalized interest to construction in
progress of $13.9 million and expensed $7.4 million. The Company's accounting
policy, in accordance with SFAS 34, provides for capitalization of interest to
construction in progress until such time as a segment reaches its Ready-for-
Service ("RFS") date. Accordingly, all interest costs were capitalized in the
three months ended June 30, 1997.

Interest income of $4.3 million and $1.3 million in the three months ended
June 30, 1998 and 1997, respectively, represents earnings on restricted cash,
cash raised from financing, and on CPA and ICPA deposits.

Provision for Income Taxes

The income tax provision of $9 million for the three months ended June 30,
1998 provides for taxes on profits earned from subsea and backhaul capacity
sales and OA&M revenues in certain jurisdictions where the Company is deemed
to have a taxable presence. The Company has incurred operating losses which
relate to non-taxable jurisdictions and therefore operating losses incurred to
date cannot be applied against future taxable earnings. Accordingly, no tax
provision or deferred tax benefit was recorded in 1997.

35
<PAGE>

Extraordinary Item; Preference Share Dividends

On May 18, 1998, the Company's wholly-owned subsidiary, GCH, issued $800
million of senior unsecured notes for the purpose of repurchasing the GTH
Senior Notes, redeeming the GTH Preference Shares, repaying in full amounts
drawn under a $200 million senior bridge facility (the "Global Crossing Bridge
Facility") and financing new projects. The Company recognized an extraordinary
loss of $19.7 million upon the repurchase of the GTH Senior Notes on May 18,
1998, comprised of a repurchase premium of approximately $9.8 million payable
to repurchase the GTH Senior Notes and a write-off of approximately $9.9
million of unamortized deferred financing costs. The redemption of the GTH
Preference Shares occurred on June 17, 1998 and resulted in a $34.1 million
charge against additional paid-in capital, comprised of approximately a $15.9
million redemption premium and $18.2 million of unamortized discount and
deferred financing costs on the GTH Preference Shares on the date of the
redemption. The redemption premium and write-off of unamortized discount and
issuance costs on the GTH Preference Shares are treated as a deduction to
arrive at net loss applicable to common shareholders in the consolidated
statement of operations.

The GTH Preference Shares accrued compounding dividends at an annual rate of
14%. During the three months ended June 30, 1998, the Company recorded
preference share dividends of approximately $3.9 million. This amount is
comprised of $3.5 million in paid-in-kind dividends, $0.3 million in
amortization of the discount on issuance and $0.1 million in amortization of
issuance costs. Preference share dividends for the three months ended June 30,
1997 were approximately $4.0 million comprised of $3.5 million in paid-in-kind
dividends, $0.3 million in amortization of the discount on issuance and $0.2
million in amortization of issuance costs. On June 17, 1998, the Company
redeemed the GTH Preference Shares as stated above.

Net Loss and Net Loss Applicable to Common Shareholders

The Company incurred a net loss of $155.4 million for the three months ended
June 30, 1998, compared to net income of $1.2 million in the three months
ended June 30, 1997. The loss for the three months ended June 30, 1998
reflects an extraordinary loss on retirement of GTH Senior Notes of $19.7
million and a non-recurring charge of $137.7 million relating to the
termination of its Advisory Services Agreement. The Company's net income
before these items would have been $2.0 million.

Net Loss Applicable to Common Shareholders during the three months ended
June 30, 1998 of $193.5 million reflects preference share dividends of $3.9
million and the redemption of GTH Preference Shares of $34.1 million. During
the three months ended June 30, 1997 the Company incurred a Net Loss
Applicable to Common Shareholders of $2.8 million after preference share
dividends of $4.0 million.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND THE PERIOD
FROM MARCH 19, 1997 (DATE OF INCEPTION) TO JUNE 30, 1997

Revenues

Through June 30, 1998, the Company had signed CPAs totalling approximately
$556 million. Of that amount, the Company recognized revenues of subsea and
backhaul capacity on AC-1 of $100.9 million for the six months ended June 30,
1998, in addition to revenues from operation and maintenance services of $0.4
million. The remaining $455 million has not yet been reflected in the
financial statements primarily because either the segment has not reached RFS
or the purchaser has not obtained the right to use the capacity. As of June
30, 1998, the Company had entered into CPAs with 22 international
telecommunications carriers and had sold approximately 19% of the minimum
projected sales capacity of 512 circuits on the AC-1 system. There were no
revenues in the period from March 19, 1997 (date of inception) to June 30,
1997, as the Company was in its development stage. As of June 30, 1998, the
Company recorded an allowance for doubtful accounts in the amount of $1.0
million.

36
<PAGE>

Expenses

Cost of Capacity Sold. For the six months ended June 30, 1998, the Company
recognized $41.2 million in costs of capacity sold, resulting in a gross
profit on capacity sales of 59%. The Company calculates cost of capacity sold
for AC-1 as previously described based on the ratio of the period's actual
revenue to total expected revenues given a minimum projected sales capacity of
512 circuits. This calculation of cost of sales matches costs with the
relative sales value of each sale. Cost of capacity sold also includes the
cost of backhaul capacity sold during the six months ended June 30, 1998 of
approximately $9 million. There were no sales or related costs recognized for
the period from March 19, 1997 (date of inception) to June 30, 1997.

Operation and Maintenance. The Company incurred OA&M costs on the United
States-United Kingdom segment of AC-1 in the amount of $2.4 million during the
six months ended June 30, 1998. The Company has entered into the AC-1 OA&M
Agreement with TSSL relating to operations, administration and maintenance of
AC-1 and related backhaul capacity. Following the AC-1 full system RFS date,
the Company anticipates that its costs under the AC-1 OA&M Agreement will be
largely recovered through charges to its customers under the terms of CPAs.

Termination of Advisory Services Agreement with PCG Telecom. In connection
with the development and construction of AC-1, ACL entered into an advisory
services agreement with an affiliate of the Company providing for the payment
by the Company of an advisory fee of 2.0% of the gross revenues of ACL. The
Company's Board of Directors also approved similar advisory fees and
authorized the Company to enter into similar agreements in respect of other
cable systems developed by the Company. The Company has agreed to acquire the
rights of the persons entitled to the fees payable under these agreements in
consideration for the issuance by the Company of Common Stock having an
aggregate value of $135 million and the cancellation of approximately $2.7
million owed to the Company under a related advance agreement. This charge of
$137.7 million is reflected in the statement of operations for the six month
period ended June 30, 1998. In addition, the Company recognized approximately
$2 million of advisory fees incurred prior to termination of the contract. See
"Certain Transactions." Upon the consummation of this transaction, all
obligations of the Company and ACL in respect of the advisory services
agreements will be terminated.

Sales and Marketing. During the six months ended June 30, 1998, the Company
recognized sales and marketing expenses of $7.3 million, including commissions
of $4.1 million incurred on the capacity sales recognized during this period.
During the period from March 19, 1997 (date of inception) to June 30, 1997,
the Company incurred sales and marketing costs of approximately $40,000.

Network Development. The Company incurred network development costs during
the six months ended June 30, 1998 in the amount of $4.3 million relating to
the development of possible new systems. No such costs were incurred during
the period from March 19, 1997 (date of inception) to June 30, 1997.

General and Administrative. General and administrative expenses totaled $9.1
million during the six months ended June 30, 1998, comprised principally of
salaries, employee benefits and recruiting fees reflecting the Company's
staffing for multiple systems; travel; insurance costs and rent expenses.
During the period from March 19, 1997 (date of inception) to June 30, 1997,
the Company incurred general and administrative costs of approximately
$50,000.

Stock-Related Expense. On January 21, 1998, April 3, 1998 and June 12, 1998,
the Board of Directors of Old GCL approved the issuance of options relating to
4,231,500, 5,557,500 and 3,352,950 shares of common stock of Old GCL,
respectively, under the Company's Stock Incentive Plan. The options granted on
January 21, 1998 and April 3, 1998 have exercise prices of $1.67 per share and
the options granted on June 12, 1998 have exercise prices of $6.67 per share
and generally have three-year vesting periods and ten-year expiration periods.
During the six months ended June 30, 1998, the Company recorded $67.1 million
of unearned compensation which is being recognized as an expense over the
vesting period of the options. Of this amount the Company recognized
approximately $21.1 million of compensation expense during the six months
ended June 30, 1998 for the options issued in April and June, certain of which
vested immediately upon issuance, since the exercise

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price was less than the estimated fair market value of the stock on the date
of grant. During the six months ended June 30, 1998, the Company also recorded
stock-related expense of $2.3 million relating to shares issued during this
period. The Company's Stock Incentive Plan commenced on January 21, 1998 and
therefore no issuances were made during the period from March 19, 1997 (date
of inception) to June 30, 1997.

Interest Expense and Interest Income

During the six months ended June 30, 1998, the Company incurred $31.8
million in interest costs, including the amortization of debt discount and
expense. Of this amount, the Company capitalized interest to construction in
progress of $24.4 million and expensed $7.4 million. The Company's accounting
policy, in accordance with SFAS 34, provides for capitalization of interest to
construction in progress until such time as a segment reaches its Ready-for-
Service ("RFS") date. Accordingly, all interest costs were capitalized in the
period from March 19, 1997 (date of inception) to June 30, 1997.

Interest income of $4.7 million and $1.3 million in the six months ended
June 30, 1998 and during the period from March 19, 1997 (date of inception) to
June 30, 1997, respectively, represents earnings on restricted cash, cash
raised from financing, and on CPA and ICPA deposits.

Provision for Income Taxes

The income tax provision of $9 million for the six months ended June 30,
1998 provides for taxes on profits earned from subsea and backhaul capacity
sales and OA&M revenues in certain jurisdictions where the Company is deemed
to have a taxable presence. The Company has incurred operating losses which
relate to non-taxable jurisdictions and therefore operating losses incurred to
date cannot be applied against future taxable earnings. Accordingly, no tax
provision or deferred tax benefit was recorded in 1997.

Extraordinary Item; Preference Share Dividends

On May 18, 1998, the Company's wholly-owned subsidiary, GCH, issued $800
million of senior unsecured notes for the purpose of repurchasing the GTH
Senior Notes, redeeming the GTH Preference Shares, repaying amounts drawn
under the Global Crossing Bridge Facility and financing new projects. The
Company recognized an extraordinary loss of $19.7 million upon the repurchase
of the GTH Senior Notes on May 18, 1998, comprised of a premium of
approximately $9.8 million payable to repurchase the GTH Senior Notes and a
write-off of approximately $9.9 million of unamortized deferred financing
costs. The redemption of the GTH Preference Shares occurred on June 17, 1998
and resulted in a $34.1 million charge against additional paid-in capital,
comprised of approximately a $15.9 million redemption premium and $18.2
million of unamortized discount and issuance cost on the GTH Preference Shares
on the date of the redemption. The redemption premium and write-off of
unamortized discount and issuance costs on the GTH Preference Shares are
treated as a deduction to arrive at net loss applicable to common shareholders
in the consolidated statement of operations.

The GTH Preference Shares accrued compounding dividends at an annual rate of
14%. During the six months ended June 30, 1998, the Company recorded
preference share dividends of approximately $8.3 million. This amount is
comprised of $7.3 million in paid-in-kind dividends, $0.6 million in
amortization of the discount on issuance and $0.4 million in amortization of
issuance costs. Preference share dividends for the period from March 19, 1997
(date of inception) to June 30, 1997 were $4.2 million comprised of $3.7
million paid-in-kind dividends, $0.3 million in amortization of the discount
on issuance and $0.2 million in amortization of issuance costs. On June 17,
1998, the Company redeemed the GTH Preference Shares as stated above.

Net Loss and Net Loss Applicable to Common Shareholders

The Company incurred a net loss of $159.2 million for the six months ended
June 30, 1998, compared to net income of $1.2 million in the period from March
19, 1997 (date of inception) to June 30, 1997. The loss for the six months
ended June 30, 1998 reflects an extraordinary loss on retirement of GTH Senior
Notes of $19.7 million and a non-recurring charge of $137.7 million relating
to the termination of its Advisory Services Agreement. The Company's net loss
before these items would have been $1.8 million.

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Net Loss Applicable to Common Shareholders during the six months ended June
30, 1998 of $201.6 million also reflects preference share dividends of $8.3
million and the redemption of GTH Preference Shares of $34.1 million. During
the period from March 19, 1997 (date of inception) to June 30, 1997, the
Company incurred a Net Loss Applicable to Common Shareholders of $3.0 million
after preference share dividends of $4.2 million.

BALANCE SHEET AS OF JUNE 30, 1998

The Company's investment in Construction in Progress, Capacity Available for
Sale, Backhaul Capacity Available for Sale and Investment in PCL totaled
approximately $906 million as at June 30, 1998.

In June 1998, the Board of Directors amended the terms of the PCG Warrants
so that the PCG Warrants will become exercisable upon the successful
completion of the Offerings. The Board of Directors also amended the terms of
the PCG Warrants to give each holder the option to convert each share under
warrant into a fraction of a Class B share of Old GCL based upon the ratio of
the current per share valuation at the time of conversion less the per share
exercise price of the warrant divided by the current per share valuation at
the time of conversion, together with a new warrant ("New PCG Warrants") to
purchase the remaining fraction of such Class B share at an exercise price
equal to the current per share valuation. Prior to the Offerings, it is
expected that the holders of the PCG Warrants will exercise their warrants to
acquire Class B shares of Old GCL by way of the cashless conversion and the
New PCG Warrants will be issued with an exercise price based on the per share
valuation at the conversion date.

The Company has accounted for the PCG Warrants based upon the value of the
cashless conversion as of June 30, 1998 using the current estimated per share
valuation at the expected conversion date multiplied by the number of Class B
shares of Old GCL estimated to be converted in exchange for the PCG Warrants.
The Company has recorded an increase in its Investment in PCL in the amount of
approximately $126.5 million and an increase in Construction in Progress for
PAC and MAC in the amounts of approximately $49.9 million and $36.9 million,
respectively, with a corresponding increase of approximately $213.3 million in
Additional Paid-in-Capital. The $213.3 million was allocated on a pro rata
basis to the three projects according to the estimated cost of each system.
The Company's accounting for the PCG Warrants is pursuant to Emerging Issues
Task Force 96-18, "Accounting for Equity Instruments with Variable Terms that
are Issued for Consideration other than Employee Services under FASB Statement
No. 123" ("EITF 96-18"). Under EITF 96-18, the fair value of equity
instruments issued for consideration other than employee services should be
measured using the stock price or other measurement assumptions as of the date
at which a firm commitment for performance has been reached. The Company has
recorded the estimated value of the PCG Warrants as of June 30, 1998, since
the Offerings were probable at that date. The $213.3 million value attributed
to the PCG Warrants as of June 30, 1998 will be adjusted to the actual value
on the date of the Offerings based upon the Price per Share to Public in the
Offerings. Such adjustment is not expected to be material.

The Company will give accounting recognition for the New PCG Warrants on the
date these warrants are issued, which is expected to be the date of the
Offerings. The Company estimates the value of each New PCG Warrant at $6.67
based on an independent valuation assuming a Price to Public Per Share of the
Offerings of $18.00 per share. Assuming all of the PCG Warrants are converted
as of June 30, 1998, the New PCG Warrants would have a total value of $44
million. Upon the issuance of the New PCG Warrants, the Company will record
the actual value of the New PCG Warrants at the date of the Offerings (based
upon the Price per Share to Public in the Offerings) and the total value will
be allocated to the investment in PCL and Construction in Progress for MAC and
PAC based on their relative total contract costs with a corresponding increase
in Additional Paid-in-Capital.

During the six months ended June 30, 1998, the Company paid fees of $7.0
million to PCG, a shareholder of the Company, relating to system evaluation
costs incurred by PCG. This amount was treated as a dividend and charged
against additional paid-in-capital.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal capital expenditure requirements involve the
construction of undersea cable systems, the related landing stations, and
certain investments in backhaul capacity to connect the landing stations

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to major metropolitan areas. As of June 30, 1998 and December 31, 1997,
respectively, the Company had incurred approximately $724 million and $519
million, respectively, of capital expenditures in respect of AC-1, principally
for system construction costs and purchases of backhaul capacity and was
committed to a further $64 million and $195 million, respectively, of capital
expenditures under the AC-1 Contract in connection with the completion of AC-
1. Backhaul capacity purchases are recorded at the present value of future
payments (excluding from such payments amounts attributable to operations and
maintenance) required to be made by the Company for such capacity.

The total cost of AC-1 is estimated at approximately $750 million, excluding
purchases of backhaul capacity and potential future upgrades but including
financing costs capitalized during the period AC-1 is under construction. All
future costs with respect to AC-1 will be fully financed with the remaining
availability under the AC-1 Credit Facility. AC-1 was initially financed
through (i) the $482 million AC-1 Credit Facility; (ii) $150 million of GTH
Senior Notes; (iii) $100 million of GTH Preference Shares; and (iv) $75
million of GCL common equity. See "Description of Certain Indebtedness." As of
December 31, 1997 and June 30, 1998, the Company had borrowed $162 million and
$367 million, respectively, under the AC-1 Credit Facility. The Company's
principal source of liquidity through those dates was the AC-1 Credit
Facility.

On May 18, 1998, GCH consummated an $800 million private offering of 9 5/8%
Senior Notes Due 2008 (the "Note Offering"). The Company has utilized (or will
utilize) the net proceeds of the Note Offering (i) to purchase all of the $150
million outstanding GTH Senior Notes, (ii) to redeem all of the $100 million
outstanding GTH Preference Shares, (iii) to repay in full the $67.2 million
outstanding under the Global Crossing Bridge Facility, (iv) to make $315
million of equity investments in certain of the Company's systems and (v) for
general corporate purposes, including $74 million to fund a one-year interest
reserve on the GCH Senior Notes.

Cash provided by operating activities was approximately $37.4 million for
the six months ended June 30, 1998 and $5.1 million for the period from March
19, 1997 (date of inception) to December 31, 1997 and principally represents
cash received on deposits on signed CPAs plus interest income received, less
sales and marketing and general and administrative expenses paid.

Cash provided by financing activities was approximately $456.3 million for
the six months ended June 30, 1998 and primarily represents borrowings under
the AC-1 Credit Facility and the Global Crossing Bridge Facility net of the
increase in proceeds on borrowings held in restricted cash and cash
equivalents. Cash provided by financing activities of $425.1 million for the
period from March 19, 1997 (date of inception) to December 31, 1997
principally relates to net proceeds from the issuance of common stock,
preference shares and senior notes, and borrowings under the AC-1 Credit
Facility less finance and organization costs paid, less an increase in
proceeds on borrowings held in restricted cash and cash equivalents.

Cash used in investing activities was approximately $191.1 million and
$429.0 million for the six months ended June 30, 1998 and the period from
March 19, 1997 (date of inception) to December 31, 1997, respectively,
represents cash paid for Construction in Progress.

The Company is currently actively developing three additional systems, PC-1,
MAC and PAC. The Company currently estimates that the costs of constructing
these systems will total approximately $2,025 million, including financing
costs but excluding potential future upgrades and amounts capitalized with
respect to the PCG Warrants. The Company expects to use approximately $315
million of the net proceeds from the Note Offering to fund initial investments
in PC-1, MAC and PAC. In order to finance certain initial costs relating to
the development of these systems, the Company has obtained additional
financing. During the first quarter of 1998, the Company, acting through GCL,
entered into the $200 million Global Crossing Bridge Facility with a syndicate
of banks led by CIBC. The Company utilized a portion of the net proceeds from
the Note Offering to repay such borrowings and terminate the remaining
commitments under the Global Crossing Bridge Facility. The Company expects
that the additional capital required to finance these cable systems will be
raised through a combination of commercial bank borrowings, non-recourse
project financings, and public and private offerings of debt and equity
securities. Effective July 30, 1998, the Company entered into a credit
agreement for the $850 million non-recourse project debt financing of PC-1
(including $50 million for the initial upgrade of the PC-1 system). Effective
June 26, 1998, the Company entered into a commitment letter for the $240
million

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non-recourse project debt financing of MAC. Effective July 21, 1998, the
Company entered into a commitment letter for $310 million non-recourse project
debt financing of PAC. There can be no assurance that the Company will be
successful in raising additional capital at all or on terms acceptable to the
Company. See "Risk Factors--Substantial Future Capital Requirements" and "Risk
Factors--Risks Related to Completing the Company's Cable Systems."

Because the Company's cost of developing and constructing its systems, as
well as operating its business, will depend on a variety of factors (including
the Company's ability to successfully negotiate construction supply contracts
at favorable prices, the ability of the Company to generate sufficient sales
to customers, changes in the competitive environment of the markets served by
the Company, the estimated levels of participation by the Company's joint
venture partners, and changes in technology), actual costs and revenues will
vary from expected amounts, possibly materially, and such variations will
likely impact the Company's future capital requirements. The development of
additional systems which may be pursued by the Company will lead to additional
future capital requirements.

As of April 21, 1998, a supply contract (the "PC-1 Contract") was entered
into with TSSL to construct PC-1. The PC-1 Contract contains construction
payments totaling approximately $1.0 billion to be made by Global Crossing and
its joint venture partners. On June 2, 1998, the Company entered into a supply
contract (the "MAC Contract") with Alcatel to construct MAC. On July 21, 1998,
the Company entered into a supply contract (the "PAC Contract") with TSSL to
construct PAC. See "Risk Factors--Substantial Future Capital Requirements" and
"Risk Factors--Risk of Error in Forward-Looking Statements."

The Company has extended financing to a small number of customers in
connection with certain CPAs. The financing terms provide for installment
payments over a period of up to four years. To date, less than ten percent of
the Company's sales have been made on this basis. The Company believes that
its extension of financing to its customers will not have a material effect on
the Company's liquidity.

The Company has entered into a commission sharing agreement with TSSL
providing for the payment to TSSL of commissions in respect of marketing of
capacity on the AC-1 and PC-1 systems. Payments by the Company to TSSL of
these commissions is fully contingent upon the receipt by the Company of cash
payment under the related CPAs and, accordingly, payment by the Company of
these commissions has no material effect on its liquidity.

FOREIGN CURRENCY EXPOSURE

All of the Company's sales and substantially all of its expenditures are
denominated in U.S. dollars. Monetary assets and liabilities denominated in
foreign currencies at year end are translated into U.S. dollars at the rate of
exchange at that date. Resulting gains or losses on exchange are recorded in
the statement of operations.

INFLATION

Management does not believe that its business is impacted by inflation to a
significantly different extent than the general economy.

YEAR 2000 COMPLIANCE

The Company believes that its computer information systems will enable it to
process transactions relating to Year 2000 and beyond and that its computer
systems relating to AC-1 will be Year 2000 compliant. The Company has received
assurances from TSSL and Lucent Technologies regarding Year 2000 compliance
status of these suppliers with respect to AC-1, but does not currently have
such information regarding its customers. In the event that any of the
Company's significant suppliers or customers do not successfully and timely
achieve Year 2000 compliance, the Company's business or operations could be
adversely affected.

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BUSINESS

Global Crossing is the world's first independent provider of global Internet
and long distance telecommunications facilities and services utilizing a
network of undersea digital fiber optic cable systems and associated
terrestrial backhaul capacity. As such, the Company believes it is the first
to offer "one-stop shopping" for its customers to multiple destinations
worldwide. The Company operates as a "carriers' carrier", providing tiered
pricing and segmented products to licensed providers of international
telecommunications services. Capacity on the Global Crossing Network is
offered to all customers on an open, equal access basis. The first four cable
systems under development by the Company, together with associated terrestrial
backhaul capacity, will form a state-of-the-art interconnected worldwide high
capacity undersea fiber optic network: AC-1, a system connecting the United
States and Europe; PC-1, a system connecting the United States and Asia; MAC,
a system connecting the eastern United States, Bermuda and the Caribbean; and
PAC, a system connecting the western United States, Mexico, Panama and the
Caribbean. The undersea component of this initial network totals 51,300 km.
The Company is in the process of developing several new cable systems and
evaluating other business development opportunities which will complement the
Global Crossing Network.

Global Crossing's business is designed to meet the varying needs of the
global carrier market. The Company offers customers the ability to purchase
capacity on demand, thereby (i) eliminating their need to commit the
substantial capital which would otherwise be required to build undersea cable
capacity and (ii) decreasing the risks associated with forecasting their
future capacity requirements. Compared with traditional undersea cable
systems, the Company offers more comprehensive, flexible and low-cost
purchasing alternatives designed to meet current market requirements of
international carriers and licensed Internet service providers, including
direct international city-to-city connectivity, the ability to purchase
capacity annually and discounts based upon aggregate volume purchased on the
Global Crossing Network.

The Global Crossing Network is being engineered and constructed to allow
multiple upgrades to its initial circuit capacity at a fraction of the initial
system cost, and the Company is exploring opportunities to expand its subsea
and terrestrial systems, as well as the range of the products it offers. The
Company anticipates that its future revenues, beyond those obtained from the
sale of the initial capacity of its first four cable systems, will derive from
several sources. First, each of the currently-planned systems under
development by the Company is upgradeable to capacities significantly beyond
the initial capacity at a fraction of the original system cost. These upgrades
can be used to meet growth in market demand for telecommunications capacity
and to achieve additional revenues. In addition, the Company is currently
evaluating a number of additional undersea cable projects, as well as
proposals to develop or purchase additional terrestrial fiber capacity in
North America, Europe, and Asia. These potential projects will be pursued to
the extent that they further the Company's strategy of developing an
integrated global network that serves approximately 50 of the largest
metropolitan communications markets worldwide. As the Company's global network
is developed, additional wholesale revenues may be generated from the sale of
additional products and services. See "Risk Factors--Sales Capacity;
Realization of Other Revenues."

Global Crossing was formed to capitalize on the accelerating growth of
international voice and data telecommunications traffic. The significant
increase in Internet usage and other bandwidth-intensive applications and the
growing use of corporate networks have substantially increased the demand for
international fiber optic cable capacity. The proliferation of
telecommunications service providers due, in large part, to industry
deregulation has further contributed to increased demand for such
international cable capacity. Additionally, the Company believes that other
technological developments, such as improvements in "last mile" access
technology, including xDSL and cable modems, and the increasing video content
of Internet applications, will result in further capacity demand growth.

The Company commenced operations in March 1997, when it contracted for the
construction of AC-1, a 14,000 km digital fiber optic cable system that will
link the United States, the United Kingdom, The Netherlands and Germany and
will initially offer 40 Gbps of service capacity, which is upgradeable to a
minimum of 80 Gbps, increasing the existing undersea fiber optic cable
capacity along the heavily trafficked transatlantic route

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by approximately 65% prior to upgrades. AC-1 commenced service on its United
States-United Kingdom segment on May 26, 1998 and the full system,
encompassing a four fiber pair self-healing ring, is scheduled for completion
by February 1999. In April 1998, Global Crossing contracted for the
construction of PC-1, a 21,000 km digital cable system that will link the
United States and Japan and will initially offer 80 Gbps of service capacity,
upgradeable to a minimum of 160 Gbps. PC-1, a four fiber pair self healing
ring, is scheduled to commence initial service in March 2000. In June 1998,
Global Crossing contracted for the construction of MAC, a 9,300 km digital
cable system that will connect New York, Bermuda, the Caribbean and Florida
and will initially offer 20 Gbps of service capacity, upgradeable to a minimum
of 40 Gbps. In addition, in July 1998, Global Crossing contracted for the
construction of PAC, a 7,000 km two fiber pair digital cable that will connect
California, Mexico, Panama and the Caribbean and will initially offer 20 Gbps
of service capacity, upgradable to a minimum of 40 Gbps.

MARKET OPPORTUNITY

The Global Crossing Network is being developed to capitalize on certain
trends in the international telecommunications industry:

Rapid Growth of International Internet and Telecommunications Traffic. While
international voice traffic from 1996-2000 is expected to grow at a rate of
13% annually, international data traffic growth is expected to significantly
outpace voice traffic growth. One of the key factors contributing to the
growth in data traffic is the increasing use of broadband applications
dominated by Internet, which has grown at a compound annual rate of 86% for
the past five years as measured by the number of Internet hosts. Reflecting
this growth, the number of ISPs is growing explosively on a global basis. ISPs
outside the United States, particularly in Europe, Asia and Latin America, are
expected to require significant subsea optical circuit capacity to provide
efficient service to their customers to popular Internet web sites in the
United States. In addition, improvements in "last mile" technology, such as
xDSL and cable modems, are contributing to the significant increase in the
number of subscribers using such bandwidth-intensive applications. For
example, the number of cable modem subscribers in the United States alone is
projected to increase by approximately 600% in 1998. Several additional key
factors are expected to drive the rapid growth in worldwide telecommunications
traffic, including the (i) worldwide growth in the use of bandwidth-intensive
applications, such as video conferencing and corporate intranets, (ii)
increased globalization of commerce and (iii) a general decline in
international tariffs.

Impact of Global Deregulation. The continued deregulation of the global
telecommunications industry has resulted in a significant increase in the
number of competitors, including traditional carriers, wireless operators,
ISPs and new local exchange service providers, due in large part to: (i) the
breadth and volume of privatization activity globally and (ii) the ability of
new entrants to effectively compete against the formerly protected incumbent
providers. This change in the global competitive landscape is generating
significant demand for broadband communications capacity as carriers seek to
secure sufficient capacity for their expansion plans. As of July 1998, the ITU
estimated that there were 1,000 international carriers, representing a 181%
increase since the end of 1996. In addition, further telecom privatization is
expected during 1998 and 1999, which in turn is expected to generate increased
global competition.

Shortage of Available Capacity. The Company believes that additional network
undersea capacity and faster response times will be required to satisfy
current and anticipated growth in telecommunications traffic. While there has
been a significant increase in the demand for global telecommunications
capacity, there has not

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been a corresponding growth in the number of new transport facilities,
especially in the undersea cable industry. The Company believes that
construction of competing undersea cable systems will be limited in the near
future due to barriers to entry, including (i) the extensive lead time
required to engineer and construct cable systems, (ii) the limited number of
major undersea cable supply and construction companies, (iii) the limited
number of qualified personnel with extensive experience in the undersea cable
industry and (iv) the significant capital required to develop undersea cable
systems.

Increasing Challenges for Consortia Systems. Historically, the planning and
ownership of undersea cable systems was conducted through large consortia
typically led by the monopoly telecommunications providers. Global Crossing
believes that the consortium approach to constructing, owning and operating
undersea cable systems is becoming far less effective as (i) carriers
increasingly view significant long term capital investments in capacity to be
a suboptimal utilization of resources, (ii) deregulation of international
telecommunications markets leads to direct competition among consortia members
for customers, (iii) competition from new entrants makes carriers' market
share and capacity requirements increasingly difficult to predict and (iv) the
rapid pace of technological change creates difficulties in the ability of
carriers to accurately forecast the growth of telecommunications traffic.

Acceptance of Privately Sponsored Cable Systems. The Company believes that
telecommunications service providers have become increasingly receptive to the
advantages of independent, privately-owned cable systems. In connection with
the marketing of capacity on the Global Crossing Network, carriers have
responded positively to the Company's ability to offer (i) capacity as and
when needed without the incurrence of significant initial capital investments,
(ii) a wide range of purchasing options appealing to both established carriers
and new market entrants, (iii) state-of-the-art system quality combined with
cost-effective high quality operations, administration and maintenance support
and (iv) the absence of direct competition with its customers.

BUSINESS STRATEGY

Global Crossing's mission is to create the world's first independent global
fiber optic network designed to offer its customers the highest quality city-
to-city communications connectivity among approximately 50 of the largest
metropolitan markets worldwide. The principal elements of the Company's
business strategy include:

Create a Worldwide Network. Upon completion, the currently announced
undersea segments of the Global Crossing Network will directly connect Asia,
North America, Europe, Central America and the Caribbean through the major
transoceanic routes utilizing state-of-the-art technology. To increase the
attractiveness of the Global Crossing Network, the Company is making selective
wholesale acquisitions of terrestrial fiber capacity, thereby providing its
customers with international city-to-city connectivity through Global
Crossing's cable systems at prices significantly lower than if such customers
had attempted to gain connectivity by separately purchasing required
terrestrial backhaul capacity. The Company also intends to actively pursue
additional opportunities for the expansion of the Global Crossing Network,
including complementary businesses and facilities.

The Company has entered into contractual arrangements to provide terrestrial
backhaul service between its landing stations in the United States and the
United Kingdom and New York City and London, respectively, as well as other
arrangements to provide backhaul service in Germany and The Netherlands. In
addition, the Company recently entered into an agreement with Qwest whereby
Global Crossing will receive access to over 25 U.S. metropolitan
communications markets on Qwest's terrestrial network. Through Global Access,
a Japanese telecommunications carrier owned by Marubeni, the Company will
offer backhaul services to PC-1 customers from the Company's Japanese landing
stations directly to Tokyo at prices substantially lower than existing
alternatives. The Company is also currently negotiating with Marubeni to
obtain a minority investment in Global Access, which is constructing a
domestic terrestrial fiber optic cable network connecting the PC-1 cable
station with Tokyo, Nagoya and Osaka. See "Use of Proceeds."

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network of undersea digital fiber optic cable systems and associated
terrestrial backhaul capacity. The Company's products are segmented to meet
the varying needs of the global carrier market, with shore-to-shore capacity
offered to major carriers that have their own terrestrial backhaul capacity
and city-to-city capacity provided to other customers that require such
service. Global Crossing also offers carriers, through wholesale channels, a
combination of volume-based purchasing flexibility, typically according to a
tiered scale with various incentive levels, and volume discounts for purchases
of capacity on one cable system based upon purchases previously made on the
Company's other systems. See "--Sales and Marketing."

Utilize State-of-the-Art Technology. The Global Crossing Network is being
engineered and constructed using the latest in fiber optic technology, self-
healing ring structures, erbium doped fiber amplifier repeaters, DWDM and
redundancies of capacity to ensure instantaneous restoration. The Company
believes that incorporating such technology in the Global Crossing Network
will (i) provide a cost advantage over existing alternatives, (ii) make it
more reliable than competing systems, (iii) allow the Company to offer
substantially more capacity than existing cable systems and (iv) enable the
capacity of each of the Company's cable systems to be upgraded at the landing
stations rapidly and at a fraction of the initial system cost without physical
modification of the submerged portion of the system.

Maintain Position as Low-Cost Provider. The Company plans to maintain its
position as a low-cost provider of facilities and services to its carrier
customers relative to its competitors. Global Crossing believes that this low-
cost position results from a combination of (i) low sales and marketing and
general and administrative costs, reflecting a commitment to wholesale
customers, (ii) ownership of undersea fiber optic facilities utilizing state-
of-the-art technology, resulting in lower operating and maintenance costs that
will be passed on to its customers, and (iii) leveraging the Company's strong
position in the undersea fiber optic facilities market to obtain low-cost
terrestrial connectivity between cable landing stations and major
telecommunications sites.

Provide "One-Stop" Sales and Service. Through both its marketing and sales
force, as well as its ongoing operations, administrative and maintenance
support, Global Crossing plans to offer one-stop sales and service to
customers worldwide. The Company currently employs 18 marketing professionals
located in the Company's headquarters in Bermuda and in major cities
throughout the world in order to facilitate the sales of its
telecommunications capacity and increase market awareness and name
recognition. See "--Sales and Marketing." The efforts of the sales force have
resulted in significant contractual arrangements to date with international
telecommunications carriers. In addition, Global Crossing is developing a
centralized operations, administration and maintenance support system to serve
the entire Global Crossing Network, including a customer care center, network
operations center and technical support center. Through such integrated
customer support, in combination with its sales force, the Company intends to
enable customers to have a single point of contact regarding capacity sales
and service on the Global Crossing Network.

Leverage Extensive Management Experience. Global Crossing has assembled and
will continue to build a strong management team comprised of executives with
extensive operating experience in the telecommunications industry and the
undersea cable sector. Prior to joining the Company, Jack Scanlon, the
Company's Chief Executive Officer, was President and General Manager of the
Cellular Networks and Space Sector of Motorola, Inc., responsible for
approximately $6 billion in annual revenues and 16,000 employees. Mr. Scanlon
has over 30 years of experience in the telecommunications industry, including
24 years with AT&T and Bell Laboratories. In addition, William Carter, the
Company's senior executive in charge of system development, was formerly the
President and Chief Executive Officer of SSI, overseeing the research and
development, engineering, implementation and integration of AT&T's
international cable and satellite facilities. Mr. Carter had been at AT&T for
30 years prior to joining the Company. During Mr. Carter's tenure, SSI had the
leading worldwide market share in the undersea cable industry. Dan J. Cohrs,
the Company's Chief Financial Officer, was formerly Vice President and Chief
Planning and Development Officer at GTE, where he was responsible for
corporate development activities, including mergers and acquisitions and
strategic transactions, as well as strategic planning and competitive
analysis. In addition, the Company's system development team includes several
individuals with extensive experience with major undersea cable and
telecommunications industry participants. See "Management."

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THE GLOBAL CROSSING NETWORK

As part of Global Crossing's mission to create an integrated global, high
capacity undersea fiber optic cable network, the Global Crossing Network is
being engineered and constructed to connect the two most heavily trafficked
international corridors in the world via AC-1 (United States to Europe) and
PC-1 (United States to Asia). Global Crossing plans to interconnect these
systems with two north-south systems (MAC and PAC), directly connecting
Bermuda, the Caribbean, Central America and, through unaffiliated cable
systems, South America. Of the four undersea fiber optic cable systems
currently being constructed by Global Crossing, AC-1, MAC and PAC are wholly-
owned projects by the Company, while PC-1 is being constructed through a joint
venture with one or more partners, principally Marubeni. Global Crossing will
initially have approximately a 58% interest in PC-1 and, in conjunction with
Marubeni, will manage its development, sales and operation.

The following table contains information regarding the estimated system
cost, initial RFS date and ownership structure of the Company's four currently
planned systems:

<TABLE>
<CAPTION>
ESTIMATED
SYSTEM COST(1) EXPECTED INITIAL OWNERSHIP
SYSTEM (MILLIONS) RFS DATE(2) STRUCTURE
------ -------------- ------------------------- -------------
<S> <C> <C> <C>
AC-1 $ 750 May 1998 (US-UK) Wholly-Owned
(complete)
February 1999 (Full Ring)
PC-1 1,200 March 2000 Joint Venture
July 2000 (Full Ring)
MAC 350 December 1999 Wholly-Owned
PAC 475 February 2000 Wholly-Owned
------
$2,775
======
</TABLE>
- --------
(1) Includes anticipated financing costs. Excludes the costs of potential
future upgrades and any amount capitalized with respect to the PCG
Warrants. The amount indicated under "Estimated System Cost" is based upon
executed supply and financing documents. Certain factors, such as
increases in interest rates and delays in construction, could result in
higher actual costs or later RFS dates than currently estimated. See "Risk
Factors--Risks Related to Completing the Company's Cable Systems" and
"Risk Factors--Risk of Error in Forward-Looking Statements."

(2) Based upon executed supply and financing documents. Certain factors, such
as reliance upon third party suppliers, could result in timing delays. See
"Risk Factors--Dependence on Third Parties."

ATLANTIC CROSSING

AC-1, the Company's first undersea fiber optic cable in the Atlantic region,
is a 14,000 km four fiber pair self-healing ring that, upon completion, will
connect the United States and Europe with landing stations in the United
States, the United Kingdom, The Netherlands and Germany. AC-1 is equipped with
state-of-the-art DWDM and the full ring will initially offer 40 Gbps of
service capacity, increasing the existing undersea fiber optic cable capacity
along the heavily trafficked transatlantic route by approximately 65% prior to
upgrades. Capacity on AC-1 is upgradeable to a minimum of 80 Gbps using DWDM
technology. AC-1 commenced service on its United States-United Kingdom segment
on May 26, 1998 and the full system, encompassing a self-healing ring, is
scheduled for completion by February 1999.

The aggregate costs of AC-1, which are estimated to be approximately $750
million (excluding potential future upgrades), have been fully financed prior
to the Offerings. In addition to the AC-1 Contract with TSSL for construction
of the system, Global Crossing has entered into other contracts with TSSL
pursuant to which TSSL will provide operations, administration and maintenance
services for the system.

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<PAGE>

of capacity on AC-1 and related backhaul commenced in October 1997 and, as of
June 30, 1998, the Company had entered into CPAs with customers providing for
payments to the Company of $556 million and $108 million of payments
(including deposits) had been received in respect thereof. These CPAs
represent approximately 19% of the minimum projected sales capacity of 512
circuits on the AC-1 system. The balance of these payments is scheduled to be
collected over the next four years. The Company's AC-1 customers now total
more than 22 international telecommunications carriers, including Deutsche
Telekom, GTE, Qwest, Teleglobe, Swisscom, PTT Telecom BV, Telia AB and a
number of emerging telecommunications companies. The Company generally grants
customers who have entered into CPAs options to acquire further capacity on
AC-1. The amount of such capacity depends upon a number of factors, including
upgrades to AC-1, future prices for AC-1 capacity and the amount of unsold
capacity on AC-1 at certain dates after the AC-1 system RFS date. In addition,
the Company has received as of June 30, 1998 non-binding indications of
interest from customers pursuant to memoranda of understanding ("MOUs") that
would, if converted into CPAs, provide for payments to the Company of
approximately $90 million. The timing of payments by purchasers under CPAs
generally depends on when service commences on the segment or segments of AC-1
on which capacity is acquired. All of the foregoing payment amounts assume the
completion of the related segment prior to specified dates falling after the
scheduled RFS date for that segment. There can be no assurance that any MOUs
will be converted into CPAs or that the final form of any CPA will contain the
same capacity purchase or payment provisions as the related MOU.

Based upon its current expectations regarding sales of capacity on AC-1, the
Company believes that it will develop and eventually construct AC-2, an
additional four fiber pair cable connecting the United States to Europe. When
combined with AC-1, AC-2 would double the capacity that Global Crossing would
be able to offer customers on the transatlantic route. There can be no
assurance that the Company will ultimately elect to proceed with AC-2 or that
such system will help the Company achieve and sustain operating profitability.

PACIFIC CROSSING

PC-1, the Company's first undersea fiber optic cable in the Pacific region,
is being developed as a 21,000 km four fiber pair self-healing ring that, upon
completion, will connect California, Washington and two landing sites in
Japan, providing connectivity to other points in Asia through interconnection
with other third party cable systems. PC-1 is designed to operate initially at
80 Gbps of service capacity and to be upgradeable to a minimum of 160 Gbps,
using DWDM technology.

In April 1998, the Company executed the PC-1 Contract with TSSL for the
construction of PC-1, which provides for a system completion date of Summer
2000 at an aggregate cost of approximately $1.2 billion. Equity investments in
PC-1 by Global Crossing and its partners are currently estimated at $400
million (of which $231 million will be provided by the Company), with the
remaining $800 million financed through incurrence of non-recourse
indebtedness at the PC-1 level. The credit agreement for the financing of such
indebtedness was executed on July 30, 1998.

On July 6, 1998, the Company executed a memorandum of understanding with DDI
Corporation, the second largest telephone company in Japan, to purchase
capacity on PC-1 which, if successfully converted to a CPA, would represent
its first sale of capacity to an Asian customer on this system.

MID-ATLANTIC CROSSING

MAC is being developed as a 9,300 km two fiber pair self-healing ring that,
upon completion, will connect New York, Bermuda the Caribbean and Florida.
Global Crossing intends that MAC will be connected to AC-1 via its cable
station in Brookhaven, New York, providing connectivity between Europe, the
eastern United States, Bermuda and the Caribbean and, through interconnection
with other non-Global Crossing submarine cable systems, South America. MAC is
being designed to operate initially at 20 Gbps of service capacity and to be
upgradeable to a minimum of 40 Gbps using DWDM technology.

Global Crossing is negotiating with TeleBermuda International Limited
("TBI"), the second international carrier in Bermuda, to acquire from TBI the
now operational BUS-1 undersea cable which connects Bermuda to

47
<PAGE>

New Jersey, in exchange for cash and certain capacity on AC-1. If such
transaction is consummated, the BUS-1 cable would be integrated with MAC,
providing an additional landing in the United States.

In June 1998, the Company executed a contract with Alcatel Submarine
Networks ("Alcatel") for the construction of MAC, which provides for a system
completion date of December 1999 at an aggregate cost of approximately $350
million (excluding potential future upgrades and amounts capitalized with
respect to the PCG Warrants), of which approximately $110 million will be
financed by equity contributions by the Company and $240 million is to be
financed through non-recourse indebtedness at the MAC level. The contractual
commitment for the financing of such indebtedness was obtained on June 26,
1998.

PAN AMERICAN CROSSING

PAC is being developed as a 7,000 km two fiber pair cable that, upon
completion, will connect California, Mexico, Panama and the Carribean,. PAC is
being designed to interconnect with PC-1 through the Company's landing station
in San Luis Obispo, California and with MAC through the Company's landing
station in St. Croix. It is anticipated that PAC will transverse Panama via an
existing terrestrial right-of-way. PAC is being designed to operate initially
at 20 Gbps of service capacity and to be upgradeable to a minimum of 40 Gbps
using DWDM technology.

In July 1998, the Company executed a contract with TSSL for the construction
of this system which provides for a system completion date of February 2000
and will cost approximately $475 million (excluding potential future upgrades
and amounts capitalized with respect to the PCG Warrants), with $165 million
financed through equity contributions from the Company and $310 million to be
financed through non-recourse indebtedness at the PAC level. The contractual
commitment for the financing of such indebtedness was obtained on July 22,
1998.

TERRESTRIAL BACKHAUL SERVICES

In addition to the undersea segments of the Global Crossing Network, the
Company has made and expects to continue to make acquisitions of terrestrial
fiber capacity which complement its core undersea cable business and which
address customer demands for global city-to-city connectivity. Global Crossing
intends to acquire such connectivity to approximately 50 of the largest
metropolitan telecommunications markets worldwide. The Company has entered
into contractual arrangements to provide terrestrial backhaul service between
its landing stations in the United States and the United Kingdom and New York
City and London, respectively, as well as other arrangements to provide
backhaul service in Germany and The Netherlands. In addition, the Company
recently entered into an agreement with Qwest whereby Global Crossing will
receive access to over 25 U.S. metropolitan communications markets on Qwest's
terrestrial network. Through Global Access, a Japanese telecommunications
carrier owned by Marubeni, the Company will offer backhaul services to PC-1
customers from the Company's Japanese landing stations directly to Tokyo at
prices substantially lower than existing alternatives. The Company is also
currently negotiating with Marubeni to obtain a minority investment in Global
Access, which is constructing a domestic terrestrial fiber optic cable network
connecting the PC-1 cable station with Tokyo, Nagoya and Osaka. See "Use of
Proceeds."

ADDITIONAL NETWORK EXPANSION OPPORTUNITIES

Further Undersea Opportunities. The undersea routes served by the Global
Crossing Network and other cable systems are projected to have substantial
growth greatly exceeding all capacity currently in use and under development
(including planned upgrades). To address such demand, the Company plans to
evaluate and, as appropriate, build additional systems on such routes. It is
anticipated that such systems, where possible, would be restored on the
existing systems and would achieve further cost efficiencies through the use
of existing landing stations.

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<PAGE>

Terrestrial Backhaul Opportunities. The Company is reviewing opportunities
to obtain terrestrial backhaul connectivity from the major cities in Europe
and Japan to landing sites for both AC-1 and PC-1 landing stations
respectively.

Other Development Opportunities. The Company is actively pursuing
development opportunities whereby Global Crossing would provide "fee for
service" expertise in the planning, design, implementation and operation of
global undersea cable systems and associated terrestrial backhaul.

OTHER ACTIVITIES

Neptune Acquisition. The Company entered into a letter agreement on May 26,
1998 with Neptune Communications, L.L.C. ("Neptune") to acquire substantially
all of the business of its wholly-owned subsidiary, Neptune Communications
Corp. ("NCC"), for an acquisition price of $20,000,000 payable in Common
Stock. Neptune is controlled by the Carlyle Group, an international investment
firm ("Carlyle"), and was formed to pursue opportunities in the undersea cable
business. Pursuant to such agreement, the Company will acquire all tangible
and intangible assets of NCC (except for assets relating to its North Pacific
Cable business), which consist principally of certain telecommunications
licenses. In addition, Carlyle managing director William Conway, the former
Chief Financial Officer of MCI, has agreed to serve on the Company's Board of
Directors. The Company and Neptune intend to enter long-form agreements with
respect to the transactions contemplated by the letter agreement. Neptune has
an option to terminate the transaction if the Company has not consummated the
Offerings by August 15, 1998.

Possible Investments. The Board of Directors of the Company has approved in
principle the making of minority investments in telecommunications and
Internet service providers that do not compete with the Company in its core
business and that will also be current or prospective purchasers of capacity
on the Global Crossing Network. Such investments may consist of purchases of
equity securities for either cash or contributions of capacity on the Global
Crossing Network. Such investments may be managed either by the Company
directly or, if the Board of Directors deems advisable, by one or more third-
party investment advisers so as to minimize potential conflicts of interest
and the amount of time allocated by the Company's senior management to such
investments.

SYSTEM PERFORMANCE

AC-1, PC-1 and MAC are each designed utilizing self-healing ring technology
to optimize system performance. Two types of protection switching, span
switching and ring switching, are provided. Span switching protects a system
against failures between adjacent landing sites which only affect service line
traffic and not the protection fibers. Ring switching protects a system
against complete failures between adjacent landing sites. Because such
technology will protect any single system failure in less than 500
milliseconds, no outages will result as a consequence of a single system
failure. Accordingly, the estimated system availability on any point-to-point
link on such systems is 99.995%.

As undersea cable systems become more powerful (i.e., carry more traffic
along their transmission paths), it is important to provide a "self-
restoration solution" because other systems do not have the capacity to
provide restoration for these new high performance undersea cable systems.
Single span systems must enter into reciprocal arrangements with either other
undersea fiber-optic operators or satellite carriers to pick up and deliver
this traffic if a system failure should occur. Providing self-restoration
through this ring design with the switching techniques described above is now
viewed as offering a qualitative advantage over single span systems with
external restoration.

With respect to PAC, which does not employ self-healing ring technology, the
Company is exploring options to enter into restoration arrangements with
terrestrial fiber optic cable operators to protect against system traffic
interruptions. The Company may also enter into similar arrangements to protect
against catastrophic system malfunction on its other cable systems.

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<PAGE>

SALES AND MARKETING

The Company markets capacity on its systems to licensed telecommunications
providers, including PTTs, Internet service providers and established and
emerging telecommunications companies. The Company believes its current
customers represent a broad array of telecommunications companies.

The initial sales strategy of the Company emphasizes the sale of capacity on
an IRU basis, whereby the customer purchases a unit of capacity for the
remaining design life of a particular cable system. On AC-1, the Company is
selling capacity at an increment of 155 megabits (Mbps), known as an STM-1,
for the 25-year life of AC-1. For the other Global Crossing cable systems, the
Company also expects to sell capacity to customers at the STM-1 level, as well
as at the smaller increment of 45 Mbps, where warranted based upon the actual
demand levels along certain routes. The Company has instituted a tiered
pricing schedule for all of its systems which provides for volume discounts,
thereby allowing customers to reduce their average circuit cost as more
circuits are purchased. In addition, the Company offers pricing discounts on
purchases of capacity prior to a system's commercial operation date, in order
to induce customers to make early purchase commitments.

To further increase the attractiveness of the Company's network, Global
Crossing intends to make selective wholesale acquisitions of backhaul
capacity, thereby enabling customers to achieve city-to-city connectivity
through the Global Crossing Network at prices significantly lower than if such
customers had attempted to gain such connectivity by separately purchasing
such backhaul capacity. For AC-1 customers, the Company entered into
contractual arrangements providing backhaul capacity between its landing
stations in the United States and the United Kingdom and New York City and
London, respectively. In addition, Deutsche Telecom and KPN provide backhaul
services directly to the Company's AC-1 customers in Germany and The
Netherlands, respectively. In addition, the Company has recently entered into
an agreement with Qwest whereby Global Crossing will receive access to over 25
U.S. cities on Qwest's terrestrial network.

Global Crossing is exploring the development of other products designed to
take advantage of its ownership of several cable systems in different parts of
the world. For example, the Company has offered its customers volume discounts
for purchases of capacity on one system based upon purchases previously made
on the Company's other systems and the ability to transfer a portion of unused
capacity purchases from one Global Crossing system to another depending on
customers' individual traffic needs.

The Company's marketing entity, Global Crossing International, was
established to facilitate the sales of communications capacity on the Global
Crossing Network, as well as to increase market awareness and name recognition
of Global Crossing. Global Crossing has been able to recruit and train a full-
service sales and marketing team, including Mr. Jack Finlayson, President of
Global Crossing International, a former senior executive of Motorola who
recently joined the Company, and Mr. Patrick Joggerst, Vice President,
Worldwide Sales and Marketing, who had been at TSSL and AT&T for a total of 17
years prior to joining the Company, most recently as Managing Director of
TSSL's Americas Region. Mr. Joggerst directly oversees the Americas Region and
is responsible for overseeing the duties of the two regional vice presidents,
each being in charge of one of the two other regions of the Company's
marketing organization, Europe/Middle East/Africa and Asia. Each regional
vice-president oversees the performance of regional marketing directors who
have direct account responsibility in certain geographic areas of the region.
In total, the Company employed 18 marketing professionals as of June 30, 1998.
While the Company intends to expand the current size of its marketing
organization, management believes that a moderately-sized sales force is
sufficient to adequately address all customers seeking to acquire undersea
cable capacity on a wholesale basis.

During the pre-operational period for AC-1, in which the Company sought to
generate significant pre-sales of capacity, the Company presented project
information meetings (otherwise known as data gathering meetings) in order to
better educate potential customers about AC-1 and Global Crossing's other
planned cable systems. To date, the Company has hosted three such meetings,
with the most recent event attracting 200 attendees representing over 75
companies. Attendees of such meetings have been affiliated with both existing
and prospective customers and have represented a variety of sectors of the
telecommunications industry. Ongoing, the Company intends to organize at least
one major international conference per year in order to provide updated

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<PAGE>

information on the Global Crossing Network. The Company also intends to host
regional project information meetings focusing on a particular cable system,
with such meetings scheduled to precede the anticipated commercial operation
date for such system.

The Company intends to reinforce customer awareness through a variety of
marketing campaigns, including its Global Crossing international conferences
and regional marketing events, participation in key industry and user group
conferences, speaking engagements, press conferences and promotional
campaigns. In addition, Global Crossing expects its marketing team to
periodically visit current and prospective customers to obtain a greater
understanding of the individual needs of such customers.

SUMMARY OF PRINCIPAL TERMS OF STANDARD CONTRACTUAL DOCUMENTATION

Capacity Purchase Agreements (CPAs)

In general, a CPA provides for the sale of capacity by the Company on an IRU
basis, whereby the purchaser owns a unit of capacity for the remaining design
life of a particular system. The term of a CPA is 25 years from the RFS date
for the system on which capacity is being acquired, which is the entire useful
life of the system. Upon execution of a CPA prior to a segment RFS date, the
Company generally receives 10% of the purchase price immediately, with the
balance of the purchase price due to the Company upon the applicable RFS date
for that segment. A limited number of CPAs provide for payment of the purchase
price in installments over two to three year periods. Each purchaser under a
CPA is required to pay its allocated share of the cost of operating,
maintaining and repairing the system. A purchaser's payment obligation under a
CPA shall generally terminate with respect to any purchased capacity on AC-1
other than the United States-United Kingdom segment (and, in some cases, with
respect to purchased capacity on the United States-United Kingdom segment), if
the RFS date for the AC-1 system has not occurred by June 30, 1999.
Performance under CPAs is also contingent upon the obtaining and continuance
of such approvals, consents, governmental authorizations, licenses and permits
as may be required or reasonably deemed necessary by each party thereto for
performance by such party thereunder and as may be satisfactory to it. The
obligations of purchasers under certain CPAs are additionally contingent upon
the execution of related ICPAs. See "Risk Factors--Sales of Capacity;
Termination of CPAs."

Additionally, each purchaser acquiring capacity on AC-1 prior to the system
RFS date is granted the right to receive additional capacity ("residual
capacity") at no additional cost upon the date which is 12 1/2 years after the
RFS date for the system. Furthermore, neither party is liable to the other for
consequential, incidental, indirect or special damages sustained by reason of
(i) any failure in or breakdown on the system or the facilities associated
with the system, (ii) the failure of any inland carrier to perform the terms
and conditions of any agreement to which it and the purchaser are parties or
(iii) for any interruption of service, whatever the cause and however long it
shall last. Each CPA is subject to an arbitration clause. Some CPAs are
supported by a parent guarantee from the purchaser.

Inland Services Agreements (ISAs)

The Company has entered into agreements with certain terrestrial fiber cable
systems to purchase inland capacity on such systems for resale to its
purchasers. In general, the term of each ISA is 25 years from the RFS date of
the particular system or until the system is retired, whichever occurs first.
In certain cases, the Company has the option to extend the term of each ISA
for an additional five years. Neither party to an ISA is responsible for any
loss, damage, delay or failure of performance resulting from an event of Force
Majeure (as defined therein). If an event of Force Majeure continues for a
period of 30 days, the Company may terminate the ISA. Each ISA is subject to
an arbitration clause.

Inland Capacity Purchase Agreements (ICPAs)

The Company has entered into ICPAs with some of its customers. Under an
ICPA, the Company provides the customer with a portion of the backhaul
capacity it purchased from owners of terrestrial cable systems under ISAs. The
term of each ICPA is 25 years from the RFS date for the particular system.
Upon execution of an

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<PAGE>

ICPA, the Company generally receives 10% of the purchase price immediately,
with the balance due no later than the RFS date for the particular segment. A
purchaser's payment obligation under an ICPA generally shall terminate with
respect to any purchased capacity on AC-1 other than the United States-United
Kingdom segment (and, in some cases, with respect to purchased capacity on the
United States-United Kingdom segment), if the RFS Date for the AC-1 system has
not occurred by June 30, 1999. Unlike a CPA, the purchaser under an ICPA is
generally not required to make any additional payments for costs associated
with operating, maintaining and repairing the backhaul capacity in which the
IRU is granted. Neither party is liable to the other for consequential,
incidental, indirect or special damages sustained (i) by reason of any failure
of any inland carrier to perform the terms and conditions of any ISA to which
it is a party or (ii) for any interruption of service, whatever the cause and
however long it shall last. Each ICPA is subject to an arbitration clause. An
ICPA may be supported by a corresponding parent guarantee from the purchaser.

OPERATIONS, ADMINISTRATION AND MAINTENANCE SUPPORT

Pursuant to the AC-1 OA&M Agreement, TSSL will provide operations,
administration and maintenance support on behalf of AC-1 for a term of eight
years following the commencement of commercial operations. As of June 30,
1998, the Company was committed under the AC-1 OA&M Agreement to make payments
totalling approximately $261 million. Such agreement is extendible at the
option of the Company for two additional periods of 8.5 years each. For AC-1,
TSSL's network operations center is designed to ensure the overall ongoing
monitoring of the system's operation, maintenance and control systems. The
network management equipment located at the Brookhaven, New York landing
station provides fault management, security management, configuration
management and performance management, while undersea network management
equipment located at all landing stations provides system level monitoring of
the undersea terminating equipment. The full integration of these control
elements allows the AC-1 cable system to be "self-diagnostic," with such
control elements facilitating localization and repair in the event of the
occurrence of a system fault.

In addition, Global Crossing is separately developing a worldwide
operations, administration and maintenance support system to serve each of its
cable systems (exclusive of AC-1 for the initial term of the TSSL OA&M
Agreement). Such support will be handled through three co-located work centers
currently anticipated to be located in Bermuda: a customer care center
("CCC"), network operations center ("NOC") and technical support center
("TSC").

Customer Care Center. The CCC will provide capacity purchasers with a single
point of contact for service provisioning, interconnect coordination support
and billing inquiries.

Network Operations Center. The NOC will handle operations, administrative
and maintenance activities for each of the Company's cable systems, including
capacity provisioning, network performance, repair and restoration activities.
Capacity provisioning relates to the appropriate allocation of capacity on the
Company's cable systems among capacity purchasers. Management of network
performance entails detection and response to system degradation and other
performance parameters, as well as preventative activities.

Technical Support Center. The TSC will be a 24-hour center managed by
highly-trained experts to handle technical inquiries from purchasers regarding
system performance and interconnection arrangements.

COMPETITION

The international telecommunications industry is highly competitive. The
Company faces competition from existing and planned cable systems along each
of its planned routes and from satellite providers, including existing
geosynchronous satellites and low-earth orbit systems now under construction.
The Company competes primarily on the basis of price, availability,
transmission quality and reliability, customer service and the location of its
systems. Traditionally, carriers have made long term investments in ownership
of cable capacity, making lower price and superior service less determinative
in convincing such carriers to acquire additional capacity on the Company's
systems than is the case in industries without such long-term relationships.
See "Risk Factors--Competition."

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Existing and Planned Cable Systems

The routes addressed by Global Crossing's planned systems are currently
served by several undersea cables as well as satellites. Currently, there are
several fiber optic transatlantic cable systems, each of which will compete
directly with AC-1. Primary future sources of transatlantic competition for
the Company may result from, among others, (i) TAT-14, a transatlantic cable
system which is being developed by its consortium members, including British
Telecom, AT&T, France Telecom and Deutsche Telekom, and (ii) Gemini, a
transatlantic cable system being operated and marketed by WorldCom and Cable &
Wireless. The Company believes that such other cable systems will compete
directly with AC-1 and the commitments of the developers and other carriers on
these systems could substantially reduce demand for capacity on AC-1.

Similarly, there are several cable systems currently operating between the
United States and Asia, the route to be served by PC-1. Competition in the
transpacific market may result from, among others, (i) China-US, a
transpacific system being developed as a "private cable system" by fourteen
large carriers, including SBC, MCI, AT&T and Sprint, most of whom have
traditionally sponsored consortium cables and (ii) a transpacific system being
developed by a consortium of major telecommunications carriers, including
Worldcom, AT&T, KDD, NTT, Cable & Wireless and GTE. Although the Company
believes that such other cable systems will not satisfy the demand for
capacity between the United States and Japan and that there is currently
enough demand projected to accommodate all such systems, such other cable
systems will receive commitments for capacity that PC-1 could have received in
their absence.

Other regional and global systems are being considered by developers,
including Project Oxygen, a global system being evaluated by CTR Group, Ltd.
In addition, the Company may face competition from existing and planned
regional systems and satellites on its MAC and PAC routes, where entrants are
vying for purchases from a small but rapidly growing customer base.

Satellite Transmission

When comparing cable transmission against satellite transmission, the
Company believes that cable has a distinct advantage with respect to latency
(i.e., transmission delay) and voice quality. Cable transmission has a lower
cost per circuit, higher capacity and longer expected equipment life than
satellite transmission. Satellite transmission is generally considered to have
a comparative advantage versus cable transmission for mobile communications
only in the area of point-to-multipoint broadcast and "thin route"
transmission, as opposed to the more common point-to-point, high volume
transmission for which cable usage is considered to be preferable.

In early 1997, the FCC granted Ka-band licenses and orbital locations to 13
companies. The firms developing future satellite technology envision a network
of satellites that will provide broadband data transmission with data rates of
2 Mbps, 20 Mbps, and even 155 Mbps. Potential participants in the field
include Astrolink, Skybridge, Teledesic Corporation, CyberStar and SpaceWay,
who are seeking to provide high bandwidth transmission sublet networks. Due to
(i) the significant initial costs related to these systems, (ii) the risks
relating to satellite launch systems and (iii) the significantly lower
transmission capacity versus current fiber optic systems, the Company believes
that the new satellite systems will not be able to offer competitive cost per
unit of transmission capacity in the dense metropolitan markets the Company is
targeting. Further, the Company believes it will have at least five years lead
time to help it solidify a sustainable competitive market position before true
broadband satellite service commences.

SUPPLIERS

There are currently three major supply companies in the undersea cable
industry: TSSL, Alcatel and KDD SCS. Cable & Wireless and Pirelli also have a
presence in the industry and there are a number of smaller suppliers who have
focused primarily on regional routes or non-repeatered systems. TSSL is
completing construction of AC-1, is responsible for the design and
installation of PAC and, together with KDD SCS (as a subcontractor), is
responsible for design and installation of PC-1. Alcatel is responsible for
design and construction of MAC. See "Risk Factors--Dependence on Third
Parties."

53
<PAGE>

PROPERTIES

The Company leases executive and administrative offices at its worldwide
headquarters at Wessex House, 45 Reid Street, Hamilton HM12 Bermuda. The
Company owns a cable station in Brookhaven, New York and a cable station in
White Sands, United Kingdom. The Company leases cable station space in Sylt,
Germany and cable station space in Beverwijk, The Netherlands. Such leases run
for the anticipated 25-year term of AC-1. The Company also leases office space
in Los Angeles, Morristown, New Jersey, Dallas, London and San Francisco.

REGULATION

The Company, in the ordinary course of development, construction and
operation of its fiber optic cable systems, will be required to obtain and
maintain various permits, licenses and other authorizations in both the United
States and in foreign jurisdictions where its cables land, and will be subject
to applicable telecommunications regulations in such jurisdictions. In
particular, submarine cable landing or similar licenses will be required in
many of the jurisdictions where Global Crossing's planned systems will land.
With respect to AC-1, an undersea cable landing license (the "AC-1 Landing
License") and a subsequent modification have been obtained from the United
States Federal Communications Commission ("FCC"), which license permits AC-1
to land in the United States at the Brookhaven, New York landing site and to
operate between the United States, the United Kingdom, The Netherlands and
Germany. The AC-1 Landing License authorizes the Company to provide capacity
on a private carriage basis, and AC-1 is not presently regulated by the FCC as
a common carrier. Global Crossing has obtained landing licenses similar to the
AC-1 Landing License in each of the other jurisdictions where the AC-1 cable
system will land and where such licenses are required. With respect to each of
the Company's cable systems other than AC-1, the Company anticipates both
filing applications for cable landing licenses with the FCC (and, where
necessary, foreign regulatory agencies) and seeking private carriage status
for these systems as well. These licenses are typically issued for a term of
years (in the case of the FCC-issued cable landing license, 25 years), and are
subject to renewal. United States law (and the law of several foreign
jurisdictions, as well) limits foreign ownership, direct or indirect, of
entities holding cable landing licenses, although the FCC has progressively
relaxed to the rules to examine only those foreign holders that are affiliated
with a foreign telecommunications carrier that has market power in the
destination country. More recently, in order to implement a multilateral World
Trade Organization agreement, the FCC adopted regulations that presumptively
permit unlimited foreign ownership by nationals of countries that are party to
that agreement. See "Risk Factors--Government Regulation."

Construction of each of the Company's cable systems also requires the
acquisition and maintenance of various permits and licenses in the ordinary
course of business. Pursuant to its construction contracts for AC-1 and PC-1,
TSSL is contractually obligated to obtain and maintain all such licenses and
permits. Although Global Crossing intends that the construction contracts for
each of the Company's other planned cable systems will impose the burden of
acquiring and maintaining construction licenses and permits on the contractor
for each of such systems, there can be no assurance that such contractor will
successfully obtain such permits and licenses. See "Risk Factors--Risks
Related to Completing the Company's Cable Systems."

EMPLOYEES

As of June 30, 1998, the Company had 82 employees. The Company considers its
relations with its employees to be good.

LEGAL PROCEEDINGS

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

54
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names, ages and positions of the
directors and executive officers of GCL.

Prior to the Offerings, GCL will amend and restate its Bye-Laws (the "Bye-
Laws") to provide for a Board of Directors consisting of 16 members divided
into three classes with terms of three years each. Mr. Brown, Mr. Porter, Mr.
Phoenix, Mr. Levine and Mr. Conway will be elected as Class A Directors, with
a term expiring in 1999; Mr. Cook, Mr. Lee, Mr. Raben, Mr. Kent and Mr.
Scanlon will be elected as Class B Directors, with a term expiring in 2000;
and Mr. Winnick, Mr. Bloom, Mr. Kehler, Mr. Weinberger, Mr. Steed and
Mr. Ogasawara will be elected as Class C Directors, with a term expiring in
2001. The form of Amended and Restated Bye-Laws is an exhibit to the
Registration Statement of which this Prospectus is a part.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Gary Winnick....... 50 Co-Chairman of the Board and Director
Lodwrick Cook...... 70 Co-Chairman of the Board and Director
Jack M. Scanlon.... 56 Chief Executive Officer and Director
David L. Lee....... 49 President, Chief Operating Officer and Director
Barry Porter....... 41 Senior Vice President and Director
Abbott L. Brown.... 54 Senior Vice President and Director
Dan J. Cohrs....... 45 Senior Vice President and Chief Financial Officer
James C. Gorton.... 36 Senior Vice President, General Counsel and Secretary
K. Eugene Shutler.. 60 Senior Vice President
Hillel Weinberger.. 44 Director
Jay R. Bloom....... 42 Director
Dean C. Kehler..... 41 Director
Jay R. Levine...... 41 Director
William D. Phoenix. 41 Director
Bruce Raben........ 44 Director
Michael R. Steed... 48 Director
William E. Conway.. 48 Director*
Toshiaki Ogasawara. 67 Director*
Geoffrey J.W. Kent. 56 Director*
</TABLE>
- --------
* Effective immediately prior to Offerings

GARY WINNICK--Mr. Winnick, founder of Global Crossing, has been Co-Chairman
of the Board of GCL since January 1998 and, prior thereto, was Chairman of the
Board since the inception of the Company in March 1997. Mr. Winnick is the
founder and has been the Chairman and Chief Executive Officer of Pacific
Capital Group since its inception, having been in the principal equity
investment and merchant banking business since 1985. Mr. Winnick holds a BA in
Economics and Business Management from C.W. Post College.

LODWRICK M. COOK--Mr. Cook has been Co-Chairman of the Board of GCL since
January 1998 and Vice Chairman, Managing Director of PCG since 1997. Prior to
joining PCG, Mr. Cook spent 39 years at Atlantic Richfield Co., serving as
President and Chief Executive Officer from 1985 to 1995 and as Chairman of the
Board of Directors from 1986 to 1995, when he became Chairman Emeritus. Mr.
Cook is also a member of the Board of Directors of Castle and Cooke, Litex and
Ocean Energy, Inc. Mr. Cook received BS degrees in mathematics and petroleum
engineering from Louisiana State University and holds an MBA degree from
Southern Methodist University.

55
<PAGE>

JACK M. SCANLON--Mr. Scanlon has been Chief Executive Officer and a director
of GCL since April 1998. Prior to joining the Company, Mr. Scanlon was
President and General Manager of the Cellular Networks and Space Sector of
Motorola Inc. and had been affiliated with Motorola Inc. since 1990. Mr.
Scanlon was Chief Operating Officer of Cambridge Technology Group from 1988 to
1990 and, prior thereto, spent 24 years with AT&T Corp. and Bell Laboratories,
rising to Group Vice President at AT&T Corp. Mr. Scanlon received his BS
degree from the University of Toronto and a MS degree in electrical
engineering from Cornell University.

DAVID L. LEE--Mr. Lee has been President and Chief Operating Officer and a
director of GCL since the inception of the Company in March 1997. He has also
been a managing director of PCG since 1989. Prior to joining PCG, Mr. Lee was
Group Vice President of Finance and Acquisitions at TRW Information Systems
Group. Mr. Lee is a graduate of McGill University and holds a PhD. in Physics
and Economics from the California Institute of Technology.

BARRY PORTER--Mr. Porter is Senior Vice President, Corporate Development and
a director of GCL. Mr. Porter has been a director of the Company since 1997
and has also been a managing director of PCG since 1993. From 1986 to 1993,
Mr. Porter was affiliated with Bear, Stearns & Co. Inc., rising to a Senior
Managing Director in the investment banking department. Mr. Porter received
his JD and MBA degrees from the University of California (Berkeley) and his BS
degree from The Wharton School.

ABBOTT L. BROWN--Mr. Brown is Senior Vice President, Corporate Affairs and a
director of GCL. Mr. Brown has been a director of the Company since 1997 and
has also been a managing director and Chief Financial Officer of PCG since
1994. From 1990 through 1994, Mr. Brown was Executive Vice President, Chief
Financial Officer and a member of the board of directors of Sony Pictures
Entertainment Inc., a wholly-owned subsidiary of Sony Corporation. Prior
thereto, Mr. Brown was a partner in the international accounting firm of Price
Waterhouse LLP. Mr. Brown holds a BS degree from Lehigh University and is a
Certified Public Accountant.

DAN J. COHRS--Mr. Cohrs has been Senior Vice President and Chief Financial
Officer of GCL since May 18, 1998. From 1993 to 1998, Mr. Cohrs was affiliated
with GTE Corporation, rising to the position of Vice President and Chief
Planning and Development Officer in 1997. From 1990 to 1993, he was at
Northwest Airlines and prior to leaving Northwest Airlines served as Vice
President of International Finance (Tokyo, Japan); from 1986 to 1990, he was
at the Marriott Corporation and served in such capacities as Vice President of
Financial Planning and Acquisitions and Vice President of Project Finance; and
from 1983 to 1986, he was a Strategy and Financial Consultant at Marakon
Associates. Mr. Cohrs received his BS degree from Michigan State University in
Engineering and his PhD degree from Cornell University in Economics, Finance
and Public Policy.

JAMES C. GORTON--Mr. Gorton became Senior Vice President and General Counsel
of GCL effective July 15, 1998 and Secretary of GCL effective August 9, 1998.
From 1994 to 1998, Mr. Gorton was a member of the New York law firm Simpson
Thacher & Bartlett and had been associated with the firm since 1986. Mr.
Gorton holds a BA degree from Columbia College and a JD degree from New York
University School of Law.

K. EUGENE SHUTLER--Mr. Shutler is a Senior Vice President of GCL and is also
President of ACL. From 1996 to 1997, Mr. Shutler served as Chairman of the
Board and Chief Executive Officer of Styles On Video, Inc. Prior thereto, Mr.
Shutler was Executive Vice President, General Counsel and a Director of MGM
Grand, Inc. from 1991 to 1995; a member of the Los Angeles law firm of Troy
and Gould from 1983 to 1991; and Vice President/General Counsel of Republic
Corporation, Continental Aircraft Services (Continental Airlines) and Caesars
World, Inc. Mr. Shutler holds a BA degree from the University of Pennsylvania
and an LLB degree from Yale Law School.

HILLEL WEINBERGER--Mr. Weinberger, a director of GCL since June 1997, has
been a Senior Vice President of Loews/CNA Holdings Corp. since 1988. Prior
thereto, Mr. Weinberger was a Senior Vice President of Presidential Life from
1982 to 1988. Mr. Weinberger serves as director to News Communications Inc.

JAY R. BLOOM--Mr. Bloom, a director of GCL since the Company's inception in
March 1997, is a managing director of CIBC Oppenheimer Corp. ("CIBC
Oppenheimer"), co-head of its High Yield Group and

56
<PAGE>

co-head of CIBC World Markets High Yield Merchant Banking Funds. Mr. Bloom
also serves on the board of directors of Heating Oil Partners, L.P.,
Consolidated Advisers Limited, L.L.C. and Morris Material Handling, Inc. Prior
to joining CIBC Oppenheimer in August 1995, Mr. Bloom was a founder and
managing director of The Argosy Group L.P. From 1984 to 1990, Mr. Bloom was a
managing director in the Mergers and Acquisitions Group of Drexel Burnham
Lambert Incorporated. Mr. Bloom was an investment banker associated with
Lehman Brothers Kuhn Loeb Incorporated from 1982 to 1984 and, from 1981 to
1982, practiced law at Paul Weiss Rifkind Wharton & Garrison in New York. Mr.
Bloom received his BS and MBA degrees from Cornell University and his JD
degree from Columbia University School of Law.

DEAN C. KEHLER--Mr. Kehler, a director of GCL since the Company's inception,
is a managing director of CIBC Oppenheimer and co-head of its High Yield
Group. In addition, he is a member of CIBC's Investment Committee and co-head
of CIBC World Markets High Yield Merchant Banking Funds. Prior to joining CIBC
Oppenheimer in 1995, Mr. Kehler was a founder and managing director of The
Argosy Group. From 1985 to 1990, Mr. Kehler was a managing director in the
Mergers and Acquisitions Group, Co-Head of Merchant Banking and a member of
the Corporate Finance Executive Committee of Drexel Burnham Lambert
Incorporated. Mr. Kehler serves on the board of directors of Booth Creek
Group, Inc., Telebanc Financial Corporation and Heating Oil Partners, L.P.
From 1979 to 1985, Mr. Kehler was an investment banker at Lehman Brothers. Mr.
Kehler received his BS degree from The Wharton School.

JAY R. LEVINE--Mr. Levine, a director of GCL since the Company's inception,
is a managing director of CIBC Oppenheimer, and manages the CIBC World Markets
High Yield Merchant Banking Funds. Prior to joining CIBC Oppenheimer in May,
1997, Mr. Levine was President of PPMJ Inc., a private consulting firm, from
September 1996 to April 1997 that advised its clients on private equity
investments. From August 1990 to June 1996, Mr. Levine was a senior executive
in the Morningside and Springfield Group, Inc., a private investment company.
Mr. Levine serves as a director of Aircraft Service International Group,
Consolidated Advisers Limited, L.L.C., Heating Oil Partners, L.P. and Talton
Holdings, Inc. Mr. Levine received a BS degree from Syracuse University, a JD
degree from Tulane University and an LLM in Taxation from New York University.

WILLIAM P. PHOENIX--Mr. Phoenix, a director of GCL since its inception, is a
managing director of CIBC Oppenheimer and co-head of Credit Capital Markets.
Prior to joining CIBC Oppenheimer in 1995, Mr. Phoenix had been the Managing
Director of the Canadian Imperial Bank of Commerce since 1982. Mr. Phoenix
serves as a director of the Electrolux Corporation. Mr. Phoenix received his
BA degree from the University of Western Ontario and his MBA degree from the
University of Toronto.

BRUCE RABEN--Mr. Raben, a director of GCL since its inception, is a managing
director of CIBC Oppenheimer. Prior to joining CIBC Oppenheimer in January
1996, Mr. Raben was a founder, managing director and co-head of the Corporate
Finance Department of Jefferies & Co., Inc. since 1990. Mr. Raben serves as a
director of Optical Security, Inc., Talton Holdings, Inc., Terex Corporation
and Equity Marketing, Inc. Mr. Raben received his MBA degree from Columbia
Business School and his AB degree from Vassar College.

MICHAEL R. STEED--Mr. Steed, a director of GCL since its inception, is
Senior Vice President of Investments for the Union Labor Life Insurance
Company, ULLICO Inc. ("ULLICO") and its Family of Companies and President of
Trust Fund Advisors, ULLICO's investment management subsidiary. Mr. Steed
joined ULLICO in November 1992 after serving seven years as President and
Founder of A.F.I.C. Group, Ltd., a financial and investment consulting firm.
From 1983 to 1985, Mr. Steed was the Executive Director of the Democratic
National Committee. Mr. Steed serves as a director of The Lewis & Clark Snake
River Beverage Company. He received his JD degree from Loyola University
School of Law in Los Angeles and his BA degree from Loyola Marymount
University in Los Angeles.

WILLIAM E. CONWAY--Mr. Conway is a nominee for director for GCL. Mr. Conway
has been a managing director of The Carlyle Group since 1987. Mr. Conway was
Senior Vice President and Chief Financial Officer of MCI Communications
Corporation from 1984 until he jointly founded The Carlyle Group in August
1987.

57
<PAGE>

Mr. Conway serves as director to GTS Duratek, Inc., Nextel Communications,
Inc. and Hownet International Corporation. Mr. Conway received his BA degree
from Dartmouth College and his MBA in Finance from Chicago Graduate School of
Business.

TOSHIAKI OGASAWARA--Mr. Ogasawara is a nominee for director for GCL. Mr.
Ogasawara has been Chairman and Publisher of The Japan Times, Limited since
1985 and President and Representative Director of Nifco Inc since 1967. Mr.
Ogasawara serves as Chairman and Representative Director for FM Inter-Wave,
Inc. and Simmons Co. Ltd.

GEOFFREY J.W. KENT--Mr. Kent is a nominee for director for GCL. Mr. Kent is
Chairman and Chief Executive Officer of the Abercrombie & Kent Group of
companies and has been associated with the company since 1967.

ADDITIONAL MANAGEMENT

Global Crossing's management team utilizes additional executives with
extensive experience in the telecommunications industry and the undersea cable
sector, including the following individuals:

WILLIAM B. CARTER, JR. is President of Global Crossing Development Co. and
the Company's Senior executive in charge of development. Prior to joining the
Company, Mr. Carter spent 30 years with AT&T, where he headed up the
International Facilities Planning (both cable and satellite) and served as
President and Chief Executive Officer for SSI and as Director of International
Network Operations for AT&T. During Mr. Carter's tenure, SSI had the leading
worldwide market share in the undersea cable industry, with an average market
share of 35-50%. Mr. Carter is a member of the World Telecommunications
Advisory Council to the International Telecommunications Union (ITU) and
Senior Advisory Council to the U.S. government on communications and economic
development. Mr. Carter received a BEE degree from Georgia Institute of
Technology and has completed the advanced program for senior managers at MIT's
Sloan School.

JACK FINLAYSON--Mr. Finlayson has been President of Global Crossing
International, Ltd. since June 1998. Prior to joining the Company, Mr.
Finlayson was corporate vice president and general manager of Motorola Inc.'s
Asia Pacific Cellular Infrastructure group, where he was responsible for
managing the wireless infrastructure business, and had been affiliated with
Motorola Inc. since 1994. Prior to joining Motorola Inc., Mr. Finlayson was
employed by AT&T, where he was sales vice president of Business Network Sales
for the southeastern United States. Mr. Finlayson has more than 17 years
experience in the telecommunications field. Mr. Finlayson received his BS
degree in marketing from LaSalle University and holds an MBA degree in
information management from St. Joseph's University.

S. WALLACE DAWSON, JR., Senior Vice President of Operations of Global
Crossing Development Co., worked at SSI for 29 years, where he had overall
delivery responsibility for the implementation of all submarine cable
projects. Prior thereto, he held various positions at AT&T, where his work
centered on specialized equipment design for military and commercial undersea
cable systems and development of various network services. Mr. Dawson holds a
BEE degree from the University of Virginia, and an MSEE degree from Duke
University. He also completed the Advanced Management Program at INSEAD,
Fountainbleu, France.

HAROLD D. GROSSNICKLE, Managing Director of Global Crossing Development Co.,
is responsible for directing the operations, administration and maintenance of
the Global Crossing Network. Mr. Grossnickle has 28 years of experience in the
telecommunications industry, including over 24 years at AT&T and AT&T
Paradyne, where he served as a vice president of network management systems
and services. Mr. Grossnickle received his BS from Iowa State University and
his MBA from the University of Missouri.

PATRICK JOGGERST is Vice President of Global Sales & Marketing of Global
Crossing International Ltd. and the Company's Senior executive in charge of
sales. Prior to joining the Company, Mr. Joggerst served as Managing Director
for the Americas Region at TSSL. His 17-year tenure at AT&T included positions
with

58
<PAGE>

several departments, including international services operations,
organizational development/human resources, and communications products and
service sales. Mr. Joggerst graduated from Georgetown University's School of
Foreign Service.

IAN MCLEAN--Mr. McLean is Vice President of GCL and also serves as Chief
Financial Officer of ACL. Prior to joining the Company in September, 1997, Mr.
McLean was Chief Financial Officer and Systems Information Officer at Price
Waterhouse, Bermuda from 1994 to 1997; Chief Financial Officer for Horizons
Limited from 1992 to 1994; Deputy Manager, Corporate Trust at Bank of Bermuda
Limited from 1988 to 1992 and Vice President of Finance for the Baillargeon
Group from 1985 to 1988. Mr. McLean is a Canadian Chartered Accountant and
holds a Bba degree from Bishop's University and a graduate diploma in
accountancy from McGill University.

WILLIAM T. RICHARDS is Vice President of Operations of ACL. Mr. Richards was
employed at British Telecommunications for seven years, most recently as
Manager of Subsea Projects & Consultancies, and served as Independent Engineer
on the FLAG system. Prior to his position at British Telecommunications, he
served as Business Development Manager at Dowty Magnetics. Mr. Richards
received his BFc (Hons.) degree from City University of London.

LISA DADOURIS, Director of Business Development of Global Crossing
Development Co., spent 12 years at AT&T and Lucent Technologies, where she
held a number of positions in business development, marketing and finance,
including Chief Financial Officer for Local Service in the northeast United
States and Director of Manufacturing Planning for Lucent. Ms. Dadouris
graduated from Wake Forest University with a BS in business, and received her
MBA in accounting from Fuqua School of Business at Duke University.

MOOL SINGHI is Director of Network Planning of Global Crossing Development
Co. Prior to joining the Company, Mr. Singhi served as the Director of Market
Planning at TSSL. Mr. Singhi spent 27 years at AT&T, where he held various key
positions in manufacturing, finance, engineering, operations and international
network planning. Mr. Singhi received a bachelor's degree in mechanical
engineering and a master's degree in operations research and industrial
engineering from the University of Buffalo.

CHARLES D. HOGAN, Director of Operations of Asia Systems of Global Crossing
Development Co., spent 42 years at AT&T, serving as Regional Managing
Developer of AT&T's General Departments. Immediately prior to joining the
Company, Mr Hogan was based in Hong Kong where he was responsible for the
planning of international digital lightwave undersea cables for AT&T in the
Asia/Pacific region, including the planned China-United States cable system.

JOHN MERCOGLIANO, Vice President of Sales and Marketing of Global Crossing
International Ltd., has over 19 years of experience in the telecommunications
industry. Prior to joining the Company, Mr. Mercogliano was employed as Vice
President-Europe of Bell Atlantic Network Systems (Bermuda) Ltd., where he was
responsible for developing strategies and directing sales and marketing
opportunities in the FLAG European region. Mr. Mercogliano received his B.A.
degree from New York University and his M.B.A. from Pace University.

COMPENSATION

Total compensation paid or accrued to the executive officers of GCL and its
consolidated subsidiaries as a group during the fiscal year ended December 31,
1997 was $155,409. Directors of GCL and its consolidated subsidiaries do not
receive compensation, except as officers or employees of GCL or its
consolidated subsidiaries.

59
<PAGE>

OPTION GRANTS AND OPTION VALUES

The table below sets forth information as of August 13, 1998 concerning
options granted since January 1, 1998 to principal officers of the Company.
Options representing a total of 9,967,500 shares of Common Stock have been
issued to officers or directors of the Company at exercise prices ranging from
$1.67 per share to $19.00 per share.

<TABLE>
<CAPTION>
GRANT
DATE
INDIVIDUAL GRANTS VALUE(1)
---------------------------------------------- ----------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANT
OPTIONS GRANTED TO EXERCISE OR DATE
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME (#) FISCAL YEAR ($/SHARE) DATE VALUE($)
---- ---------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Gary Winnick............ 900,000 7.45% 1.67 03/31/07 15,600,000
Co-Chairman of the
Board
Jack Scanlon............ 1,800,000 14.89% 1.67 04/01/08 31,200,000
Chief Executive Officer
Bill Carter............. 1,500,000 12.41% 1.67 10/27/07 26,000,000
President, Global
Crossing Development
Co.
James Gorton............ 750,000 6.21% 6.67 06/12/08 9,250,000
Senior Vice President
and General Counsel
Jack Finlayson.......... 585,000 4.84% 6.67 06/12/08 7,215,000
President, Global
Crossing International,
Ltd. 150,000 1.24% 19.00 06/12/08 --
</TABLE>
- --------
(1) Based upon difference between exercise price and $19.00, the Price to
Public per Share of the Offerings.

The table below sets forth information as of August 13, 1998 concerning
exercises of stock options by the individuals named above for the current year
and the value of such individuals' unexercised options based upon the midpoint
of the expected pricing range of the Offerings.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS(#) OPTIONS($)
SHARES VALUE ----------------- --------------------
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE(1)
---- ----------- -------- ----------------- --------------------
<S> <C> <C> <C> <C>
Gary Winnick............ -- -- 300,000/600,000 5,200,000/10,400,000
Co-Chairman of the
Board
Jack Scanlon............ -- -- 450,000/1,350,000 7,800,000/23,400,000
Chief Executive Officer
Bill Carter............. -- -- 0/1,500,000 0/26,000,000
President, Global
Crossing Development
Co.
James Gorton............ -- -- 187,500/562,500 2,312,500/6,937,500
Senior Vice President
and General Counsel
Jack Finlayson.......... -- -- 292,500/442,500 3,607,500/3,607,500
President, Global
Crossing International,
Ltd.
</TABLE>
- --------
(1) Based upon difference between exercise price and $19.00, the Price to
Public per Share of the Offerings.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

The 1998 Global Crossing Ltd. Stock Incentive Plan (the "Stock Incentive
Plan") provides that, upon a "change in control," certain of the awards
granted under the Stock Incentive Plan will vest immediately. A "change in
control" is defined under the Stock Incentive Plan as the occurrence of any of
the following: (i) any Person (other than a Person holding securities
representing 10% or more of the combined voting power of GCL's outstanding
securities as of July 15, 1998, GCL, any trustee or other fiduciary holding
securities under an employee benefit plan of GCL, or any company owned,
directly or indirectly, by the shareholders of GCL in

60
<PAGE>

substantially the same proportions as their ownership of stock of GCL) becomes
the beneficial owner (as defined under Rule 13d-3 under the Exchange Act) of
securities of GCL (a) in excess of the interest held by the existing
shareholders of GCL as of July 15, 1998 and (b) representing 30% or more of
the combined voting power of GCL's then outstanding securities; (ii) during
any period of 24 months, individuals who at the beginning of such period
constitute the board of directors and any new director (other than those
directors who meet certain exceptions specified in the Stock Incentive Plan)
whose election was approved in advance by a vote of at least two-thirds of the
directors then still in office, cease for any reason to constitute at least a
majority of the board of directors; (iii) the shareholders of GCL approve any
transaction under which GCL is merged or consolidated with any other company,
other than a merger or consolidation which would result in shareholders of GCL
immediately prior thereto continuing to own more than 65% of the combined
voting power of the voting securities of GCL or such surviving entity; or (iv)
the shareholders of GCL approve a plan of complete liquidation of the company
or an agreement for the sale or disposition by GCL of all or substantially all
of GCL's assets, other than the liquidation of GCL into a wholly-owned
subsidiary.

GCL has entered into an employment agreement, dated as of April 1, 1998,
with Mr. Jack Scanlon, providing for Mr. Scanlon's employment as GCL's Chief
Executive Officer for a term of two years and continuing thereafter for
successive two-year terms unless either GCL or Mr. Scanlon provides at least
three months' notice in advance of the expiration of the current term. In
connection with such agreement, Mr. Scanlon was issued an option to purchase a
total of 1,800,000 shares of Common Stock at an exercise price of $1.67 per
share. Such options vest in 25% increments upon the first day of employment
and at the end of each of the first three years of Mr. Scanlon's employment
with GCL. Upon a "change of control", as defined in the Stock Incentive Plan,
or any other "non-fault" termination as defined in Mr. Scanlon's employment
agreement, vesting of all of such options shall immediately occur and Mr.
Scanlon shall be entitled to terminate the agreement and receive a lump sum
payment equal to the sum of two times Mr. Scanlon's then annual base salary
and bonus. In the event that a public offering of Common Stock or a reasonably
equivalent opportunity to liquidate stock does not occur within three years of
the commencement of Mr. Scanlon's employment, Mr. Scanlon may require GCL to
purchase up to 450,000 shares of Common Stock held by him at $13.33 per share.
GCL has agreed to make similar arrangements available to Mr. Cohrs with
respect to 150,000 shares of Common Stock after three years of employment. Mr.
Finlayson has the option to sell 150,000 shares of Common Stock to the Company
at $13.33 per share after two years of employment.

GCL COMMITTEES

Audit Committee. The purpose of the Audit Committee is to: (i) make
recommendations concerning the engagement of independent public accountants;
(ii) review with GCL management and the independent public accountants the
plans for, and scope of, the audit procedures to be utilized and results of
audits; (iii) approve the professional services provided by the independent
public accountants; (iv) review the adequacy and effectiveness of GCL's
internal accounting controls; (v) review GCL's insurance program; and (vi)
perform any other duties and functions required by any organization under
which GCL's securities may be listed. Messrs. Kehler, Weinberger and Brown are
the current members of the Audit Committee. Following the Offerings, GCL will
reconstitute the Audit Committee so that it will be comprised of three members
of GCL's Board of Directors, at least two of which will be independent
directors.

Compensation Committee. The purpose of the Compensation Committee is to
establish and submit to the Board of Directors of GCL recommendations with
respect to (i) compensation of officers and other key employees of GCL and
(ii) awards to be made under the Stock Incentive Plan. Messrs. Cook, Steed and
Levine are the current members of the Compensation Committee.

61
<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS

The following table and the accompanying footnotes set forth, as of August
13, 1998, certain information regarding the beneficial ownership of the common
stock of GCL ("Common Stock") by (i) each person or entity who is known to GCL
to own beneficially five percent or more of GCL's voting Common Stock, (ii)
each of GCL's directors and executive officers and (iii) all directors and
executive officers of GCL as a group. To the knowledge of GCL, each such
stockholder has sole voting and investment power with respect to the shares
shown, unless otherwise noted. For a summary of the principal terms of the
Common Stock, see "Description of Capital Stock."
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK
--------------------------------------------------------
NUMBER NUMBER OF
OF SHARES PERCENTAGE NUMBER OF SHARES PERCENTAGE
PRIOR TO PRIOR TO SHARES TO AFTER AFTER
BENEFICIAL OWNER OFFERINGS(1) OFFERINGS BE SOLD OFFERINGS OFFERINGS
---------------- ------------ ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Pacific Capital Group,
Inc.(2) ............... 52,118,934 26.85% 1,096,463 51,022,471 24.16%
150 El Camino Drive,
Suite 204
Beverly Hills,
California 90212
Canadian Imperial Bank
of Commerce(3)......... 48,588,400 25.03% -- 48,588,400 23.01%
161 Bay Street, 8th
Floor--BCE Place
P.P. Box 500
M5J258
Toronto, Canada
Continental Casualty
Company(4)............. 20,037,585 10.32% -- 20,037,585 9.49%
CNA Plaza, Floor 23
South
Chicago, Illinois 60685
MRCo, Inc. (5).......... 16,939,097 8.73% -- 16,939,097 8.02%
111 Massachusetts
Avenue NW
Washington, DC 20001
Gary Winnick(6)......... 52,418,934 27.00% 1,096,463 51,322,471 24.31%
Lodwrick M. Cook(7)..... 2,356,227 1.21% -- 2,356,227 1.12%
Jack M. Scanlon(8)...... 450,000 * -- 450,000 *
Dan J. Cohrs(9)......... 225,000 * -- 225,000 *
David L. Lee(10)........ 11,802,943 6.08% 306,704 11,496,239 5.44%
Abbott L. Brown(11)(12). 6,979,633 3.60% 230,129 6,749,504 3.20%
Barry Porter(13)........ 10,864,212 5.60% 306,704 10,557,508 5.00%
James C. Gorton(14)..... 187,500 * -- 187,500 *
Jack Finlayson(15)...... 292,500 * -- 292,500 *
K. Eugene
Shutler(12)(16)........ 248,986 * -- 248,986 *
Hillel Weinberger(17)... 21,345,900 11.00% -- 21,345,900 10.11%
Jay R. Bloom(18)........ 48,588,400 25.03% -- 48,588,400 23.01%
Dean C. Kehler(18)...... 48,588,400 25.03% -- 48,588,400 23.01%
Jay R. Levine(18)(19)... 48,588,400 25.03% -- 48,588,400 23.01%
William P.
Phoenix(18)(19)........ 48,588,400 25.03% -- 48,588,400 23.01%
Bruce Raben(18)(19)..... 48,588,400 25.03% -- 48,588,400 23.01%
Michael R. Steed(20).... 16,954,097 8.73% -- 16,954,097 8.03%
William E. Conway(21)... 15,000 * -- 15,000 *
Toshiaki Ogasawara(21).. 15,000 * -- 15,000 *
Geoffrey J.W. Kent(21).. 15,000 * -- 15,000 *
All Directors and
Executive Officers as a
Group.................. 172,759,314 88.99% 1,940,000 170,819,314 80.90%
</TABLE>
- --------
* Percentage of shares beneficially owned does not exceed one percent.
(1) As of August 13, 1998, after giving effect to the Old GCL Exchange, the
PCG Warrant Conversion, the Advisory Services Agreement Termination, the
TDC Exchange and the transactions associated therewith, 182,832,900
shares of Common Stock would have been issued and outstanding. An
additional 2,500,500 shares of Common Stock would have been issuable upon
the exercise of options within 60 days of August 13, 1998; an additional
2,554,183 shares of Common Stock would have been issuable upon the
exercise of the GCL Warrants (effective upon the Offerings); and an
additional 6,250,006 shares of Common Stock

62
<PAGE>

would have been issuable upon the exercise of the New PCG Warrants
(effective upon the Offerings). Both the GCL Warrants and the New PCG
Warrants will have a per share exercise price equal to the Price to Public
per Share of the Offerings. Amounts appearing in the foregoing table
include (i) all shares of Common Stock outstanding as of August 13, 1998,
(ii) all shares of Common Stock issuable upon the exercise of options
within 60 days of August 13, 1998 and (iii) all shares of Common Stock
issuable upon the exercise of the GCL Warrants and New PCG Warrants.

(2) Includes 38,742,872 shares of Common Stock and 1,257,894 shares of Common
Stock issuable upon the exercise of GCL Warrants which in May 1998 were
transferred to GKW Unified Holdings, LLC, a company formed for the
benefit of Gary Winnick and members of his family that is managed by PCG.
Includes 3,025,002 shares of Common Stock issuable upon the exercise of
New PCG Warrants.

(3) Includes 75,000 shares of Common Stock issuable upon the exercise of
options within 60 days of August 13, 1998 granted to the members of the
Board of Directors affiliated with CIBC.

(4) Includes 8,397,750 shares of Common Stock owned by Continental Casualty
Corporation and 933,150 shares of Common Stock held by Continental
Casualty Corp. Designated High Yield, for which Continental Casualty
Corporation holds sole voting and investment power. Includes 10,706,685
shares of Common Stock to be acquired by Continental Casualty Corp.
Designated High Yield prior to the Offerings.

(5) Includes 348,967 shares of Common Stock issuable upon the exercise of GCL
Warrants.

(6) Includes all shares of Common Stock owned by GKW Unified Holdings, LLC,
of which PCG is manager, and all shares of Common Stock owned by PCG, of
which Mr. Winnick is Chairman and Chief Executive Officer. Includes
300,000 shares of Common Stock issuable upon the exercise of options
within 60 days of August 13, 1998.

(7) Includes 475,001 shares of Common Stock issuable upon the exercise of New
PCG Warrants. Includes 150,000 shares of Common Stock issuable upon the
exercise of options within 60 days of August 13, 1998.

(8) Includes 450,000 shares of Common Stock issuable upon the exercise of
options within 60 days of August 13, 1998.

(9) Includes 225,000 shares of Common Stock issuable upon exercise of options
within 60 days of August 13, 1998.

(10) Includes 4,950,411 shares of Common Stock and 256,578 shares of Common
Stock issuable upon the exercise of GCL Warrants owned by San Pasqual
Corp., of which Mr. Lee and his family are the sole shareholders.
Includes 2,716,617 shares of Common Stock and 75,150 shares of Common
Stock issuable upon the exercise of GCL Warrants owned by the David and
Ellen Lee Family Trust of which Mr. Lee and his wife are the sole
shareholders. Includes 150,000 shares of Common Stock issuable upon the
exercise of options within 60 days of August 13, 1998. Includes 912,501
shares of Common Stock issuable upon the exercise of New PCG Warrants.

(11) Includes all 3,772,709 shares of Common Stock and 183,833 shares of
Common Stock issuable upon the exercise of GCL Warrants owned by
Ridgestone Corp., of which Mr. Brown's family and a related trust are the
sole shareholders. Includes 150,000 shares of Common Stock issuable upon
the exercise of options within 60 days of August 13, 1998. Includes
725,001 shares of Common Stock issuable upon the exercise of New PCG
Warrants.

(12) After giving effect to the liquidation of PCG Telecom LDC, which is
managed by Ridgestone Corp. and of which Mr. Brown and Mr. Shutler are
shareholders, and the distribution therefrom of 37,209 shares to Mr.
Brown and 148,986 shares to Mr. Shutler.

(13) Includes all 5,941,984 shares of Common Stock and 282,816 shares of
Common Stock issuable upon the exercise of GCL Warrants owned by
Galenight Corp., of which Mr. Porter is the sole shareholder. Includes
150,000 shares of Common Stock issuable upon the exercise of options
within 60 days of August 13, 1998. Includes 22,317 shares of Common Stock
issuable upon the exercise of GCL Warrants and 912,501 shares of Common
Stock issuable upon the exercise of New PCG Warrants.

(14) Includes 187,500 shares of Common Stock issuable upon exercise of options
within 60 days of August 13, 1998.

63
<PAGE>

(15) Includes 292,500 shares of Common Stock issuable upon exercise of options
within 60 days of August 13, 1998.

(16) Includes 100,000 shares of Common Stock issuable upon the exercise of
options within 60 days of August 13, 1998.

(17) Includes all shares of Common Stock owned by Continental Casualty
Company, an affiliate of Loews/CNA Holdings Corp. Mr. Weinberger is an
officer of Loews/CNA Holdings Corp. Includes 1,293,315 shares of Common
Stock, consisting of 1,050,000 shares to be held by Global Crossing Trust
1998, of which Mr. Weinberger is a trustee and 243,315 shares to be held
by a partnership of which Mr. Weinberger is a managing partner. Includes
15,000 shares of Common Stock issuable upon the exercise of options
within 60 days of August 13, 1998.

(18) Includes all shares of Common Stock beneficially owned by CIBC. Messrs.
Bloom, Kehler, Levine, Phoenix and Raben are all affiliated with CIBC
Oppenheimer, an affiliate of CIBC.

(19) Beneficial ownership of all shares of Common Stock indicated is
disclaimed.

(20) Includes all shares of Common Stock owned by MRCo, Inc. Mr. Steed is the
Senior Vice President of ULLICO and the President of MRCo, Inc., which is
a wholly-owned subsidiary of ULLICO. Includes 15,000 shares of Common
Stock issuable upon the exercise of options within 60 days of August 13,
1998. Includes 348,967 shares of Common Stock issuable upon the exercise
of GCL Warrants.

(21) Includes 15,000 shares of Common Stock issuable upon the exercise of
options within 60 days of August 13, 1998. Effective immediately prior to
Offerings.

64
<PAGE>

CERTAIN TRANSACTIONS

GENERAL

The Company has entered into certain transactions described below with
entities affiliated with the Company, its officers and directors.

TRANSACTIONS WITH PACIFIC CAPITAL GROUP (PCG) AND ITS AFFILIATES

PCG and its affiliates, including PCG Telecom Services LLC ("PCG Telecom")
and Ocean Systems International LLC ("OSI"), have entered into certain
transactions with the Company described below in connection with the
development by PCG and its affiliates of several of Global Crossing's systems,
including AC-1, PC-1, PAC and MAC, and the decision by the Board of Directors
of GCL to assume the ongoing development of systems (other than AC-1) from
OSI. Revenue from the Company comprises the sole source of revenues for PCG
Telecom. PCG and its affiliates are controlled by Mr. Gary Winnick, the Co-
Chairman of the Board of Directors of GCL, and certain other officers and
directors of GCL are affiliated with PCG, including Messrs. Cook, Lee, Porter
and Brown. See "Management" and "Principal and Selling Shareholders."

Advisory Services Agreements. ACL has entered into an Advisory Services
Agreement, dated as of March 25, 1997 (as amended, the "AC-1 Advisory
Agreement"), with PCG Telecom with respect to AC-1, under which PCG Telecom is
entitled to an advisory fee of 2.0% of the gross revenues of ACL. The Board of
Directors of GCL has agreed that each other direct subsidiary of GCL shall
from time to time enter into, or cause each of its subsidiaries to enter into,
similar Advisory Services Agreements (together with the AC-1 Advisory
Agreement, the "Advisory Services Agreements") with PCG Telecom, providing for
an advisory services fee of 2% of such subsidiary's gross revenues (not double
counting any portion of intercompany revenues on which the advisory services
fee has already been calculated). The aggregate amount of all advisory fees
payable under the Advisory Services Agreements shall be reduced by the amount,
if any, by which principals of PCG receive cash compensation (as opposed to
reimbursement of expenses) from the Company other than cash compensation paid
to such principals in their capacities as officers or directors of the Company
as approved by the Board of Directors. In addition, until the earlier of (i)
the date GCL has a public equity market value in excess of $1.5 billion and
(ii) March 25, 2002 (such earlier date, the "Deferred Fee Payment Date"), the
aggregate cumulative amount of the fees paid under the Advisory Services
Agreements in respect of the calendar years prior to and including each
calendar year set forth below shall not exceed the amounts set forth below,
with any excess being deferred and paid (together with interest thereon at a
rate per annum equal to LIBOR) on the Deferred Fee Payment Date: 1998--$10
million; 1999--$20 million; 2000--$30 million; and 2001--$40 million.

Amounts payable under the AC-1 Advisory Agreement are to be divided annually
in the following manner: 90% of the initial $5 million in advisory services
fees is retained by PCG Telecom, 5% of the initial $5 million in advisory
service fees is payable to ULLICO, Inc. ("ULLICO"), which is the ultimate
parent of MRCo, Inc., and 5% of the initial $5 million in advisory service
fees is payable to PCG. With respect to amounts over the initial $5 million
annually in advisory services fees, 15.5% is payable to ULLICO, 15.5% is
payable to PCG, 35% is payable to CIBC and the remaining 34% is retained by
PCG Telecom. Amounts retained by PCG Telecom, after deducting associated
expenses incurred by PCG relating to salaries, bonuses, overhead and an annual
discretionary expense reduction, are divided amongst Messrs. Winnick, Brown,
Lee, and Porter in the following percentages: 40%, 15%, 22.5%, and 22.5%,
respectively.

All amounts payable annually under each of the other Advisory Services
Agreements will be retained by PCG Telecom and, after deducting associated
expenses incurred by PCG relating to salaries, bonuses, overhead and an annual
discretionary expense reduction, divided amongst Messrs. Winnick, Cook, Brown,
Lee, and Porter in the percentages: 50%, 8%, 12%, 15%, and 15% respectively.

The Company has agreed to acquire the rights to advisory fees payable under
the Advisory Services Agreements in consideration for the issuance, through
PCG Telecom, to the persons entitled to receive such fees

65
<PAGE>

of shares of Common Stock having an aggregate value of $135 million and the
cancellation of approximately $2.7 million owed to the Company under a related
advance agreement (the "Advisory Services Agreement Termination"). Upon the
consummation of this transaction, all of the obligations of the Company and
ACL in respect of the Advisory Services Agreements will be terminated. Any
final agreement will be subject to the approval of the Company's current
shareholders. The Company has obtained a fairness opinion from an independent
financial advisor in connection with this transaction. As a result of this
transaction, the Company will incur a charge of approximately $137.7 million
which has been reflected in its statement of operations for the period ended
June 30, 1998. Of this amount, $135 million was determined by applying the 2%
advisory fee to projected revenues for the Company's systems. The present
value of the aggregate advisory fees was then calculated at $155.5 million,
using a discount rate of 12% in respect of AC-1 and 15% in respect of systems
other than AC-1. This amount was subsequently reduced to $135 million. Both
the discount rates and the ultimate valuation were determined as a result of a
negotiation process including a disinterested director of the Company and the
various persons entitled to fees under the Advisory Services Agreements. The
shares of Common Stock to be issued in connection with the Advisory Services
Agreement Termination will be issued to and beneficially owned by the
following persons in the following amounts:

<TABLE>
<CAPTION>
RECIPIENT COMMON STOCK(1) VALUE
--------- --------------- ------------
<S> <C> <C>
Gary Winnick (including PCG and PCG
Telecom).................................. 3,257,577 $ 61,893,963
CIBC....................................... 670,000 12,730,000
ULLICO..................................... 366,579 6,965,001
Lodwrick M. Cook........................... 304,974 5,794,506
Abbott L. Brown............................ 683,711 12,990,510
David L. Lee............................... 911,211 17,313,010
Barry Porter............................... 911,211 17,313,010
--------- ------------
Total.................................... 7,105,263 $135,000,000
========= ============
</TABLE>
- --------
(1) Based upon the Price to Public per Share of the Offerings.

The net proceeds from the sale of the Shares being offered by the Selling
Shareholders in the Offerings are to be used by such Selling Shareholders to
fund anticipated income tax liabilities resulting from this transaction. See
"Principal and Selling Shareholders."

PCG Warrants. Old GCL and PCG entered into a warrant agreement, dated as of
January 21, 1998 (the "PCG Warrant Agreement"), pursuant to which Old GCL
issued PCG three separate warrants (collectively, the "PCG Warrants")
providing PCG with the right to purchase (i) 9,226,592 of Old GCL's Class B
Shares for an aggregate purchase price of $50,000,000; (ii) an additional
4,613,297 of Old GCL's Class B Shares for an aggregate purchase price of
$31,250,000; and (iii) an additional 4,613,297 of Old GCL's Class B Shares for
an aggregate purchase price of $37,500,000. Such PCG Warrants would entitle
PCG to acquire an additional 10% of the capital stock of Old GCL (as of the
date of issuance of the PCG Warrants), with the exercise price of each PCG
Warrant based upon a different market valuation of the Company. In connection
with issuance of the PCG Warrants, the PC-1, MAC and PAC systems (then under
development) were acquired by the Company, as was the development team that
had been assembled by Pacific Capital Group (led by William Carter, former
President of AT&T Submarine Systems International ("SSI") and Wally Dawson,
former Senior Vice President of SSI). The exercise of each of the PCG Warrants
is conditioned upon (i) an initial public offering of shares of Old GCL (or
any successor thereto), underwritten by an investment banking firm of national
reputation (as determined by a majority of the Board of Directors of Old GCL)
from which Old GCL shall have received at least $50,000,000 in net proceeds,
(ii) the investment by Old GCL in the aggregate of at least $500,000,000 of
Net Attributable Capital (as defined below) in cable systems other than AC-1
and (iii) the generation in the aggregate by cable systems other than AC-1 of
at least $100,000,000 in Net Attributable Revenues (as defined below). For
purposes of the PCG Warrant Agreement, with respect to any cable system, (i)
"Net Attributable Capital" means the aggregate debt and equity capitalization
of such system multiplied by the percentage ownership of Old GCL (directly or
indirectly) in such system, and (ii) "Net Attributable Revenues" means the net
revenues of such system multiplied by the percentage ownership interest of Old
GCL (directly or indirectly)

66
<PAGE>

in such system. Rights under each of the PCG Warrants has been divided amongst
Messrs. Winnick, Cook, Brown, Lee and Porter in the following percentages:
50%, 8%, 12%, 15% and 15%, respectively.

The Board of Directors of Old GCL has determined that upon the successful
completion of the Offerings the conditions precedent to exercising the PCG
Warrants will have been met and therefore the PCG Warrants have been deemed
exercisable. The Board of Directors of Old GCL has also amended the terms of
the PCG Warrants to give each holder the option to convert each share under
warrant into a fraction of a Class B Share based upon the ratio of the current
per share valuation at the time of conversion less the per share exercise
price of the warrant divided by the current per share valuation at the time of
conversion multiplied by the number of warrants to be converted, together with
a new warrant ("New PCG Warrants") to purchase the remaining fraction of such
Class B Share at an exercise price equal to the Price to Public Per Share
payable in the Offerings. The New PCG Warrants will terminate five years from
the date of issuance. Prior to the Offerings, PCG will convert the PCG
Warrants in such manner into Class B Shares and New PCG Warrants, utilizing
the anticipated price of the Offerings as the current per share valuation for
such purposes, with the Company assuming the obligations of Old GCL under the
New PCG Warrants (the "PCG Warrant Conversion"). Upon the PCG Warrant
Conversion, Messrs. Winnick, Cook, Brown, Lee and Porter will transfer
100,000, 25,000, 25,000, 25,000 and 25,000 New PCG Warrants, respectively, to
Nelson S. Zand, an employee of PCG.

Following such transactions, shares of Common Stock and New PCG Warrants
issued in connection with the conversion of the PCG Warrants will be issued to
the following persons in the following amounts:

<TABLE>
<CAPTION>
COMMON NEW PCG
NAME STOCK WARRANTS VALUE(1)
---- ---------- --------- ------------
<S> <C> <C> <C>
Gary Winnick.......................... 6,101,589 3,025,002 $136,953,955
David L. Lee.......................... 1,830,475 912,501 41,120,907
Barry Porter.......................... 1,830,475 912,501 41,120,907
Abbott L. Brown....................... 1,464,379 725,001 32,861,958
Lodwrick M. Cook...................... 976,252 475,001 21,850,045
Nelson S. Zand........................ 0 200,000 1,390,000
---------- --------- ------------
Total............................... 12,203,170 6,250,006 $275,297,772
========== ========= ============
</TABLE>
- --------
(1) Based upon a price per share of Common Stock of $19.00 (the Price to
Public per Share of the Offerings) and the Company's estimated value,
based upon independent appraisals, of $6.95 per warrant. See "Pro Forma
Financial Information."

Advance Agreements. GCL has entered into an Advance Agreement, dated as of
March 24, 1998 (the "AC-1 Advance Agreement"), with PCG Telecom, pursuant to
which GCL has agreed to make advances to PCG Telecom within three days of a
written request from PCG in respect of fees which will become owing to PCG
Telecom under the AC-1 Advisory Agreement in an amount not to exceed 1% of the
amounts payable under long-form capacity purchase agreements executed by ACL.
As security for the obligation of PCG Telecom to repay such advances, PCG
Telecom has granted a security interest to GCL in its rights to receive
payments under the AC-1 Advisory Agreement. The AC-1 Advance Agreement will be
terminated and the obligation of PCG Telecom to repay approximately $2.7
million to the Company thereunder cancelled in connection with the termination
of the Advisory Service Agreements discussed above.

Of the $4,669,340 advanced to PCG Telecom under the AC-1 Advance Agreement,
the following amounts were paid to directors, executive officers and
shareholders of the Company:

<TABLE>
<CAPTION>
NAME AMOUNT
---- ----------
<S> <C>
Gary Winnick............................. $3,191,630(1)
David L. Lee............................. 481,130
Barry Porter............................. 481,130
Abbott L. Brown.......................... 320,754
MRCo, Inc................................ 194,696
----------
Total.................................. $4,669,340
==========
</TABLE>
- --------
(1) Includes amounts received by PCG, including reimbursement of PCG expenses
of $1,987,914.

67
<PAGE>

Assignment of Rights. As part of the consideration for the assumption by the
Company of the rights of OSI to the ongoing development of cable systems, in
the first quarter of 1998 the Company paid PCG $7.0 million for costs incurred
by PCG to such date in connection with such development.

Arrangement Fees. Additionally, during 1997, $7,250,000 in fees were paid to
PCG and certain of its key executives, who are shareholders of GCL, and
another shareholder of GCL for services provided in respect of arranging the
AC-1 Credit Facility, the GTH Senior Notes and GTH Preference Shares. Of such
fees, the following amounts were paid to directors, executive officers and
shareholders of the Company:

<TABLE>
<CAPTION>
NAME AMOUNT
---- ----------
<S> <C>
Gary Winnick................................ $3,000,000
David L. Lee................................ 1,250,000
Abbott L. Brown............................. 1,000,000
Barry Porter................................ 1,000,000
MRCo, Inc. ................................. 1,000,000
----------
Total..................................... $7,250,000
==========
</TABLE>

TRANSACTIONS WITH CIBC AND ITS AFFILIATES

CIBC and its affiliates have entered into certain financing transactions
with the Company in connection with the development and construction of the
Company's systems: (i) CIBC, Inc. was the arranger and initial lender under
the $200 million Global Crossing Bridge Facility, which was repaid and
terminated on May 18, 1998; (ii) CIBC, Inc. is one of the lead agents under
the $482 million AC-1 Credit Facility, (iii) CIBC Wood Gundy Securities Corp.,
an affiliate of CIBC, acted as exclusive placement agent for the issuance by
GTH of its $100 million outstanding GTH Preference Shares and the issuance by
GTH of its $150 million outstanding GTH Senior Notes; (iv) CIBC Oppenheimer
was an Initial Purchaser in connection with the issuance by GCH of its $800
million GCH Senior Notes; (v) CIBC, Inc. and other banks entered into a credit
agreement with the Company, effective July 30, 1998, for the $850 million non-
recourse project debt financing of PC-1; (vi) CIBC, Inc. and other lenders
issued a $104 million loan to Pacific Crossing Ltd. to make the initial
payments with respect to the PC-1 construction contract, which was repaid and
terminated on July 30, 1998, and (vii) CIBC, Inc. will be a lead agent under
the proposed $240 million MAC bank credit facility. See "Description of
Certain Indebtedness." During 1997, the Company paid CIBC approximately $25
million in fees in connection with these transactions. CIBC is a substantial
shareholder in GCL and certain members of the Board of Directors of the GCL
are affiliated with CIBC, including Messrs. Bloom, Kehler, Phoenix, Raben and
Levine. See "Management" and "Principal and Selling Shareholders."

TRANSACTIONS WITH WORLDPORT

On April 7, 1998, the Company entered into a CPA with Worldport
Communications, Inc. ("Worldport"), whereby Worldport acquired a total of five
STM-1s of capacity on AC-1 in a transaction that occurred in the ordinary
course of business of the Company and on terms and conditions no less
favorable to the Company than those contained in its other CPAs. Worldport
also executed an MOU to purchase capacity on PC-1, PAC and MAC. Certain
officers and directors of the Company, including Mr. Winnick, Mr. Cook, Mr.
Scanlon, Mr. Lee, Mr. Porter, Mr. Brown, Mr. Raben, Mr. Bloom, Mr. Kehler and
Mr. Steed, have direct or indirect equity ownership positions in Worldport
aggregating approximately 10% of the current common stock of Worldport. In
addition, Continental Casualty Corporation, with which Mr. Weinberger is
affiliated, holds warrants to purchase common stock in Worldport aggregating
less than 1% of the current common stock of Worldport and has also engaged in
certain debt financing transactions with Worldport. Campuslink Communications
Systems Inc., a private company which provides telecommunications services to
colleges and universities and which is indirectly majority-owned by Mr.
Winnick and Union Labor Life Insurance Company, an affiliate of MRCo, Inc.,
has reached an agreement in principle to be acquired by Worldport. In
addition, in connection with the Company's recent decision to explore the
making of minority investments in telecommunications and internet service
providers that are current or prospective customers on the Global Crossing
Network, the Company is considering an investment in Worldport. If the Company
chooses to make such investment, it is currently anticipated that such
investment would amount to approximately $10 million of cash and two STM-1
circuits on AC-1.

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<PAGE>

TRANSACTIONS WITH TELECOMMUNICATIONS DEVELOPMENT CORPORATION

Prior to the Offerings and after giving effect to the Old GCL Exchange,
Telecommunications Development Corporation, a Cayman Islands corporation
("TDC"), will own 11,016,879 shares of Common Stock, as well as 291,477 GCL
Warrants. See "Description of Capital Stock--Old GCL Exchange." TDC was formed
in 1996 for the purpose of making investments in start-up telecommunications
companies and one of the companies in which TDC invested was Old GCL. Mr. Lee
is the Chairman and Mr. Winnick is a director of TDC. Messrs. Lee, Winnick,
Brown and Porter beneficially own a majority of the outstanding common stock
of TDC and approximately 29% of the outstanding preferred stock of TDC. The
balance of such stock is owned by persons not affiliated with the Company (the
"Unaffiliated Shareholders"). TDC has informed the Company that, in connection
with the Offerings, it is undergoing a reorganization to facilitate the
ability of Unaffiliated Shareholders to sell Common Stock in the open market
following the Offerings. In connection with this reorganization, TDC proposed
a transaction (the "TDC Exchange") pursuant to which the Company will acquire
the 11,016,879 shares of Common Stock owned by TDC in exchange for 10,866,879
newly-issued shares of Common Stock (based upon a Price to Public per Share in
the Offerings of $19.00). The TDC Exchange is intended to enable TDC to
achieve the reorganization without the incurrence of gain for tax purposes.
Following the TDC Exchange, TDC will distribute all of the shares of Common
Stock and GCL Warrants owned by it to the holders of its preferred and common
stock and then liquidate (the "TDC Liquidation"). The TDC Exchange was
approved by a committee of disinterested members of the Company's Board of
Directors. The benefit to the Company from the TDC Exchange is that it will
have effectively acquired 150,000 shares of Common Stock for no cost.
Following the TDC Exchange and TDC Liquidation, shares of Common Stock and GCL
Warrants originally held by TDC will be issued to the following persons in the
following amounts:

<TABLE>
<CAPTION>
COMMON GCL
NAME STOCK WARRANTS VALUE (1)
---- ---------- -------- ------------
<S> <C> <C> <C>
Gary Winnick............................. 2,398,540 65,714 $ 46,235,971
David L. Lee............................. 2,716,617 75,150 52,374,738
Barry Porter............................. 812,908 22,317 15,670,654
Abbott L. Brown.......................... 270,970 7,439 5,223,564
Non-affiliates........................... 4,667,844 120,857 89,909,692
---------- ------- ------------
Total.................................. 10,866,879 291,477 $209,414,619
========== ======= ============
</TABLE>
- --------
(1) Based upon a price per share of Common Stock of $19.00 (the Price to
Public per Share of the Offerings) and the Company's estimated value,
based upon an independent appraisal, of $10.10 per warrant.

TRANSACTIONS REGARDING CLASS A SHARES OF OLD GCL

The Class A common stock of Old GCL was issued in connection with the sale
by Old GCL of the GTH Preference Shares and was offered for nominal or no
consideration as an inducement to purchase the GTH Preference Shares. The
holders of Old GCL's Class B and Class C common stock agreed to the dilutive
effects of issuing the Class A stock on the understanding that Class A stock
not ultimately needed in connection with the sale of the GTH Preference Shares
would be transferred to the holders of the Class B and Class C common stock on
a pro rata basis. Of the 31,102,950 shares of Class A Common Stock issued by
Old GCL, 11,250,000 shares were sold to purchasers of the GTH Preference
Shares at a price of $.67 per Class A share. The remaining 19,852,950 shares
were issued to an affiliate of CIBC Wood Gundy Securities Corporation ("CIBC
Securities"), the placement agent for the offering of the GTH Preference
Shares. This affiliate of CIBC Securities transferred 14,696,150 Class A
shares to purchasers from it of the GTH Preference Shares for no additional
consideration and retained the remaining 5,161,800 Class A shares and CIBC
Securities retained a substantial ownership interest in the GTH Preference
Shares. The holders of the Old GCL Class B and Class C shares took the
position that, consistent with their understanding regarding the disposition
of Class A shares not needed in connection with sales by CIBC Securities of
the GTH Preference Shares, the Class A shares retained by its affiliate should

69
<PAGE>

be transferred to the holders of Old GCL's Class B and Class C shares.
Accordingly, such affiliate of CIBC Securities retained 2,580,900 of the Class
A shares based upon its ownership of Class C shares and transferred the
remaining 2,580,899 Class A shares as follows:

<TABLE>
<CAPTION>
CLASS A
NAME SHARES VALUE (1)
---- --------- -----------
<S> <C> <C>
Gary Winnick(2)................. 1,122,213 $21,322,047
MRCo, Inc. ..................... 611,769 11,623,611
Telecommunications Development
Corporation.................... 382,356 7,264,764
PCG Telecom LDC................. 170,148 3,232,812
Barry Porter(3)................. 130,000 2,470,000
David L. Lee(4)................. 95,589 1,816,191
Abbott L. Brown(5).............. 68,824 1,307,656
--------- -----------
Total......................... 2,580,899 $49,037,081
========= ===========
</TABLE>
- --------
(1) Based upon the number of shares of Common Stock to be received pursuant to
the Old GCL Exchange multiplied by $19.00 (the Price to Public per Share
of the Offerings).
(2) Shares indicated for Gary Winnick were acquired by GKW Unified Holdings,
LLC, which is managed by PCG.
(3) Shares indicated for Barry Porter were acquired by Galenight Corp., of
which Mr. Porter is sole shareholder.
(4) Shares indicated for David L. Lee were acquired by San Pasqual Corp., of
which Mr. Lee and his family are the sole shareholders.
(5) Shares indicated for Abbott L. Brown were acquired by Ridgestone Corp., of
which Mr. Brown's family and a related trust are the sole shareholders.

70
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The following summary description of the capital stock of the Company does
not purport to be complete and is subject to the provisions of the constituent
documents of GCL and each of its subsidiaries.

OLD GCL EXCHANGE

As of the date hereof, all shares of common stock of the Company are held by
Old GCL. In order to provide for certain class voting protections and
differential rights upon liquidation, Old GCL has issued and outstanding five
classes of common stock: Class A shares, Class B shares, Class C shares, Class
D shares and Class E shares. Class A shares, Class B shares and Class C shares
have identical voting rights other than with respect to election of directors,
in which case it is specified in Old GCL's Articles of Association how many
directors each class is entitled to elect. Except with respect to any
shareholder vote that would modify the rights of such class, holders of Class
D shares and Class E shares have no voting rights. With respect to
distributions, Class D shares are subordinated to the rights of each of the
other classes of stock until such other classes shall have received cumulative
payments yielding a specific internal rate of return. In January 1998, Old GCL
authorized Class E shares, which are non-voting but otherwise identical in all
respects to Class B shares, to be issued to individuals receiving awards under
GCL's Stock Incentive Plan that was established at such time.

Prior to the Offerings, GCL will declare a stock dividend to Old GCL so that
Old GCL will hold 1.5 shares of common stock of GCL for each share of common
stock of Old GCL outstanding. Pursuant to the terms of the Articles of
Association of Old GCL, prior to the Offerings each holder of Class D shares
will convert such shares into a fraction of a Class E share based upon a
valuation at the time of such conversion, together with a warrant to purchase
the remaining fraction of such Class E share at an exercise price based upon
such market valuation. In addition, each holder of Class E shares of Old GCL
will have such Class E shares converted into Class B shares of Old GCL.
Accordingly, each holder of Class D and Class E shares will ultimately receive
Class B shares, with the warrants to purchase Class E shares received by
former Class D shareholders then cancelled in exchange for warrants ("GCL
Warrants") to purchase shares of Common Stock of GCL at an exercise price
equal to the Price to Public Per Share payable in the Offerings.

Immediately subsequent to such transactions and prior to the Offerings, each
shareholder of Old GCL (other than CIBC) will agree with Old GCL to exchange
their interests in Old GCL for shares of Common Stock of GCL held by Old GCL
at a rate of 1.5 shares of Common Stock of GCL per share of common stock of
Old GCL. CIBC will not participate in the Old GCL Exchange and will continue
to maintain its beneficial ownership position in GCL through Old GCL.
Subsequent to the Old GCL Exchange, each previous shareholder of Old GCL will
hold an equal proportionate interest in GCL, with Old GCL becoming wholly-
owned by CIBC.

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<PAGE>

The following table sets forth the beneficial share ownership of Old GCL by
directors, executive officers and principal shareholders of the Company prior
to the Old GCL Exchange and the number of shares of Common Stock to be
transferred in connection with the Old GCL Exchange:

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
-------------------- --------------------- --------------------- -------------------------------
GCL
OLD GCL GCL SHARES OLD GCL GCL SHARES OLD GCL GCL SHARES OLD GCL GCL SHARES WARRANTS
NAME SHARES RECEIVED SHARES RECEIVED SHARES RECEIVED SHARES(2) RECEIVED RECEIVED
- ---------------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Canadian
Imperial Bank of
Commerce(3)..... 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Pacific Capital
Group, Inc. .... 804,338 1,206,507 15,040,966 22,561,449 0 0 10,296,100 14,983,516 1,261,545
Continental
Casualty
Company......... 8,208,390 12,312,585 1,575,000 2,362,500 3,575,000 5,362,500 0 0 0
MRCo, Inc. ..... 407,846 611,769 7,626,700 11,440,050 0 0 3,013,800 4,171,733 348,965
Gary Winnick.... 804,338 1,206,507 15,040,966 22,561,449 0 0 10,296,100 14,983,516 1,261,545
Lodwrick M.
Cook............ 0 0 300,000 450,000 0 0 0 0 0
Jack M. Scanlon. 0 0 0 0 0 0 0 0 0
Dan J. Cohrs.... 0 0 0 0 0 0 0 0 0
David L. Lee.... 127,340 191,009 2,381,275 3,571,912 0 0 2,215,900 3,895,379 335,902
Abbott L. Brown. 53,490 80,234 1,000,253 1,500,379 0 0 1,523,400 2,191,340 184,245
Barry Porter.... 105,711 158,567 1,976,816 2,965,223 0 0 2,442,500 3,628,839 306,372
James C. Gorton. 0 0 0 0 0 0 0 0 0
Jack Finlayson.. 0 0 0 0 0 0 0 0 0
K. Eugene
Shutler......... 5,042 7,563 94,282 141,423 0 0 0 0 0
Hillel
Weinberger...... 9,070,600 13,605,900 1,575,000 2,362,500 3,575,000 5,362,500 0 0 0
Jay R. Bloom(3). 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Dean C.
Kehler(3)....... 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Jay R.
Levine(3)....... 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
William P.
Phoenix(3)...... 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Bruce Raben(3).. 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Michael R.
Steed........... 407,846 611,769 7,626,700 11,440,050 0 0 3,013,800 4,171,733 348,965
William E.
Conway.......... 0 0 0 0 0 0 0 0 0
Toshiaki
Ogasawara....... 0 0 0 0 0 0 0 0 0
Geoffrey J. W.
Kent............ 0 0 0 0 0 0 0 0 0
<CAPTION>
CLASS E(1)
----------------
GCL
OLD GCL SHARES
NAME SHARES RECEIVED
- ----------------- ------- --------
<S> <C> <C>
Canadian
Imperial Bank of
Commerce(3)..... 50,000 75,000
Pacific Capital
Group, Inc. .... 0 0
Continental
Casualty
Company......... 0 0
MRCo, Inc. ..... 0 0
Gary Winnick.... 200,000 300,000
Lodwrick M.
Cook............ 100,000 150,000
Jack M. Scanlon. 300,000 450,000
Dan J. Cohrs.... 150,000 225,000
David L. Lee.... 100,000 150,000
Abbott L. Brown. 100,000 150,000
Barry Porter.... 100,000 150,000
James C. Gorton. 125,000 187,500
Jack Finlayson.. 195,000 292,500
K. Eugene
Shutler......... 66,667 100,000
Hillel
Weinberger...... 10,000 15,000
Jay R. Bloom(3). 50,000 75,000
Dean C.
Kehler(3)....... 50,000 75,000
Jay R.
Levine(3)....... 50,000 75,000
William P.
Phoenix(3)...... 50,000 75,000
Bruce Raben(3).. 50,000 75,000
Michael R.
Steed........... 10,000 15,000
William E.
Conway.......... 10,000 15,000
Toshiaki
Ogasawara....... 10,000 15,000
Geoffrey J. W.
Kent............ 10,000 15,000
</TABLE>
- -------
(1) Includes shares of Common Stock issuable upon the exercise of stock
options which are exercisable within 60 days of August 13, 1998.
(2) In connection with the liquidation of TDC, Messrs. Winnick, Lee, Porter
and Brown will also receive 735,985, 833,587, 249,438 and 83,147 shares of
Common Stock, respectively, plus warrants to acquire a further 65,714,
75,150, 22,317 and 7,439 shares of Common Stock, respectively, directly
attributable to Class D shares held by TDC. Such amounts are reflected in
the post-liquidation columns under "Class D" above; however, amounts
initially held by TDC are not shown in the "Old GCL Shares" column under
"Class D" above. See "Certain Transactions--Transactions with
Telecommunications Development Company."
(3) Amounts appearing under "GCL Shares Received", other than Class E shares,
will be held through Old GCL, which will be wholly-owned by CIBC after the
Old GCL Exchange.

72
<PAGE>

GCL

General. Pursuant to its Memorandum of Association, the authorized share
capital of GCL is $6,000,000, divided into 600,000,000 shares of par value
$.01 each. Prior to the Old GCL Exchange, all of the outstanding shares of
Common Stock of GCL will be held by Old GCL.

Voting and Transfer Restrictions. Following the adoption of the Amended and
Restated Bye-Laws of the Company immediately prior to the Offerings, each
share of Common Stock will have one vote, except that if, and so long as, the
Controlled Shares (as defined below) of any person constitute more than 9.5%
(or, in the case of CIBC and certain of its affiliates, collectively, 35%) of
the voting power of the outstanding shares, including the Common Stock, of the
Company (an "Over-the-Threshold Common Stockholder"), the voting rights with
respect to the Controlled Shares owned by such person will be limited, in the
aggregate, to a voting power of 9.5%, pursuant to a formula set forth in the
Bye-Laws. The votes that could be cast by Over-the-Threshold Common
Stockholders but for the restrictions on voting rights described above will be
allocated to the other holders of Common Stock, pro rata based upon the number
of shares of Common Stock held by all other holders of Common Stock, subject
only to the further limitation that no stockholder allocated any such voting
rights may exceed the applicable limitation set forth above as a result of
such allocation. "Controlled Shares" includes, among other things, all shares
of Common Stock that a person is deemed (i) to own directly, indirectly or
constructively pursuant to Section 958 of the Code or (ii) to beneficially own
directly or indirectly as a result of the possession of sole or shared voting
power within the meaning of Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.

The Bye-Laws also provide that any transfer of shares of Common Stock (or
any interest therein) that results in a person (other than PCG, GKW Unified
Holdings, LLC, CIBC, Continental Casualty Company or MRCo, Inc. or their
affiliates or certain lenders to any of them) beneficially owning (within the
meaning of Section 13(d) of the Exchange Act), directly or indirectly,
Controlled Shares in excess of the Maximum Percentage (as defined below) of
the outstanding shares of Common Stock without the approval of a majority of
the members of the Board of Directors and stockholders holding at least 75% of
the votes that may be cast by all holders of Common Stock (after giving effect
to the voting limitations outlined above) shall not be registered in the share
register of the Company and shall be void and of no effect. "Maximum
Percentage" means (x) in the case of a natural person, 5%, and (y) in the case
of any person (other than a natural person) or any group (as used in Section
13(d) of the Exchange Act), 9.5%.

Amendments to or waivers of the voting reallocation and transfer restriction
provisions of the Bye-Laws will require the approval of the Board of Directors
and stockholders holding 75% of the votes that may be cast by all holders of
Common Stock. In the event of any such amendment or waiver, under certain
circumstances the Company shall indemnify and hold harmless any stockholder
who, as a result thereof, becomes subject to treatment as a "United States
Shareholder" for purposes of Section 951 et seq. of the Code from and against
all losses, costs, damages, liabilities and expenses directly or indirectly
arising out of such treatment.

These voting reallocation and transfer restrictions could make it difficult
for any person or group of persons acting in concert (other than certain
existing owners) to acquire control of the Company.

Distributions. Holders of Common Stock will be treated equally with respect
to all distributions to shareholders of GCL.

GCL STOCKHOLDERS AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

The Company, PCG, GKW Unified Holdings, LLC ("GKW"), CIBC, Continental
Casualty Company, MRCo, Inc. and certain other shareholders of the Company
(including certain of the Company's officers and

73
<PAGE>

directors and their affiliates) (collectively, the "Existing Holders") have
entered into a Stockholders Agreement and a Registration Rights Agreement,
each of which has been filed as an exhibit to the Registration Statement of
which this Prospectus constitutes a part.

Under the Stockholders Agreement, the Company has been granted a right of
first refusal on certain private transfers by the Existing Holders during the
first two years after the consummation of the Offerings. In addition, subject
to the exceptions set forth in the Stockholders Agreement, certain of the
Existing Holders have rights ("tag-along rights") permitting such shareholder
to participate, on the same terms and conditions, in certain transfers of
shares by other Existing Holders as follows: (i) PCG, GKW and CIBC (and their
affiliates and permitted transferees) shall have the right to participate in
any transaction initiated by any of them to transfer 5% or more of the
outstanding securities of the Company and (ii) PCG, GKW, CIBC, Continental
Casualty Company and MRCo, Inc (and their affiliates and permitted
transferees) shall have the right to participate in any transaction initiated
by any of them to transfer any securities of the Company which transaction
would result in a change of control of the Company. In addition, so long as
Gary Winnick, PCG and GKW and certain of their transferees ("PCG Holders")
collectively beneficially own (within the meaning of Section 13(d) of the
Exchange Act) at least 15% of the outstanding shares of Common Stock, any PCG
Holder shall be entitled to seek appraisal of the fair value of the Common
Stock beneficially owned by such person (and the payment thereof in cash) in
connection with any merger or consolidation of the Company or the sale, lease
or transfer of all or substantially all of the assets of the Company, if such
PCG Holder, in his capacity as a shareholder of the Company, shall not have
voted in favor of or given consent with respect to such transaction and
beneficially owns the Common Stock as to which appraisal is sought immediately
prior to consummation of the transaction.

Pursuant to the Registration Rights Agreement, the Existing Holders have
certain demand and piggyback registration rights and receive indemnification
and, in certain circumstances, expense reimbursement from the Company in
connection with such registration.

CAPITAL STOCK OF SUBSIDIARIES

GCL owns, directly or indirectly, 100% of the capital stock of each of its
subsidiaries, except for the PC-1 joint venture entity, in which it will have
approximately a 58% economic interest. See "Business--Pacific Crossing."

TRANSFER AGENT AND REGISTRAR FOR COMMON STOCK

The transfer agent and registrar for the Common Stock is First Chicago Trust
Company of New York.

74
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offerings, there has been no public market for the Common
Stock. Sales of a substantial amount of Common Stock in the public market, or
the perception that such sales may occur, could adversely affect the market
price of the Common Stock prevailing from time to time in the public market
and could impair the Company's ability to raise additional capital through the
sale of its equity securities in the future.

Upon completion of the Offerings, assuming no exercise of the over-allotment
options granted to the Underwriters, the Company will have 201,892,900 shares
of Common Stock outstanding, including 21,000,000 Shares of Common Stock
offered hereby and 180,892,900 restricted shares of Common Stock. The
restricted shares of Common Stock generally will be eligible for sale under
Rule 144 as currently in effect, beginning as early as 180 days from the date
of this Prospectus.

The Shares offered hereby will be freely tradable without restriction or
further registration under the Securities Act by persons other than affiliates
of the Company within the meaning of Rule 144 promulgated under the Securities
Act. The holders of restricted shares generally will be entitled to sell these
shares in the public securities market without registration under the
Securities Act to the extent permitted by Rule 144 (or Rule 145, as
applicable) promulgated under the Securities Act or any exemption under the
Securities Act.

In general, under Rule 144 as currently in effect, if one year has elapsed
since the later of the date of acquisition of restricted shares from the
Company or any affiliate of the Company, as that term is defined under the
Securities Act, the holder is entitled to sell within any three-month period a
number of shares of Common Stock that does not exceed the greater of 1% of the
then-outstanding shares of Common Stock or the average weekly trading volume
of shares of Common Stock on all exchanges and reported through the automated
quotation system of a registered securities association during the four
calendar weeks preceding the date on which notice of the sale is filed with
the Commission. Sales under Rule 144 are also subject to certain restrictions
on the manner of sales, notice requirements and the availability for current
public information about the Company. If two years have elapsed since the date
of acquisition of restricted shares from the Company or from any affiliate of
the Company, and the holder thereof is deemed not to have been an affiliate of
the Company at any time during the 90 days preceding a sale, such person would
be entitled to sell such Common Stock in the public market under Rule 144(k)
without regard to the volume limitations, manner of sale provisions, public
information requirements or notice requirements.

The Company intends to file a registration statement under the Securities
Act to register shares of Common Stock reserved for issuance under the Stock
Incentive Plan, thus permitting the resale of such shares by non-affiliates
upon issuance in the public market without restriction under the Securities
Act. Such registration statement will automatically become effective
immediately upon filing.

Subject to certain exceptions, the Company and its shareholders have agreed
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, or announce the offering of any shares of Common Stock, including
any such shares beneficially or indirectly owned or controlled by the Company
or any securities convertible into, or exchangeable or exercisable for, shares
of Common Stock for 180 days from the date of this Prospectus, without the
prior written consent of Smith Barney Inc. and Merrill Lynch.

75
<PAGE>

DESCRIPTION OF CERTAIN INDEBTEDNESS

GCH SENIOR NOTES

On May 18, 1998, GCH, the direct wholly-owned subsidiary of the Issuer,
issued and sold the GCH Senior Notes in the aggregate principal amount of
$800.0 million to a group of institutional investors in a private transaction
not subject to the registration requirements under the Securities Act. The GCH
Senior Notes are guaranteed by the Issuer and certain subsidiaries of GCH. The
Indenture for the GCH Senior Notes contains certain covenants that, among
other things, limit the ability of GCH and certain of its subsidiaries (the
"Restricted Subsidiaries") to incur additional indebtedness and issue
preferred stock, pay dividends or make other distributions, repurchase capital
stock or subordinated indebtedness, create certain liens, enter into certain
transactions with affiliates, sell assets of GCH or its Restricted
Subsidiaries, issue or sell capital stock of GCH's Restricted Subsidiaries or
enter into certain mergers and consolidations. In addition, under certain
limited circumstances, GCH will be required to offer to purchase the GCH
Senior Notes at a price equal to 100% of the principal amount thereof plus
accrued and unpaid interest to the date of purchase, with the excess proceeds
of certain asset sales. In the event of a Change of Control (as defined in the
Indenture), holders of the GCH Senior Notes will have the right to require GCH
to purchase all of their GCH Senior Notes at a price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest. The
Indenture relating to the GCH Senior Notes is an exhibit to the Registration
Statement of which this Prospectus is a part.

The Company entered into a Registration Agreement dated May 18, 1998 (the
"Registration Agreement") with the initial purchasers of the GCH Senior Notes
(the "Initial Purchasers") for the benefit of the holders of the GCH Senior
Notes. Pursuant to the Registration Agreement, GCH agreed, for the benefit of
the holders, that it will, at its cost, (a) file a registration statement (the
"Exchange Offer Registration Statement") with the Commission with respect to a
registered offer (the "Exchange Offer") to exchange the GCH Senior Notes for a
series of notes (the "New Notes") with terms identical in all material
respects to the GCH Senior Notes (except that the New Notes will not contain
terms with respect to registration rights or transfer restrictions) or (b) in
lieu of the Exchange Offer Registration Statement, file a shelf registration
statement (the "Shelf Registration Statement") with respect to registration of
resales of the GCH Senior Notes. If (i) the Exchange Offer Registration
Statement has not been filed with the Commission within 90 days after May 18,
1998 (the "Closing Date") or declared effective within 150 days after the
Closing Date, or the Exchange Offer has not been consummated within 180 days
after the Closing Date or (ii) in lieu thereof, the Shelf Registration
Statement has not been filed with the Commission on or prior to 30 days after
such filing obligation arises or declared effective within 90 days after such
obligation arises or (iii) after either the Exchange Offer Registration
Statement or the Shelf Registration Statement has been declared effective, as
the case may be, it thereafter ceases to be effective or usable (subject to
certain exceptions) in connection with resales of GCH Senior Notes or New
Notes in accordance with and during the periods specified in the Registration
Agreement (each such event referred to in clauses (i) through (iii), a
"Registration Default"), additional interest ("Special Interest") will accrue
on the GCH Senior Notes and the New Notes (in addition to the stated interest
on the GCH Senior Notes and the New Notes) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. Special Interest will accrue
and be payable semiannually at a rate of 0.50% per annum during the 90-day
period immediately following the occurrence of any Registration Default and
shall increase by 0.25% per annum at the end of each subsequent 90-day period,
but in no event shall such rates exceed 1.00% per annum in the aggregate
regardless of the number of Registration Defaults. The Registration Agreement
relating to the GCH Senior Notes is an exhibit to the Registration Statement
of which this Prospectus is a part.

AC-1 CREDIT FACILITY

ACL is the borrower under the $482.0 million senior secured AC-1 Credit
Facility, comprised of a $472.0 million term loan facility and a $10.0 million
working capital facility, with certain commercial lending institutions and
CIBC and Deutsche Bank AG, New York Branch, an affiliate of Deutsche Bank
Securities Inc., as lead agents for the lenders. The AC-1 Credit Facility is
secured by pledges of the stock of ACL and its

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subsidiaries (and other entities holding landing licenses or AC-1 assets) and
security interests in the assets and revenues of ACL and its subsidiaries and
is being used to provide financing for a portion of AC-1. A portion of the AC-
1 Credit Facility is available only to pay interest on the loans prior to the
AC-1 RFS date, and a portion is available to issue letters of credit to the
contractor of AC-1. The loans under the AC-1 Credit Facility will amortize in
eight semi-annual installments, commencing on the first initial principal
payment date (which shall be May 31 or November 30) to occur more than two
months after the commercial operation date (anticipated to occur in February
1999), with 15% of the principal amount to be amortized in the first year, 25%
in the second year, 30% in the third year and 30% in the fourth year.
Borrowings bear interest at an adjustable rate based on the adjusted base rate
or LIBOR plus an applicable margin. The facility also requires mandatory
prepayments to be made from, among other things, 50% of excess cash flow, 50%
of net cash proceeds of any equity offering of ACL and 100% of net cash
proceeds of any permitted debt offerings of ACL or its immediate parent,
permitted asset sales or insurance proceeds. As of June 30, 1998, a total of
$367 million in indebtedness (to which the Notes would be effectively
subordinated) was outstanding under the AC-1 Credit Facility.

The AC-1 Credit Facility contains covenants that, among other things,
restrict ACL's use of the term loan proceeds to the financing of AC-1 and the
payment of fees and expenses directly thereto and the use of the working
capital facility proceeds to AC-1 costs and for working capital purposes and
limit ACL's ability to make certain dividends, distributions or investments
and mergers. The facility generally only permits dividends or distributions
with respect to a portion of ACL's excess cash flow, but severely restricts
the payment of other dividends or distributions to GCL. The AC-1 Credit
Facility contains certain financial covenants relating to minimum sales of
capacity on AC-1 and ratio of EBITDA to interest expense, the failure to
comply with which would cause all excess cash flow to be applied to the
lenders under the AC-1 Credit Facility for such period. The AC-1 Credit
Facility contains certain events of default including, among other things,
failure to pay amounts when due, failure to comply with covenants and
insolvency. An event of default shall also occur upon the occurrence of
certain failures in connection with AC-1. Upon the occurrence of an event of
default, the AC-1 Credit Facility permits the lenders to declare all
outstanding borrowings to be immediately due and payable and to proceed
against the collateral. In addition, the AC-1 Credit Facility prescribes the
order by which proceeds from the sale of AC-1 capacity shall be applied, both
prior to and after the commencement of commercial operations, and requires ACL
to maintain certain reserve accounts. As a result of the foregoing, the
ability of ACL to use and distribute revenue is severely restricted so long as
the AC-1 Credit Facility remains in existence.

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TAX CONSIDERATIONS

TAXATION OF THE COMPANY

The Company believes that a significant portion of its income will not be
subject to tax in Bermuda, which currently has no corporate income tax, or
other countries in which the Issuer or its affiliates conduct activities or in
which customers of the Company are located, including the United States.
However, this belief is based upon the anticipated nature and conduct of the
business of the Company, which may change, and upon the Company's
understanding of its position under the tax laws of the various countries in
which the Company has assets or conducts activities, which position is subject
to review and possible challenge by taxing authorities and to possible changes
in law (which may have retroactive effect). The extent to which certain taxing
jurisdictions may require the Company to pay tax or to make payments in lieu
of tax cannot be determined in advance. In addition, the operations of and
payments due to the Company may be affected by changes in taxation, including
retroactive tax claims or assessments of withholding on amounts payable to the
Company or other taxes assessed at the source, in excess of the taxation
anticipated by the Company based on business contacts and practices of the
Company and the current tax regimes. There can be no assurance that these
factors will not have a material adverse effect on the Company.

United States Federal Income Tax Considerations

The Issuer and its non-United States subsidiaries will be subject to United
States federal income tax at regular corporate rates (and to United States
branch profits tax) on their income that is effectively connected with the
conduct of a trade or business within the United States, and will be required
to file federal income tax returns reflecting that income. The Company intends
to conduct its operations so as to reduce the amount of its effectively
connected income. However, no assurance can be given that the Internal Revenue
Service (the "IRS") will agree with the positions taken by the Company in this
regard. Moreover, the United States subsidiaries of the Issuer will be subject
to United States federal income tax on their worldwide income regardless of
its source (subject to reduction by allowable foreign tax credits), and
distributions by such United States subsidiaries to the Issuer or its foreign
subsidiaries generally will be subject to United States withholding.

Bermuda Tax Considerations

Under current Bermuda law, the Company is not subject to tax on income or
capital gains. Furthermore, the Company has obtained from the Minister of
Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 (as
amended), an undertaking that, in the event that Bermuda enacts any
legislation imposing tax computed on profits, income, any capital asset, gain
or appreciation, or any tax in the nature of estate duty or inheritance tax,
then the imposition of such tax will not be applicable to the Company or to
any of its operations, or the shares, capital or Common Stock of the Company,
until March 28, 2016. This undertaking does not, however, prevent the
imposition of property taxes on any company owning real property or leasehold
interests in Bermuda.

TAXATION OF STOCKHOLDERS

In the opinion of Simpson Thacher & Bartlett, special United States federal
income tax counsel to the Company, the summary set forth below under "Taxation
of Stockholders--United States Federal Income Tax Considerations" accurately
describes certain material United States federal income tax consequences that
may be relevant to the purchase, ownership and disposition of the Common
Stock. In the opinion of Appleby, Spurling & Kempe, special Bermuda tax
counsel to the Company, the summary set forth below under "Taxation of
Stockholders--Bermuda Tax Considerations" accurately describes certain
material Bermuda tax consequences that may be relevant to the purchase,
ownership and disposition of the Common Stock. Unless otherwise stated, the
discussion below deals only with Common Stock held as capital assets by United
States Holders (as defined below) who purchase the Common Stock upon original
issuance at its original offering price. The discussion does not deal with all
possible tax consequences relating to an investment in the Common Stock

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and does not purport to deal with the tax consequences applicable to all
categories of investors, some of which (such as dealers in securities,
insurance companies and tax-exempt entities) may be subject to special rules.
In particular, the discussion does not address the tax consequences under
state, local or other national (e.g., non-United States, non-Bermuda) tax
laws. Accordingly, each prospective investor should consult its own tax
advisor regarding the particular tax consequences to it of an investment in
the Common Stock. The following discussion is based upon laws, regulations and
relevant interpretations thereof in effect as of the date of this Prospectus,
all of which are subject to change, possibly retroactively.

Bermuda Tax Considerations

Under current Bermuda law, no income, withholding or other taxes or stamp or
other duties are imposed upon the issue, transfer or sale of the Common Stock
or on any payments thereunder. See "Taxation of the Company--Bermuda Tax
Considerations" for a description of the undertaking on taxes obtained by the
Company from the Minister of Finance of Bermuda.

United States Federal Income Tax Considerations

The following is a summary of certain material United States federal income
tax considerations that apply to the acquisition, ownership and disposition of
Common Stock by United States Holders (as defined below) as of the date
hereof. This summary deals only with Common Stock that is held as a capital
asset by a United States Holder, and does not address tax considerations
applicable to United States Holders that may be subject to special tax rules,
such as dealers or traders in securities, financial institutions, insurance
companies, tax-exempt entities, United States Holders that hold Common Stock
as part of a straddle, conversion transaction, constructive sale or other
arrangement involving more than one position, United States Holders that have
a principal place of business or "tax home" outside the United States or
United States Holders whose functional currency is not the United States
dollar. In addition, the summary generally does not address the tax
consequences to United States Holders that own (or are deemed for United
States federal income tax purposes to own, pursuant to complex attribution and
constructive ownership rules) 10% or more of the voting stock of the Issuer or
any of its non-United States subsidiaries ("10% Shareholders"). 10%
Shareholders are advised to consult their own tax advisors regarding the tax
considerations incident to an investment in Common Stock.

The discussion below is based upon the provisions of the Code, and
regulations, rulings and judicial decisions thereunder as of the date hereof;
any such authority may be repealed, revoked or modified, perhaps with
retroactive effect, so as to result in United States federal income tax
consequences different from those discussed below.

THE DISCUSSION SET OUT BELOW IS INTENDED ONLY AS A SUMMARY OF CERTAIN UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN THE COMMON STOCK.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
TAX CONSEQUENCES OF AN INVESTMENT IN THE COMMON STOCK, INCLUDING THE
APPLICATION TO THEIR PARTICULAR SITUATIONS OF THE TAX CONSIDERATIONS DISCUSSED
BELOW, AS WELL AS THE APPLICATION OF STATE, LOCAL, FOREIGN OR OTHER FEDERAL
TAX LAWS. THE STATEMENTS OF UNITED STATES FEDERAL INCOME TAX LAW SET OUT BELOW
ARE BASED ON THE LAWS IN FORCE AND INTERPRETATIONS THEREOF AS OF THE DATE OF
THIS PROSPECTUS, AND ARE SUBJECT TO ANY CHANGES OCCURRING AFTER THAT DATE.

As used herein, a "United States Holder" of Common Stock means a holder that
is (i) a citizen or resident of the United States, (ii) a corporation or
partnership created or organized in or under the laws of the United States or
any political subdivision thereof, (iii) an estate the income of which is
subject to United States federal income taxation regardless of its source or
(iv) a trust which is subject to the supervision of a court within the United
States and the control of a United States person as described in section
7701(a)(30) of the Code.

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Taxation of Dividends

The gross amount of dividends paid to United States Holders of Common Stock
will be treated as dividend income to such United States Holders, to the
extent paid out of current or accumulated earnings and profits, as determined
under United States federal income tax principles. Such income will be
includible in the gross income of a United States Holder as ordinary income on
the day received by the United States Holder. Such dividends will not be
eligible for the dividends received deduction allowed to corporations under
the Code. Subject to the PFIC rules described below, to the extent that the
amount of any distribution exceeds the Issuer's current and accumulated
earnings and profits for a taxable year, the distribution will first be
treated as a tax-free return of capital, causing a reduction in the adjusted
basis of the Common Stock (thereby increasing the amount of gain, or
decreasing the amount of loss, to be recognized by the United States Holder on
a subsequent disposition of the Common Stock), and the balance in excess of
adjusted basis will be taxed as capital gain. The Issuer does not anticipate
paying cash dividends in the foreseeable future. See "Dividend Policy."

For so long as the Issuer is a "United States-owned foreign corporation,"
distributions with respect to the Common Stock that are taxable as dividends
generally will be treated for United States foreign tax credit purposes as
either (i) foreign source "passive income" (or, in the case of certain United
States Holders, foreign source "financial services income") or (ii) United
States source income, in proportion to the earnings and profits of the Issuer
in the year of such distribution allocable to foreign and United States
sources, respectively. For this purpose, the Issuer will be treated as a
United States-owned foreign corporation so long as stock representing 50% or
more of the voting power or value of the Issuer is owned, directly or
indirectly, by United States Holders.

Taxation of Capital Gains

For United States federal income tax purposes, a United States Holder will
recognize taxable gain or loss on any sale or exchange of Common Stock in an
amount equal to the difference between the amount realized for the Common
Stock and the United States Holder's adjusted basis in the Common Stock.
Subject to the PFIC and CFC rules discussed below, such gain or loss will be
capital gain or loss. Capital gain of individuals derived with respect to
capital assets held for more than one year is eligible for reduced rates of
taxation depending upon the holding period of such capital assets. The
deductibility of capital losses is subject to limitations. Any gain recognized
by a United States Holder generally will be treated as United States source
income. It is presently unclear whether any loss realized by a United States
Holder will be treated as United States or foreign source.

Passive Foreign Investment Company

The Issuer believes that it is not a PFIC and does not expect to become a
PFIC in the future for United States federal income tax purposes, although
there can be no assurance in this regard. This conclusion is a factual
determination made annually and thus is subject to change. In addition, it is
based, in part, on interpretations of existing law that the Issuer believes
are reasonable, but which have not been approved by any taxing authority.

In general, the Issuer will be a PFIC with respect to a United States Holder
if, for any taxable year in which the United States Holder held Common Stock,
either (i) at least 75% of the gross income of the Issuer for the taxable year
is passive income or (ii) at least 50% of the value (determined on the basis
of a quarterly average) of the Issuer's assets is attributable to assets that
produce or are held for the production of passive income. For this purpose,
passive income generally includes dividends, interest, royalties, rents (other
than rents and royalties derived in the active conduct of a trade or business
and not derived from a related person), annuities and gains from assets that
produce passive income. If the Issuer owns (directly or indirectly) at least
25% by value of the stock of another corporation, the Issuer will be treated
for purposes of the PFIC tests as owning its proportionate share of the assets
of the other corporation, and as receiving directly its proportionate share of
the other corporation's income. If the Issuer is classified as a PFIC in any
year with respect to which a United States person is a shareholder, the Issuer
generally will continue to be treated as a PFIC with respect to such
shareholder in all succeeding years, regardless of whether it continues to
meet the income or asset test described above, subject to certain possible
shareholder elections that may apply in certain circumstances.

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<PAGE>

If the Issuer is treated as a PFIC, unless a United States Holder makes a
"QEF election" or a "mark to market election," each as described below:

1. Distributions made by the Issuer during a taxable year to a United
States Holder with respect to Common Stock that are "excess distributions"
(defined generally as the excess of the amount received with respect to the
Common Stock in any taxable year over 125% of the average received in the
shorter of either the three previous years or the United States Holder's
holding period before the taxable year) must be allocated ratably to each
day of the United States Holder's holding period. The amounts allocated to
the current taxable year and to taxable years prior to the first year in
which the Issuer was classified as a PFIC are included as ordinary income
in the United States Holder's gross income for that current year. The
amount allocated to each other prior taxable year is taxed as ordinary
income at the highest rate in effect for the United States Holder in that
prior year and the tax is subject to an interest charge at the rate
applicable to deficiencies in income taxes.

2. The entire amount of any gain realized upon the sale or other
disposition (including for these purposes a pledge) of Common Stock will be
treated as an excess distribution made in the year of sale or other
disposition and as a consequence will be treated as ordinary income and, to
the extent allocated to years prior to the year of sale or disposition,
will be subject to the interest charge described above. In addition, United
States Holders who acquire their Common Stock from decedents generally will
not receive a "stepped-up" basis in such Common Stock. Instead, such United
States Holders will have a tax basis equal to the lower of the fair market
value of such Common Stock or the decedent's basis.

The special PFIC tax rules described above will not apply to a United States
Holder if the United States Holder elects to have the Issuer treated as a
"qualified electing fund" (a "QEF election") and the Issuer provides certain
information to United States Holders. If the Issuer is treated as a PFIC, it
intends to notify United States Holders and to provide to United States
Holders such information as may be required to make such QEF election
effective.

A United States Holder that makes a QEF election will be taxable currently
on its pro rata share of the Issuer's ordinary earnings and net capital gain
(at ordinary income and capital gain rates, respectively) for each taxable
year of the Issuer during which it is treated as a PFIC, regardless of whether
or not distributions were received. The United States Holder's basis in the
Common Stock will be increased to reflect taxed but undistributed income.
Distributions of income that had previously been taxed will result in a
corresponding reduction of basis in the Common Stock and will not be taxed
again as a distribution to the United States Holder.

Alternatively, a United States Holder of stock in a PFIC that is treated as
"marketable stock" may make a mark to market election. A United States Holder
that makes such an election will not be subject to the PFIC rules described
above. Instead, in general, an electing United States Holder will include in
each year as ordinary income the excess, if any, of the fair market value of
such stock at the end of the taxable year over its adjusted basis and will be
permitted an ordinary loss in respect of the excess, if any, of the adjusted
basis of such stock over its fair market value at the end of the taxable year
(but only to the extent of the net amount previously included in income as a
result of the mark to market election). The electing United States Holder's
basis in the stock will be adjusted to reflect any such income or loss
amounts. Any gain or loss on the sale of the Common Stock will be ordinary
income or loss (except that such loss will be ordinary loss only to the extent
of the previously included net mark to market gain). The mark to market
election is only available with respect to stock that is regularly traded on
certain United States exchanges and other exchanges designated by the United
States Treasury. The meaning of the term "regularly traded," for purposes of
the mark to market election, is unclear.

A United States Holder who owns Common Stock during any year that the Issuer
is a PFIC must file IRS Form 8621. United States Holders are urged to consult
their tax advisors concerning the United States federal income tax
consequences of holding Common Stock of the Issuer if it is a PFIC, including
the advisability and availability of making any of the foregoing elections.

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Foreign Personal Holding Company

If the Issuer or one of its non-United States subsidiaries were classified
as an FPHC, all United States Holders (including certain indirect holders),
regardless of their percentage ownership, would be required to include in
income, as a dividend, their pro rata share of the Issuer's (or its relevant
non-United States subsidiary's) undistributed FPHC income (generally, taxable
income with certain adjustments) if they were holders on the last day of the
Issuer's taxable year (or if earlier, the last day on which the Issuer
satisfied the shareholder test). In addition, if the Issuer were classified as
an FPHC, United States Holders who acquire their Common Stock from decedents
would not receive a "stepped-up" basis in such Common Stock. Instead, such
United States Holders would have a tax basis equal to the lower of the fair
market value of such Common Stock or the decedent's basis.

A foreign corporation will be classified as an FPHC if (i) at any time
during the corporation's taxable year, five or fewer individuals, who are
United States citizens or residents, directly or indirectly own more than 50%
of the corporation's stock (by either voting power or value) (the "shareholder
test") and (ii) the corporation receives at least 60% of its gross income (50%
after the initial year of qualification), as adjusted, for the taxable year
from certain passive sources (the "income test"). It is possible that the
shareholder test will be met after the Offering. It is also possible that the
Issuer or one of its non-United States subsidiaries would meet the income test
in a given year and would be treated as an FPHC. The Company intends to manage
its affairs so as to attempt to avoid or minimize having income imputed to its
United States Holders under these rules, to the extent such management of its
affairs is consistent with its business goals, although there can be no
assurance in this regard.

Personal Holding Company

A corporation classified as a PHC is subject to a 39.6% tax on its
undistributed PHC income. Foreign corporations (such as the Issuer) determine
their liability for PHC tax by considering only (i) gross income derived from
United States sources and (ii) gross income that is effectively connected with
a United States trade or business. A corporation will be classified as a PHC
if (i) at any time during the last half of the corporation's taxable year,
five or fewer individuals own more than 50% of the corporation's stock (by
value) directly or indirectly and (ii) the corporation receives at least 60%
of its gross income, as adjusted, from certain passive sources. However, if a
corporation is an FPHC or a PFIC, it cannot be a PHC. It is possible that the
Issuer could meet the PHC shareholder test in a given taxable year. It is also
possible that the Issuer or one of its non-United States subsidiaries would
meet the income test in a given year and would be treated as a PHC. The
Company intends to manage its affairs so as to attempt to avoid or minimize
the imposition of the PHC tax, to the extent such management of its affairs is
consistent with its business goals, although there can be no assurance in this
regard.

Controlled Foreign Corporations

If 10% Shareholders (as defined above) own, in the aggregate, more than 50%
(measured by voting power or value) of the shares of the Issuer or any of its
non-United States corporate subsidiaries (directly, indirectly, or by
attribution), the Issuer or any such non-United States subsidiary would be a
CFC. If characterized as CFCs, then a portion of the undistributed income of
the Issuer and its non-United States subsidiaries may be includible in the
taxable income of 10% Shareholders of those entities, and a portion of the
gain recognized by such 10% Shareholders on the disposition of their shares in
the Issuer (which could otherwise qualify for capital gains treatment) may be
converted into ordinary dividend income. It is possible that the Issuer and
its non-United States corporate subsidiaries may be CFCs or may become CFCs in
the future. However, as discussed above, CFC status generally only has
potentially adverse consequences to 10% Shareholders.

In order to attempt to prevent any United States person from being a 10%
Shareholder of the Issuer, the Bye-Laws of the Issuer generally provide, among
other things, that no holder of Common Stock (or any group of holders through
whom ownership may be attributed to another holder by the constructive
ownership or attribution rules of Section 958 of the Code) will be allowed to
cast votes with respect to more than 9.5% of the

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Common Stock, and certain restrictions have been placed on the transferability
of shares. There can be no assurance that these limitations will prevent the
characterization of the Issuer (or any of its non-United States subsidiaries)
as a CFC or of any United States Holder as a 10% Shareholder. However, a
United States Holder that owns directly less than 10% of the Common Stock
generally will not be treated as a 10% Shareholder unless it is attributed
Common Stock owned by other shareholders.

Taxation of Non-United States Holders

For United States federal income tax purposes, a non-United States Holder
generally will not be subject to tax or withholding on distributions made with
respect to, and gains realized from the disposition of, Common Stock unless
such distributions and gains are attributable to an office or fixed place of
business maintained by such non-United States Holder in the United States.

Information Reporting and Backup Withholding
United States Holders

In general, information reporting requirements will apply to dividends in
respect of the Common Stock or the proceeds received on the sale, exchange, or
redemption of the Common Stock paid within the United States (and in certain
cases, outside of the United States) to United States Holders other than
certain exempt recipients (such as corporations), and a 31% backup withholding
may apply to such amounts if the United States Holder fails to provide an
accurate taxpayer identification number or to report dividends required to be
shown on its United States federal income tax returns. The amount of any
backup withholding from a payment to a United States Holder will be allowable
as a refund or credit against the United States Holder's United States federal
income tax liability, provided that the required information or appropriate
claim for refund is furnished to the IRS.

Non-United States Holders

Under current law, United States information reporting requirements and
backup withholding generally will not apply to dividends paid to a non-United
States Holder at an address outside the United States (unless the payor has
knowledge that the payee is a United States person). However, under recently
finalized United States Treasury regulations effective for payments made after
December 31, 1999, a non-United States Holder will generally be subject to
backup withholding unless applicable certification requirements are met.

As a general matter, information reporting and backup withholding will not
apply to a payment of the proceeds of a sale of Common Stock effected outside
the United States by a foreign office of a non-United States Holder. However,
payment of the proceeds of a sale of Common Stock within the United States or
conducted through certain United States related financial intermediaries is
subject to both backup withholding and information reporting unless the
beneficial owner certifies under penalties of perjury that it is a non-United
States Holder (and the payor does not have actual knowledge that the
beneficial owner is a United States person) or the holder otherwise
establishes an exemption.

The amount of any backup withholding from a payment to a non-United States
Holder will be allowable as a refund or credit against such non-United States
Holder's United States federal income tax liability, provided that the
required information or appropriate claim for refund is furnished to the IRS.

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UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement
among the Company, the Selling Shareholders and the U.S. Underwriters (the
"U.S. Underwriting Agreement"), the Company and the Selling Shareholders have
agreed to sell to each of the U.S. Underwriters named below (the "U.S.
Underwriters"), and each of the U.S. Underwriters, for whom Smith Barney Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, CIBC Oppenheimer Corp.,
Deutsche Bank Securities Inc., Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated are acting as the representatives (the "U.S. Representatives"),
has severally agreed to purchase the number of Shares set forth opposite its
name below:

<TABLE>
<CAPTION>
UNDERWRITING
U.S. UNDERWRITERS COMMITMENT
----------------- ------------
<S> <C>
Smith Barney Inc. ............................................ 4,031,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................. 4,031,000
CIBC Oppenheimer Corp. ....................................... 1,343,000
Deutsche Bank Securities Inc. ................................ 1,343,000
Goldman, Sachs & Co. ......................................... 1,343,000
Morgan Stanley & Co. Incorporated............................. 1,343,000
Bear, Stearns & Co. Inc. ..................................... 306,000
BT Alex. Brown Incorporated................................... 306,000
Chase Securities Inc. ........................................ 306,000
Credit Suisse First Boston Corporation........................ 306,000
Donaldson, Lufkin & Jenrette Securities Corporation........... 306,000
Dresdner Kleinwort Benson North America LLC................... 306,000
Hambrecht & Quist LLC......................................... 306,000
Lazard Freres & Co. LLC....................................... 306,000
Lehman Brothers Inc. ......................................... 306,000
Monness, Crespi, Hardt & Co., Inc. ........................... 306,000
NationsBanc Montgomery Securities LLC......................... 306,000
----------
Total....................................................... 16,800,000
==========
</TABLE>

The Company and the Selling Shareholders have been advised by the U.S.
Representatives that the several U.S. Underwriters initially propose to offer
such Shares to the public at the Price to Public set forth on the cover page
of this Prospectus and to certain dealers at such price less a concession not
in excess of $.68 per Share. The U.S. Underwriters may allow, and such dealers
may re-allow, a concession not in excess of $.10 per Share to other dealers.
After the Offerings, the Price to Public and such concessions may be changed.

The Company has granted to the U.S. Underwriters and the international
underwriters (the "International Underwriters" and, collectively with the U.S.
Underwriters, the "Underwriters") options, exercisable during the 30-day
period after the date of this Prospectus, to purchase up to 3,150,000
additional shares of Common Stock from the Company at the Price to Public less
the Underwriting Discount, solely to cover over-allotments. To the extent that
the U.S. Underwriters and the International Underwriters exercise such
options, each of the U.S. Underwriters and the International Underwriters, as
the case may be, will be committed, subject to certain conditions, to purchase
a number of option shares proportionate to such U.S. Underwriter's or
International Underwriter's initial commitment.

The Company and the Selling Shareholders have entered into an International
Underwriting Agreement with the International Underwriters named therein, for
whom Smith Barney Inc., Merrill Lynch International, CIBC Oppenheimer Corp.,
Deutsche Bank AG (London Branch), Goldman Sachs International and Morgan
Stanley & Co. International Limited are acting as the representatives (the
"International Representatives" and, together with the U.S. Representatives,
the "Representatives"), providing for the concurrent offer and sale of
4,200,000 Shares (in addition to the shares covered by the over-allotment
options described above) outside the United States and Canada. Both the U.S.
Underwriting Agreement and the International Underwriting Agreement provide
that

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<PAGE>

the obligations of the U.S. Underwriters and the International Underwriters
are such that if any of the Shares are purchased by the U.S. Underwriters
pursuant to the U.S. Underwriting Agreement, or by the International
Underwriters pursuant to the International Underwriting Agreement, all the
Shares agreed to be purchased by either the U.S. Underwriters or the
International Underwriters, as the case may be, pursuant to their respective
agreements must be so purchased. The Price to Public and Underwriting Discount
per Share for the U.S. Offering and the International Offering will be
identical. The closing of the International Offering is a condition to the
closing of the U.S. Offering and the closing of the U.S. Offering is a
condition to the closing of the International Offering.

Each U.S. Underwriter has severally agreed that, as part of the distribution
of the 16,800,000 Shares offered by the U.S. Underwriters, (i) it is not
purchasing any Shares for the account of anyone other than a United States or
Canadian Person, (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any Shares or distribute this Prospectus to any person
outside of the United States or Canada, or to anyone other than a United
States or Canadian Person and (iii) any dealer to whom it may sell any Shares
will represent that it is not purchasing for the account of anyone other than
a United States or Canadian Person and agree that it will not offer or resell,
directly or indirectly, any Shares outside of the United States or Canada, or
to anyone other than
a United States or Canadian Person or to any other dealer who does not so
represent and agree. Each International Underwriter has severally agreed that,
as part of the distribution of the 4,200,000 Shares offered by the
International Underwriters, (i) it is not purchasing any Shares for the
account of any United States or Canadian Person, (ii) it has not offered or
sold, and will not offer or sell, directly or indirectly, any Shares or
distribute any Prospectus relating to the International Offering to any person
in the United States or Canada, or to any United States or Canadian Person and
(iii) any dealer to whom it may sell any Shares will represent that it is not
purchasing for the account of any United States or Canadian Person and agree
that it will not offer or resell, directly or indirectly, any Shares in the
United States or Canada, or to any United States or Canadian Person or to any
other dealer who does not so represent and agree.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Agreement Between U.S.
Underwriters and International Underwriters, including sales of Directed
Shares (as defined below). "United States or Canadian Person" means any person
who is a national or resident of the United States or Canada, any corporation,
partnership or other entity created or organized in or under the laws of the
United States or Canada or of any political subdivision thereof, and any
estate or trust the income of which is subject to United States or Canadian
federal income taxation, regardless of its source (other than any non-United
States or non-Canadian branch of any United States or Canadian Person), and
includes any United States or Canadian branch of a person other than a United
States or Canadian Person.

Pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, sales may be made between the U.S. Underwriters and the
International Underwriters of such number of Shares as may be mutually agreed.
The price of any Shares so sold shall be the Price to Public, less an amount
not greater than the concession to securities dealers. To the extent that
there are sales between the U.S. Underwriters and the International
Underwriters pursuant to the Agreement Between U.S. Underwriters and
International Underwriters, the number of Shares initially available for sale
by the U.S. Underwriters or by the International Underwriters may be more or
less than the amount specified on the cover page of this Prospectus.

Any offer of the Shares in Canada will be made only pursuant to an exemption
from the prospectus filing requirement and an exemption from the dealer
registration requirement (where such an exemption is not available, offers
shall be made only by a registered dealer) in the relevant Canadian
jurisdiction where such offer is made.

The U.S. Underwriting Agreement provides that the Company and the Selling
Shareholders will indemnify the U.S. Underwriters against certain liabilities
and expenses, including liabilities under the Securities Act, or contribute to
payments the U.S. Underwriters may be required to make in respect thereof.

85
<PAGE>

including any such shares beneficially or indirectly owned or controlled by
the Company or any securities convertible into, or exchangeable or exercisable
for, shares of Common Stock, for 180 days from the date of this Prospectus,
without the prior written consent of Smith Barney Inc. and Merrill Lynch.

At the Company's request, certain of the U.S. Underwriters have reserved up
to 10% of the Shares (the "Directed Shares") for sale at the Price to Public
to persons who are directors, officers or employees of, or otherwise
associated with, the Company and its affiliates and who have advised the
Company of their desire to purchase such Shares. The number of Shares of
Common Stock available for sale to the general public will be reduced to the
extent of sales of Directed Shares to any of the persons for whom they have
been reserved. Any Shares not so purchased will be offered by the U.S.
Underwriters on the same basis as all other Shares offered hereby. The Company
has agreed to indemnify those certain U.S. Underwriters against certain
liabilities and expenses, including liabilities under the Securities Act, in
connection with the sales of the Directed Shares.

The Underwriters do not intend to confirm sales of Shares to accounts over
which they exercise discretionary authority.

In connection with the Offerings and in compliance with applicable law, the
Underwriters may overallot (i.e., sell more Shares than the total amount shown
on the list of Underwriters and participations which appears above) and may
effect transactions which stabilize, maintain or otherwise affect the market
price of the Shares at levels above those which might otherwise prevail in the
open market. Such transactions may include placing bids for the Shares or
effecting purchases of the Shares for the purpose of pegging, fixing or
maintaining the price of the Shares or for the purpose of reducing a syndicate
short position created in connection with the offering. A syndicate short
position may be covered by exercise of the option described above in lieu of
or in addition to open market purchases. In addition, the contractual
arrangements among the Underwriters include a provision whereby, if the
Representatives purchase Shares in the open market for the account of the
underwriting syndicate and the securities purchased can be traced to a
particular Underwriter or member of the selling group, the underwriting
syndicate may require the Underwriter or selling group member in question to
purchase the Shares in question at the cost price to the syndicate or may
recover from (or decline to pay to) the Underwriter or selling group member in
question the selling concession applicable to the securities in question. The
Underwriters are not required to engage in any of these activities and any
such activities, if commenced, may be discontinued at any time.

Prior to the Offerings, there has been no public market for the Common
Stock. The Price to Public was determined by negotiations between the Company,
the Selling Shareholders and the Representatives. Among the factors considered
in determining the Price to Public were prevailing market conditions, the
market values of publicly traded companies that the Underwriters believed to
be somewhat comparable to the Company, the demand for the Shares and for
similar securities of publicly traded companies that the Underwriters believed
to be somewhat comparable to the Company, the future prospects of the Company
and its industry in general, sales, earnings and certain other financial and
operating information of the Company in recent periods, and other factors
deemed relevant. There can be no assurance that the prices at which the Shares
will sell in the public market after the Offerings will not be lower than the
Price to Public. See "Risk Factors--No Prior Public Market; Possible
Volatility of Stock Price."

The Underwriters and certain of their affiliates have provided and may in
the future provide investment banking and other financial services to the
Company and certain of its affiliates for which they receive customary fees.
Salomon Brothers Inc, an affiliate of Smith Barney Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, CIBC Oppenheimer Corp., Deutsche Bank
Securities Inc. (formerly known as Deutsche Morgan Grenfell Inc.) and Morgan
Stanley & Co. Incorporated acted as Initial Purchasers in connection with the
issuance by GCH of its $800 million GCH Senior Notes. Affiliates of CIBC
Oppenheimer Corp. have engaged in certain related-party transactions with the
Company, including as a lender under the AC-1 Credit Facility. Affiliates of
Deutsche Bank Securities Inc. are acting as lenders under the AC-1 Credit
Facility and PC-1 credit agreement, and an affiliate of Goldman, Sachs & Co.
is acting as a lender under the PC-1 credit agreement. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources," "Principal and Selling Shareholders,"
"Certain Transactions" and "Description of Certain Indebtedness."

86
<PAGE>

Under Rule 2720 ("Rule 2720") of the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD"), the Company is considered an
affiliate of CIBC Oppenheimer Corp. The Offerings are being conducted in
accordance with Rule 2720, which provides that, among other things, when an
NASD member participates in the underwriting of an affiliate's equity
securities, the public offering price per share can be no higher than that
recommended by a "qualified independent underwriter" meeting certain standards
("QIU"). In accordance with this requirement, Smith Barney Inc. has assumed
the responsibilities of acting as QIU in pricing the Offerings and conducting
due diligence. The Company and the other Underwriters have agreed to indemnify
Smith Barney Inc. in its capacity as QIU against certain liabilities,
including liabilities under the Securities Act.

LEGAL MATTERS

The validity of the Common Stock will be passed upon by the Company's
counsel, Appleby, Spurling & Kempe, Hamilton, Bermuda. Certain legal matters
under United States and New York law with respect to the Shares offered hereby
will be passed upon for the Company by Simpson Thacher & Bartlett, New York,
New York, and for the Underwriters by Latham & Watkins, New York, New York.
Simpson Thacher & Bartlett and Latham & Watkins will rely, as to matters of
Bermuda law, on the opinion of Appleby, Spurling & Kempe, Hamilton, Bermuda.
Certain partners of Simpson Thacher & Bartlett will be purchasing Directed
Shares in the Offerings in an aggregate amount equal to less than 1% of the
Shares. See "Underwriting."

EXPERTS

The financial statements and schedules included in this prospectus and
elsewhere in the registration statement to the extent and for the periods
indicated in their reports have been audited by Arthur Andersen & Co.,
independent public accountants, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.

AVAILABLE INFORMATION

The Company is not currently subject to the information requirements of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"). As a
result of the Offerings, GCL will be required to file reports and other
information with the Securities and Exchange Commission (the "Commission")
pursuant to the informational requirements of the Exchange Act. GCL intends to
furnish its stockholders with Annual Reports containing Consolidated Financial
Statements audited by independent certified public accountants and with
quarterly reports containing unaudited financial information for each of the
first three quarters of each year.

GCL has filed with the Commission a Registration Statement on Form S-1 under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the securities offered hereby. As permitted by the rules and regulations of
the Commission, this Prospectus, which is a part of the Registration
Statement, omits certain information, exhibits, schedules and undertakings set
forth in the Registration Statement. For further information pertaining to the
Company and the securities offered hereby, reference is made to such
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents or provisions of any documents
referred to herein are not necessarily complete, and in each instance,
reference is made to the copy of the document filed as an exhibit to the
Registration Statement. GCL will issue annual and quarterly reports. Annual
reports will include audited financial statements prepared in accordance with
accounting principles generally accepted in the United States and a report of
its independent auditors with respect to the examination of such financial
statements. In addition, GCL will issue to its securityholders such other
unaudited quarterly or other interim reports as it deems appropriate.

The Registration Statement may be inspected without charge at the office of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
the Registration Statement may be obtained from the Commission at prescribed
rates from the Public Reference Section of the Commission at such address, and
at the Commission's regional offices located at 7 World Trade Center, 13th
Floor, New York, New York 10048, and at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, registration
statements and certain other filings made with the Commission through its
Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system are
publicly available through the Commission's site on the Internet's World Wide
Web, located at http://www.sec.gov.

87
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Report of Independent Public Accountants............................. F-2
Consolidated Balance Sheets as of June 30, 1998 (unaudited) and
December 31, 1997................................................... F-3
Consolidated Statements of Operations for the three months ended June
30, 1998 (unaudited) and June 30, 1997 (unaudited), for the six
months ended June 30, 1998 (unaudited), for the period from March
19, 1997 (Date of Inception) to June 30, 1997 (unaudited) and for
the period from March 19, 1997 (Date of Inception) to December 31,
1997.............................................................. F-4
Consolidated Statements of Shareholders' Equity for the six months
ended June 30, 1998 (unaudited) and for the period from March 19,
1997 (Date of Inception) to December 31, 1997..................... F-5
Consolidated Statements of Cash Flows for the six months ended June
30, 1998 (unaudited), for the period from March 19, 1997 (Date of
Inception) to June 30, 1997 (unaudited) and for the period from
March 19, 1997 (Date of Inception) to December 31, 1997........... F-6, F-7
Notes to Consolidated Financial Statements........................... F-8
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of
Global Crossing Ltd., LDC:

We have audited the accompanying consolidated balance sheet of Global
Crossing Ltd., LDC (a Cayman Islands company in its development stage) and
subsidiaries as of December 31, 1997, and the related consolidated statements
of operations, shareholders' equity and cash flows for the period from March
19, 1997 (date of inception) to December 31, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit 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 that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Global Crossing Ltd., LDC
and subsidiaries as of December 31, 1997, and the results of their operations
and their cash flows for the period from March 19, 1997 (date of inception) to
December 31, 1997, in conformity with accounting principles generally accepted
in the United States.

Arthur Andersen & Co.

Hamilton, Bermuda
April 21, 1998

F-2
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 1998 AND DECEMBER 31, 1997
(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents................ $ 304,125,205 $ 1,452,684
Accounts receivable, net of allowance for
doubtful accounts of $1,012,117......... 33,954,617 --
Interest receivable...................... 1,979,573 123,000
Other assets and prepaid costs........... 28,347,113 892,958
Restricted cash and cash equivalents..... 237,485,187 25,275,196
-------------- ------------
605,891,695 27,743,838
Long term accounts receivable.............. 7,900,000 --
Backhaul capacity available for sale....... 54,738,560 21,200,000
Undersea capacity available for sale....... 206,271,310 --
Construction in progress................... 518,636,709 497,318,509
Investment in Pacific Crossing Ltd. ....... 126,456,345 --
Deferred finance and organization costs,
net of accumulated amortization of
$3,994,076 ($2,246,857 as of December 31,
1997)..................................... 44,338,405 25,934,021
-------------- ------------
$1,564,233,024 $572,196,368
============== ============
LIABILITIES:
Current liabilities:
Accrued construction costs............... $ 21,688,211 $ 52,003,875
Accounts payable and accrued liabilities. 8,520,395 1,658,399
Accrued interest and preference share
dividends............................... 9,361,111 2,921,854
Deferred revenue......................... 42,747,611 5,325,000
Income taxes payable..................... 9,000,000 --
Current portion of obligations under
inland services agreements.............. 43,489,498 17,891,000
Current portion of obligations under
capital leases.......................... 6,215,130 12,297,645
-------------- ------------
141,021,956 92,097,773
Long term debt............................. 367,048,000 162,325,000
Senior notes............................... 796,277,203 150,000,000
Long term deferred revenue................. 6,916,667 --
Obligations under inland services
agreements................................ 7,628,050 3,009,000
Obligations under capital leases........... 7,561,897 --
-------------- ------------
Total liabilities........................ 1,326,453,773 407,431,773
-------------- ------------
COMMITMENTS
MANDATORILY REDEEMABLE PREFERENCE SHARES
(109,830 shares as of December 31, 1997,
$1,000 preference liquidation preference
per share (net of unamortized discount and
issuance costs of $12,223,993 and
$6,962,407 respectively)).................. -- 90,643,919
-------------- ------------
SHAREHOLDERS' EQUITY:
Class A common stock, 31,102,950 shares
issued (31,102,950 as of December 31,
1997)..................................... 20 20
Class B common stock, 51,075,000 shares
issued (50,625,000 as of December 31,
1997)..................................... 34 34
Class C common stock, 50,625,000 shares
issued (50,625,000 as of December 31,
1997)..................................... 34 34
Class D common stock, 33,088,200 shares
issued, convertible to Class E shares
(33,088,200 as of December 31, 1997)...... 22 22
Class E common stock, 337,500 shares
issued (nil as of December 31, 1997)...... -- * --
Other shareholders' equity................. 397,095,005 74,280,922
Accumulated deficit........................ (159,315,864) (160,356)
-------------- ------------
237,779,251 74,120,676
-------------- ------------
$1,564,233,024 $572,196,368
============== ============
</TABLE>
- --------
*Amount less than $1.

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

F-3
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
THREE MONTHS THREE MONTHS SIX MONTHS FROM MARCH 19, 1997 FROM MARCH 19, 1997
ENDED ENDED ENDED (DATE OF INCEPTION) (DATE OF INCEPTION)
JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1998 TO JUNE 30, 1997 TO DECEMBER 31, 1997
------------- ------------- ------------- ------------------- --------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
SALES AND OPERATING
REVENUES............... $ 101,255,867 $ -- $ 101,255,867 $ -- $ --
------------- ----------- ------------- ----------- ------------
EXPENSES:
Cost of capacity sold.. 41,200,229 -- 41,200,229 -- --
Operations and
maintenance........... 2,470,000 -- 2,470,000 -- --
Sales and marketing.... 6,528,780 40,235 7,312,995 40,235 1,366,724
Network development.... 4,314,183 -- 4,314,183 -- 78,000
General and
administrative........ 6,507,671 50,204 9,099,341 50,204 1,617,770
Termination of
advisory services
agreement............. 139,669,340 -- 139,669,340 -- --
Stock related expense.. 22,760,170 -- 23,397,670 -- --
Provision for doubtful
accounts.............. 1,012,117 -- 1,012,117 -- --
Depreciation and
amortization.......... 442,827 51,623 473,194 51,623 39,214
------------- ----------- ------------- ----------- ------------
224,905,317 142,062 228,949,069 142,062 3,101,708
------------- ----------- ------------- ----------- ------------
OPERATING LOSS.......... (123,649,450) (142,062) (127,693,202) (142,062) (3,101,708)
OTHER INTEREST INCOME
(EXPENSE):
Interest income........ 4,327,602 1,347,512 4,673,436 1,347,512 2,941,352
Interest expense....... (7,403,037) -- (7,426,271) -- --
------------- ----------- ------------- ----------- ------------
INCOME (LOSS) BEFORE
INCOME TAXES AND
EXTRAORDINARY ITEM..... (126,724,885) 1,205,450 (130,446,037) 1,205,450 (160,356)
Provision for income
taxes................. (9,000,000) -- (9,000,000) -- --
------------- ----------- ------------- ----------- ------------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM..... (135,724,885) 1,205,450 (139,446,037) 1,205,450 (160,356)
Extraordinary loss on
retirement of senior
notes................. (19,709,471) -- (19,709,471) -- --
------------- ----------- ------------- ----------- ------------
NET INCOME (LOSS)....... (155,434,356) 1,205,450 (159,155,508) 1,205,450 (160,356)
Preference share
dividends............. (3,898,203) (4,041,664) (8,306,433) (4,236,108) (12,689,923)
Redemption of
preference shares..... (34,140,067) -- (34,140,067) -- --
------------- ----------- ------------- ----------- ------------
NET LOSS APPLICABLE TO
COMMON SHAREHOLDERS.... $(193,472,626) $(2,836,214) $(201,602,008) $(3,030,658) $(12,850,279)
============= =========== ============= =========== ============
LOSS PER COMMON SHARE
Net loss before
extraordinary item:
Basic and diluted.... $ (1.05) $ (0.02) $ (1.10) $ (0.02) $ (0.08)
============= =========== ============= =========== ============
Extraordinary item..... $ (0.12) $ -- $ (0.12) $ -- $ --
============= =========== ============= =========== ============
Net loss applicable to
common shareholders:
Basic and diluted.... $ (1.17) $ (0.02) $ (1.22) $ (0.02) $ (0.08)
============= =========== ============= =========== ============
Shares used in computing
basic and diluted net
loss per share......... 166,194,035 165,441,150 166,062,697 165,441,150 165,441,150
============= =========== ============= =========== ============
</TABLE>

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

F-4
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) AND FOR THE PERIOD FROM
MARCH 19, 1997 (DATE OF INCEPTION) TO DECEMBER 31, 1997
(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
OTHER SHAREHOLDERS'
COMMON STOCK EQUITY
--------------------- --------------------------
ADDITIONAL TOTAL
PAID-IN UNEARNED ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT(1) CAPITAL COMPENSATION DEFICIT EQUITY
----------- --------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of Class A
common stock for cash
on March 25, 1997...... 11,250,000 $ 7 $ 7,499,993 $ -- $ -- $ 7,500,000
Class A common stock
distributed for nil
consideration to the
initial purchaser of
preference shares on
March 25, 1997......... 19,852,950 13 13,234,987 -- -- 13,235,000(2)
Issuance of Class B
common stock for cash
on March 25, 1997...... 50,625,000 34 31,249,966 -- -- 31,250,000
Issuance of Class C
common stock for cash
on March 25, 1997...... 50,625,000 34 33,749,966 -- -- 33,750,000
Issuance of Class D
common stock for cash
to certain Class B
shareholders on
March 25, 1997......... 33,088,200 22 2,499,978 -- -- 2,500,000
Costs incurred related
to the issuance of
common stock........... -- -- (1,264,045) -- -- (1,264,045)
Preference share
dividends.............. -- -- (12,689,923) -- -- (12,689,923)
Net loss for the period. -- -- -- -- (160,356) (160,356)
----------- ---- ------------ ------------ ------------- -------------
Balance, December 31,
1997................... 165,441,150 110 74,280,922 -- (160,356) 74,120,676
----------- ---- ------------ ------------ ------------- -------------
Issuance of Class B
common stock for cash
on January 21, 1998.... 450,000 -- * 750,000 -- -- 750,000
Issuance of Class E
common stock for cash
on January 21, 1998.... 187,500 -- * 312,500 -- -- 312,500
Issuance of Class E
common stock for cash
on April 22, 1998...... 150,000 -- * 1,725,179 -- -- 1,725,179
Cash reimbursement to
certain shareholders... -- -- (7,047,044) -- -- (7,047,044)
Unearned compensation... -- -- 67,130,700 (67,130,700) -- --
Compensation expense.... -- -- -- 21,134,991 -- 21,134,991
PCG Warrants to be
converted to common
stock.................. -- -- 213,384,957 -- -- 213,384,957
Common stock to be
issued in exchange for
termination of advisory
services agreement..... -- -- 135,000,000 -- -- 135,000,000
Preference share
dividends.............. -- -- (8,306,433) -- -- (8,306,433)
Redemption of preference
shares................. -- -- (34,140,067) -- -- (34,140,067)
Net loss for the six
months ended June 30,
1998................... -- -- -- -- (159,155,508) (159,155,508)
----------- ---- ------------ ------------ ------------- -------------
Balance, June 30, 1998.. 166,228,650 $110 $443,090,714 $(45,995,709) $(159,315,864) $ 237,779,251
=========== ==== ============ ============ ============= =============
</TABLE>
- --------
*Amount less than $1.
(1) Amount per share less than $1.
(2) Per Note 7, value was determined based on the $1 per share paid for the
11,250,000 Class A shares.

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

F-5
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
SIX MONTHS MARCH 19, 1997 MARCH 19, 1997
ENDED (DATE OF INCEPTION) (DATE OF INCEPTION)
JUNE 30, TO JUNE 30, TO DECEMBER 31,
1998 1997 1997
------------- ------------------- -------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss applicable to
common shareholders... $(201,602,008) $ (3,030,658) $ (12,850,279)
Adjustments to
reconcile net loss to
net cash provided by
operating activities:
Depreciation and
amortization.......... 473,194 51,623 39,214
Provision for doubtful
accounts.............. 1,012,117 -- --
Termination of advisory
services agreement ... 135,000,000 -- --
Stock related expenses. 23,397,670 -- --
Preference share
dividends............. 8,306,433 4,236,108 12,689,923
Redemption of
preference shares..... 34,140,067 -- --
Extraordinary loss on
retirement of debt.... 19,709,471 -- --
Increase in accounts
receivable............ (42,866,734) -- --
Increase in interest
receivable............ (1,856,573) (246,449) (123,000)
Increase in backhaul
capacity available for
sale.................. (33,538,560) -- (21,200,000)
Increase in other
assets and prepaid
costs................. (27,454,155) (216,355) (909,015)
Undersea capacity
available for sale
transferred from
construction in
progress.............. 238,554,078 -- --
Increase in undersea
capacity available for
sale.................. (206,271,310) -- --
Increase in deferred
revenue............... 44,339,278 -- 5,325,000
Increase in income tax
payable............... 9,000,000 -- --
Increase in accounts
payable and accrued
liabilities........... 6,861,996 1,991,377 1,248,133
Increase in obligations
under inland service
agreements............ 30,217,548 -- 20,900,000
------------- ------------- -------------
Net cash provided by
operating activities. 37,422,512 2,785,646 5,119,976
------------- ------------- -------------
CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES:
Finance and
organization costs
incurred.............. (31,773,003) (25,320,533) (28,180,878)
Preference share
issuance costs........ -- (7,487,343) (7,529,651)
Costs related to
issuance of common
stock................. -- (1,264,045) (1,264,045)
Cash reimbursement to
certain shareholders.. (7,047,044) -- --
Proceeds from issuance
of common stock and
additional paid-in
capital............... 525,000 75,000,000 75,000,000
Proceeds from issuance
of preference shares.. -- 100,000,000 100,000,000
Redemption of
preference shares..... (134,371,773) -- --
Proceeds from long term
debt.................. 204,723,000 9,250,000 162,325,000
Proceeds from issuance
of senior notes....... 796,232,000 75,000,000 150,000,000
Retirement of senior
notes................. (159,750,000) -- --
Increase in restricted
cash and cash
equivalents........... (212,209,991) (77,354,396) (25,275,196)
------------- ------------- -------------
Net cash provided by
financing activities. 456,328,189 147,823,683 425,075,230
------------- ------------- -------------
CASH FLOWS USED IN
INVESTING ACTIVITIES:
Cash paid for
construction in
progress and capacity
available for sale.... (191,072,180) (147,597,810) (428,742,522)
Investment in Pacific
Crossing Ltd.......... (6,000) -- --
------------- ------------- -------------
Net cash used in
investing activities. (191,078,180) (147,597,810) (428,742,522)
------------- ------------- -------------
NET INCREASE IN CASH.... 302,672,521 3,011,519 1,452,684
CASH, beginning of
period................. 1,452,684 -- --
------------- ------------- -------------
CASH, end of period..... $ 304,125,205 $ 3,011,519 $ 1,452,684
============= ============= =============
</TABLE>

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

F-6
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(EXPRESSED IN U.S. DOLLARS)

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

F-7
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BACKGROUND

On March 19, 1997, Global Crossing Ltd., LDC ("GCL"), formerly GT Parent
Holdings LDC, was incorporated as an exempted limited duration company in the
Cayman Islands. GCL is an independent developer, owner and operator of
undersea digital fiber optic cable systems. Atlantic Crossing Ltd. ("ACL"),
formerly Global Telesystems Ltd., a Bermuda company which is an indirect
wholly-owned subsidiary of GCL, was incorporated to construct and operate an
undersea fiber optic cable ring with landing stations in the United States,
the United Kingdom, Germany and the Netherlands. ACL has incorporated wholly-
owned subsidiaries in each of these countries in order to own the portion of
the cable system located in each country and the related territorial waters.

GCL entered into a joint venture, Pacific Crossing Ltd., ("PCL") for
purposes of constructing and operating PC-1, an undersea fiber optic cable
ring system connecting California, Washington and two landing sites in Japan
(see Note 3).

Mid-Atlantic Crossing Ltd., a wholly-owned subsidiary of GCL, entered into a
contract with Alcatel Submarine Networks on June 2, 1998 for the construction
of MAC, an undersea fiber optic cable ring connecting New York, the Caribbean
and Florida at a total cost of $350 million. Mid-Atlantic Crossing Ltd. is in
the process of incorporating companies in each country in which the cable will
land in order to own the portion of the cable system located in each country
and the related territorial waters. To finance, in part, the construction of
MAC, the Company signed a commitment letter to obtain $240 million of senior
secured non-recourse indebtedness.

Effective July 21, 1998, the Company through its wholly-owned subsidiary Pan
American Crossing Ltd., entered into a contract with Tyco Submarine Systems
Ltd. ("TSSL"), formerly AT&T Submarine Systems, Inc. for the construction of
PAC, an undersea fiber optic cable system connecting California, Mexico and
Panama at a total cost of $475 million. To finance, in part, the construction
of PAC, Pan American Crossing Ltd. signed a commitment letter to obtain $310
million of non-recourse indebtedness on July 21, 1998.

To finance construction of ACL's undersea fiber optic cable ring, GCL issued
$75 million of common stock and Global Telesystems Holdings Ltd. ("GTH"), an
indirect wholly-owned subsidiary of GCL, and the parent of ACL, issued $100
million of preference shares and sold $150 million of senior notes, as
described in Note 6. These proceeds, together with a $482 million Credit
Facility, as described in Note 5, are being used to pay for construction
costs, financing fees and other related costs. Together GCL and its
subsidiaries are defined as the Company.

ACL has entered into a fixed price contract (the "Contract") with TSSL for
the development, design, construction and installation of a four fiber pair,
fiber optic cable system connecting (i) the United States to the United
Kingdom, (ii) the United Kingdom to the Netherlands and Germany, (iii) the
Netherlands to Germany and (iv) Germany to the United States (collectively,
"AC-1" or the "System"). AT&T Corp. has provided ACL with a guarantee in
respect of TSSL's obligations under the Contract. Assuming that construction
of AC-1 progresses according to the Contract schedule, the System will be
accepted by ACL and made available for commercial service on February 22, 1999
(the "System RFS date"). Certain segments of the System are expected to be
completed in advance of the System RFS date. The United States to the United
Kingdom segment was ready for service on May 26, 1998 and the Germany to the
United States segment is expected to be ready for service on November 30,
1998. Once ACL formally accepts each segment of the System, the segment

F-8
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Customers of the Company enter into Capacity Purchase Agreements ("CPA") to
obtain an IRU in units of transatlantic and European capacity ("AC-1
Capacity"). The purchase price for AC-1 Capacity is non-refundable once the
segment of the System specified in the CPA is ready for service and the IRU
entitles the customer to all rights and obligations of ownership of the AC-1
capacity for a period ending 25 years after the System RFS date. The Company's
CPAs provide that the AC-1 System will have self-healing ring capability,
whether or not a CPA relates only to a segment of the System. Self-healing
capability enables capacity on the segment of the System to be instantaneously
restored either on the System's other segments or within the same segment in
the event of interruption so that the same point-to-point connectivity is
maintained.

Customers who purchase AC-1 capacity prior to the System RFS date will be
granted 80% of the capacity that remains unsold, if any, 12 1/2 years after
the System RFS date. However, based on sales projections provided by a third
party consultant, it is highly unlikely that there will be a material amount
of unsold capacity on AC-1 at the end of 12 1/2 years after the System RFS
date. The Company has no constraints on the pricing or structure of sales of
residual capacity and the Company would expect that if such capacity had any
remaining value, it would enter into one or more transactions to dispose of
such capacity prior to such date to realize such remaining value. As a result,
the right to residual capacity is not a substantive right.

ACL subsidiaries have entered into contracts, called Inland Services
Agreements, to obtain IRUs of capacity on terrestrial telecommunications
systems ("Backhaul Capacity") for terms of 25 years from the System RFS date.
Under the IRU, the Company is required to pay an up-front non-recurring charge
plus, in certain cases, monthly recurring charges over a 25 year period and in
exchange obtains all rights and obligations of ownership. The Company has
accounted for the IRUs as capital leases since these IRUs represent leases as
defined under Statement of Financial Accounting Standards No. 13, "Accounting
for Leases" ("SFAS 13"). The Company sells this Backhaul Capacity under
separate CPAs ("Backhaul CPA") to certain customers that have purchased
capacity on AC-1 for the purpose of extending capacity from AC-1 landing
stations to major telecommunication centers in the United States and the
United Kingdom. The purchase price for Backhaul Capacity is non-refundable and
grants the customer an IRU which entitles the customer to all rights and
obligations of ownership of the Backhaul Capacity for a period ending 25 years
after the System RFS date.

ACL has entered into an Operations, Administration and Maintenance ("OA&M")
agreement with TSSL whereby TSSL is obligated to provide operating,
administration and maintenance functions to AC-1. The administration functions
include but are not limited to the provision of billing information and annual
expense budgets. The operations and maintenance functions include but are not
limited to the management and maintenance of a Network Operating Center,
assumption of ship costs and any related ship repair costs, obtaining

F-9
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Pursuant to the terms of CPAs, ACL is obliged to use commercially reasonable
efforts to cause the System to be maintained in efficient working order and in
accordance with industry standards. In exchange for the operating,
administration and maintenance services provided by ACL through the OA&M
agreement with TSSL, customers are obligated for the term of the IRU to pay
for their allocable share of the costs for operating and maintaining the
System. In accordance with the CPA, customers appoint members to a System
Advisory Committee which is charged with the responsibility of directing the
operations and maintenance of the System. Customers pay for 110% of ACL's cost
to operate and maintain the system based on their pro-rata share of total
capacity subject to annual maximum amounts per circuit purchased of $250,000
per transatlantic circuit and $50,000 per European circuit. Their pro-rata
share is effectively calculated by taking the weighted average of purchased
capacity over total capacity multiplied by 110% of actual costs incurred.
These OA&M costs are billed to customers quarterly in advance based on the
prior year's actual costs, are non-refundable, and should a customer fail to
make an OA&M payment, ACL may suspend all rights to capacity granted under the
IRU.

ACL originally entered into a Sales Agency Agreement with TSSL whereby TSSL
was responsible for the marketing and sale of capacity of the System and
received commissions on sales proceeds received at rates that varied as
certain cumulative revenue levels were reached. Effective March 5, 1998, the
Company entered into a commissions sharing agreement with TSSL whereby GCL
assumed primary responsibility for the marketing and sale of capacity of the
System and will share a percentage of commissions payable to TSSL under the
Sales Agency Agreement as consideration for assuming primary responsibility
for the sales effort and marketing of the Company's projects. The Sales Agency
Agreement with TSSL will terminate on March 25, 2002 with an option to extend
it until March 25, 2005.

On January 21, 1998, GCL effected a 100-for-1 stock split of each of the
Class A, B, C and D common stock and undesignated stock and amended the par
value of each share of common stock from $.0001 per share to $.000001 per
share. All share information presented in the consolidated financial
statements, including these Notes, gives effect to the stock split.

Shares of common stock of GCL outstanding have been restated to reflect the
equivalent number of shares of New GCL that will be issued in connection with
the Old GCL Exchange as described in "Description of Capital Stock."

2. SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States. The
preparation of financial statements in conformity with generally accepted
accounting principles 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 revenues and expenses during the reporting
period. Actual results could differ from those estimates. The significant
accounting policies are summarized as follows:

F-10
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

a) Principles of Consolidation

The consolidated financial statements include the accounts of GCL and its
wholly owned subsidiaries. All significant intercompany transactions have been
eliminated. Investment in PCL, in which GCL does not exercise control, has
been accounted for using the equity method.

b) Development Stage Company

The Company was in its development stage until May 26, 1998 when the United
States to United Kingdom segment of the AC-1 system was placed into service
and the Company began generating significant revenues. All aspects of the AC-1
System are scheduled to be ready for commercial service by February 22, 1999.
Currently, construction of the Company's other undersea fiber optic cable
systems are underway.

Successful future operations are subject to several risks, including the
ability of the Company to ensure the successful, timely and cost-effective
completion of AC-1 and other cable systems as well as to successfully market
and generate significant revenue from the sale of capacity of the system. GCL
may encounter problems, delays and expenses, many of which may be beyond its
control. There can be no assurance that the cable systems will be completed
within the time frame and that capacity sales will meet expectations, or that
substantial delays would not adversely affect GCL's achievement of profitable
operations.

c) Cash and Cash Equivalents

The Company considers short-term highly liquid investments with an original
maturity of three months or less at the date of purchase to be cash
equivalents. Cash and cash equivalents include cash in banks and short-term
money market deposits with a maturity of one month.

d) Sales, Cost of Sales and Deferred Revenue

The Company enters into CPAs to sell capacity on the transatlantic and
European segments. In addition, in conjunction with most sales of AC-1
capacity, the Company enters into Backhaul CPAs to sell Backhaul Capacity.
Both AC-1 and Backhaul CPAs grant the customer an IRU of capacity for the life
of the cable which is 25 years from the ready for service date.

Sales of capacity under CPAs are accounted for as sales type leases as they
represent leases of property and meet the criteria for sales-type lease
accounting under SFAS 13.

Revenues from the sale of AC-1 capacity and backhaul capacity are recognized
in the period that the rights and obligations of ownership transfer to the
purchaser, which occurs when (1) the purchaser obtains the right to use the
capacity, which can only be suspended following a failure of the purchaser to
pay the full purchase price or fulfill its contractual obligations, (2) the
purchaser is obligated to pay OA&M costs and (3) the segment of the System
related to the capacity purchased is available for service. Customers who have
entered into CPAs for AC-1 capacity to date have paid deposits toward the
purchase price and such amounts have been included as deferred revenue in the
accompanying consolidated balance sheet. Certain CPAs require a refund of
these deposits should the System RFS date occur after June 30, 1999. The
Company's CPAs provide that the AC-1 system will have self-healing ring
capability, whether or not a customer purchases capacity on a single segment

F-11
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Costs incurred on each segment of the System, currently reflected as
construction in progress in the accompanying consolidated balance sheet, will
be recorded as capacity available for sale at the date each segment of the
System becomes operational. AC-1 Capacity and Backhaul Capacity available for
sale will be recorded at the lower of cost or fair value less costs to sell
and will be charged to costs of sales in the period the related revenues are
recognized. Fair value of AC-1 capacity will be derived from a third party
consultant's market study of expected sales of capacity.

The amount charged to cost of sales in any period relating to System
capacity will be calculated based on the ratio of System capacity revenues
recognized in the period to total expected System capacity revenues over the
life of the System multiplied by the total costs incurred to construct the
System. This calculation of the cost of sales amount matches costs with the
value of each sale relative to total expected revenues. Until the entire
System is completed, for purposes of calculating cost of sales, the total
System costs incurred will include an estimate of remaining costs to be
incurred to complete the entire System. Backhaul Capacity sold to customers is
acquired from third party capacity providers generally when needed to fulfill
the Company's commitments under Backhaul CPA agreements. The cost of acquiring
Backhaul Capacity will be charged to cost of sales in the period that the
related revenue is recognized.

The calculation of cost of undersea sales will be based on a total system
cost and revenue forecast that includes both the initial system cost and the
cost of system upgrades that management has the intent and ability to
complete, provided the need for such upgrades is supported by a consultant's
independent revenue forecast.

The AC-1 System was designed to enable the Company to upgrade the System in
future years so as to increase the initial design capacity of 256 circuits
available for sale. The business plan for the investment in AC-1 indicated a
minimum capacity sales level of 512 circuits and management currently has both
the intent and ability to upgrade the system to that level. This is
demonstrated by the fact that (i) the Board of Directors has authorized the
purchase of the upgrade, (ii) the Company has the financial ability to
purchase the upgrade and (iii) there are no regulatory or technology issues
preventing the completion of the upgrade. In the period the Company purchases
any further upgrades, the total expected System capacity revenues and cost of
the System used in the cost of sales calculation will change to take into
account the further increase in System cost and in System capacity. The total
expected System capacity revenues used by the Company in its cost of sales
calculation will always be limited by total sales forecasted by a third party
consultant which will be updated on an annual basis. Based on the current
third party consultant's sales forecast, the Company expects to sell all 512
circuits available for sale, which includes the initial upgrade.

In addition to capacity upgrades, management's estimate of future expected
AC-1 capacity revenues may change due to a number of factors including
possible variances in actual sales prices and volume from

F-12
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Under their respective CPAs, certain customers have been provided options to
purchase additional capacity at specified prices for specified future periods
as well as the option to purchase additional capacity should the Company
upgrade the System capacity in the future. In many cases, prices under the
options to purchase capacity during these specified periods are lower than the
current price for capacity charged to the customer. Management's estimate of
future revenues for purposes of calculating cost of sales takes into
consideration prices under these options.

Undersea and backhaul OA&M revenues are recognized in the period the
services are provided. On an annual basis the actual undersea OA&M costs
incurred by the Company will be accumulated and an adjustment will be made to
true up actual undersea OA&M revenues so that they equal 110% of actual costs
incurred, provided specified contractual limits have not been reached. This
adjustment will be recorded in the period in which the adjustment is made.

e) Commissions and Advisory Services Fees

The Company's policy is to record the commission and advisory fee expense
and related payable upon the recognition of revenue so as to appropriately
match these costs with the related revenue. Under the Advisory Services
Agreement ("ASA"), the Company pays PCG Telecom Services LLC ("PCG Telecom")
and its affiliates 2% of revenues for advisory services performed and under
the Sales Agency Agreement pays TSSL a commission based on a percentage of
capacity revenues. See Note 12 for discussion of the termination of the ASA.

f) Backhaul Capacity Available For Sale

The cost of acquiring Backhaul Capacity under Inland Service Agreements has
been capitalized to backhaul capacity available for sale. Under these
agreements the Company is required to pay an up-front non-recurring charge
plus, in certain cases, recurring charges over the period the capacity is
provided. The Company has capitalized the present value of total future
payments (excluding OA&M costs) in backhaul capacity available for sale and
has recorded an equal amount as an obligation under Inland Services Agreements
in the accompanying consolidated balance sheets (see Note 5). The related OA&M
costs will be expensed in the period the services are provided.

g) Construction in Progress

Construction in progress includes direct expenditures for construction of
the System and is stated at cost. Capitalized costs include costs incurred
under the Contract; advisory, consulting and legal fees; interest; and
amortized finance costs incurred during the construction phase. Once it is
probable that a cable system will be

F-13
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Additionally, the Company has included in construction in progress the
minimum lease payments related to the IRU held by GT Landing Corp. on System
assets in the United States and minimum lease payments related to leases of
buildings and conduits in Germany and Netherlands described further in Note 5.

Interest costs incurred which includes the amortization of deferred finance
fees and the issuance discount, ("interest cost") are capitalized to
construction in progress in accordance with Statement of Financial Accounting
Standards No. 34, "Capitalization of Interest Costs" ("SFAS 34"). Total
interest cost incurred and interest capitalized to construction in progress
during the periods were:

<TABLE>
<CAPTION>
PERIOD FROM
MARCH 19, 1997
(DATE OF
THREE MONTHS ENDED SIX MONTHS ENDED INCEPTION) TO
JUNE 30, 1998 JUNE 30, 1998 DECEMBER 31, 1997
------------------ ---------------- -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Interest cost incurred... $21,312,645 $31,828,147 $9,776,767
=========== =========== ==========
Interest cost capitalized
to construction in
progress................ $13,909,608 $24,401,876 $9,776,767
=========== =========== ==========
</TABLE>

No interest costs were incurred as of June 30, 1997.

h) Deferred Finance and Organization Costs

Costs incurred to obtain financing for the System through the issuance of
senior notes and long term debt have been reflected as an asset in the
accompanying consolidated balance sheets. Costs incurred to obtain financing
for the System through the issuance of common stock and preference shares,
respectively, have been reflected as a reduction in the carrying value of the
issued common and preference shares. The financing costs relating to the debt
are amortized over the term of the related debt agreements. Offering costs of
$7,529,651 related to the issuance of preference shares were being amortized
on a straight line basis through the mandatory redemption date of April 1,
2007. The issuance discount, as explained in Note 7, was also being amortized
through the mandatory redemption date. On June 17, 1998 the preference shares
were redeemed at which time the remaining balance of unamortized discount and
offering costs was charged against additional paid-in capital. During the
construction period of the System, the amortized portion of deferred financing
costs relating to the senior notes and the long term debt are included in
construction in progress as a component of interest capitalized or recorded as
interest expense in accordance with SFAS 34. The amortized portion of the
deferred financing costs relating to the preference shares is included as a
component of preference share dividends. Deferred organization costs, which
include legal and professional fees incurred to bring GCL, GTH and ACL into
legal existence, are amortized to expense over a period of five years.

i) Translation of Foreign Currencies

Transactions in foreign currencies are translated into United States dollars
at the rate of exchange prevailing at the date of each transaction. Monetary
assets and liabilities denominated in foreign currencies at year end are

F-14
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

j) Stock Option Plan

The Company accounts for stock option grants in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("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.
Disclosures will be made in the consolidated financial statements of future
periods in accordance with Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("SFAS 123"), (see Note 9).

k) Interest Rate Derivatives

The Company uses derivative financial instruments for the purpose of
reducing its exposure to adverse fluctuations in interest rates. The Company
does not utilize derivative financial instruments for trading or other
speculative purposes. The counterparty to these instruments is CIBC. The
Company is exposed to credit loss in the event of nonperformance by this
counterparty.

As discussed in Note 5, effective December 31, 1997, the Company entered
into an interest rate swap agreement to hedge its exposure to interest rates
on its long term debt. The net cash amounts paid or received on the agreement
are accrued and recognized as an adjustment to interest expense on the related
debt.

For interest rate derivatives to qualify for hedge accounting, the debt
instrument being hedged must expose the Company to interest rate risk and, at
the inception of the derivative instrument and throughout the period the
derivative is held, there must be a high correlation of changes in the market
value of the derivative and interest expense of the hedged item. Gains and
losses on interest rate derivatives and other derivative instruments which do
not meet this criteria would be recorded in the statement of operations.

If an interest rate derivative instrument were to terminate or be replaced
by another instrument and no longer qualify as a hedge instrument, then it
would be marked to market and carried on the balance sheet at fair value.

l) Interim Financial Information

The unaudited financial statements as of June 30, 1998, and for the three
months and six months ended June 30, 1998, for the three months ended June 30,
1997 and for the period from March 19, 1997 (date of inception) to June 30,
1997 include, in the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for the fair presentation
of such financial statements.

m) Net loss per Share

Basic net loss per share is computed using the weighted average number of
shares of common stock outstanding. Diluted net loss per share is computed
using the weighted average number of shares of common

F-15
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The following is a reconciliation of the numerator and the denominator of
the basic and diluted net loss per share:

<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
THREE MONTHS THREE MONTHS SIX MONTHS MARCH 19, 1997 MARCH 19, 1997
ENDED ENDED ENDED (DATE OF INCEPTION) (DATE OF INCEPTION)
JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1998 TO JUNE 30, 1997 TO DECEMBER 31, 1997
-------------- ------------- -------------- ------------------- --------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Basic and Diluted
Net income (loss)
before extraordinary
item.................. $ (135,724,885) $ 1,205,450 $ (139,446,037) $ 1,205,450 $ (160,356)
Preference share
dividends............. (3,898,203) (4,041,664) (8,306,433) (4,236,108) (12,689,923)
Redemption of
preference shares..... (34,140,067) -- (34,140,067) -- --
-------------- ------------ -------------- ------------ ------------
Net loss applicable to
common shareholders
before extraordinary
item.................. $(173,763,155) $ (2,836,214) $(181,892,537) $ (3,030,658) $(12,850,279)
============== ============ ============== ============ ============
Weighted average shares
outstanding........... 166,194,035 165,441,150 166,062,697 165,441,150 165,441,150
============== ============ ============== ============ ============
Basic and diluted net
loss per common share
before extraordinary
item................... $ (1.05) $ (0.02) $ (1.10) $ (0.02) $ (0.08)
============== ============ ============== ============ ============
</TABLE>

n) Income taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). The Company recognizes current and deferred income tax assets and
liabilities based upon all events that have been recognized in the
consolidated financial statements. Deferred tax assets and liabilities are
determined based on differences between the financial reporting and tax bases
of assets and liabilities. A deferred tax liability or asset is recorded using
the enacted tax rates expected to apply to taxable income in the period in
which the deferred tax liability or asset is expected to be settled or
realized. Future tax benefits attributable to these differences, if any, are
recognized to the extent that realization of such benefits is more likely than
not.

o) Pending and New Accounting Standards

The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130") and Statement of Financial Accounting Standards No. 131,
"Disclosures About Segments of an Enterprise and Related Information" ("SFAS
131"). SFAS 130 and SFAS 131 are effective for periods beginning after
December 15, 1997. There was no impact to the financial statements due to the
adoption of SFAS 130 in the first six months of 1998. Management does not
expect the impact of the adoption of SFAS 131 on the Company's financial
position or results of operations to be material.

The Financial Accounting Standards Board has also recently issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," ("SFAS 133") which is effective for
periods beginning after June 15, 1999. Management does not expect the impact
of the adoption of SFAS 133 on the Company's financial position or results of
operations to be material.

F-16
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The American Institute of Certified Public Accountants recently issued
Statement of Position 98-5, "Reporting on the Cost of Start-Up Activities"
("SOP 98-5"). SOP 98-5 is effective for periods beginning after December 15,
1998. Management does not expect the impact of the adoption of SOP 98-5 on the
Company's financial position or results of operations to be material.

p) Reclassifications

Certain reclassifications have been made to the December 31, 1997
consolidated financial statements to conform with the presentation as of June
30, 1998.

3. INVESTMENT IN PACIFIC CROSSING LTD.

On April 9, 1998, a wholly-owned subsidiary of GCL entered into a joint
venture to construct a cable system project, PC-1. PC-1 is owned and operated
by PCL. The Company has an economic interest in PCL represented by a 50%
direct voting interest and, through one of the joint venture partners, owns a
further 8% economic non-voting interest. PCL entered into a contract on April
21, 1998 with TSSL to construct PC-1 for a total price of approximately $1.2
billion, which will be financed through a $400 million equity contribution by
the joint venture partners and an $850 million credit facility. On July 30,
1998, an $850 million aggregate senior secured non-recourse loan facility
("the PCL Credit Facility") was executed, for the construction and financing
costs of PC-1. The PCL Credit Facility is comprised of an $840 million
multiple drawdown term loan facility and a $10 million working capital
facility. On July 30, 1998, an initial drawdown was made on the term loan
facility to repay the $104 million promissory note used for initial
construction costs on PC-1 as well as fees incurred to secure the credit
facility. The Company also placed $231 million into a restricted cash
collateral account on July 30, 1998 to satisfy its equity funding commitment
for its 58% joint venture economic interest in PCL. This amount will be
accounted for as an equity investment in the joint venture.

The investment in Pacific Crossing Ltd. is comprised of the following items:

<TABLE>
<S> <C>
Equity investment in PCL.................................... $ 6,000
PC-1 development costs...................................... 126,450,345
------------
Investment in Pacific Crossing Ltd. ........................ $126,456,345
============
</TABLE>

The PC-1 development costs represent the estimated value of the PCG Warrants
as of June 30, 1998 which were granted to PCG in exchange for the PC-1 system
and related rights. In connection with the formation of PCL, the Company
agreed to make available to PCL the consideration received by the Company in
connection with the grant of the PCG Warrants, in addition to the $231 million
cash investment made by the Company. See Note 12.

4. RESTRICTED CASH AND CASH EQUIVALENTS

Restricted cash and cash equivalents comprises approximately $78 million as
of June 30, 1998 ($nil as of December 31, 1997) for the collateralization of
the promissory note used to make the initial payments on the PC-1
construction, $74 million as of June 30, 1998 ($20 million as of December 31,
1997) reserved for purposes of funding future interest payable on senior
notes, approximately $72 million as of June 30, 1998 ($5 million as

F-17
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. LONG TERM DEBT AND OBLIGATIONS UNDER INLAND SERVICES AGREEMENTS AND CAPITAL
LEASES

On June 27, 1997, ACL entered into a $410 million aggregate senior secured
non-recourse loan facility (the "Credit Facility") with a group of banks led
by CIBC and Deutsche Bank AG, for the construction and financing costs of AC-
1. On December 15, 1997, the Credit Facility was amended to increase it to
$482 million comprised of a $472 million multiple draw down term loan facility
(the "Term Facility") and a $10 million working capital facility (the "Working
Capital Facility") for the purpose of extending the System to include, among
other things, a Netherlands landing site. The Credit Facility is secured by
pledges of the stock of ACL and its subsidiaries and security interests in its
assets and revenues. As of June 30, 1998, ACL had borrowed $367,048,000
($162,325,000 as of December 31, 1997) under the Credit Facility.

The Credit Facility provides that ACL may select loan arrangements as either
a Eurodollar loan or an Alternative Base Rate ("ABR") Loan. The Eurodollar
interest rate is LIBOR plus 2.5% and the ABR interest rate is the greatest of
(a) the Prime Rate (b) the Base CD Rate plus 1% and (c) the Federal Funds
Effective Rate plus 0.5%, plus 1.5%. ACL pays a commitment fee of 0.5% per
annum on the unused portion of the Credit Facility. The Credit Facility
contains various covenants that, among other things, (i) limit further
indebtedness by ACL and its subsidiaries, (ii) limit the ability of ACL to pay
dividends, (iii) require ACL to meet certain minimum capacity sales levels and
(iv) require ACL to meet a minimum interest coverage ratio for the years 1999
through to maturity of the Credit Facility. The Credit Facility will be repaid
in eight semi-annual installments, commencing on the first May 31 or November
30 occurring two months after the System RFS date, with $72.3 million of the
principal amount due in the initial year and $120.5 million, $144.6 million,
and $144.6 million due in the second, third and fourth years, respectively. If
at any semi-annual installment date the outstanding loan balance is lower than
the installment amounts noted in the previous sentence, then the outstanding
loan balance amount will be repaid. In addition, on each semi-annual
installment date, ACL will apply an amount equal to 50% of Excess Cash Flow to
the mandatory prepayment of the remaining outstanding balance under the Credit
Facility. Excess Cash Flow is defined under the terms of the Credit Facility
as all cash received from revenues during the period reduced by the payment of
OA&M expenses, ASA fees, commissions under the Sales Agency Agreement, and
transfers to certain reserve accounts. The Credit Facility also requires
mandatory prepayments to be made from 50% of net cash proceeds of any equity
offering of ACL and 100% of net cash proceeds from permitted debt offerings by
ACL or GTH. Optional prepayments may be made at any time without premium or
penalty. All revenues received prior to the System RFS date are used to fund
certain reserve accounts, as defined by the Credit Facility, and thereafter
applied against the borrowings under the Credit Facility and the Old Senior
Notes as determined by the Credit Facility agreement.

On September 30, 1997, pursuant to the Contract with TSSL and the Credit
Facility agreement, ACL put in place a $50 million letter of credit in favor
of TSSL which will expire at such time as ACL has paid all costs under the
contract. ACL pays a commitment fee of 2.5% per annum on the full amount of
the letter of credit.

F-18
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

As described in Note 1, the Company has capitalized the minimum lease
payments of the IRU held by GT Landing Corp. on System assets held in the
United States. The Company has been granted a bargain purchase option to
purchase for $10,000 all rights and title to these assets at any time during
the term of this contract which is 25 years from the System RFS. As of June
30, 1998, the present value of the payments under the IRU recorded as an
obligation under capital leases is $5,660,619 ($12,297,645 as of December 31,
1997).

The Company has capitalized building and conduit leases in the Netherlands
and Germany. The leases are for a period of 25 years which represents more
than 75 percent of the economic life of the asset being purchased. The Company
has the option to extend the Netherlands lease for an additional 5 year term.
As of June 30, 1998, the present value of the obligation has been recorded as
an obligation under capital leases in the accompanying consolidated balance
sheet in the amount of $8,116,408 ($ nil as of December 31, 1997.)

Contracts to purchase Backhaul Capacity have a duration of 25 years from
System RFS which represents more than 75 percent of the economic life of the
asset being purchased. Certain of these contracts require payments over the 25
year period. As of June 30, 1998, the present value of the payments under
these contracts (excluding amounts attributable to operations and maintenance)
has been recorded as obligations under Inland Services Agreements in the
accompanying consolidated balance sheets in the amount of $51,117,547
($20,900,000 as of December 31, 1997).

At June 30, 1998 future minimum payments, in the aggregate for the six
months ending December 31, 1998 and for the four succeeding years, under these
Inland Services Agreements and capital leases are as follows:

<TABLE>
<S> <C>
For the six months ending December 31, 1998.................... $ 39,138,000
1999........................................................... 23,069,000
2000........................................................... 7,057,000
2001........................................................... 4,692,000
2002........................................................... 4,847,000
Thereafter until 2024.......................................... 152,083,000
------------
Total minimum lease payments................................... 230,886,000
Less: Amount representing maintenance payments................. 138,515,331
------------
92,370,669
Less: Amount representing interest............................. 27,476,095
------------
Present value of net minimum lease payments.................... $ 64,894,574
============
</TABLE>

F-19
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. SENIOR NOTES

New Senior Notes

The 9 5/8% senior notes due May 15, 2008 with a face value of $800 million
("New Senior Notes") are general unsecured obligations of Global Crossing
Holdings Ltd. ("GCH"), a wholly owned subsidiary of GCL and will rank senior
to any future subordinated indebtedness of GCH and pari passu in right of
payment with any future unsecured senior indebtedness of GCH. GCH has set
aside $74 million to fund the first two interest payments. Interest is payable
semi-annually in arrears on each May 15 and November 15 commencing on November
15, 1998. The New Senior Notes are redeemable at the option of GCH on May 15,
2003 at 104.813%, May 15, 2004 at 103.208%, on May 15, 2005 at 101.604% and on
May 15, 2006 and on May 15 thereafter at par. The New Senior Notes are
redeemable at the option of the Holder only upon the occurrence of a change in
control in GCL. The New Senior Notes agreement imposes certain limitations on
the ability of GCH and its subsidiaries to, among other things, (i) incur
additional indebtedness including senior indebtedness and (ii) pay certain
dividends and make certain other restricted payments and investments.

Old Senior Notes

The 12% senior notes due March 31, 2004 with a face value of $150 million
("Old Senior Notes") are general unsecured obligations of GTH and will rank
senior to any future subordinated indebtedness of GTH and pari passu in right
of payment with any future unsecured senior indebtedness of GTH. The Old
Senior Notes bear an initial interest rate of 12% per annum. Interest is
payable semi-annually in arrears on each June 1 and December 1. If the Old
Senior Notes are not repaid by April 1, 2000, the interest rate will increase
by 0.5% on April 1, 2000 and by an additional 0.5% on each subsequent April 1,
until repaid. If the interest rate exceeds 15% per annum (the interest rate
payable increases by 2% upon any event of default) GTH may, at its option,
cause such interest in excess of 15% to be paid in additional senior notes.

As described in Note 5, revenues received prior to the System RFS date are
used to fund certain reserve accounts which are then applied against
borrowings under the Credit Facility and the Old Senior Notes as determined by
the Credit Facility agreement. Additionally, GTH will on each June 1 and
December 1, commencing on the first such date to occur more than 90 days after
the System RFS date, apply an amount equal to 50% of ACL's Excess Cash Flow
(as defined in Note 5), to redeem the Old Senior Notes at face value, plus
accrued interest to the date of repurchase. The Old Senior Notes are
redeemable at the option of GTH, at redemption prices starting at 106% of the
face value beginning April 1, 2000, declining to 103% in 2001, and 100% in
2002 and 2003, plus accrued interest (see Note 15).

On May 18, 1998, a portion of the proceeds from the issuance of the New
Senior Notes was used to repurchase the Old Senior Notes. The Company
recognized an extraordinary loss of $19.7 million on repurchase comprising a
premium of approximately $9.8 million and a write-off of approximately $9.9
million of unamortized deferred financing costs.

7. MANDATORILY REDEEMABLE PREFERENCE SHARES

The authorized preference shares consist of 500,000 shares at a liquidation
preference of $1,000 per share. Effective March 25, 1997, 100,000 shares were
issued for $100 million in cash and as of June 30, 1998, nil shares (109,830
shares as of December 31, 1997) were issued and outstanding.

F-20
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The holders of preference shares are entitled to receive cumulative,
compounding dividends at an initial annual rate of 14% of the $1,000
liquidation preference per share. If the preference shares are not redeemed on
or prior to April 1, 2001, the annual dividend rate will increase by 0.5% per
annum (the dividend rate payable increases by 2% upon any event of default)
thereafter, subject to a maximum annual dividend rate of 20%. At the option of
GTH, accrued dividends may be paid in cash or paid by issuing additional
preference shares (i.e. pay-in-kind) until April 1, 2002, at which time they
must be paid in cash. However, if the dividend rate exceeds 15% per annum, GTH
may cause dividends in excess of 15% to be paid in additional preference
shares. Dividends paid in additional preference shares are payable on a
quarterly basis and cash dividends are payable on a semi-annual basis. All
dividends declared to date have been paid in additional preference shares. The
preference shares rank senior to all common stock with respect to dividend
rights, rights of redemption or rights on liquidation and senior to any future
preferred stock. The preference shares are non-voting unless GTH fails to pay
a dividend, fails to make a mandatory redemption or upon a change in control,
fails to make an offer to purchase the preference shares at 101%, at which
time the holders of a majority of the preference shares will be entitled to
elect one to two directors. In the event that any preference shares are still
outstanding on April 1, 2001, the holders thereof will receive warrants to
purchase shares of Class A common stock of GCL at an exercise price of $.01
per share, up to a maximum of 46,440 shares of GCL common stock.

The preference shares have a mandatory redemption on April 1, 2007 at their
liquidation preference. In addition, the preference shares will be redeemed
out of ACL's Excess Cash Flows (as described in Note 5) after repayment of the
Credit Facility and Senior Notes at redemption prices starting at 114% for
both 1997 and 1998, declining to 112% in 1999 and 2000, 107% in 2001 and 100%
thereafter. The preference shares can be redeemed, in whole or in part, at the
option of GTH at redemption prices starting at 114% of the liquidation
preference through 2001, declining to 111% in 2002, 108% in 2003, 105% in
2004, 102% in 2005 and 100% thereafter. The outstanding preference shares are
exchangeable, in whole, at the option of GTH for Senior Subordinated Exchange
Notes ("Exchange Notes") issued by ACL at a rate of $1,000 principal amount of
Exchange Notes for each $1,000 of liquidation preference of preference shares.
These Exchange Notes will bear an interest rate equal to the dividend rate of
the preference shares and will have repayment terms similar to the preference
shares described above.

In connection with the issuance of the preference shares, the holders of
preference shares purchased an aggregate of 11,250,000 shares of GCL's Class A
common stock for total proceeds of $7.5 million. Additionally, in connection
with the issuance of the preference shares, the initial purchaser of the
preference shares received 19,852,950 shares of GCL's Class A common stock for
no additional consideration representing 15% of the aggregate number of GCL's
Class A, B and C shares outstanding, after giving effect to the issuance. The
initial purchaser had the right to distribute these Class A shares to
purchasers of the preference shares. The Company has reflected the
$13,235,000 estimated fair value of the GCL's Class A common stock as a
discount in the carrying value of the preference shares.

The fair value of the 19,852,950 shares of GCL's Class A common stock
distributed to preference shareholders was based on the $.67 per share paid by
the holders of preference shares for the 11,250,000 GCL's Class A shares
purchased for cash.

On June 17, 1998, proceeds from the issuance of the New Senior Notes were
used to redeem the preference shares. The redemption of the preference shares
resulted in a charge against additional paid-in capital comprised

F-21
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Preference share dividends included the following:

<TABLE>
<CAPTION>
FOR THE
FOR THE PERIOD
PERIOD FROM
FROM MARCH 19,
MARCH 19, 1997 (DATE
SIX 1997 (DATE OF
MONTHS OF INCEPTION)
THREE MONTHS THREE MONTHS ENDED INCEPTION) TO
ENDED JUNE ENDED JUNE JUNE 30, TO JUNE 30, DECEMBER 31,
30, 1998 30, 1997 1998 1997 1997
------------ ------------ ----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Preference share
dividends.............. $3,448,123 $3,500,001 $7,337,031 $3,694,445 $11,111,672
Amortization of discount
on preference shares... 286,759 349,257 617,634 349,257 1,011,007
Amortization of
preference share
issuance costs......... 163,321 192,406 351,768 192,406 567,244
---------- ---------- ---------- ---------- -----------
$3,898,203 $4,041,664 $8,306,433 $4,236,108 $12,689,923
========== ========== ========== ========== ===========
</TABLE>

8. COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL

<S> <C> <C>
Common Stock:
Authorized:
1,000,000,000 Class A common stock of $.00000067 par
value
1,000,000,000 Class B common stock of $.00000067 par
value
1,000,000,000 Class C common stock of $.00000067 par
value
3,000,000,000 Class D common stock of $.00000067 par
value
1,000,000,000 Class E common stock of $.00000067 par
value
43,000,000,000 undesignated common stock of $.00000067
par value
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
Issued and Outstanding as of June 30, 1998:
31,102,950 Class A shares (31,102,950 as of December 31,
1997).................................................. $20 $20
51,075,000 Class B shares (50,625,000 as of December 31,
1997).................................................. 34 34
50,625,000 Class C shares (50,625,000 as of December 31,
1997).................................................. 34 34
33,088,200 Class D shares (33,088,200 as of December 31,
1997).................................................. 22 22
337,500 Class E shares (nil as of December 31, 1997).... -- * --
</TABLE>
- --------
* Amount less than $1.

F-22
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

As discussed in Note 1, on January 21, 1998, GCL effected a 100 for 1 stock
split of each of the Class A, B, C and D common stock and undesignated stock
and amended the par value of each share of common stock from $.0001 per share
to $.000001 per share. Shares of common stock of GCL outstanding have been
restated to reflect the equivalent number of shares of New GCL that will be
issued in the Old GCL Exchange as discussed in "Description of Capital Stock".
Class A shares, Class B shares and Class C shares all have voting rights. On
March 25, 1997, GCL issued 11,250,000 Class A shares, 50,625,000 Class B
shares, 50,625,000 Class C shares for $.67 per share, resulting in aggregate
proceeds of $75 million. As discussed in Note 7, in addition to the 11,250,000
Class A shares issued to the preference shareholders for cash, in connection
with the issuance of the preference shares, a total of 19,852,950 Class A
shares were distributed to the initial preference shareholder representing 15%
of the aggregate number of Class A, B and C shares outstanding. In addition,
warrants to acquire a maximum of 46,440 shares of common stock of GCL were
issued into escrow for the benefit of the holders of preference shares. All or
a portion of the warrants may be exercised at a price of $.01 per share if the
preference shares are outstanding on April 1, 2001. Effective January 21,
1998, GCL authorized 1,000,000,000 of new Class E non-voting shares.

Certain of the Class B shareholders were issued a total of 33,088,200 Class
D shares. Of the $33,750,000 of proceeds received from the issuance of Class B
shares, $2,500,000 was allocated to the Class D shares representing the
estimated fair value of the Class D shares based on an independent valuation.
Class D shares are non-voting shares which carry special preference rights on
the cash distributions made by GCL. Class D shareholders will receive 10% of
cash distributions to common shareholders once the internal rate of return to
Class C shareholders exceeds 10%, and then increasing to 20% of cash
distributions to common shareholders once the internal rate of return to Class
C shareholders exceeds 30%. Effective January 21, 1998, Class D share rights
were amended such that Class D shareholders now have the option to convert
each Class D share into one Class E share upon payment to GCL of $1.47 per
share or are entitled to a fraction of a Class E share based upon a valuation
at the time of such conversion, together with a warrant to purchase the
remaining fraction of such Class E share at an exercise price based upon such
market valuation. By granting to holders of the Class D shares an option to
convert such shares into Class E shares, the Company obtained effective
assurance that it could effect a change to a corporate structure in the event
of a major equity event, such as a merger or other business combination or in
the event of an IPO by GCL's wholly-owned subsidiary, New GCL, see Note 10, of
its common stock, since the holders of the Class D shares would need to
exercise their options in order to participate directly in benefits of a
merger or acquisition of GCL or in order to obtain the benefits of any trading
market for the common stock of GCL; no trading market was expected to develop
for the Class D shares. The grant of the options to Class D shareholders
represents an equity transaction since the Company granted these shareholders
amended share rights in the form of options with new warrants. As an equity
transaction, the fair value of the option would be recorded as an increase in
additional paid-in capital and a corresponding charge against retained
earnings, but since the Company has an accumulated deficit, the charge would
be made against additional paid in capital which would have no impact on the
consolidated financial statements. The Company will account for the new
warrants as an equity transaction on the date the warrants are issued, which
is expected to be the IPO date. The accounting would increase additional paid
in capital and a charge to retained earnings to the extent the Company has
retained earnings on that date, or against additional paid in capital if the
Company does not have retained earnings.

F-23
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

During the six months ended June 30, 1998, the Company issued, at a price of
$.67 per share, 450,000 Class B shares and 337,500 Class E shares. Since the
estimated fair value of shares exceeded the issue price, the Company increased
stock related expense and shareholders' equity by $1,625,179 and $2,162,679 in
the three and six months ended June 30, 1998, respectively.

9. STOCK OPTION PLAN

On January 21, 1998, GCL adopted the 1998 Stock Incentive Plan ("the Plan")
which provides for the granting of non-qualified stock options to key officers
and employees of GCL at the discretion of the compensation committee or Board
of Directors. As of June 30, 1998, the maximum number of shares of common
stock which may be issued under the Plan was 16,607,865 shares of Class E
common stock. Generally, options vest equally over a period of three years and
expire ten years from the date of grant.

The following table summarizes the transactions of the Company's stock
option plans for the six months ended June 30, 1998:

<TABLE>
<CAPTION>
WEIGHTED NUMBER
NUMBER OF AVERAGE EXERCISABLE
OPTIONS EXERCISE AS AT
OUTSTANDING PRICE JUNE 30, 1998
----------- -------- -------------
<S> <C> <C> <C>
Options outstanding as of December 31,
1997.................................. -- -- --
Options granted on January 21, 1998.... 4,231,500 $1.67 --
Options granted April 3, 1998.......... 5,557,500 1.67 1,305,000
Options granted June 12, 1998.......... 3,352,950 6.67 831,251
Options forfeited...................... (1,563,000) 1.67 --
---------- ----- ---------
Options outstanding as of June 30,
1998.................................. 11,578,950 $3.01 2,136,251
========== ===== =========
</TABLE>

The weighted average remaining life of the options outstanding as of June
30, 1998 is 9.5 years. During the three month and six month periods ended June
30, 1998, no options had expired or were exercised. Of the options granted on
April 3, 1998 and June 12, 1998, there were 90,000 options and 370,500
options, respectively, which had an exercise price equal to the IPO price.
Since the IPO price was unknown as of June 30, 1998, these options were not
considered in the weighted average exercise price computations.

During the three months ended June 30, 1998, the Company recorded $67.1
million of unearned compensation ($5.3 million of which relates to the put
rights described below) which is being recognized as an expense over the
vesting period of the options. Of this amount, the Company recognized $21.1
million of compensation expense ($0.3 million of which relates to the employee
rights described below) during the three months and six months ended June 30,
1998, for the options issued in April and June, certain of which vested
immediately, since the exercise price was less than the estimated fair value
of the stock on the dates of grant. The remaining $46.0 million will be
recognized in the amounts of $4.8 million in each of the third and fourth
quarters of 1998, $19.2 million in 1999, $13.5 million in 2000 and $3.7
million in 2001. No compensation expense was recognized in respect of the
January 21, 1998 option grant since the estimated fair value of the stock, on
that date did not exceed the exercise price. Certain employees have the right,
after three years of employment, to require the Company to purchase up to
600,000 shares of common stock held by them for $13.33

F-24
<PAGE>

per share, if the Company has not completed an IPO of its stock by that time
and one employee has the option to sell 150,000 shares of stock to the Company
at $13.33 per share for a period of two years from the grant date.

On August 9, 1998, the Company granted options to purchase 507,750 shares
under the Plan at a exercise price equal to the IPO price. Such options
generally have a three year vesting period and expire ten years from the date
of grant.

As permitted by SFAS 123, the Company has chosen to account for employee
stock options under APB 25 and is recognizing compensation expense over the
vesting period to the extent that the estimated fair value of the stock on the
date the options were granted exceeded the exercise price on the dates of
grant. Had compensation cost for the Company's stock-based compensation plans
been determined consistent with the SFAS 123 fair value approach, the impact
on the Company's loss applicable to common shareholders and loss per share
would be as follows:

<TABLE>
<CAPTION>
FOR THE THREE FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, 1998 JUNE 30, 1998
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Net loss applicable to common shareholders:
As reported.................................... $(193,472,626) $(201,602,008)
Pro forma...................................... $(195,220,089) $(203,496,876)
Basic and diluted net loss per share:
As reported.................................... $ (1.17) $ (1.22)
Pro forma...................................... $ (1.17) $ (1.23)
</TABLE>

The fair value of options for purposes of the SFAS 123 disclosure is
estimated on the date of grant using the minimum value method with the
following average assumptions: no dividend yield, risk-free interest rates of
5.45% and an average expected life of 4 years. The estimated fair value of the
options granted on January 21, April 3, and June 12, 1998 were $0.49, $11.40
and $15.90 respectively.

10. FORMATION OF GLOBAL CROSSING HOLDINGS LTD.

On March 18, 1998, GCL formed a wholly-owned subsidiary, New GCL, a Bermuda
company, and contributed its investment in GTH to New GCL. On April 30, 1998,
New GCL formed a wholly-owned subsidiary GCH, a Bermuda company. New GCL
contributed its investment in GTH to GCH upon its formation.

Because GCL, New GCL and GCH are entities under common control, the
transfers by GCL to New GCL and New GCL to GCH were accounted for similar to
pooling of interests. Accordingly, the summarized financial information of GCH
presented below reflects the accounts of GTH and its subsidiaries retroactive
to inception of GTH (March 24, 1997). GCL, New GCL and GTH each provide a
guarantee of the New Senior Notes described in Note 6. Additionally, Global
Crossing International, Inc. ("GCI"), a wholly-owned subsidiary of GCH that
provides marketing and development services to GCL, along with its wholly-
owned subsidiaries also provide guarantees of the New Senior Notes. All
guarantees are full, unconditional, joint and several. Separate financial
statements of each subsidiary guarantor have not been provided because they
would not be material to investors.

F-25
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

SUMMARIZED FINANCIAL INFORMATION OF GCH AND GUARANTORS:
($ AMOUNTS IN '000S)
(UNAUDITED)

<TABLE>
<CAPTION>
NEW GUARANTOR NON-GUARANTOR CONSOLIDATING ELIMINATION GCL
GCL GCL GCH SUBSIDIARIES SUBSIDIARIES ENTRIES ENTRIES CONSOLIDATED
AS OF JUNE 30, 1998 -------- -------- -------- ------------ ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Current assets......... $ 782 $ 47 $376,479 $ 15,736 $226,192 $ -- $ (13,344) $ 605,892
Long term accounts
receivable............ -- -- -- -- 7,900 -- -- 7,900
Senior notes........... -- -- 150,000 -- -- -- (150,000) --
Backhaul capacity
available for sale.... -- -- -- -- 54,739 -- -- 54,739
Capacity available for
sale.................. -- -- -- -- 201,328 4,943 -- 206,271
Construction in
progress.............. -- -- -- -- 418,793 99,988 (144) 518,637
Investment in
subsidiary............ 46,038 46,022 294,399 341,201 -- -- (727,660) --
Investment in Pacific
Crossing Ltd.......... -- -- -- -- 6 126,450 -- 126,456
Deferred finance costs,
net................... 190 171 30,904 9,816 13,074 -- (9,816) 44,339
-------- -------- -------- -------- -------- --------- --------- ----------
Total assets........... $ 47,010 $ 46,240 $851,782 $366,753 $922,032 $ 231,381 $(900,964) $1,564,234
======== ======== ======== ======== ======== ========= ========= ==========
Current liabilities.... $ 989 $ 202 $ 9,483 $ 3,149 $128,876 $ 11,668 $ (13,344) $ 141,023
Long term debt......... -- -- -- -- 367,048 -- -- 367,048
Senior notes........... -- -- 796,277 150,000 -- -- (150,000) 796,277
Long term deferred
revenue............... -- -- -- -- 6,917 -- -- 6,917
Obligations under
inland service
agreements............ -- -- -- -- 7,628 -- -- 7,628
Obligations under
capital leases........ -- -- -- -- 7,562 -- -- 7,562
Shareholders' equity... 46,021 46,038 46,022 213,604 404,001 219,713 (737,620) 237,779
-------- -------- -------- -------- -------- --------- --------- ----------
Total liabilities and
shareholders' equity.. $ 47,010 $ 46,240 $851,782 $366,753 $922,032 $ 231,381 $(900,964) $1,564,234
======== ======== ======== ======== ======== ========= ========= ==========

- -------------------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED
JUNE 30, 1998
Sales and operating
revenue............... $ -- $ -- $ -- $ -- $101,256 $ -- $ -- $ 101,256
Operating expenses..... 1,009 284 3,346 16,774 53,518 154,018 -- 228,949
-------- -------- -------- -------- -------- --------- --------- ----------
Operating income
(loss)................ (1,009) (284) (3,346) (16,774) 47,738 (154,018) -- (127,693)
Other income (expense),
net................... -- -- (2,643) (1,103) 993 -- (2,753)
Provision for income
taxes................. -- -- -- -- -- (9,000) -- (9,000)
Extraordinary loss..... -- -- (9,750) -- -- (9,960) -- (19,710)
-------- -------- -------- -------- -------- --------- --------- ----------
Net income (loss)...... (1,009) (284) (15,739) (17,877) 48,731 (172,978) -- (159,156)
Equity in gain (loss)
from subsidiary....... (27,615) (27,331) (11,592) 48,407 -- -- 18,131 --
Preference share
dividends............. -- -- -- (8,306) -- -- -- (8,306)
Premium on redemption
of preference shares.. -- -- -- (34,140) -- -- -- (34,140)
-------- -------- -------- -------- -------- --------- --------- ----------
Net income (loss)
applicable to common
shareholders.......... $(28,624) $(27,615) $(27,331) $(11,916) $ 48,731 $(172,978) $ 18,131 $ (201,602)
======== ======== ======== ======== ======== ========= ========= ==========
</TABLE>

F-26
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

AS OF JUNE 30, 1998 AND DECEMBER 31, 1997
(INFORMATION FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998,
FOR THE THREE MONTHS ENDED JUNE 30, 1997, AND FOR THE PERIOD FROM MARCH 19,
1997
(DATE OF INCEPTION) TO JUNE 30, 1997 IS UNAUDITED)
(EXPRESSED IN U.S. DOLLARS)
SUMMARIZED FINANCIAL INFORMATION OF GCH AND GUARANTORS (CONTINUED):
($ AMOUNTS IN '000S)

<TABLE>
<CAPTION>
NEW GUARANTOR NON-GUARANTOR ELIMINATION GCL
GCL GCL GCH SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-------- -------- -------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1997
Current assets.......... $ 33 $ 12 $ 12 $ 21,307 $ 6,597 $ (217) $ 27,744
Backhaul capacity
available for sale..... -- -- -- -- 21,200 -- 21,200
Construction in
progress............... -- -- -- 9,014 488,305 -- 497,319
Investment in
subsidiary............. 73,964 73,952 73,940 276,897 -- (498,753) --
Deferred finance costs,
net.................... 208 -- -- 10,619 15,107 -- 25,934
-------- -------- -------- -------- -------- --------- --------
Total assets............ $ 74,205 $ 73,964 $ 73,952 $317,837 $531,209 $(498,970) $572,197
======== ======== ======== ======== ======== ========= ========
Current liabilities..... $ 72 $ -- $ -- $ 3,253 $ 88,978 $ (205) $ 92,098
Long term debt.......... -- -- -- -- 162,325 -- 162,325
Senior notes............ -- -- -- 150,000 -- -- 150,000
Obligations under inland
service agreements..... -- -- -- -- 3,009 -- 3,009
Mandatorily redeemable
preference shares...... -- -- -- 90,644 -- -- 90,644
Shareholders' equity.... 74,133 73,964 73,952 73,940 276,897 (498,765) 74,121
-------- -------- -------- -------- -------- --------- --------
Total liabilities and
shareholders' equity... $ 74,205 $ 73,964 $ 73,952 $317,837 $531,209 $(498,970) $572,197
======== ======== ======== ======== ======== ========= ========

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

FOR THE PERIOD FROM
MARCH 19, 1997 TO
DECEMBER 31, 1997
Interest income......... $ -- $ -- $ -- $ 556 $ 2,385 $ -- $ 2,941
Operating expenses...... 42 -- -- 200 2,859 -- 3,101
-------- -------- -------- -------- -------- --------- --------
Net income (loss)....... (42) -- -- 356 (474) -- (160)
Equity in loss of
subsidiary............. (12,808) (12,808) (12,808) (474) -- 38,898 --
Preference share
dividends.............. -- -- -- (12,690) -- -- (12,690)
-------- -------- -------- -------- -------- --------- --------
Net loss applicable to
common shareholders.... $(12,850) $(12,808) $(12,808) $(12,808) $ (474) $ 38,898 $(12,850)
======== ======== ======== ======== ======== ========= ========
</TABLE>

11. FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values of the
Company's financial instruments:

<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
---------------------------- ----------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash, restricted cash
and cash equivalents... $ 541,610,392 $ 541,610,392 $ 26,727,880 $ 26,727,880
Current portion of
obligations under
Inland Services
Agreements and capital
leases................. (49,704,628) (49,704,628) (30,188,645) (30,188,645)
Long term debt,
obligations under
Inland Services
Agreements
and capital leases..... (382,237,947) (382,237,947) (165,334,000) (165,334,000)
Preference shares....... -- - (90,643,919) (90,643,919)
Senior notes............ (796,277,203) (796,277,203) (150,000,000) (150,000,000)
Interest rate swap
transaction............ -- (115,344) -- (115,115)
</TABLE>

F-27
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Long term debt, obligations
under Inland Services
Agreements and capital The Credit Facility is a special financing
leases........................ for the construction of the System, and the
interest rates provided under the existing
Credit Facility are the best estimate of cur-
rent market rates available to ACL for fi-
nancing with similar terms. Obligations under
Inland Services Agreements and capital leases
are recorded at their present value using a
weighted average interest rate of the Credit
Facility, preference shares, and Senior
Notes.

Preference shares.............. Since the preference shares are a special fi-
nancing for the construction of the System,
the dividend rates provided under the exist-
ing preference share agreement are the best
estimate of current market rates available
for financing with similar terms and redemp-
tion provisions.

Senior notes................... Since the Senior Notes are a special financ-
ing for the construction of the Systems, the
interest rates provided under the existing
Senior Notes arrangement are the best esti-
mate of current market rates available for
financing with similar terms.

The interest rate swap transaction is "zero
Interest rate swap cost" meaning that the cost of acquiring the
transaction................... transaction is embedded in the fixed interest
rate paid. As the transaction is accounted
for as a hedge against interest rate fluctua-
tions on the long term debt there is no car-
rying value. The fair value is a mid-market
valuation provided by CIBC.

12. RELATED PARTY TRANSACTIONS

Advisory Services Agreement

ACL has entered into the ASA with PCG Telecom, an affiliate of Pacific
Capital Group, Inc. ("PCG") which is a shareholder of GCL. Under the ASA, PCG
Telecom provides ACL with advice in respect of the development and maintenance
of the System, development and implementation of marketing and pricing
strategies and the preparation of business plans and budgets. As compensation
for its advisory services, PCG Telecom receives a 2% fee on the gross revenues
of the Company, subject to certain restrictions, with the first such payment
occurring at the System RFS date. Advances on fees payable under the ASA are
being paid to PCG Telecom at a rate of 1% on signed CPAs and Backhaul CPAs
until the System RFS date and are secured by amounts payable under the ASA.
Fees paid under the ASA to PCG Telecom are shared amongst ULLICO, Inc., PCG,
CIBC, and Messrs. Winnick, Cook, Brown, Lee and Porter, all of whom are
shareholders of GCL. The Advisory Service Agreements ("ASA") which were
terminated effective on June 30, 1998 had terms of 25 years subject to
termination, however, the ASA did not contain provisions regarding
cancellation fees or liquidated damages in the event of termination or breach.
The Advisory Services Agreement Termination was recorded in the consolidated
financial statements as an increase in additional paid-in capital and a charge
against the statement of operations in the amount of $137.7 million. The
$137.7 million is comprised of a $135 million settlement of the fees that
would have been payable and the cancellation of approximately $2.7 million
owed to the Company under a related advance agreement. The $135 million amount
was calculated by applying the 2% advisory services fee to projected future
revenues and discounting the amount relating to AC-1 revenues by 12% and the
amount relating to all other system's revenues by 15%. The result of this
calculation was $155.5 million, which amount was subsequently reduced to $135
million. Both the discount rates and the ultimate valuation were determined as
a result of a negotiation process including a disinterested director of the
Company and the various persons entitled to fees under the ASA. The Company
has obtained a fairness opinion from an independent financial advisor in
connection with this transaction.

F-28
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Prior to January 21, 1998, PCG and its affiliates had commenced development
of systems other than AC-1, namely PC-1, MAC and PAC. Through January 21,
1998, such development included assembling a management team, negotiating with
potential suppliers, partners, financing sources, obtaining preliminary market
and feasibility studies and developing technical requirements. On January 21,
1998, the Board determined that it was in the Company's best interests to
pursue these new systems, obtain the results of the work and the employees
then within the scope of activity of PCG and broaden the goals, objectives and
business plan of the Company. In consideration of PCG transferring the results
of its activities and becoming limited in its future activities in fiber optic
telecommunications other than through the Company, the Board approved and the
shareholders subsequently approved the transaction whereby PCG received
approximately $7 million representing PCG's costs related thereto and GCL
entered into a warrant agreement ("PCG Warrants") under which PCG was issued
three separate warrants permitting PCG to purchase (i) 9,226,592 of GCL's
Class B shares for an aggregate price of $50,000,000; (ii) an additional
4,613,297 of the GCL's Class B shares for an aggregate price of $31,250,000;
and (iii) an additional 4,613,297 of GCL's Class B shares for an aggregate
price of $37,500,000. The PCG Warrants were granted in exchange for the rights
to commence the development of the new projects that previously had been under
development by an affiliate of PCG.

These warrants are intended to entitle PCG to acquire, in addition to their
existing ownership, 10% of the capital stock of GCL, as of the date these
warrants were issued. Exercise of these warrants is contingent upon (i) an IPO
of shares of GCL (or any successor thereto), underwritten by an investment
banking firm of national reputation (as determined by a majority of the Board
of Directors of GCL) from which GCL shall have received at least $50,000,000
in net proceeds, (ii) the investment by GCL in the aggregate of at least
$500,000,000 of Net Attributable Capital (as defined below) in cable systems
other than AC-1 and (iii) the generation in the aggregate by cable systems
other than AC-1 of at least $100,000,000 in Net Attributable Revenues (as
defined below). For purposes of the PCG Warrant Agreement, with respect to any
cable system, "Net Attributable Capital" means the aggregate debt and equity
capitalization of such system multiplied by the percentage ownership of Old
GCL (directly or indirectly) in such system, and "Net Attributable Revenues"
means the net revenues of such system multiplied by the percentage ownership
interest of GCL (directly or indirectly) in such system. No accounting was
made for the PCG Warrants at the time of issuance on the basis that it was
indeterminable when the conditions described above would be met.

In June, 1998, the Board of Directors amended the terms of the PCG Warrants
so that the PCG Warrants will become exercisable upon the successful
completion of the IPO and eliminated conditions (ii) and (iii) above. Further
to this amendment, the Board of Directors also amended the terms of the PCG
Warrants to give each holder the option to convert each share under warrant
into a fraction of a Class B share based upon the ratio of the current per
share valuation at the time of conversion less the per share exercise price of
the warrant divided by the current per share valuation at the time of
conversion multiplied by the 18,453,185 shares available under the PCG
Warrants, together with a new warrant ("New PCG Warrants") to purchase the
remaining fraction of such Class B share at an exercise price equal to the
current per share valuation. Prior to the IPO, it is expected that the holders
of the PCG Warrants will exercise their warrants to acquire Class B shares by
way of the cashless conversion and the New PCG Warrants will be issued with an
exercise price based on the per share valuation at the conversion date.

F-29
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

AS OF JUNE 30, 1998 AND DECEMBER 31, 1997
(INFORMATION FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998,
FOR THE THREE MONTHS ENDED JUNE 30, 1997, AND FOR THE PERIOD FROM MARCH 19,
1997
(DATE OF INCEPTION) TO JUNE 30, 1997 IS UNAUDITED)
(EXPRESSED IN U.S. DOLLARS)
The Company has accounted for the PCG Warrants by assuming the cashless
conversion took place as of June 30, 1998 using the current estimated per
share valuation at the expected conversion date, multiplied by the number of
Class B shares estimated to be converted in exchange for the PCG Warrants. The
resulting value under this calculation is approximately $213.3 million which
has been allocated to the new systems acquired in exchange for the PCG
Warrants. In connection with the formation of PCL, the Company agreed to make
available to PCL the consideration received by the Company in connection with
the grant of the PCG Warrants, in addition to the $231 million cash investment
made by the Company. See Note 3. Therefore, the Company recorded an increase
in its investment in PCL in the amount of approximately $126.5 million and an
increase in construction in progress for PAC and MAC in the amounts of
approximately $49.9 million and $36.9 million, respectively, with a
corresponding increase of $213.3 million in additional paid in capital. The
$213.3 million was allocated on a pro rata basis to the three projects
according to the estimated cost of each system. The Company's accounting for
the PCG Warrants is pursuant to Emerging Issues Task Force 96-18, "Accounting
for Equity Instruments with Variable Terms that are Issued for Consideration
other than Employee Services under FASB Statement No. 123" ("EITF 96-18").
Under EITF 96-18, the fair value of equity instruments issued for
consideration other than employee services should be measured using the stock
price or other measurement assumptions as of the date at which a firm
commitment for performance level has been reached. The Company has recorded
the estimated value of the PCG Warrants as of June 30, 1998, since the IPO was
probable at that date. The $213.3 million value attributed to the PCG Warrants
as of June 30, 1998 will be adjusted to the actual value on the actual date of
the IPO based upon the Price per Share to Public in the Offerings. Such
adjustment is not expected to be material.

The Company will give accounting recognition for the New PCG Warrants on the
date these warrants are issued, which is the date of the IPO. The Company has
estimated the value of each of the New PCG Warrants at $6.67 based on an
independent valuation assuming an IPO price of $18 per share. Assuming a
cashless conversion, as of June 30, 1998 the New PCG Warrants would have a
total value of approximately $44 million. Upon the issuance of the New PCG
Warrants the Company will record the actual value of the New PCG Warrants in a
manner similar to that described above whereby the total value will be
allocated to the investment in PCL, MAC and PAC based on their relative total
contract costs.

Other transactions

$7,250,000 in fees were paid to PCG and certain of its key executives, who
are shareholders of GCL, and another shareholder for services provided in
respect of obtaining the Credit Facility, Senior Notes and preference share
financing. Of the fees paid, $5,523,775 was allocated to the Credit Facility
and Senior Notes and recorded as deferred finance costs, $986,725 was
allocated to the preference shares and recorded as a reduction in the carrying
value of the preference shares and $739,500 was recorded as common stock
issuance costs and is included in the approximately $1.3 million which is
reflected as a reduction in additional paid-in capital.

GCL has paid CIBC and affiliates ("CIBC"), a shareholder, approximately $25
million in fees related to the financing obtained under the Old Senior Notes,
Credit Facility, and the issuance of preference shares. Of the fees incurred,
approximately $6.2 million related to underwriting and commitment fees
pertaining to the issuance of the preference shares and were recorded as a
reduction in the carrying value of the preference shares, approximately $9.2
million related to underwriting, commitment and advisory fees in connection
with the issuance of the Senior Notes and approximately $9.6 million related
to fees associated with obtaining the Credit Facility which were recorded as
deferred finance costs. CIBC is a member of the syndicate funding the Credit

F-30
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

On April 7, 1998, the Company signed a CPA with Worldport Communications,
Inc. ("Worldport"), to acquire capacity on AC-1. This transaction occurred in
the ordinary course of business of the Company and on terms and conditions no
less favorable to the Company than in its other CPAs. Certain officers and
directors of the Company, have direct or indirect equity ownership positions
in Worldport, aggregating approximately 10% of the current common stock of
Worldport.

The Board of Directors authorized, that immediately prior to the IPO, the
Company will purchase all common shares owned by Telecommunications
Development Corporation ("TDC") in the Company in exchange for 150,000 fewer
shares of newly issued common shares based upon the per share value at the
repurchase date. The transaction benefited the Company since 150,000 fewer
shares were outstanding after the repurchase without any cost to the Company.
The transaction will be accounted for as the acquisition of treasury stock and
will be recorded at the fair value of the consideration given.

13. TAXES

The Company accounts for income taxes in accordance with SFAS 109. The
components of income tax expense are as follows:

<TABLE>
<CAPTION>
THREE
MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1998 JUNE 30, 1998
------------- ----------------
(UNAUDITED)
<S> <C> <C>
Current
U.S. .......................................... $8,000,000 $8,000,000
Other foreign.................................. 1,000,000 1,000,000
---------- ----------
Total income tax expense....................... $9,000,000 $9,000,000
---------- ----------
</TABLE>

Bermuda does not impose a statutory income tax and consequently the
provision for income taxes recorded relates to income earned in taxable
jurisdictions. There are no significant temporary differences between
accounting and taxable income.

Since the Company has not recognized any income in periods prior to April 1,
1998, no tax provision has been reflected in those periods. Operating losses
incurred in those periods relate almost entirely to non-taxable jurisdictions
and therefore these operating losses cannot be applied to future taxable
earnings of the Company. Therefore the Company has not recorded any deferred
tax asset as a result of such losses in accordance with SFAS 109.

F-31
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

14. COMMITMENTS

As of June 30, 1998, ACL was committed under its contract with TSSL for
future construction costs totaling approximately $64 million ($195 million as
of December 31, 1997) and is committed under the OA&M contract with TSSL to
quarterly payments, over the next eight years, totaling approximately $261
million ($263 million as of December 31, 1997).

ACL is committed to paying TSSL commissions ranging from 4% to 7% on
revenues received until 2002, subject to certain reductions. As of June 30,
1998, Mid Atlantic Crossing Ltd. was committed under its contract with Alcatel
Submarine Networks for future construction costs totaling approximately $180
million and as of July 21, 1998 Pan American Crossing Ltd. was committed under
its contract with TSSL for future construction costs totaling approximately
$335 million.

GCL and its subsidiaries have commitments under various operating leases
primarily relating to its office facility in Bermuda. Rent expense for
operating leases $26,556 and $361,354 for the three and six months ended June
30, 1998. Estimated future minimum lease payments on all operating leases are
approximately as follows:

<TABLE>
<S> <C>
For the six months ended December 31, 1998................... $ 438,000
1999......................................................... 953,000
2000......................................................... 963,000
2001......................................................... 971,000
2002......................................................... 652,000
Thereafter................................................... 1,910,000
</TABLE>

F-32
<PAGE>

GLOSSARY OF CERTAIN DEFINED TERMS

Unless the context otherwise requires, any reference in this Prospectus to
any agreement shall mean such agreement and all schedules, exhibits and
attachments thereto, as amended, supplemented or otherwise modified as of the
date of this Prospectus. All terms defined herein used or the singular shall
have the same meanings when used in the plural and vice versa.

<TABLE>
<C> <S>
Amplifier: A device used to boost the strength of an
electronic or optical signal, which is
weakened (attenuated) as it passes through
the transport network. Amplifiers add gain
to the signal by an amount equal to the
loss in the previous section of the
network since last amplification.
Backhaul Capacity: Capacity on terrestrial fiber optic cables
from undersea cable landing stations to
metropolitan areas.
Band: A range of frequencies between two defined
limits.
Bandwidth: A measure of capacity of information-
carrying capacity on a communications
channel. 1) The difference between the
high and low frequencies of a transmission
band, expressed in cycles per second
(Hertz) or in wavelengths (nanometers). It
is a measure of raw capacity without
compression or coding of the information
signal. A voice transmission requires
about 3 KHz and a TV channel about 6 MHz.
2) Transmission capacity is expressed in
bits per second. For example megabits per
second (Mbps) is a bit rate expressed in
millions of bits per second while gigabits
per second (Gbps) is a bit rate expressed
in billions.
. Narrowband: Less than or equal to 64-
kbps
. Wideband: Digital rates between 64-kbps
and 1.544-Mbps (DS1) or 2.048-Mbps
(E1)--LANs, bulk files transfer, video
conferencing, and multimedia.
. Broadband: Greater than 44.736-Mbps (D3)
or 34.368-Mbps (E3)
Bit: A binary unit of information that can have
either of two values, 0 or 1. Contraction
of binary digit:
. KILOBIT = 1,000 bits
. MEGABIT = 1 million bits
. GIGABIT = 1 billion bits
. TERABIT = 1 trillion bits
Broadband: A transmission channel usually carrying a
tremendous amount of information at
transmission speeds of 45 Mbps (45,000,000
bits per second) or greater. Some
facilities have transmission speeds in the
billion of bits (gigabits per second or
Gbps).
1. A communications channel with bandwidth
sufficiently large to carry voice, data
and video on a single channel.
2. Any voice communications channel having
a bandwidth greater than a voice grade
channel.
. A bandwidth of 45 Mbps can carry 672
voice connections.
. In theory up to 64 telephone grade
communication channels can be carried on
one 6 MHz broadband channel.
</TABLE>

GL-1
<PAGE>

<TABLE>
<C> <S>
Capacity: The information-carrying ability of a
telecommunications system, as defined by
its design (number of fibers, system
length, and opto/electronic equipment)
and its deployed equipment (amount of
opto/electronics in the station) and
measured in bits per second. Capacity is
sold in discrete units, usually system
interface levels such as DS-3's and STM-
1's, that in the aggregate are the
equivalent of total system capacity.
Carrier: 1. A third party provider of communications
services by wire, fiber or radio.
. Common Carrier: A private company
offering facilities or services to the
general public on a non-discriminatory
basis and regulated as to market entry,
practices, and rates by various Federal
and State authorities.
. Private Carrier: Services provided for
internal use and free of most common
carrier regulations to allow
discrimination in service provision or
pricing.
2. A signal that is modulated in order to
transmit information.
Common Carrier: A business authorized by the FCC to provide
communications services by wire or radio
from place to place without influence of
content. Services are provided to the
public on a non-discriminatory basis, and
are regulated by Title II of the
Communications Act of 1934. Regulatory
agencies are the FCC and state public
utility commissions.
. Non-dominant carrier is one which has
insufficient market power to practice
anti-competitive pricing.
. Private carriers are not regulated by
government agencies and may charge
whatever the market will bear.
Compression: Algorithm that minimizes the redundancy in
the signal to be transmitted.
Digital: Describes a method of storing, processing
and transmitting information through the
use of distinct electronic or optic pulses
representing the binary digits 0 and 1. In
communications they will modify a carrier
at a selected frequency. The precise
signal transitions preclude any distortion
such as graininess or snow in the case of
video transmission, or static or other
background distortion in the case of audio
transmission.
Digital Transmission: Method of storing, processing and
transmitting information through the use
of distinct electronic or optical pulses
that represent the binary digits 0 and 1.
Digital transmission and switching
technologies employ a sequence of these
pulses to represent information as opposed
to a continuously variable analog signal.
The precise digital numbers preclude any
distortion such as graininess or snow in
the case of video transmission, or static
or other background distortion in the case
of audio transmission.
</TABLE>

GL-2
<PAGE>

<TABLE>
<C> <S>
Doped Fibers: Various impurities may be added to silica-
based fiber-optic strands as they are
constructed to achieve specifically
desired transmission or physical
properties.
. Erbium-Doped Optical Fiber Amplifier
(EDFA) optical amplifiers use a section
of optical fiber doped with the rare
earth erbium and optically pumped with
a laser diode. It can amplify a range
of wavelengths at the same time
surrounding a base wavelength of 1550
nm.
. Praseodymium-doped fibers produce a
signal gain of 30 dB in 1310 nm fibers.
DS1: A digital transmission hierarchy
supporting 1.544 million bits per second
that may be used for "near full-motion"
or compressed video, data or voice
circuits (24, 48 or 96).
DWDM (Dense Wavelength Division
Multiplexing): A technique which employs more than one
light source and detector operating at
different wavelengths and simultaneously
transmits optical signals through the
same fiber while message integrity of
each signal is preserved.
EDFA (Erbium Doped Fiber A purely optical (as opposed to
Amplifier): electronic) device used to boost an
optical signal. It contains several
meters of glass fiber doped with erbium
ions. When the erbium ions are excited to
a higher energy state, the doped fiber
changes from a passive medium to an
active amplifying medium.
Fiber Kilometers: The number of route kilometers installed
multiplied by the number of fiber strands
along the path.
Gbps (Gigabit per second): A data rate of 1 Gbps corresponds to 1,000
million bits per second.
Internet: A fabric of interconnected computer
networks, originally known as the DARPA
network (Defense Advanced Research
Projects Agency) connecting government
and academic sites. It currently links
about 50 million people world-wide who
use it for everything from scientific
research to simple E-Mail.
Indefeasible Right of Use (IRU): A measure of currency in the undersea
cable business. The owner of an IRU has
the right to use the capacity for the
time and bandwidth to which the IRU
applies.
ISP: Independent service provider.
ITU (International
Telecommunications
Union): The ITU is an intergovernmental agency of
the United Nations within which the
public and private sectors cooperate for
the development of telecommunications.
The ITU adopts international regulations
governing the use of the radio spectrum
and develops standards to facilitate the
interconnection of telecommunications
systems on a worldwide basis. It is
headquartered in Geneva, Switzerland. In
1996, the ITU comprised 185 Member States
and 363 members (scientific and
industrial companies, public and private
operators, broadcasters, regional and
international organizations active in
three sectors: Radio communications,
Standardization and Development).
</TABLE>

GL-3
<PAGE>

<TABLE>
<C> <S>
Mbps (Megabit per second): One Mbps corresponds to a data rate of
1,000,000 bite per second.
Multimedia: The electronic conversation between two or
more people or groups of people in
different places using two or more types
of digitally integrated communication for
voice, sound, text, data, graphics,
video, image or presence at the same
time. Applications include conferencing,
presentations, training, referencing,
games, etc.
Multiplexing: An electronic or optical process that
combines two or more lower bandwidth
transmissions into one higher bandwidth
signal by splitting the total available
bandwidth into narrower bands (frequency
division) or by allotting a common
channel to several transmitting sources
one at a time in sequence (time
division).
Multipoint: Pertaining or referring to a
communications line to which three or
more stations are connected. It implies
that the line physically extends from one
station to another until all are
connected.
Optical Fibers: Thin filaments of glass through which
light beams are transmitted. Enormous
capacity, low-cost, low-power
consumption, small space, lite-weight,
insensitivity to electromagnetic
interference characterize this transport
media.
PTTs (Post, Telephone and
Telegraph
companies): International telecommunications carriers
which are generally under the control of
the government in a country that has not
yet privatized its telecommunications
markets.
Repeater: 1. Equipment that receives a low-power
signal, possibly converting it from
light to electrical form, amplifying it
or retiming and reconstructing it for
transmission. It may need to be
reconverted to light for retransmission.
2. An optoelectrical device used at each
end and occasionally at intermediate
points of exceptionally long fiber-optic
span. Optical input is converted to
electrical form to restore a clean
signal, which drives lasers that fully
restores the optical signal at the
original signal strength.
Route Kilometers: The number of route kilometers installed.
RFS (Ready for Service): The data of provisional acceptance or
commercial service of a cable system.
STM (Synchronous Transfer Mode): New term for traditional TDM switching to
distinguish it from ATM.
STM-1: The largest standard circuit unit of
capacity, which consists of 155,500 Kbps
(equal to 155 Mbps). Thus, each Gbps
contains enough capacity for 6.4 STM-1
circuits. While capacity is sold to the
largest telecommunications companies in
minimum investment units equal to one
STM-1 unit, most telecommunications
companies buy smaller units at a price
higher than the equivalent STM-1 price.
</TABLE>

GL-4
<PAGE>

<TABLE>
<C> <S>
Wavelength: The distance between two crests of a signal
or a carrier and is measured in terms of
meters, millimeters, nanometers, etc. In
lightwave applications, because of the
extremely high frequencies, wavelength is
measured in nanometers.
xDSL: A term referring to a variety of new
Digital Subscriber Line technologies. Some
of these varieties are asymmetric with
different data rates in the downstream and
upstream directions. Others are symmetric.
Downstream speeds range from 384 Kbps (or
"SDSL") to 1.5-8 Mbps (or "ADSL").
</TABLE>

GL-5
<PAGE>

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

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES
OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO WHICH IT
RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER
IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.

-----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Service of Process and Enforcement of Liabilities......................... ii
Information Regarding Forward-Looking Statements.......................... ii
Summary................................................................... 1
Risk Factors.............................................................. 15
Use of Proceeds........................................................... 25
Dividend Policy........................................................... 25
Dilution.................................................................. 25
Capitalization............................................................ 27
Selected Consolidated Financial Data...................................... 28
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 31
Business.................................................................. 42
Management................................................................ 55
Principal and Selling Shareholders........................................ 62
Certain Transactions...................................................... 65
Description of Capital Stock.............................................. 71
Shares Eligible for Future Sale........................................... 75
Description of Certain Indebtedness....................................... 76
Tax Considerations........................................................ 78
Underwriting.............................................................. 84
Legal Matters............................................................. 87
Experts................................................................... 87
Available Information..................................................... 87
Index to Consolidated Financial Statements................................ F-1
Glossary of Certain Defined Terms......................................... GL-1
</TABLE>

UNTIL SEPTEMBER 7, 1998 (25 DAYS AFTER COMMENCEMENT OF THE OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

21,000,000 SHARES

GLOBAL CROSSING LTD.

COMMON STOCK

LOGO GLOBAL CROSSING

-------

PROSPECTUS

DATED AUGUST 13, 1998

-------

SALOMON SMITH BARNEY

MERRILL LYNCH & CO.

CIBC OPPENHEIMER

DEUTSCHE BANK SECURITIES

GOLDMAN, SACHS & CO.

MORGAN STANLEY DEAN WITTER

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

APPENDIX DESCRIBING GRAPHIC MATERIAL
PURSUANT TO RULE 304 OF REGULATION S-T

Inside Front cover

Beginning clockwise from top left corner.

Picture 1.

Picture of assorted European currency on top of newspaper background.
Caption below picture says "cost effective".

Picture 2.

Picture of face of a clock with hands featured prominently. Caption
below picture says "reliable".

Picture 3.

Picture of fiber optic cables. Caption below picture says
"connectivity".

Picture 4.

Picture of hand holding cellular telephone.

Picture 5.

Picture of globe with focus on the North Atlantic Ocean. Caption in
picture says "global".

Gatefold

Map of world indicating the Company's network of undersea fiber optic
cables linking the continents and indicating terrestrial capacity acquired from
third parties.

The descriptive caption in the top left corner of the map reads: "The
Global Crossing Network will be initially comprised of: Atlantic Crossing, which
commenced service on the United States to United Kingdom segment in May 1998;
Mid-Atlantic Crossing, scheduled to commence service in November 1999; Pan-
American Crossing, scheduled to commence service in February 2000; and Pacific
Crossing, scheduled to commence initial service in March 2000."

<PAGE>

Inside Back Cover

Beginning clockwise in top left corner.

Picture 1.

Fiber optic cable being loaded into water from cable laying ship.

Picture 2.

Woman verifying computer equipment in landing station.

Picture 3.

Cable-laying vessel on high seas.

Picture 4.

Manufacturing process of optical repeater being worked on by five
technicians.

Picture 5.

Two men laying fiber optic cable.