GLOBAL CROSSING LTD, S-1/A, 1998-07-27

GLOBAL CROSSING LTD
S-1/A, 1998-07-27
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 1998
REGISTRATION NO. 333-53393
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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PRE-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GLOBAL CROSSING LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
BERMUDA 4813 NOT APPLICABLE
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
</TABLE>

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WESSEX HOUSE
45 REID STREET
HAMILTON HM12, BERMUDA
(441) 296-8600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

CT CORPORATION
1633 BROADWAY, 23RD FLOOR
NEW YORK, NEW YORK 10019
(212) 479-8200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

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COPIES TO:
<TABLE>
<S> <C> <C>
D. RHETT BRANDON, ESQ. JAMES C. GORTON, ESQ. ROGER KIMMEL, ESQ.
SIMPSON THACHER & BARTLETT GLOBAL CROSSING LTD. LATHAM & WATKINS
425 LEXINGTON AVENUE 150 EL CAMINO DRIVE, SUITE 885 THIRD AVENUE, SUITE 1000
NEW YORK, NEW YORK 10017 204 NEW YORK, NEW YORK 10022
(212) 455-2000 BEVERLY HILLS, CA 90212 (212) 906-1200
(310) 281-4900
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act of 1933 registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act of 1933, please check the following box. [_]
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CALCULATION OF REGISTRATION FEE

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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE(3)
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<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share........ 24,150,000 shares $19.00 $458,850,000 $135,361
</TABLE>
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(1) Includes 3,150,000 shares of Common Stock issuable pursuant to a 30-day
option granted to the Underwriters solely to cover over-allotments.
(2) Estimated solely for the purpose of calculating the registration fee.

(3) Previously paid.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>

EXPLANATORY NOTE

This Registration Statement contains two prospectus cover pages: one to be
used for a prospectus in connection with a United States and Canadian offering
(the "U.S. Prospectus") and one to be used for a prospectus in connection with
a concurrent international offering (the "International Prospectus"). The
International Prospectus will be identical to the U.S. Prospectus except that
it will have a different front cover page and back cover page and a different
section entitled "Underwriting." The front cover page, back cover page, and
"Underwriting" section to be used in the International Prospectus are located
at the end of the U.S. Prospectus and have been labeled "Alternate Page for
International Prospectus."
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED JULY 27, 1998

PROSPECTUS
21,000,000 SHARES

GLOBAL CROSSING LTD.
LOGO

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, 18,950,000 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 2,050,000
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. It is currently estimated that the Price to Public will be
between $17 and $19 per share. 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
10.41% (11.79% if the Underwriters' over-allotment options are exercised in
full) and existing shareholders will own 89.59% (88.21% if the over-allotment
options are exercised in full) of the outstanding Common Stock. See "Principal
and Selling Shareholders."

Application has been made to have the Common Stock listed on the Nasdaq Stock
Market's National Market (the "Nasdaq National Market") under the symbol
"GBLXF" and listed supplementally on the Bermuda Stock Exchange.

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SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED
HEREBY.

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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
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<S> <C> <C> <C> <C>
Per Share $ $ $ $
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Total(3) $ $ $ $
</TABLE>
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(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 $2,400,000 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 $ , $ and $ , respectively.
See "Underwriting."

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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
, 1998.

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Joint Book-Running Managers

SALOMON SMITH BARNEY MERRILL LYNCH & CO.

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

The date of this Prospectus is , 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.

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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
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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 approximately 51,000 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
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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 in 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
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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.

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

3
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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."

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, 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 approximately $550 million. The Company's AC-1 customers now total
more than 20 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

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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 $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 at least $200
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
contractual commitment for the financing of such indebtedness was obtained on
May 11, 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), 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).
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

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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.

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

Global Crossing Ltd.

Global Crossing Holdings Ltd.

<S> <C> <C> <C> <C>
Global Telesystems Pacific Crossing Mid-Atlantic Crossing Pan American 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 any costs of
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, which is comprised of $1,200 million for PC-1,
$350 million for MAC and $475 million for PAC. The Company has obtained
contractual commitments for the debt financing of such systems, which debt
financing will be non-recourse to the Company other than with respect to its
required equity contribution. Based upon executed debt financing commitments,
equity investments in PC-1 by Global Crossing and its partners are currently
estimated at $400 million (of which at least $200 million will be provided by
the Company), with the remaining $800 million of estimated costs expected 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 initially 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 "Refinancing"). 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 ............ 15,160,000 shares

International Offering.... 3,790,000 shares

Total (1)................. 18,950,000 shares

Common Stock offered by the Selling Shareholders:

U.S. Offering ............ 1,640,000 shares

International Offering.... 410,000 shares

Total .................... 2,050,000 shares

Common Stock to be
outstanding after the
Offerings (1)(2) .......... 201,688,519 shares

Net Proceeds to the
Company..................... Approximately $318.2 million (approximately
$371.5 million if the Underwriters' over-
allotment options are exercised in full).

Nasdaq National Market
symbol...................... GBLXF

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 a dividend by Global Crossing Ltd., LDC, a Cayman
Island limited duration company ("Old GCL") of 1.5 shares of Common Stock
of GCL for each share of common stock of Old GCL (the "Common Stock
Dividend"), the liquidation of Old GCL (the "Old GCL Liquidation"), 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 July 13, 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) 2,696,074 shares of Common Stock reserved for issuance under the GCL
Warrants (see "Description of Capital Stock--Liquidation of Old GCL"); and
(iii) 6,597,227 shares of Common Stock reserved for issuance under the New
PCG Warrants (see "Certain Transactions").

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 months ended March 31, 1998 are derived from unaudited interim
financial statements. The unaudited interim financial statements include all
adjustments, consisting of normal recurring accruals, that management considers
necessary for fair presentation of the financial position as of and results of
operations for these interim periods. 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 Company is in its development stage; accordingly, 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
FOR THE MARCH 19, 1997
THREE MONTHS (DATE OF INCEPTION) TO
ENDED MARCH 31, 1998 DECEMBER 31, 1997
-------------------- ----------------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Interest Income.................... $ 345,834 $ 2,941,352
------------ ------------
Expenses:
Sales and Marketing................ 784,216 1,366,724
General and Administrative......... 2,614,903 1,695,770
Depreciation and Amortization...... 30,367 39,214
Project Evaluation Costs........... 7,047,044 --
------------ ------------
Total Expenses..................... 10,476,530 3,101,708
------------ ------------
Net Loss(1)........................ (10,130,696) (160,356)
Preference Share Non-Cash
Dividends(2)...................... (4,408,230) (12,689,923)
------------ ------------
Net Loss Applicable to Common
Shareholders...................... $(14,538,926) $(12,850,279)
============ ============
</TABLE>
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
AS OF MARCH 31, 1998 1997
---------------------------- -------------
AS
HISTORICAL ADJUSTED(3) HISTORICAL
------------ -------------- -------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and Restricted Cash.......... $ 41,918,190 $ 834,999,528 $ 26,727,880
Construction in progress.......... 620,963,878 698,676,666 518,518,509
Investment in Pacific Crossing
Ltd.............................. -- 113,036,783 --
Deferred Finance and
Organizational Costs, Net of
Accumulated Amortization......... 24,974,952 43,085,449 25,934,021
Other Assets...................... 12,764,977 12,764,977 1,015,958
------------ -------------- -------------
Total Assets...................... $700,621,997 $1,702,563,403 $ 572,196,368
============ ============== =============
Long Term Debt and Other
Obligations...................... $463,895,845 $1,113,895,845 $ 315,334,000
GTH Preference Shares............. 95,007,302 -- 90,643,919
Shareholders' Equity:
Common Stock.................... 110 2,016,885 110
Treasury Stock.................. -- (139,773,807) --
Additional Paid-in Capital...... 87,395,845 796,369,289 86,970,845
Deficit Accumulated During the
Development Stage.............. (27,389,205) (144,328,708) (12,850,279)
------------ -------------- -------------
Total Shareholders' Equity........ 60,006,750 514,283,659 74,120,676
------------ -------------- -------------
Total Capitalization.............. $618,909,897 $1,628,179,504 $ 480,098,595
============ ============== =============
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
AS OF
JUNE 30, 1998
--------------
<S> <C>
OPERATING DATA:
Executed CPAs................................................. $550 million
<CAPTION>
ESTIMATED(4)
--------------
<S> <C>
Route Kilometers.............................................. 51,300
Fiber Kilometers.............................................. 345,200
Estimated System Costs
AC-1 ....................................................... $750 million
Other Projects Under Development............................ $2,025 million
Landing Stations.............................................. 14
</TABLE>
- -------
(1) The Company is in the process of finalizing determination of the fair value
of its Common Stock on the date of its stock grants. On a pro forma basis,
assuming the fair value of the Company's Common Stock were determined to be
the midpoint of the expected pricing range for the Offerings on the dates
of grants which commenced on January 21, 1998, the net loss for the three
months ended March 31, 1998 would increase by $7.4 million. This would have
no effect on the Company's cash flow, total assets, total liabilities or
stockholders equity.
(2) The holders of 14% senior increasing rate redeemable exchangeable
preference shares (the "GTH Preference Shares") of Global Telesystems
Holdings Ltd. ("GTH") are 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. All dividends to date have been paid through the issuance
of additional preference shares. The Company has redeemed all of the
outstanding GTH Preference Shares effective as of June 17, 1998.
(3) See the pro forma financial information below for a full description of the
adjustments.
(4) 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."

PRO FORMA FINANCIAL INFORMATION

The impact of the Refinancing, the Offerings, the PCG Warrant Conversion (as
defined herein), the Advisory Services Agreement Termination, the TDC Exchange
and the Old GCL Liquidation have all been reflected in the pro forma balance
sheet as of March 31, 1998. The pro forma statements of operations give effect
to recurring items only. Therefore, the one time charge resulting from the
redemption of GTH Preference Shares, the one time extraordinary loss resulting
from the repurchase of the GTH Senior Notes and the one time charge resulting
from the Advisory Services Agreement Termination have not been included in the
pro forma statements of operations. These transactions have, however, been
disclosed in the footnotes to the pro forma statements of operations.

PRO FORMA BALANCE SHEET DATA:

<TABLE>
<CAPTION>
HISTORICAL ADVISORY
AS OF PCG SERVICES OLD
MARCH 31, WARRANT AGREEMENT TDC GCL
1998 REFINANCING OFFERINGS(2) CONVERSION(3) TERMINATION(4) EXCHANGE(5) LIQUIDATION(6)
------------ ------------ ------------ ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and Re-
stricted
Cash(7)........ $ 41,918,190 $474,847,338 $318,234,000 $ -- $ -- $ -- $ --
Construction in
Progress....... 620,963,878 -- -- 77,712,788 -- -- --
Investment in
Pacific
Crossing Ltd. . -- -- -- 113,036,783 -- -- --
Deferred Finance
and
Organizational
Costs,
Net of
Accumulated
Amortization... 24,974,952 18,110,497 -- -- -- -- --
Other Assets.... 12,764,977 -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------- -----------
Total Assets.... $700,621,997 $492,957,835 $318,234,000 $190,749,571 $ -- $ -- $ --
============ ============ ============ ============ ============ ============= ===========
Current
Liabilities.... $ 81,712,100 $ (7,328,201) $ -- $ -- $ -- $ -- $ --
Long Term Debt
and Other
Obligations.... 463,895,845 650,000,000 -- -- -- -- --
GTH Preference
Shares(8)...... 95,007,302 (95,007,302) -- -- -- -- --
Shareholders'
Equity:
Common Stock.... 110 -- 189,500 118,559 75,000 108,507 1,525,209
Treasury Stock,
at Cost........ -- -- -- -- -- (139,773,807) --
Additional Paid-
in Capital..... 87,395,845 (34,767,159) 318,044,500 190,631,012 96,925,000 139,665,300 (1,525,209)
Deficit
Accumulated
During the
Development
Stage.......... (27,389,205) (19,939,503) -- -- (97,000,000) -- --
------------ ------------ ------------ ------------ ------------ ------------- -----------
Total
Shareholders'
Equity......... 60,006,750 (54,706,662) 318,234,000 190,749,571 -- -- --
------------ ------------ ------------ ------------ ------------ ------------- -----------
Total
Liabilities and
Shareholders'
Equity......... $700,621,997 $492,957,835 $318,234,000 $190,749,571 $ -- $ -- $ --
============ ============ ============ ============ ============ ============= ===========
<CAPTION>
ADJUSTED
AS OF
MARCH 31,
1998
---------------
<S> <C>
Cash and Re-
stricted
Cash(7)........ $ 834,999,528
Construction in
Progress....... 698,676,666
Investment in
Pacific
Crossing Ltd. . 113,036,783
Deferred Finance
and
Organizational
Costs,
Net of
Accumulated
Amortization... 43,085,449
Other Assets.... 12,764,977
---------------
Total Assets.... $1,702,563,403
===============
Current
Liabilities.... $ 74,383,899
Long Term Debt
and Other
Obligations.... 1,113,895,845
GTH Preference
Shares(8)...... --
Shareholders'
Equity:
Common Stock.... 2,016,885
Treasury Stock,
at Cost........ (139,773,807)
Additional Paid-
in Capital..... 796,369,289
Deficit
Accumulated
During the
Development
Stage.......... (144,328,708)
---------------
Total
Shareholders'
Equity......... 514,283,659
---------------
Total
Liabilities and
Shareholders'
Equity......... $1,702,563,403
===============
</TABLE>

10
<PAGE>

PRO FORMA STATEMENTS OF OPERATIONS DATA:

<TABLE>
<CAPTION>
HISTORICAL AS ADJUSTED HISTORICAL AS ADJUSTED HISTORICAL AS ADJUSTED
FOR THE FOR THE FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
THREE MONTHS THREE MONTHS MARCH 19, 1997 MARCH 19, 1997 MARCH 19, 1997 MARCH 19, 1997
ENDED ENDED (DATE OF INCEPTION) (DATE OF INCEPTION) (DATE OF INCEPTION) (DATE OF INCEPTION)
MARCH 31, MARCH 31, TO DECEMBER 31, TO DECEMBER 31, TO MARCH 31, TO MARCH 31,
1998 1998(9) 1997 1997(9) 1998 1998(9)
------------ ------------ ------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Interest
Income(10)..... $ 345,834 $ 7,845,271 $ 2,941,352 $ 26,856,225 $ 3,287,186 $ 34,701,496
------------ ------------ ------------ ------------ ------------ ------------
Expenses:
Interest
expense(11).... 23,234 12,576,640 -- 40,031,418 23,234 52,608,058
Other expenses.. 10,453,296 10,453,296 3,101,708 3,101,708 13,555,004 13,555,004
------------ ------------ ------------ ------------ ------------ ------------
Net Loss before
Non-Recurring
Charges........ (10,130,696) (15,184,665) (160,356) (16,276,901) (10,291,052 (31,461,566)
Preference Share
Dividends...... (4,408,230) -- (12,689,923) -- (17,098,153) --
------------ ------------ ------------ ------------ ------------ ------------
Net Loss
Applicable to
Common
Shareholders
before Non-
Recurring
Charges........ $(14,538,926) $(15,184,665) $(12,850,279) $(16,276,901) $(27,389,205) $(31,461,566)
============ ============ ============ ============ ============ ============
Basic and
diluted net
loss per common
share before
Non-Recurring
Charges........ $ (0.13) $ (0.08) (0.12) (0.08) (0.25) (0.16)
============ ============ ============ ============ ============ ============
Shares used in
computing basic
and diluted net
loss per common
share.......... 110,615,211 201,434,630 110,294,100 201,113,519 110,370,758 201,190,177
============ ============ ============ ============ ============ ============
</TABLE>
(1) As adjusted for the May 18, 1998 issuance of the $800 million 9 5/8%
Senior Notes ("GCH Senior Notes"). This offering resulted in Global
Crossing Holdings Ltd. receiving $771.7 million, net of $28.3 million in
financing fees which have been capitalized as Deferred Finance Costs in
the "As adjusted as of March 31, 1998" column. These net proceeds were
used in part to redeem the GTH Preference Shares ($131.1 million) and to
repurchase the GTH Senior Notes Due 2004 (the "GTH Senior Notes") ($165.8
million). The remaining proceeds ($474.8 million) were invested in cash
and cash equivalents.
As a result of the repurchase of GTH Senior Notes, there was a one time
extraordinary loss of $19.9 million comprised of: (i) a $9.7 million charge
for the tender premium on the GTH Senior Notes and (ii) a write-off of $10.2
million of deferred fees and issue costs associated with the GTH Senior
Notes assuming the GTH Senior Notes had been repurchased as of March 31,
1998. In addition, $6.0 million in accrued interest on the GTH Senior Notes
was assumed to have been repaid and has been deducted from Current
Liabilities in the "Adjusted as of March 31, 1998" column.
As a result of the redemption of the GTH Preference Shares, there was a one
time $34.8 million charge recorded as Additional Paid-in Capital and
comprised of: (i) a $16.1 million charge for the call premium and (ii) a
write-off of $18.7 million of discount and issue costs associated with the
GTH Preference Shares assuming the GTH Preference Shares had been redeemed
as of March 31, 1998. In addition, $1.3 million in accrued dividends on the
GTH Preference Shares were assumed to have been repaid and have been
deducted from Current Liabilities in the "Adjusted as of March 31, 1998"
column.
(2) As adjusted to reflect the net proceeds of the Offerings ($318.2 million)
after deducting underwriting and offering expenses , assuming a Price to
Public per Share of $18, the midpoint of the expected pricing range of the
Offerings.
(3) As adjusted for the PCG Warrant Conversion (see "Certain Transactions") to
occur immediately preceding the Offerings. Effective January 21, 1998, the
Company entered into a warrant agreement under which Old GCL acquired the
rights to develop PC-1, MAC and PAC and in return issued warrants
providing PCG the right to purchase a total of 12,302,123 Class B shares
contingent on the Offerings and the achievement of certain performance
levels in the new projects undertaken by the Company. In June 1998 the
achievement of certain performance levels in the new projects undertaken
by the Company were deemed met by the Board of Directors. The amount of
the adjustment to construction in process and investment in Pacific
Crossing Ltd., includes the value of New PCG Warrants which will be issued
when the existing PCG Warrants are exercised.
The costs associated with the PCG Warrants have been attributed on a pro
rata basis to each of the projects for which the rights were obtained. The
portion of the cost related to MAC and PAC ($33 million and $44.7 million,
respectively) have been capitalized as construction in progress. The portion
of the cost related to PC-1 ($113 million) has been capitalized and included
as part of the Company's investment in Pacific Crossing Ltd. since Pacific
Crossing Ltd. is not consolidated.
(4) As adjusted for the Advisory Services Agreement Termination on June 30,
1998. See "Certain Transactions." The Company intends to acquire 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 will record a
charge in the amount of approximately $97 million which is discounted from
the $135 million to take into account the non-marketability of the non-
registered common stock issued. This charge is not reflected in the pro
forma statements of operations as it is nonrecurring.
(5) As adjusted for the repurchase of the Company's shares held by
Telecommunications Development Company ("TDC"). See "Certain
Transactions." Prior to the Offerings, the Company will purchase and
reissue all of the shares of Common Stock of the Company held by TDC
(after giving effect to the Common Stock Dividend). The Company will
record the treasury stock at its fair value of $139.7 million.
(6) As adjusted for the Old GCL Liquidation. The Company intends to declare a
dividend of 1.5 shares of Common Stock of the Company for each share of
common stock of Old GCL and then liquidate Old GCL concurrently with the
Offerings.
(7) The majority of restricted cash and cash equivalents appearing in the
"Historical as of March 31, 1998" column are funds which had been reserved
for the purpose of funding future interest payable on the GTH Senior Notes
and the amount appearing in the "As Adjusted as of March 31, 1998" column
includes additional funds reserved for the purposes of funding future
interest payable on the GCH Senior Notes.
(8) The amount in the "Historical as of March 31, 1998" column reflects (i)
$100 million of GTH Preference Shares originally issued, plus (ii) $13.7
million of GTH Preference Shares issued as dividends thereon, less (iii)
$18.7 million, reflecting the unamortized discount and issue costs
associated therewith. The GTH Preference Shares as reflected in the "As
Adjusted as of March 31, 1998" column have been redeemed as described in
Note (1).
(9) The "As Adjusted" columns include the effects of 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 redeem the GTH Preference
Shares.
The "As adjusted" columns are not adjusted for non recurring items including
the $19.9 million extraordinary loss resulting from the repurchase of the
GTH Senior Notes (as described in Note (1) above), the $34.8 million one
time charge in connection with the redemption of the GTH Preference Shares
(as described in Note (1) above) nor the $97 million one time charge related
to the Advisory Services Agreement Termination (as described in Note (4)
above).
(10) The Company has assumed that any GCH Senior Notes proceeds not used to
redeem the GTH Preference Shares or repurchase GTH Senior Notes were
invested in cash equivalents earning interest income over the entire
period covered by the pro forma statements of operations.
(11) The effect of 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 of the pro forma statements of operations. 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 periods covered by each of the statements of operations.
The remaining interest costs incurred from the GCH Senior Notes has been
included in the "As adjusted" columns as additional interest expense. The
Company has assumed that for the purposes of the pro forma statements of
operations that the GCH Senior Notes have been outstanding for the entire
periods covered by each of the statements of operations.

11
<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; DEVELOPMENT STAGE COMPANY

The Company was organized in March 1997 and is in the development stage. The
Company's financial information relates to a period in which the Company was
engaged in construction and development of AC-1 and had minimal revenues and
operating costs because the costs of construction have been capitalized. The
Company's operations to date have generated operating losses. The Company had
net losses applicable to common shareholders of approximately $27.4 million
for the period from March 19, 1997 (date of inception) through March 31, 1998,
which consisted primarily of paid in-kind dividends on 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
approximately $550 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 March 31, 1998, on a consolidated pro forma basis after giving effect
to the Offerings, the Note Offering and the application of the net proceeds
therefrom, the Company would have had $1,188.3 million of total liabilities,
including approximately $1,118.8 million of senior indebtedness, of which
$305.5 million would have been secured.

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 such refinancing
would be available. If the Company were unable to refinance its indebtedness
or obtain new

12
<PAGE>

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.

13
<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,
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 CPA's 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 "--Rapidly Changing Industry; Pricing
Uncertainties" and "Business--Competition."

RELATIONSHIP WITH PRINCIPAL SHAREHOLDERS; CONFLICTS OF INTEREST

As of July 13, 1998, Pacific Capital Group, Inc. ("PCG") had a 27.08%
beneficial ownership interest in GCL (after giving effect to the liquidation
of Old GCL). 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

14
<PAGE>

other officers and directors of GCL are affiliated with PCG. In addition,
through an affiliate, Canadian Imperial Bank of Commerce ("CIBC") had a 24.96%
beneficial ownership interest in GCL (after giving effect to the liquidation
of Old GCL). 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 47.32% of the outstanding Common Stock (46.59% 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 assume a price of $18 per share of Common Stock (the midpoint
of the expected pricing range of the Offerings).

<TABLE>
<CAPTION>
COMMON COMMON STOCK STOCK ADVISORY
STOCK OWNED AFTER WARRANTS OPTIONS SERVICES
INVESTOR TO BE SOLD VALUE OFFERINGS(1) VALUE(1) HELD VALUE HELD VALUE FEES TOTAL VALUE
- -------- ---------- ----------- ------------ ------------ --------- ----- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gary Winnick.... 1,158,636 $20,855,448 46,893,141 $844,076,538 4,626,388 $ -- 900,000 $14,700,000 $ 3,191,630 $882,823,616
Lodwrick M.
Cook........... -- $ -- 1,720,391 $ 30,967,038 527,779 $ -- 450,000 $ 7,350,000 $ -- $ 38,317,038
Jack M. Scanlon. -- $ -- -- $ -- -- $ -- 1,800,000 $29,400,000 $ -- $ 29,400,000
Dan J. Cohrs.... -- $ -- -- $ -- -- $ -- 675,000 $ 7,650,000 $ -- $ 7,650,000
David L. Lee.... 324,093 $ 5,833,674 10,060,178 $181,083,204 1,339,741 $ -- 450,000 $ 7,350,000 $ 481,130 $194,748,008
Abbott L. Brown. 243,178 $ 4,377,204 5,663,382 $101,940,876 985,713 $ -- 450,000 $ 7,350,000 $ 320,754 $113,988,834
Barry Porter.... 324,093 $ 5,833,674 9,153,049 $164,754,882 1,311,669 $ -- 450,000 $ 7,350,000 $ 481,130 $178,419,686
James C. Gorton. -- $ -- -- $ -- -- $ -- 750,000 $ 8,500,000 $ -- $ 8,500,000
Jack Finlayson.. -- $ -- -- $ -- -- $ -- 735,000 $ 6,630,000 $ -- $ 6,630,000
K. Eugene
Shutler........ -- $ -- 148,986 $ 2,681,748 -- $ -- 300,000 $ 4,900,000 $ -- $ 7,581,748
Hillel
Weinberger..... -- $ -- 21,330,900 $383,956,200 -- $ -- 60,000 $ 980,000 $ -- $384,936,200
Jay R. Bloom.... -- $ -- 48,550,622 $873,911,196 -- $ -- 60,000 $ 980,000 $ -- $874,891,196
Dean C. Kehler.. -- $ -- 48,550,622 $873,911,196 -- $ -- 60,000 $ 980,000 $ -- $874,891,196
Jay R. Levine... -- $ -- 48,550,622 $873,911,196 -- $ -- 60,000 $ 980,000 $ -- $874,891,196
William D.
Phoenix........ -- $ -- 48,550,622 $873,911,196 -- $ -- 60,000 $ 980,000 $ -- $874,891,196
Bruce Raben..... -- $ -- 48,550,622 $873,911,196 -- $ -- 60,000 $ 980,000 $ -- $874,891,196
Michael R.
Steed.......... -- $ -- 16,591,109 $298,639,962 368,353 $ -- 60,000 $ 980,000 $ 194,696 $299,814,658
</TABLE>

15
<PAGE>

- --------
(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 48,639,025 shares of Common Stock owned benefically by CIBC, an
affiliate of their employer, CIBC Oppenheimer Corp. ("CIBC Oppenheimer").
The amount shown for Mr. Steed includes 17,007,831 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) 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 June 30, 1998 and
options in respect of 5,120,000 shares are exercisable, subject to various
conditions, following vesting on various dates through July 2001.

(3) 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 (determined on the basis of the Price to Public per Share
payable in the Offerings) 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 $18.00) 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). 3,438,557 $ 61,894,026
CIBC......................................... 707,222 12,729,996
ULLICO....................................... 386,944 6,964,992
Lodwrick M. Cook............................. 321,917 5,794,506
Abbott L. Brown.............................. 721,694 12,990,492
David L. Lee................................. 961,833 17,312,994
Barry Porter................................. 961,833 17,312,994
--------- ------------
Total...................................... 7,500,000 $135,000,000
========= ============
</TABLE>

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

16
<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.

17
<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

18
<PAGE>

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.

RISK OF ERROR IN FORWARD-LOOKING STATEMENTS

The Company is 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

19
<PAGE>

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 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 $15.66 per Share (based on a Price to
Public of $18.00 per Share and 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,

20
<PAGE>

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 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 201,688,519 shares of
Common Stock outstanding, including 21,000,000 Shares of Common Stock offered
hereby and 180,688,519 "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 certain shareholders,
directors and officers of the Company 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."

21
<PAGE>

USE OF PROCEEDS

The net proceeds from the Offerings to the Company are estimated to be
approximately $318.2 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 March 31, 1998, the "Historical net tangible book value" of the Company
was $35 million or $0.19 per share of Common Stock. Historical net tangible
book value per share represents the Company's net worth less intangible assets
of $25 million divided by 182,738,519 shares of Common Stock outstanding on
July 13, 1998 (after giving effect to the Common Stock Dividend, the Advisory
Services Agreement Termination and the PCG Warrant Conversion). After giving
effect to the sale by the Company of 18,950,000 Shares pursuant to the
Offerings at an assumed initial public offering price of $18.00 per share and
after deducting the underwriting discount and expenses of the Offerings, the
pro forma net tangible book value of the Company at March 31, 1998, would have
been $471.2 million, or $2.34 per share of Common Stock. Such amount
represents an immediate increase in pro forma net tangible book value of $2.15
per share of Common Stock to the existing stockholder and an immediate
dilution to new investors of $15.66 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>
Assumed public offering price per Share........................ $18.00
Historical net tangible book value per share at March 31, 1998. $0.19
Increase in net tangible book value per share attributable to
the effects
of the Offerings.............................................. 2.15
-----
Pro forma net tangible book value per share after the Offer-
ings.......................................................... 2.34
------
Dilution per share to new investors............................ $15.66
======
</TABLE>

The foregoing table assumes no exercise of the Underwriters' over-allotment
options to purchase an additional 3,150,000 Shares.

22
<PAGE>

CAPITALIZATION

The following table sets forth as of March 31, 1998 (i) the historical
consolidated capitalization of the Company and (ii) the capitalization as
adjusted to reflect the Offerings, the Note Offering and the application of
the net proceeds therefrom. 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 MARCH 31, 1998
----------------------------
ACTUAL AS ADJUSTED(1)
------------ --------------
(UNAUDITED)
<S> <C> <C>
Long Term Debt:
AC-1 Credit Facility(2)..................... $305,508,000 $ 305,508,000
GTH Senior Notes............................ 150,000,000 --
Obligations under capital leases............ 7,642,845 7,642,845
Obligations under Inland Services
Agreements(3).............................. 745,000 745,000
GCH Senior Notes............................ -- 800,000,000
------------ --------------
Total Long Term Debt...................... 463,895,845 1,113,895,845
------------ --------------
GTH Preference Shares......................... 95,007,302 --
------------ --------------
Shareholders' Equity:
Common Stock................................ 110 2,016,885
Treasury Stock.............................. -- (139,773,807)
Additional Paid-in Capital.................. 87,395,845 796,369,289
Accumulated Deficit During Development
Stage...................................... (27,389,205) (144,328,708)
------------ --------------
Total Shareholders' Equity................ 60,006,750 514,283,659
------------ --------------
Total Capitalization...................... $618,909,897 $1,628,179,504
============ ==============
</TABLE>
- --------
(1) As adjusted to reflect the Refinancing, the Note Offering, the Offerings,
the PCG Warrant Conversion, the Advisory Services Agreement Termination,
the TDC Exchange and the Old GCL Liquidation. For detailed information on
these adjustments, see Note 2 to "Summary Consolidated Financial and
Operating Data."

(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 $305.5 million was
outstanding as of March 31, 1998. See "Description of Certain
Indebtedness--AC-1 Credit Facility."

(3) Net of the $12.5 million current portion of such obligations.

23
<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 months ended March 31,
1998 and for the period from March 19, 1997 (date of inception) to March 31,
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 March 31, 1998 and results of
operations for this interim period presented. Results of operations for the
interim period is 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 Company is in its development stage; accordingly, 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 FOR THE PERIOD FOR THE PERIOD
THREE MONTHS MARCH 19, 1997 MARCH 19, 1997
ENDED (DATE OF INCEPTION) (DATE OF INCEPTION)
MARCH 31, 1998 TO DECEMBER 31, 1997 TO MARCH 31, 1998
-------------- -------------------- -------------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Interest Income......... $ 345,834 $ 2,941,352 $ 3,287,186
------------ ------------ ------------
Expenses:
Sales and Marketing... 784,216 1,366,724 2,150,940
General and
Administrative....... 2,614,903 1,695,770 4,310,673
Depreciation and
Amortization......... 30,367 39,214 69,581
Project Evaluation
Costs................ 7,047,044 -- 7,047,044
------------ ------------ ------------
Total Expenses.......... 10,476,530 3,101,708 13,578,238
------------ ------------ ------------
Net Loss (1)............ (10,130,696) (160,356) (10,291,052)
Preference Share Non-
Cash Dividends (2)..... (4,408,230) (12,689,923) (17,098,153)
------------ ------------ ------------
Net Loss Applicable to
Common Shareholders.... $(14,538,926) $(12,850,279) $(27,389,205)
============ ============ ============
Basic and diluted net
loss per common share
(3).................... $ (0.13) $ (0.12) $ (0.25)
============ ============ ============
Shares used in computing
basic and diluted net
loss per
common share........... 110,615,211 110,294,100 110,370,758
============ ============ ============
<CAPTION>
AS OF AS OF
MARCH 31, 1998 DECEMBER 31, 1997
-------------------- -------------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Current Assets Including Cash and
Restricted Cash (4)................... $ 54,683,167 $ 27,743,838
Construction in Progress (5)........... 620,963,878 518,518,509
Deferred Finance and Organization
Costs, Net of Accumulated
Amortization.......................... 24,974,952 25,934,021
------------ ------------
Total Assets........................... $700,621,997 $572,196,368
============ ============
Current Liabilities.................... $ 81,712,100 $ 92,097,773
Long Term Debt......................... 305,508,000 162,325,000
GTH Senior Notes....................... 150,000,000 150,000,000
Obligations Under Capital Leases....... 7,642,845 --
Obligations Under Inland Services
Agreements (6)........................ 745,000 3,009,000
GTH Preference Shares (7).............. 95,007,302 90,643,919
Shareholders' Equity:
Common Stock......................... 110 110
Additional Paid-in Capital........... 87,395,845 86,970,845
Deficit Accumulated During the
Development Stage................... (27,389,205) (12,850,279)
------------ ------------
Total Shareholders' Equity............. 60,006,750 74,120,676
------------ ------------
Total Liabilities and Shareholders'
Equity................................ $700,621,997 $572,196,368
============ ============
</TABLE>

24
<PAGE>

<TABLE>
<CAPTION>
AS OF
JUNE
30, 1998
------------
<S> <C>
OPERATING DATA:
Executed CPAs...................................................... $550 million
</TABLE>

<TABLE>
<CAPTION>
ESTIMATED(8)
--------------
<S> <C>
Route Kilometers................................................ 51,300
Fiber Kilometers................................................ 345,200
Estimated System Costs
AC-1 .......................................................... $ 750 million
Other Projects Under Development............................... $2,025 million
Landing Stations................................................ 14
</TABLE>
- --------
(1) The Company is in the process of finalizing determination of the fair
value of its Common Stock on the date of its stock option grants. On a pro
forma basis, assuming the fair value of the Company's Common Stock were
determined to be the midpoint of the expected pricing range for the
Offerings on the dates of grants which commenced on January 21, 1998, the
net loss for the three months ended March 31, 1998 would increase by $7.4
million. This would have no effect on the Company's cash flow, total
assets, total liabilities or stockholders equity.

(2) The holders of GTH Preference Shares are 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. All dividends to date have been paid through
the issuance of additional preference shares. The Company has redeemed all
of the outstanding GTH Preference Shares effective as of June 17, 1998.

(3) 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.

(4) The majority of restricted cash and cash equivalents are funds which have
been reserved for the purpose of funding future interest payable on the
GTH Senior Notes. The Company has applied a portion of the net proceeds of
the Note Offering to repurchase all outstanding GTH Senior Notes.

(5) Construction in Progress includes direct and indirect expenditures for
construction of AC-1 and is stated at cost. Capitalized costs include
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. Costs incurred to acquire backhaul capacity are also
included.

(6) Certain contracts to acquire backhaul capacity require payments over a 25-
year period. The amount shown reflects the present value of such payments,
net of the $12.5 million ($18.1 million as of December 31, 1997) current
portion of such payments, which is included under "Current Liabilities."

(7) Reflects (i) $100 million of GTH Preference Shares originally issued, plus
(ii) $13.7 million ($9.8 million as of December 31, 1997) of GTH
Preference Shares issued as dividends thereon, less (iii) $18.7 million
($19.2 million as of December 31, 1997), 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.

(8) 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."

25
<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."

The Company, 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 Credit Facility and the execution of financing
commitments with respect to PC-1, MAC and PAC and (iv) the construction and
activation of the United States to United Kingdom segment of AC-1.

Sales of capacity by the Company on its cable systems are effected through
Capacity Purchase Agreements 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 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 Company's basic pricing structure currently provides for volume-based
discounts to its customers. Customers are generally provided options in their
capacity purchase agreements to purchase additional capacity in

26
<PAGE>

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.

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 intends
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 (determined on the basis of the Price to Public per
Share payable in the Offerings) 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 will incur a charge of
$97 million, which is discounted from the $135 million to take into account
the non-marketability of the non-registered common stock issued, which will be
reflected in its statement of operations for the period ended June 30, 1998.
See "Certain Transactions." Upon the consummation of this transaction, all of
the obligations of the Company and ACL in respect of these advisory services
agreements will be terminated.

REVENUES

Prior to the RFS date for the United States to United Kingdom segment of AC-
1, the Company had no revenues and had interest income on restricted cash,
cash raised from financing, cash on CPA deposits and cash on ICPA deposits. As
of June 30, 1998, the Company had entered into CPAs with customers for
capacity on AC-1 providing for payments to the Company of an aggregate of at
least $550 million and had received aggregate payments (including deposits)
from customers of approximately $108 million. Cash deposits have been recorded
as unearned revenue prior to activating the capacity sold pursuant to the
related CPA. Most deposits are refundable if the AC-1 system RFS date does not
occur prior to June 30, 1999. See "Business--Summary of Principal Terms of
Standard Contractual Documentation."

Since the RFS date for the United States to United Kingdom segment of AC-1,
which occurred on May 26, 1998, the Company's revenues have been principally
comprised of revenues from sales of cable capacity on AC-1 and the sale of
backhaul capacity. Revenues from the sale of capacity on the Company's systems
and from the sale of backhaul capacity are recognized in the period during
which (i) the purchaser obtains the right to use the capacity, which can only
be suspended by a failure of the purchaser to pay the full purchase price or
fulfill its contractual obligations, (ii) the purchaser is obligated to pay
OA&M costs and (iii) the segment of the system related to the capacity
purchased is available for service.

COST OF SALES; CAPACITY AVAILABLE FOR SALE

Cable construction costs incurred with respect to each segment of AC-1,
reflected as "Construction in Progress" in the Company's consolidated December
31, 1997 balance sheet, will be reflected as capacity available for sale at
the date such segment becomes operational. Capacity available for sale will be
recorded at the lower of cost or fair value less cost to sell and will be
charged to cost of sales in the period the related revenues are recognized.
Fair value of 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 related to AC-1 capacity
will be calculated based on the ratio of AC-1 capacity revenues recognized in
the period to total expected AC-1 capacity revenues over the life of the
system, multiplied by the total cost incurred to construct AC-1. The Company
plans to use the same accounting policy for its other planned cable systems.
The cost to acquire backhaul capacity will be charged to cost of sales in the
period during which the related revenues are recognized. 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 sales. These adjustments will be recorded on a prospective basis over
future periods commencing with the period when management revises its
estimate.

OPERATING EXPENSES

In addition to cost of sales, the Company's operating expenses will
principally comprise sales and marketing, operating and maintenance and
general and administrative costs. Costs relating to the Company's evaluation
of possible additional systems will be expensed as incurred.

27
<PAGE>

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.

CONSTRUCTION IN PROGRESS

Construction in progress includes direct expenditures for construction of
AC-1 and is stated at cost. These expenditures include costs incurred under
the AC-1 Contract; advisory, consulting and legal fees; interest and amortized
debt issuance costs incurred during the construction phase. Additionally, the
Company has capitalized the cost of acquiring backhaul capacity. The Company
has recorded in "Construction in Progress" amounts for backhaul capacity equal
to the present value of future payments associated with the acquisition of
such backhaul capacity.

RESULTS OF OPERATIONS FOR THE PERIOD FROM MARCH 19, 1997 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,
and approximately $1.7 million was attributable to general and administrative
expenses.

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
13,235,300 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. The Class A shares will be cancelled in connection with
the Common Stock Dividend and the liquidation of Old GCL which is to occur
concurrently with the Offerings, with holders of such Class A shares receiving
a dividend of 1.5 shares of Common Stock of GCL for each share of Old GCL
stock held by it prior to cancellation 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 MARCH 31, 1998

For the three months ended March 31, 1998, the Company had revenues of
approximately $0.3 million, consisting entirely of interest income, and net
loss applicable to common shareholders of approximately $14.5 million.

28
<PAGE>

During this period, the Company incurred approximately $0.8 million of sales
and marketing expenses; $2.6 million of general and administrative expenses;
$7.0 million of project evaluation costs relating to new cable systems; and
approximately $4.4 million of PIK dividends, including amortization of both
the discount on issuance and issuance costs. The increase in sales and
marketing and general and administration expenses reflects the continuing
growth in number of employees during the development stage. The number of the
Company's employees has increased from 9 as of December 31, 1997 to 38 as of
March 31, 1998. The Company also issued options on 2,731,500 shares of Common
Stock at an exercise price of $1.67 per share in January 1998 (after giving
effect to the Common Stock Dividend). No compensation expense was recorded
related to these options since the estimated fair value of the options on the
date of grant did not exceed the exercise price.

RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1998

For the three months ended June 30, 1998, the Company expects to report
revenues and gross profit of approximately $101 million and $57.5 million,
respectively.

During this period, the Company incurred an operating loss of $69.1 million
(which includes non-cash charges of $97 million relating to the Advisory
Services Agreement Termination and a charge of $8.7 million for stock-based
compensation using an independent determination of the fair value of the stock
at the dates the stock options were granted over the past 12 months) and a net
loss before extraordinary item of $81.5 million.

In addition, during the period the Company incurred an extraordinary loss on
the repurchase of the GTH Senior Notes of $19.7 million. This loss is
comprised of a $9.8 million charge for the tender premium on the GTH Senior
Notes and a $9.9 million write-off of deferred finance fees relating to the
GTH Senior Notes.

Net loss applicable to Common Shareholders of $139.3 million includes a one
time charge related to the redemption of GTH Preference Shares of $38.0
million, which consists of a $15.9 million premium on the redemption of the
GTH Preference Shares, an $18.3 million write-off of discount and issuance
costs and $3.8 million of preferred share dividends accrued during the second
quarter of 1998 through the date of redemption.

The Company's investment in construction in progress, capacity available for
sale and investment in the Pacific Crossing Ltd. joint venture total
approximately $842 million as at June 30, 1998.

The Company is in the process of finalizing determination of the fair value
of its Common Stock on the date of its stock option grants. On a pro forma
basis, assuming the fair value of the Company's Common Stock were determined
to be the midpoint of the expected pricing range for the Offerings on the
dates of grants which commenced on January 21, 1998, the net loss for the
three months ended March 31, 1998 and June 30, 1998 would increase by $7.4
million and $34.4 million, respectively. This would have no effect on the
Company's cash flow, total assets, total liabilities or stockholders equity.

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 to
major metropolitan areas. As of May 31, 1998 and December 31, 1997,
respectively, the Company had incurred approximately $660 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 $61 million and $195 million, respectively, of capital
expenditures under the AC-1 Contract in connection with the completion of AC-
1. Amounts attributable to purchases of backhaul capacity represent the
present value of future payments required to be made by the Company for such
capacity.

The total cost of AC-1 is estimated at approximately $750 million, 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 March 31, 1998, respectively, the Company had borrowed
$162 million and $306 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

29
<PAGE>

GTH Preference Shares, (iii) to repay in full the $67.2 million outstanding
under the $200 million senior bridge loan facility of GCH (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 $1.3 million for the
quarter ended March 31, 1998 and $5.4 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 of $129.5 million for the quarter
ended March 31, 1998 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 of $129.4 million and $429.0 million for
the quarter ended March 31, 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. 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.
At March 31, 1998, approximately $12.1 million of borrowings were outstanding
under the Global Crossing Bridge Facility. 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 May 11, 1998, the Company entered into a
commitment letter with three financial institutions (CIBC Inc., Deutsche Bank
AG, an affiliate of Deutsche Bank Securities Inc., and Goldman Sachs Credit
Partners, L.P., an affiliate of Goldman, Sachs and Co.) 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 with two financial institutions (CIBC Inc.
and Deutsche Bank AG) for the $240 million non-recourse project debt financing
of MAC. Effective July 21, 1998, the Company entered into a commitment letter
with The Chase Manhattan Bank for the $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 $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

30
<PAGE>

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.

INCOME TAXES

Since the Company recognized no income through March 31, 1998, no income tax
provision has been reflected in the consolidated financial statements.

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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<PAGE>

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 approximately
51,000 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

32
<PAGE>

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.

33
<PAGE>

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 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

34
<PAGE>

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."

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 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.

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<PAGE>

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."

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. 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

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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, 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.

The Company has successfully marketed capacity on AC-1 to licensed
telecommunications providers, including PTTs, Internet service providers and
established and emerging telecommunications companies. Sales 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 approximately $550 million and $108 million of payments (including
deposits) had been received in respect thereof. These CPAs represent
approximately 37% of the initial capacity of AC-1 prior to upgrades. The
balance of these payments is scheduled to be collected over the next four
years. The Company's AC-1 customers include 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 (excluding potential
future upgrades). Equity investments in PC-1 by Global Crossing and its
partners are currently estimated at $400 million (of which at least $200
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 contractual commitment for the financing of such indebtedness was obtained
on May 11, 1998.

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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 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), 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), 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

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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.

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

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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.

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

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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
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

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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 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 December 31,
1997, the Company was committed under the AC-1 OA&M Agreement to make payments
totalling approximately $263 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").

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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."

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

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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."

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

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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 approximately 75 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.

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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.......... 40 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 and General Counsel
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.

46
<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. 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.

47
<PAGE>

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 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. 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.

48
<PAGE>

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. 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.

49
<PAGE>

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 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.

50
<PAGE>

OPTION GRANTS AND OPTION VALUES

The table below sets forth information as of July 13, 1998 concerning
options granted since January 1, 1998 to principal officers of the Company.
Options representing a total of 9,847,500 shares of Common Stock (after giving
effect to the Common Stock Dividend) have been issued to officers or directors
of the Company at exercise prices ranging from $1.67 per share to the price of
the Offerings.

<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 7.77% 1.67 03/31/07 14,700,000
Co-Chairman of the
Board
Jack Scanlon............ 1,800,000 15.55% 1.67 04/01/08 29,400,000
Chief Executive Officer
Bill Carter............. 1,500,000 12.95% 1.67 10/27/07 24,500,000
President, Global
Crossing Development
Co.
James Gorton............ 750,000 6.48% 6.67 06/12/08 8,500,000
Senior Vice President
and General Counsel
Jack Finlayson.......... 585,000 5.05% 6.67 06/12/08 6,630,000
President, Global
Crossing International,
Ltd. 150,000 1.30% (2) 06/12/08 --
</TABLE>
- --------
(1) Based upon difference between exercise price and midpoint of expected
pricing range of the Offerings.
(2) Exercise price will equal the price of the Offerings.

The table below sets forth information as of July 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 4,900,000/9,800,000
Co-Chairman of the
Board
Jack Scanlon............ -- -- 450,000/1,350,000 7,350,000/22,050,000
Chief Executive Officer
Bill Carter............. -- -- 0/1,500,000 0/24,500,000
President, Global
Crossing Development
Co.
James Gorton............ -- -- 187,500/562,500 2,125,000/6,375,000
Senior Vice President
and General Counsel
Jack Finlayson.......... -- -- 292,500/442,500 3,315,000/3,315,000
President, Global
Crossing International,
Ltd.
</TABLE>
- --------
(1) Based upon difference between exercise price and midpoint of expected
pricing range 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

51
<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 Option 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 (after giving effect to the Common Stock Dividend). 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 (after giving effect to
the Common Stock Dividend). GCL has agreed to make similar arrangements
available to Mr. Cohrs with respect to 150,000 shares (after giving effect to
the Common Stock Dividend) 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 (after giving effect
to the Common Stock Dividend).

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.

52
<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS

The following table and the accompanying footnotes set forth, as of July 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 PERCENTAGE NUMBER OF PERCENTAGE
OF PRIOR TO SHARES TO AFTER
BENEFICIAL OWNER SHARES(1) OFFERINGS BE SOLD OFFERINGS
---------------- ----------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Pacific Capital Group, Inc.(2) ... 52,678,165 27.08% 1,158,636 24.14%
150 El Camino Drive, Suite 204
Beverly Hills, California 90212
Canadian Imperial Bank of
Commerce......................... 48,550,622 24.96% -- 22.74%
161 Bay Street, 8th Floor--BCE
Place
P.P. Box 500
M5J258
Toronto, Canada
Continental Casualty Company(3)... 20,037,585 10.30% -- 9.39%
CNA Plaza, Floor 23 South
Chicago, Illinois 60685
MRCo, Inc. (4).................... 16,959,462 8.72% -- 7.95%
111 Massachusetts Avenue NW
Washington, DC 20001
Gary Winnick(5)................... 52,978,165 27.24% 1,158,636 24.28%
Lodwrick M. Cook(6)............... 2,398,170 1.23% -- 1.12%
Jack M. Scanlon(7)................ 450,000 * -- *
Dan J. Cohrs(8)................... 225,000 * -- *
David L. Lee(9)................... 11,874,012 6.10% 324,093 5.41%
Abbott L. Brown(10)(11)........... 7,042,273 3.62% 243,178 3.19%
Barry Porter(12).................. 10,938,811 5.62% 324,093 4.97%
James C. Gorton(13)............... 187,500 * -- *
Jack Finlayson(14)................ 292,500 * -- *
K. Eugene Shutler(11)(15)......... 248,986 * -- *
Hillel Weinberger(16)............. 21,345,900 10.97% -- 10.00%
Jay R. Bloom(17).................. 48,565,622 24.97% -- 22.75%
Dean C. Kehler(17)................ 48,565,622 24.97% -- 22.75%
Jay R. Levine(17)(18)............. 48,565,622 24.97% -- 22.75%
William P. Phoenix(17)(18)........ 48,565,622 24.97% -- 22.75%
Bruce Raben(17)(18)............... 48,565,622 24.97% -- 22.75%
Michael R. Steed(19).............. 16,974,462 8.73% -- 7.95%
William E. Conway(20)............. 15,000 * -- *
Toshiaki Ogasawara(20)............ 15,000 * -- *
Geoffrey J.W. Kent(20)............ 15,000 * -- *
All Directors and Executive
Officers as a Group.............. 173,626,383 89.26% 2,050,000 80.38%
</TABLE>
- --------
* Percentage of shares beneficially owned does not exceed one percent.
(1) As of July 13, 1998, after giving effect to the Old GCL Liquidation, the
Common Stock Dividend, the PCG Warrant Conversion, the Advisory Services
Agreement Termination, the TDC Exchange and the transactions associated
therewith, 182,738,519 shares of Common Stock would have been issued and
outstanding. An additional 2,475,500 shares of Common Stock would have
been issuable upon the exercise of options within 60 days of June 30,
1998; an additional 2,696,074 shares of Common Stock would have been
issuable upon the exercise of the GCL Warrants (effective upon the
Offerings); and an additional 6,597,227 shares of Common Stock 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.

53
<PAGE>

(2) Includes 38,670,241 shares of Common Stock and 1,327,776 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 3,298,612 shares of Common Stock issuable upon the exercise of
New PCG Warrants.
(3) 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.
(4) Includes 368,353 shares of Common Stock issuable upon the exercise of GCL
Warrants.
(5) 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 July 13, 1998.
(6) Includes 593,750 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 July 13, 1998.
(7) Includes 450,000 shares of Common Stock issuable upon the exercise of
options within 60 days of July 13, 1998.
(8) Includes 225,000 shares of Common Stock issuable upon exercise of options
within 60 days of July 13, 1998.
(9) Includes 4,936,156 shares of Common Stock and 270,832 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 2,707,890 shares of Common Stock and 79,325 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 July 13, 1998. Includes 989,584
shares of Common Stock issuable upon the exercise of New PCG Warrants.
(10) Includes all 3,762,154 shares of Common Stock and 194,045 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 July 13, 1998. Includes 791,668
shares of Common Stock issuable upon the exercise of New PCG Warrants.
(11) 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.
(12) Includes all 5,926,271 shares of Common Stock and 298,528 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 July 13, 1998. Includes 989,584 shares of Common Stock
issuable upon the exercise of New PCG Warrants.
(13) Includes 187,500 shares of Common Stock issuable upon exercise of options
within 60 days of July 13, 1998.
(14) Includes 292,500 shares of Common Stock issuable upon exercise of options
within 60 days of July 13, 1998.
(15) Includes 100,000 shares of Common Stock issuable upon the exercise of
options within 60 days of July 13, 1998.
(16) 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 July 13, 1998.
(17) 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. Includes 15,000 shares of Common Stock
issuable upon the exercise of options within 60 days of July 13, 1998.
(18) Beneficial ownership of all shares of Common Stock indicated is
disclaimed.
(19) 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 July 13,
1998. Includes 368,353 shares of Common Stock issuable upon the exercise
of GCL Warrants.
(20) Includes 15,000 shares of Common Stock issuable upon the exercise of
options within 60 days of July 13, 1998. Effective immediately prior to
Offerings.

54
<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

55
<PAGE>

of shares of Common Stock having an aggregate value (determined on the basis
of the Price to Public per Share payable in the Offerings) 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 $97 million
which is discounted from the $135 million to take into account the non-
marketability of the non-registered stock which will be reflected in its
statement of operations for the period ended June 30, 1998. The Company
anticipates that 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 VALUE(1)
--------- ------------ ------------
<S> <C> <C>
Gary Winnick (including PCG and PCG Telecom)... 3,438,557 $ 61,894,026
CIBC........................................... 707,222 12,729,996
ULLICO......................................... 386,944 6,964,992
Lodwrick M. Cook............................... 321,917 5,794,506
Abbott L. Brown................................ 721,694 12,990,492
David L. Lee................................... 961,833 17,312,994
Barry Porter................................... 961,833 17,312,994
--------- ------------
Total........................................ 7,500,000 $135,000,000
========= ============
</TABLE>
- --------
(1) Based upon the midpoint of expected pricing range 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")
permitting PCG to purchase (i) 6,151,061 of Old GCL's Class B Shares for an
aggregate purchase price of $50,000,000; (ii) an additional 3,075,531 of Old
GCL's Class B Shares for an aggregate purchase price of $31,250,000; and (iii)
an additional 3,075,531 of Old GCL's Class B Shares for an aggregate purchase
price of $37,500,000 (prior to giving effect to the Common Stock Dividend).
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 projects (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) 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.

56
<PAGE>

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. 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 GCL assuming the obligations of Old GCL under the New PCG
Warrants and Old GCL being liquidated and dissolved (the "PCG Warrant
Conversion").

The Company anticipates that, 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.......................... 5,927,979 3,298,612 $106,703,622
David L. Lee.......................... 1,778,392 989,584 32,011,056
Barry Porter.......................... 1,778,392 989,584 32,011,056
Abbott L. Brown....................... 1,422,712 791,668 25,608,816
Lodwrick M. Cook...................... 948,474 527,779 17,072,532
---------- --------- ------------
Total............................... 11,855,949 6,597,227 $213,407,082
========== ========= ============
</TABLE>
- --------
(1) Based upon the number of shares of Common Stock received multiplied by
$18.00 (the midpoint of the expected pricing range for the Offerings) plus
the number of warrants received multiplied by the difference between
exercise price per share and $18.00.

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.

57
<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 $6.5 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; (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
Note; (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 commitment letter with the Company, effective May 11,
1998, for the $850 million non-recourse project debt financing of PC-1; (vi)
CIBC, Inc. and other lenders issued a $101 million loan to Pacific Crossing
Ltd. to make the initial payments with respect to the PC-1 construction
contract; 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.

58
<PAGE>

TRANSACTIONS WITH TELECOMMUNICATIONS DEVELOPMENT CORPORATION

Prior to the Offerings, to facilitate the liquidation of Telecommunications
Development Corporation, a Cayman Islands corporation ("TDC"), the Company
will purchase all of 11,000,686 shares of Common Stock of the Company held by
TDC (after giving effect to the Old GCL Liquidation) in exchange for
10,850,686 newly issued shares of Common Stock, based upon the anticipated
Price to Public per Share of the Offerings (the "TDC Exchange"). Upon
consummation of such transaction, 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"). 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 Company
anticipates that, 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
---- ---------- --------
<S> <C> <C>
Gary Winnick.......................................... 2,392,140 69,365
David L. Lee.......................................... 2,707,890 79,325
Barry Porter.......................................... 810,646 23,557
Abbott L. Brown....................................... 270,215 7,852
Non-affiliates........................................ 4,669,795 127,571
---------- -------
Total............................................... 10,850,686 307,670
========== =======
</TABLE>

TRANSACTIONS REGARDING CLASS A SHARES OF OLD GCL

In connection with the initial purchase of the GTH Preference Shares by CIBC
Wood Gundy Securities Corp., the initial purchaser thereof, an affiliate of
the initial purchaser, CIBC Wood Gundy Capital SFC, received a total of
13,235,300 shares of Class A stock of Old GCL for no additional consideration.
9,794,100 of these shares were transferred to subsequent purchasers of the GTH
Preference Shares. Of the remaining 3,441,200 Class A shares, 1,720,600 shares
were transferred to holders of Old GCL's Class B and Class C shares as
follows:

<TABLE>
<CAPTION>
CLASS A
NAME SHARES
---- ---------
<S> <C>
Gary Winnick(1).............................. 748,142
MRCo, Inc. .................................. 407,846
Telecommunications Development Corporation... 254,904
PCG Telecom LDC.............................. 113,432
Barry Porter(2).............................. 86,667
David L. Lee(3).............................. 63,726
Abbott L. Brown(4)........................... 45,883
---------
Total...................................... 1,720,600
=========
</TABLE>
- --------
(1) Shares indicated for Gary Winnick were acquired by GKW Unified Holdings,
LLC, which is managed by PCG.
(2) Shares indicated for Barry Porter were acquired by Galenight Corp., of
which Mr. Porter is sole shareholder.
(3) Shares indicated for David L. Lee were acquired by San Pasqual Corp., of
which Mr. Lee and his family are the sole shareholders.
(4) 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.

59
<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.

LIQUIDATION OF OLD GCL

As of the date hereof, all 1,200,000 shares of common stock of GCL are held
by Global Crossing Ltd., LDC, a Cayman Islands company ("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 (the "Common Stock Dividend"). 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. Old GCL will then declare a dividend to its shareholders of 1.5
shares of Common Stock of GCL for each Class A, Class B or Class C share of
Old GCL held. Immediately subsequent to such dividend, Old GCL will be
liquidated and each of the outstanding Class A, Class B and Class C shares
will be cancelled (the "Old GCL Liquidation").

60
<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 liquidation thereof and the number of shares of Common Stock to be
issued in connection with such liquidation (after giving effect to the Common
Stock Dividend):

<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** RECEIVED RECEIVED
- ---------------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Canadian
Imperial Bank of
Commerce ....... 1,720,600 2,580,900 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 14,917,285 1,327,776
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 4,152,346 368,353
Gary Winnick.... 804,338 1,206,507 15,040,966 22,561,449 0 0 10,296,100 14,917,285 1,327,776
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 L. 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 3,881,125 350,157
Abbott L. Brown. 53,490 80,234 1,000,253 1,500,379 0 0 1,523,400 2,181,541 194,045
Barry Porter.... 105,711 158,567 1,976,816 2,985,223 0 0 2,442,500 3,613,127 322,085
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.... 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Dean C. Kehler.. 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Jay R. Levine... 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
William P.
Phoenix......... 1,720,600 2,580,900 0 0 30,175,000 45,262,500 0 0 0
Bruce Raben..... 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 4,152,346 368,353
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*
----------------
GCL
OLD GCL SHARES
NAME SHARES RECEIVED
- ----------------- ------- --------
<S> <C> <C>
Canadian
Imperial Bank of
Commerce ....... 0 0
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 L. 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.... 10,000 15,000
Dean C. Kehler.. 10,000 15,000
Jay R. Levine... 10,000 15,000
William P.
Phoenix......... 10,000 15,000
Bruce Raben..... 10,000 15,000
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>
- -------
* Includes shares of Common Stock issuable upon the exercise of stock options
which are exercisable within 60 days of July 13, 1998.
** In connection with the liquidation of TDC, Messrs. Winnick, Lee, Porter and
Brown will also receive 731,547, 828,108, 247,906 and 82,635 shares of
Common Stock, respectively, plus warrants to acquire a further 69,365,
79,325, 23,557 and 7,852 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."

61
<PAGE>

GCL

General. Pursuant to its Memorandum of Association, the authorized share
capital of GCL is $12,000, divided into 1,200,000 shares of par value $.01
each. As of the date hereof, all of such shares were issued and outstanding
and held by Old GCL. Prior to the Offerings, GCL will amend and restate its
Memorandum of Association to increase its authorized share capital to consist
of 600,000,000 shares of Common Stock. The form of Amended and Restated
Memorandum of Association is an exhibit to the Registration Statement of which
this Prospectus is a part.

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, 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 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.

62
<PAGE>

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.

63
<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 201,688,519 shares
of Common Stock outstanding, including 21,000,000 Shares of Common Stock
offered hereby and 180,688,519 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, the Selling Shareholders and
certain other shareholders, directors and officers of the Company 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,
the Selling Shareholders or such other shareholders, 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.

64
<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 as lead agents for the lenders. The
AC-1 Credit Facility is secured by pledges of the stock of ACL and its
subsidiaries (and other entities holding landing licenses

65
<PAGE>

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 March 31,
1998, a total of $305.5 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.

66
<PAGE>

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

67
<PAGE>

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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<PAGE>

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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<PAGE>

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. ............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................
CIBC Oppenheimer Corp. .......................................
Deutsche Bank Securities Inc. ................................
Goldman, Sachs & Co. .........................................
Morgan Stanley & Co. Incorporated.............................
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 $ per Share. The U.S. Underwriters may allow, and such dealers
may re-allow, a concession not in excess of $ 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 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.

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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. "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 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.

Subject to certain exceptions, the Company, its parent, the Selling
Shareholders and certain other directors and officers of the Company 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, the Selling Shareholders, respectively 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.

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<PAGE>

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.

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.

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.
Affiliates of CIBC Oppenheimer have engaged in certain related-party
transactions with the Company, including as a lender under the AC-1 Credit
Facility. 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."

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

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<PAGE>

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.

EXPERTS

The financial statements of the Company for the period from March 19, 1997
(date of inception) to December 31, 1997, included in this Prospectus have
been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto included herein.

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.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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

CONSOLIDATED BALANCE SHEETS

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

<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Current assets:
Cash....................................... $ 2,737,743 $ 1,452,684
Interest receivable........................ 85,000 123,000
Value added tax recoverable................ 8,470,341 --
Other assets and prepaid costs............. 4,209,636 892,958
Restricted cash and cash equivalents....... 39,180,447 25,275,196
------------ ------------
54,683,167 27,743,838
Construction in progress..................... 620,963,878 518,518,509
Deferred finance and organization costs, net
of accumulated amortization of $3,453,283
($2,246,857 as of December 31, 1997)........ 24,974,952 25,934,021
------------ ------------
$700,621,997 $572,196,368
============ ============
LIABILITIES:
Current liabilities:
Accrued construction costs................. $ 23,732,932 $ 52,003,875
Accounts payable and accrued liabilities... 4,041,649 1,658,399
Accrued dividends on preference shares..... 1,326,201 1,281,354
Accrued interest on Senior Notes........... 6,002,000 1,640,500
Unearned revenue........................... 14,550,000 5,325,000
Short term borrowings...................... 11,929,750 --
Current portion of obligations under
capital leases............................ 7,616,631 12,297,645
Current portion of obligations under inland
services agreements....................... 12,512,937 17,891,000
------------ ------------
81,712,100 92,097,773
Long term debt............................... 305,508,000 162,325,000
Senior Notes................................. 150,000,000 150,000,000
Obligations under capital leases............. 7,642,845 --
Obligations under inland services
agreements.................................. 745,000 3,009,000
------------ ------------
Total liabilities.......................... 545,607,945 407,431,773
------------ ------------
COMMITMENTS
MANDATORILY REDEEMABLE PREFERENCE SHARES,
113,674 shares (109,830 as of December 31,
1997), $1,000 liquidation preference per
share (net of unamortized discount on
issuance of $11,893,118 ($12,223,993 as of
December 31, 1997) and net of unamortized
issued costs of $6,773,960 ($6,962,407 as of
December 31, 1997)).......................... 95,007,302 90,643,919
------------ ------------
SHAREHOLDERS' EQUITY:
Class A common stock, 20,735,300 shares
issued (20,735,300 as of December 31,
1997)....................................... 20 20
Class B common stock, 34,050,000 shares
issued (33,750,000 as of December 31,
1997)....................................... 34 34
Class C common stock, 33,750,000 shares
issued (33,750,000 as of December 31, 1997)
shares issued............................... 34 34
Class D common stock, 22,058,800 shares
issued, convertible to Class E shares
(22,058,800 as of December 31, 1997)........ 22 22
Class E common stock, 125,000 shares issued
(nil as of December 31, 1997)............... -- * --
Additional paid-in capital................... 87,395,845 86,970,845
Deficit accumulated during the development
stage....................................... (27,389,205) (12,850,279)
------------ ------------
60,006,750 74,120,676
------------ ------------
$700,621,997 $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
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(EXPRESSED IN U.S. DOLLARS)

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

F-4
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------------- PAID-IN ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT(1) CAPITAL DEFICIT EQUITY
----------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Issuance of Class A
common stock for cash
on March 25, 1997...... 7,500,000 $ 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......... 13,235,300 13 13,234,987 -- 13,235,000(2)
Issuance of Class B
common stock for cash
on March 25, 1997...... 33,750,000 34 31,249,966 -- 31,250,000
Issuance of Class C
common stock for cash
on March 25, 1997...... 33,750,000 34 33,749,966 -- 33,750,000
Issuance of Class D
common stock for cash
to certain Class B
shareholders on
March 25, 1997......... 22,058,800 22 2,499,978 -- 2,500,000
Costs incurred related
to the issuance of
common stock........... -- -- (1,264,045) -- (1,264,045)
Net loss applicable to
common shareholders for
the period............. -- -- -- (12,850,279) (12,850,279)
----------- ---- ----------- ------------ ------------
Balance, December 31,
1997................... 110,294,100 110 86,970,845 (12,850,279) 74,120,676
----------- ---- ----------- ------------ ------------
Issuance of Class B
common stock for cash
on January 21, 1998.... 300,000 -- * 300,000 -- 300,000
Issuance of Class E
common stock for cash
on January 21, 1998.... 125,000 -- * 125,000 -- 125,000
Net loss applicable to
common shareholders for
the three months ended
March 31, 1998......... -- -- -- (14,538,926) (14,538,926)
----------- ---- ----------- ------------ ------------
Balance, March 31, 1998. 110,719,100 $110 $87,395,845 $(27,389,205) $ 60,006,750
=========== ==== =========== ============ ============
</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
7,500,000 Class A shares.

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

F-5
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
THREE MONTHS MARCH 19, 1997 MARCH 19, 1997 MARCH 19, 1997
ENDED (DATE OF INCEPTION) (DATE OF INCEPTION) (DATE OF INCEPTION)
MARCH 31, TO MARCH 31, TO DECEMBER 31, TO MARCH 31,
1998 1997 1997 1998
------------ ------------------- ------------------- -------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss applicable
to common
shareholders......... $(14,538,926) $ (194,444) $ (12,850,279) $ (27,389,205)
Adjustments to
reconcile net loss
to net cash provided
by operating
activities:
Depreciation and
amortization....... 30,367 -- 39,214 69,581
Preference share
dividends.......... 4,408,230 194,444 12,689,923 17,098,153
Decrease (increase)
in interest
receivable......... 38,000 -- (123,000) (85,000)
Increase in other
assets and prepaid
costs.............. (3,323,902) -- (909,015) (4,232,917)
Increase in value
added tax
recoverable........ (8,470,341) -- -- (8,470,341)
Increase in unearned
revenue............ 9,225,000 -- 5,325,000 14,550,000
Increase in accounts
payable and accrued
liabilities........ 1,956,567 25,000 1,248,133 3,204,700
Increase in short
term borrowings.... 11,929,750 -- -- 11,929,750
------------ ------------- ------------- -------------
Net cash provided
by operating
activities....... 1,254,745 25,000 5,419,976 6,674,721
------------ ------------- ------------- -------------
CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES:
Finance and
organization costs
incurred............. (247,357) (16,661,358) (28,180,878) (28,428,235)
Preference share
issuance costs....... -- -- (7,529,651) (7,529,651)
Costs related to
issuance of common
stock................ -- -- (1,264,045) (1,264,045)
Proceeds from
issuance of common
stock and additional
paid-in capital...... 425,000 75,000,000 75,000,000 75,425,000
Proceeds from
issuance of
preference shares.... -- 100,000,000 100,000,000 100,000,000
Proceeds from long
term debt............ 143,183,000 -- 162,325,000 305,508,000
Proceeds from
issuance of Senior
Notes................ -- -- 150,000,000 150,000,000
Increase in
restricted cash and
cash equivalents..... (13,905,251) (124,887,205) (25,275,196) (39,180,447)
------------ ------------- ------------- -------------
Net cash provided
by financing
activities....... 129,455,392 33,451,437 425,075,230 554,530,622
------------ ------------- ------------- -------------
CASH FLOWS USED IN
INVESTING ACTIVITY:
Cash paid for
construction in
progress............. (129,425,078) (31,112,795) (429,042,522) (558,467,600)
------------ ------------- ------------- -------------
NET INCREASE IN CASH... 1,285,059 2,363,642 1,452,684 2,737,743
CASH, beginning of
period................ 1,452,684 -- -- --
------------ ------------- ------------- -------------
CASH, end of period.... $ 2,737,743 $ 2,363,642 $ 1,452,684 $ 2,737,743
============ ============= ============= =============
SUPPLEMENTAL
INFORMATION ON NON-
CASH INVESTING
ACTIVITIES:
Costs incurred for
construction in
progress............. $102,445,369 $ 31,112,795 $ 518,518,509 $ 620,963,878
Decrease (increase)
in accrued
construction costs... 28,270,943 -- (52,003,875) (23,732,932)
Increase in accrued
interest on Senior
Notes................ (4,361,500) -- (1,640,500) (6,002,000)
Increase in accrued
liabilities.......... (426,683) -- (410,267) (836,950)
Amortization of
deferred finance
costs................ (1,183,283) -- (2,223,700) (3,406,983)
Increase in
obligations under
capital leases....... (2,961,831) -- (12,297,645) (15,259,476)
Decrease (increase)
in obligations under
inland services
agreements........... 7,642,063 -- (20,900,000) (13,257,937)
------------ ------------- ------------- -------------
Cash paid for
construction in
progress........... $129,425,078 $ 31,112,795 $ 429,042,522 $ 558,467,600
============ ============= ============= =============
SUPPLEMENTAL
INFORMATION ON NON-
CASH FINANCING
ACTIVITY:
Class A common stock
distributed to
holders of
preference shares
reflected as a
discount............. $ -- $ 13,235,000 $ 13,235,000 $ 13,235,000
============ ============= ============= =============
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW
INFORMATION:
Interest paid and
capitalized.......... $ 4,445,632 $ -- $ 8,136,267 $ 12,581,899
============ ============= ============= =============
Interest paid (net of
capitalized
interest)............ $ 23,234 $ -- $ -- $ 23,234
============ ============= ============= =============
</TABLE>

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

F-6
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 1998 AND DECEMBER 31, 1997
(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1998, FOR THE PERIOD FROM
MARCH 19, 1997
(DATE OF INCEPTION) TO MARCH 31, 1997, AND CUMULATIVE FROM MARCH 19, 1997
(DATE OF INCEPTION) TO MARCH 31, 1998 IS UNAUDITED)
(EXPRESSED IN U.S. DOLLARS)

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.
During the three months ended March 31, 1998, GCL began to develop three
additional undersea fiber optic cable systems: Pacific Crossing, Mid-Atlantic
Crossing and Pan American Crossing. Subsequent to March 31, 1998, GCL
incorporated additional companies to own and operate these additional cable
systems (see Note 15).

To finance construction of ACL's undersea fiber optic cable ring, GCL issued
$75 million of common stock and Global Telesystems Holdings Limited ("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 Tyco
Submarine Systems Ltd. ("TSSL"), formerly AT&T Submarine Systems, Inc., 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 31, 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
becomes ready for service and the ownership of the segment assets transfers to
ACL and its subsidiaries. The only exception to this transfer of ownership is
in respect of certain of the segment assets located in U.S. territory to which
TSSL retains title until such time as GT Landing Corp., as a U.S. wholly owned
subsidiary of ACL, exercises its $10,000 bargain purchase option to purchase
title. Pursuant to the Contract, TSSL granted GT Landing Corp. an indefeasible
right of use ("IRU"), for the estimated life of the System of 25 years from
the System RFS date. GT Landing Corp. has accounted for the IRU as a capital
lease, since the IRU transfers the risks and rewards of ownership to GT
Landing Corp. The U.S. assets governed by his IRU include all landing stations
assets (with the exception of the building and land, to which GT Landing Corp.
has title), fiber optic cable located in the U.S. and the landing license.

F-7
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

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.

Customers who purchase AC-1 capacity prior to the System RFS date are
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 residual 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 IRU 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 as these IRUs represent leases as
defined under 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 and
renewing all operating permits, providing repair equipment, providing cable
protection and ordering and restocking spares. The OA&M Agreement is for an
initial term of eight years with two renewal periods of eight and one half
years each. Quarterly payments under the OA&M Agreement to TSSL will commence
as ACL accepts ownership to the various segments.

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 operation 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 maximum
amounts per circuit purchased of $250,000 per transatlantic circuit and
$50,000 per European circuit.

F-8
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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, 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.

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 and
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:

a) Principles of Consolidation

The consolidated financial statements include the accounts of Global
Crossing Ltd., LDC and its wholly owned subsidiaries. All significant
intercompany transactions have been eliminated. Investments in entities in
which Global Crossing Ltd., LDC exercises significant influence, but does not
control, are accounted for using the equity method.

b) Development Stage Company

The Company is in its development stage, having completed various studies
and vendor selection for AC-1. Currently, landing stations are under
construction, submersible plant and cable is being manufactured and cable-
laying operations are underway. The Company will begin recognizing revenues
from signed CPAs upon the ready for service date of May 31, 1998 for the
United States to the United Kingdom segment and all aspects of the System will
be ready for commercial service by February 22, 1999. In addition, the Company
is in the initial stages of developing three other undersea fiber optic cable
systems.

F-9
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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. ACL
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 costs set out in the Contract and that capacity
sales will meet expectations, or that substantial delays would not adversely
affect ACL'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 Recognition and Unearned Revenue

As of March 31, 1998, the Company had entered into signed CPAs totaling
approximately $280 million (approximately $141 million as of December 31,
1997).

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 Statement of Financial Accounting Standards No. 13:
Accounting for Leases (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 by 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 are reflected as unearned 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.

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.

F-10
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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
relative value of each sale 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 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. In addition to the 256 circuits available for sale, there
are 256 circuits reserved for restoration. The rationale under the business
plan for the investment in AC-1 indicated a minimum capacity sales level of at
least 512 circuits and therefore the business plan assumes the purchase of at
least one upgrade to increase capacity available for sale to the 512 circuits.
In the period the Company first recognizes revenue on the System, the estimate
of total expected System capacity revenues over the life of the System, for
purposes of the cost of sales calculation, will be based on the minimum
capacity sales level required under the business plan which, as noted above,
is 512 circuits available for sale. The Company has included the cost from the
upgrade in the cost of sale calculation since (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 of the 512 circuits available for sale.

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 management's
estimates. Management will continually evaluate these factors in conjunction
with the updated third party consultant's sales forecast and, as necessary,
revise its estimate of the total expected revenues of AC-1 capacity to be
derived over the life of the System. Changes in management's estimate of the
total expected revenues to be derived from sales of AC-1 capacity will result
in adjustments to the calculations of cost of sales. These adjustments will be
recorded on a prospective basis over future periods commencing with the period
management revises its estimate.

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.

F-11
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

OA&M revenues are recognized evenly over the fiscal quarter to which they
relate. On an annual basis the actual OA&M costs incurred by the Company will
be accumulated and an adjustment will be made to true up actual OA&M revenues
so that they equal 110% of actual costs incurred, provided specified 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 Pacific Capital Group, Inc. ("PCG") and
its affiliates 2% of capacity of sales for advisory services performed and
under the Sales Agency Agreement pays TSSL a commission based on a percentage
of capacity sales. See Note 12 and Note 15 for further discussion of the ASA.

f) 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 constructed, costs directly identifiable
with the cable system under development are capitalized. Costs relating to the
evaluation of new projects incurred prior to the date development of the cable
system becomes probable are expensed as incurred. During the three months
ended March 31, 1998, the Company expensed approximately $7 million paid to a
subsidiary of PCG for such project evaluation costs relating to certain new
projects that are described in Note 15.

Additionally, the cost of acquiring Backhaul Capacity under Inland Services
Agreements has been capitalized in construction in progress. 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 maintenance charges) in construction in progress and has
recorded an equal amount as an obligation under Inland Services Agreements in
the accompanying consolidated balance sheets (see Note 5). The maintenance
charges will be expensed in the period incurred. 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 U.S. and minimum lease
payments related to leases of buildings in Germany and Netherlands described
further in Note 5.

Total interest cost incurred for the three months ended March 31, 1998 was
$8,830,366 of which $8,807,133 was capitalized to construction in progress and
total interest cost incurred for the period March 19, 1997 (date of inception)
to December 31, 1997 was $9,776,767 of which $9,776,767 was capitalized to
construction in progress.

g) 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

F-12
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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 are amortized on a straight line basis through the mandatory redemption
date of April 1, 2007. The preference shares were issued at a discount, as
explained in Note 7, which is also being amortized through the mandatory
redemption date. 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. 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.

h) Translation of Foreign Currencies

Transactions in foreign currencies are translated into U.S. 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 translated
into U.S. dollars at the rate of exchange at that date. Resulting gains or
losses on exchange are recorded as other income or loss in the statement of
operations.

i) 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",
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.
Certain options granted by the company require the company to repurchase stock
from employees at specified option prices. These options are accounted for
using variable plan accounting because the final measurement date of each
option is not known until the stock is repurchased or the option expires. For
these options, the amount of compensation expense to be recorded over the
vesting period will be adjusted as the value of the options change.
Disclosures will be made in the consolidated financial statements of future
periods in accordance with Statement of Financial Accounting Standard No. 123,
"Accounting for Stock-Based Compensation" (See Note 9).

j) 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

F-13
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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.

k) Interim Financial Information

The unaudited financial statements as of March 31, 1998, and for the three
months ended March 31, 1998 and for the period from March 19, 1997 (date of
inception) to March 31, 1997 include, in the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for the fair presentation of such financial statements.

l) 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 stock outstanding and
common stock equivalents including shares issuable under options and warrants
that are dilutive using the treasury stock method.

The following table sets forth the computation of basic and diluted net loss
per share:

<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FOR THE THREE MARCH 19, MARCH 19, MARCH 19,
MONTHS ENDED 1997 (DATE OF 1997 (DATE OF 1997 (DATE OF
MARCH 31, INCEPTION) TO INCEPTION) TO INCEPTION) TO
1998 MARCH 31, 1997 DECEMBER 31, 1997 MARCH 31, 1998
------------- -------------- ----------------- --------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Numerator:
Net loss applicable to
common shareholders.... $ (14,538,926) $ (194,444) $ (12,850,279) $(27,389,205)
Denominator:
Denominator for basic
and diluted net loss
per share:............. 110,615,211 110,294,100 110,294,100 110,370,758
------------- ------------ ------------- ------------
Basic and diluted net
loss per share
applicable to common
shareholders........... $ (0.13) $ --* $ (0.12) $ (0.25)
</TABLE>

Subsequent to March 31, 1998, the Company issued additional options which
have not been included in the above net loss per share calculations. See Note
15 for further discussions of stock options.
- --------
* Amount less than $(0.01)

m) Pending and New Accounting Standards

The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standard No. 130, "Reporting Comprehensive Income" ("SFAS
130") and Statement of Financial Accounting Standard

F-14
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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 quarter 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 American Institute of Certified Public Accountants (AICPA) 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 this SOP on the
Company's financial position or results of operations to be material.

n) Reclassifications

Certain reclassifications have been made to the December 31, 1997
consolidated balance sheet to conform with the presentation as of March 31,
1998.

3. RESTRICTED CASH AND CASH EQUIVALENTS

Restricted cash and cash equivalents comprises approximately $20 million as
of March 31, 1998 and December 31, 1997 reserved for purposes of funding
future interest payable on Senior Notes, approximately $15 million as of March
31, 1998 ($5 million as of December 31, 1997) in funds received from CPAs
signed to date that may be used only in accordance with the terms of the long
term debt agreement and approximately $4 million as of March 31, 1998 (nil as
of December 31, 1997) restricted for purchases of Backhaul Capacity.

4. SHORT TERM BORROWINGS

Effective March 24, 1998, GCL obtained a $200 million secured revolving
credit promissory note ("Bridge Facility") from CIBC and other lenders to fund
development of the new undersea fiber optic cable systems discussed further in
Note 15 and advances on the ASA. All amounts borrowed under the Bridge
Facility are due and payable on June 24, 1998 and bear interest at a floating
rate of LIBOR plus 2.5%. As of March 31, 1998, the Company had borrowings of
approximately $12 million under the Bridge Facility. The Bridge Facility is
secured by pledges of the common stock of all existing and future direct
subsidiaries of GCL. (See Note 15).

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
limited 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 March 31, 1998, ACL had borrowed $305,508,000
($162,325,000 as of December 31, 1997) under the Credit Facility.

F-15
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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 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.

As of March 31, 1998, all borrowings under the Credit Facility are
Eurodollar Loans with $7,800,000 ($500,000 as of December 31, 1997) drawn down
under the Working Capital Facility and $297,708,000 ($161,825,000 as of
December 31, 1997) drawn down under the Term Facility. ACL has incurred
interest costs, including amortization of deferred financing costs, of
$5,554,697 for the three months ended March 31, 1998 ($4,246,616 for the
period from inception through December 31, 1997). These costs have been
capitalized and included in construction in progress in the accompanying
consolidated balance sheets. Effective December 31, 1997, ACL entered into an
interest rate swap transaction based on one month LIBOR to minimize its
exposure to increases in interest rates on its borrowings. The swap
transaction was amended on February 2, 1998 and currently fixes ACL's floating
interest rate at 5.7825% on a notional amount of borrowings ranging between
$200 million and $310 million until January 31, 1999.

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 U.S.
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 March 31, 1998 the
present value of the payments under the IRU have been

F-16
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

recorded as an obligation under capital leases in the amount of $7,143,068,
($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 March 31, 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.

As described in Note 1, ACL has purchased Backhaul Capacity. Certain
contracts to purchase Backhaul Capacity require payments over a 25 year period
which represents more than 75 percent of the economic life of the asset being
purchased. As of March 31, 1998, the present value of these payments has been
recorded as obligations under Inland Services Agreements in the accompanying
consolidated balance sheets in the amount of $13,257,937, ($20,900,000 as of
December 31, 1997).

As at March 31, 1998 future minimum payments, in the aggregate for the nine
months ended 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 nine months ended December 31, 1998.................... $ 16,776,053
1999........................................................... $ 5,595,000
2000........................................................... $ 2,632,000
2001........................................................... $ 2,647,000
2002........................................................... $ 2,671,000
Thereafter until 2024.......................................... $ 76,683,000
------------
Total minimum lease payments................................... $107,004,053
Less: Amount representing interest............................. $ 28,730,640
Less: Amount representing maintenance payments................. $ 49,756,000
------------
Present value of net minimum lease payments.................... $ 28,517,413
============
</TABLE>

6. SENIOR NOTES

The 12% senior notes due March 31, 2004 with a face value of $150 million
("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 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 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. GTH has incurred
interest costs, including amortization of deferred financing costs, of
$4,930,282 for the three months ended March 31, 1998 ($9,013,534 for the
period ended December 31, 1997), which has been capitalized and included in
construction in progress in the accompanying consolidated balance sheets.

F-17
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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 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 Senior Notes at face value, plus accrued
interest to the date of repurchase. The 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).

The Senior Notes agreement imposes certain limitations on the ability of GTH
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.

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 March 31, 1998, 113,674 shares
(109,830 shares as of December 31, 1997) were issued and outstanding.

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

F-18
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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 (see Note 15).

During the three months ended March 31, 1998, dividends approximating $3.9
million ($9.8 million for the period from inception through December 31, 1997)
were paid by issuing additional preference shares and a further $1.3 million
($1.3 million as of December 31, 1997) in dividends were accrued as of March
31, 1998.

Preference share dividends included the following:

<TABLE>
<CAPTION>
THREE FOR THE PERIOD FOR THE PERIOD
MONTHS MARCH 19, 1997 MARCH 19, 1997
ENDED MARCH (DATE OF INCEPTION) (DATE OF INCEPTION)
31, TO DECEMBER 31, TO MARCH 31,
1998 1997 1998
----------- ------------------- -------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Preference share
dividends.............. $3,888,908 $11,111,672 $15,000,580
Amortization of discount
on preference shares... 330,875 1,011,007 1,341,882
Amortization of
preference share
issuance costs......... 188,447 567,244 755,691
---------- ----------- -----------
$4,408,230 $12,689,923 $17,098,153
========== =========== ===========
</TABLE>

In connection with the issuance of the preference shares, the holders of
preference shares purchased an aggregate of 7,500,000 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 13,235,300 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 13,235,300 shares of GCL's Class A common stock
distributed to preference shareholders was based on the $1 per share paid by
the holders of preference shares for the 7,500,000 GCL's Class A shares
purchased for cash.

8. COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL

<TABLE>
<S> <C> <C>
Common Stock:
Authorized:
1,000,000,000 Class A common stock of $.000001 par value
1,000,000,000 Class B common stock of $.000001 par value
1,000,000,000 Class C common stock of $.000001 par value
3,000,000,000 Class D common stock of $.000001 par value
</TABLE>

F-19
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
1,000,000,000 Class E common stock of
$.000001 par value
43,000,000,000 undesignated common stock of
$.000001 par value
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
Issued and Outstanding as of March 31, 1998:
20,735,300 Class A shares (20,735,300 as of
December 31, 1997)........................ $20 $20
34,050,000 Class B shares (33,750,000 as of
December 31, 1997)........................ 34 34
33,750,000 Class C shares (33,750,000 as of
December 31, 1997)........................ 34 34
22,058,800 Class D shares (22,058,800 as of
December 31, 1997)........................ 22 22
125,000 Class E shares (nil as of December
31, 1997)................................. -- * --
</TABLE>
- --------
* Amount less than $1.

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. Class A shares, Class B shares and Class C shares all
have voting rights. On March 25, 1997, GCL issued 7,500,000 Class A shares,
33,750,000 Class B shares, 33,750,000 Class C shares for $1 per share,
resulting in aggregate proceeds of $75 million. As discussed in Note 7, in
addition to the 7,500,000 Class A shares issued to the preference shareholders
for cash, in connection with the issuance of the preference shares, a total of
13,235,300 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 22,058,800 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 $2.20 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.

F-20
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

During the three months ended March 31, 1998, the Company issued, at a price
of $1 per share, 300,000 Class B shares and 125,000 Class E shares to
employees of GCL resulting in an increase in shareholders' equity of $425,000.

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 March 31, 1998, the maximum number of shares of common
stock which may be issued under the Plan was 8,303,933 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 three months ended March 31, 1998:

<TABLE>
<CAPTION>
NUMBER
WEIGHTED EXERCISABLE WEIGHTED
NUMBER OF AVERAGE AS AT AVERAGE
OPTIONS EXERCISE MARCH 31, REMAINING
OUTSTANDING PRICE 1998 LIFE
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Options outstanding as of December
31, 1997........................... -- -- -- --
Options granted on January 21, 1998. 2,821,000 $2.50 -- 10 years
Forfeited........................... (1,000,000) $2.50 -- 10 years
Options outstanding as of March 31,
1998............................... 1,821,000 $2.50 -- 10 years
</TABLE>

During the three month period ended March 31, 1998, no options had expired
or were exercised.

As permitted by SFAS 123, the Company has chosen to account for stock
options under APB 25 and accordingly no compensation expense has been
recognized as of March 31, 1998 since the estimated fair value of the stock on
the date the options were granted (January 21, 1998) did not exceed the
exercise price. 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 MONTHS
ENDED MARCH
31, 1998
------------
(UNAUDITED)
<S> <C>
Net loss applicable to common shareholders:
As reported.................................................... $(14,538,926)
Pro forma...................................................... (14,670,874)
Basic and diluted net loss per share:
As reported.................................................... $ (0.13)
Pro forma...................................................... (0.13)
</TABLE>

F-21
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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 weighted 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, 1998 was $0.49 per share.

10. FORMATION OF GLOBAL CROSSING HOLDINGS LTD.

On March 18, 1998, GCL formed a wholly-owned subsidiary, Global Crossing
Ltd. (New GCL), a Bermuda company, and contributed its investment in GTH to
New GCL. New GCL is currently in the process of forming a wholly-owned
subsidiary, to be named Global Crossing Holdings Ltd. (GCH), a Bermuda
company. New GCL will contribute, among other things, its investment in GTH to
GCH upon its formation. It is the Company's intent to declare a dividend of
1.5 shares of common stock of New GCL for each share of common stock of GCL,
and then liquidate GCL concurrently with the initial public offering of New
GCL.

Because GCL and New GCL are entities under common control, the transfer by
GCL to New GCL of its investment in GTH was accounted for similar to a pooling
of interests. The anticipated transfer of New GCL's investment in GTH to GCH
will also be accounted for similar to a 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 will each provide a guarantee of the senior unsecured
notes to be issued by GCH as discussed under the Refinancing heading of Note
15. 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 will also provide guarantees of the
senior unsecured notes to be issued by GCH. All guarantees will be 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-22
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

AS OF MARCH 31, 1998 AND DECEMBER 31, 1997
(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1998, FOR THE PERIOD FROM
MARCH 19, 1997
(DATE OF INCEPTION) TO MARCH 31, 1997, AND CUMULATIVE FROM MARCH 19, 1997 (DATE
OF INCEPTION) TO MARCH 31, 1998 IS UNAUDITED)
(EXPRESSED IN U.S. DOLLARS)

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

<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR ELIMINATION GCL
GCL GCH SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
AS OF MARCH 31, 1998 -------- -------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Current assets.......... $ 340 $ 2,182 $ 22,919 $ 29,581 $ (339) $ 54,683
Construction in pro-
gress.................. -- -- 13,944 607,020 -- 620,964
Investment in subsidi-
ary.................... 59,541 69,164 275,878 -- (404,583) --
Deferred finance costs,
net.................... 228 148 10,189 14,389 21 24,975
Current liabilities..... 102 11,953 8,759 61,216 (318) 81,712
Long term debt.......... -- -- -- 305,508 -- 305,508
Senior Notes............ -- -- 150,000 -- -- 150,000
Obligations under capi-
tal leases............. -- -- -- 7,643 -- 7,643
Obligations under Inland
Service Agreements..... -- -- -- 745 -- 745
Mandatorily redeemable
preference shares...... -- -- 95,007 -- -- 95,007
Shareholders' equity.... $ 60,007 $ 59,541 $ 69,164 $275,878 $(404,583) $ 60,007
- -------------------------------------------------------------------------------------------------

FOR THE THREE MONTHS
ENDED
MARCH 31, 1998
Interest income......... $ -- $ -- $ 230 $ 116 $ -- $ 346
Operating expenses...... 128 23 9,190 1,136 -- 10,477
-------- -------- -------- -------- --------- --------
Net loss................ (128) (23) (8,960) (1,020) -- (10,131)
Equity in loss from sub-
sidiary................ (14,411) (14,388) (1,020) -- 29,819 --
Preference share divi-
dends.................. -- -- (4,408) -- -- (4,408)
-------- -------- -------- -------- --------- --------
Net loss applicable to
common shareholders.... $(14,539) $(14,411) $(14,388) $ (1,020) $ 29,819 $(14,539)
======== ======== ======== ======== ========= ========
- -------------------------------------------------------------------------------------------------

AS OF DECEMBER 31, 1997
Current assets.......... $ 33 $ 12 $ 21,307 $ 6,597 $ (205) $ 27,744
Construction in
progress............... -- -- 9,014 509,505 -- 518,519
Investment in
subsidiary............. 73,952 73,940 276,897 -- (424,789) --
Deferred finance costs,
net.................... 208 -- 10,619 15,107 -- 25,934
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.... $ 74,121 $ 73,952 $ 73,940 $276,897 $(424,789) $ 74,121
</TABLE>

F-23
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

AS OF MARCH 31, 1998 AND DECEMBER 31, 1997
(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1998, FOR THE PERIOD FROM
MARCH 19, 1997
(DATE OF INCEPTION) TO MARCH 31, 1997, AND CUMULATIVE FROM MARCH 19, 1997 (DATE
OF INCEPTION) TO MARCH 31, 1998 IS UNAUDITED)
(EXPRESSED IN U.S. DOLLARS)

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

<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR ELIMINATION GCL
GCL GCH SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-------- -------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
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) (474) -- 26,090
Preference share
dividends.............. -- -- (12,690) -- -- (12,690)
-------- -------- -------- ------- ------- --------
Net loss applicable to
common shareholders.... $(12,850) $(12,808) $(12,808) $ (474) $26,090 $(12,850)
======== ======== ======== ======= ======= ========
FOR THE PERIOD FROM
MARCH 19, 1997 TO MARCH
31, 1998
Interest income......... $ -- $ -- $ 786 $ 2,501 $ -- $ 3,287
Operating expenses...... 170 23 9,390 3,995 -- 13,578
-------- -------- -------- ------- ------- --------
Net income.............. (170) (23) (8,604) (1,494) -- (10,291)
Equity in loss of
subsidiary............. (27,219) (27,196) (1,494) -- 55,909 --
Preference share
dividends.............. -- -- (17,098) -- -- (17,098)
-------- -------- -------- ------- ------- --------
Net loss applicable to
common shareholders.... $(27,389) $(27,219) $(27,196) $(1,494) $55,909 $(27,389)
======== ======== ======== ======= ======= ========
</TABLE>

11. FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
---------------------------- ----------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Restricted cash and cash
equivalents............ $ 39,180,447 $ 39,180,447 $ 25,275,196 $ 25,275,196
Short term borrowings... (11,929,750) (11,929,750) -- --
Long term debt,
obligations under
Inland Services
Agreements
and capital leases..... (334,025,413) (334,025,413) (195,522,645) (195,522,645)
Preference shares....... (95,007,302) (95,007,302) (90,643,919) (90,643,919)
Senior Notes............ (150,000,000) (150,000,000) (150,000,000) (150,000,000)
Interest rate swap
transaction............ -- (321,070) -- (115,115)
</TABLE>

Restricted cash and cash
equivalents................... The carrying amount of restricted cash and
cash equivalents is a reasonable estimate of
fair value as the balances include amounts
held in banks and money market deposits with
a short-term maturity.

F-24
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Short term borrowings.......... The carrying value of short term borrowings
approximates fair value as the borrowings are
repayable within three months.

Long term debt, obligations
under Inland Services
Agreements and capital
leases........................ The Credit Facility is a special financing
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 System, 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.

Interest rate swap
transaction................... The interest rate swap transaction is "zero
cost" meaning that the cost of acquiring the
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

ACL has entered into the ASA with PCG Telecom, an affiliate of 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 cash received from gross revenues, 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. Approximately $2 million had
been advanced to PCG Telecom as of March 31, 1998 and is reflected in other
assets and prepaid costs in the accompanying consolidated balance sheets. A
minimal portion of the fees under the ASA are paid to PCG Telecom and then
further allocated by PCG Telecom to MRCO, Inc. and PCG both of which are
shareholders of GCL (see Note 15).

Effective January 21, 1998, GCL entered into a warrant agreement ("PCG
Warrants") under which PCG was issued three separate warrants permitting PCG
to purchase (i) 6,151,061 of GCL's Class B shares for an aggregate price of
$50,000,000; (ii) an additional 3,075,531 of the GCL's Class B shares for an
aggregate price of $31,250,000; and (iii) an additional 3,075,531 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.

F-25
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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
initial public offering 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, (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 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. See further discussion of warrants in Note 15.

$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 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. As of March 31, 1998 CIBC held 17,218 outstanding
preference shares (25,636 as of December 31, 1997), and $9 million in Senior
Notes. CIBC is also a member of the syndicate funding the Credit Facility
under which GCL has borrowings of $305,508,000 ($162,325,000 as of December
31, 1997), as of March 31, 1998 and has been paid interest and other related
fees in the amount of approximately $9.8 million ($4.2 million as of December
31, 1997).

13. TAXES

Since the Company has not recognized any income to date, no tax provision
has been reflected in the consolidated financial statements and
correspondingly no deferred tax liability has been recorded in accordance with
SFAS 109. The Company has incurred operating losses which relate almost
entirely to non-taxable jurisdictions and therefore operating losses incurred
to date cannot be applied against future taxable earnings of the Company and
therefore, have not been recorded as deferred tax assets in accordance with
SFAS 109.

F-26
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

14. COMMITMENTS

As of March 31, 1998, ACL was committed under its contract with TSSL for
future construction costs totaling approximately $105 million ($195 million as
of December 31, 1997) and is committed under the OA&M contract with TSSL to
quarterly payments totaling approximately $260 million ($263 million as of
December 31, 1997) over the next eight years. The Company is committed to
paying TSSL commissions ranging from 4% to 7% on revenues received.

GCL and its subsidiaries have commitments under various operating leases
primarily relating to its office facility in Bermuda. Rent expense for
operating leases was $41,309 since inception and $26,556 for the three months
ended March 31, 1998. Estimated future minimum lease payments on all operating
leases are approximately as follows:

<TABLE>
<S> <C>
For the nine months ended December 31, 1998.................. $ 815,000
1999......................................................... 893,000
2000......................................................... 903,000
2001......................................................... 911,000
2002......................................................... 590,000
Thereafter................................................... 3,811,000
</TABLE>

15. SUBSEQUENT EVENTS

New projects

Effective April 21, 1998, GCL, through its wholly-owned subsidiary, GCT
Pacific Holdings Ltd., which was incorporated on April 1, 1998, entered into a
contract with TSSL to construct a cable system project, PC-1,
for a contract price of approximately $1.2 billion which will be financed
through a $400 million equity contribution by the joint venture partners and
the remainder through the credit facility discussed below. PC-1 is an undersea
fiber optic cable system connecting California, Washington and two landing
sites in Japan. PC-1 is owned and operated by Pacific Crossing Ltd. ("PCL"), a
joint venture company. The Company has an economic interest in PCL represented
by a 50% direct voting interest in PCL and through one of the joint venture
partners anticipates owning a further 8% economic interest in PCL but does not
have voting control. The Company's funding commitment in respect of the $400
million, which is proportional to the planned total 58% economic interest,
will aggregate approximately $232 million. The Company will account for its
investment in PCL on an equity basis. To finance construction of PC-1, PCL has
signed a commitment to obtain an $850 million senior secured, limited
recourse, credit facility from CIBC and other lenders. PCL has borrowed
approximately $104 million from CIBC and other lenders under a promissory note
to be used to make the initial payments on the PC-1 construction contract.
Upon the funding of the $850 million credit facility a portion of the facility
will be used to repay the $104 million promissory note.

Effective June 2, 1998, GCL, through its wholly-owned subsidiary Mid-
Atlantic Crossing Ltd., 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. On June 26, 1998, Mid-Atlantic
Crossing Ltd. signed a commitment to obtain $240 million of non-recourse
indebtedness from CIBC and other lenders.

F-27
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Effective July 21, 1998, the Company through its wholly-owned subsidiary Pan
American Crossing Ltd., entered into a $475 million contract with TSSL for the
construction of PAC, an undersea fiber optic cable system connecting
California, Mexico and Panama. On the same day, Pan American Crossing Ltd.
signed a commitment to obtain $310 million of non-recourse indebtedness with
the remaining $165 million to be financed through equity contributions.

Backhaul Capacity Purchases

During April 1998, the Company signed several Inland Services Agreements to
Purchase Backhaul Capacity. In accordance with Note 2(f), the Company will
capitalize the approximately $26 million present value of future payments
under these agreements as part of construction in progress in the accompanying
consolidated balance sheets.

Stock options

On April 3, 1998 and June 12, 1998, the Board of Directors approved the
issuance of 3,665,000 options and 2,235,000 options, respectively, under the
Plan. The April 3, 1998 shares have exercise prices of $2.50 per share and the
June 12, 1998 shares have exercise prices of $10 per share generally with a
three year vesting period and a ten year expiration. During the quarter ended
June 1998, the Company will recognize approximately $8.7 million of
compensation expense for the options issued in April and June since the
exercise price is less than the estimated fair value of the stock used for
financial statement purposes on the date of grant. The estimated fair value of
the options granted in April is $5 per share and the estimated fair value of
the options granted in June is $20 per share. Certain employees have the
right, after three years of employment, to require the Company to purchase up
to 300,000 shares of common stock held by them for $20.00 per share, if the
Company has not completed an initial public offering of its stock by that time
and one employee has the option to sell 100,000 shares of stock to the Company
at $20.00 per share.

Refinancing

On May 18, 1998, GCH issued $800 million of senior unsecured notes for the
purpose of repurchasing the Senior Notes, redeeming the outstanding preference
shares, repaying amounts drawn under the Bridge Facility, and financing the
new projects. The Company recognized an extraordinary loss of $19.7 million on
refinancing on May 18, 1998 comprising a premium of approximately $9.8 million
payable to repurchase the Senior Notes and a write-off of approximately $9.9
of unamortized deferred financing costs. The redemption of the preference
shares occurred on June 17, 1998 and resulted in a charge against additional
paid-in capital comprising approximately a $15.9 million redemption premium
and $18.3 million of unamortized discount and issuance cost on the preference
shares on the date of the redemption. The redemption premium and write off of
unamortized discount and issuance costs on the preference shares will be
treated as a deduction to arrive at net loss applicable to common shareholders
in the consolidated statement of operations. Furthermore, upon the redemption
of the preference shares, the warrants attached to the preference shares as
described in Note 7 have expired. Pursuant to the senior unsecured notes
agreement GCL, New GCL and several of GCH's wholly-owned subsidiaries provided
guarantees of these notes as described in Note 10, and additionally, these
same guarantors along with ACL and its subsidiaries are restricted in respect
of, among other things, the ability to pay dividends.

F-28
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

PCG Warrants

Subsequent to March 31, 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 initial public offering ("IPO") and thereby
eliminating the other two conditions described in Note 12.

Further to the amendment to the conditions precedent to exercise, 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 number
of 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. As of June 30, 1998, the Company will record
an increase in its investment in PCL and an increase in construction in
progress for PAC and MAC with a corresponding increase in additional paid in
capital an amount representing the estimated value of the PCG Warrants based
on the per share valuation at the conversion date, discounted for non-
marketability of a non-registered share, multiplied by the number of warrants
to be converted to Class B shares. The Company's accounting for the PCG
Warrants is pursuant to EITF 96-18, "Accounting for Equity Instruments with
Variable Terms that are Issued for Consideration other than Employee Services
under FASB Statement No. 123." 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 IPO was probable at that date. The estimated value of the warrants will be
adjusted to the actual value on the measurement date (i.e. the IPO). The New
PCG Warrants will be valued and recorded upon the completion of the IPO.

Transaction with Worldport

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.

Advisory Service Agreement

Effective June 30, 1998, the Company has agreed to acquire the rights of
those entitled to fees payable under the ASA 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. The cost of buying out the rights to the ASA fees,
estimated at approximately $97 million, which is discounted from $135 million
to take into account the non-marketability of the non-registered common stock
issued, will be recorded as an expense in the Company's financial statements
for the three month period ended June 30, 1998.

F-29
<PAGE>

GLOBAL CROSSING LTD., LDC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Telecommunications Development Corporation Exchange

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 will be accounted for as the acquisition of
treasury stock and will be recorded at the fair value of the consideration
given.

F-30
<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.............................................................. 12
Use of Proceeds........................................................... 22
Dividend Policy........................................................... 22
Dilution.................................................................. 22
Capitalization............................................................ 23
Selected Consolidated Financial Data...................................... 24
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 26
Business.................................................................. 32
Management................................................................ 46
Principal and Selling Shareholders........................................ 53
Certain Transactions...................................................... 55
Description of Capital Stock.............................................. 60
Shares Eligible for Future Sale........................................... 64
Description of Certain Indebtedness....................................... 65
Tax Considerations........................................................ 67
Underwriting.............................................................. 73
Legal Matters............................................................. 75
Experts................................................................... 76
Available Information..................................................... 76
Index to Consolidated Financial Statements................................ F-1
Glossary of Certain Defined Terms......................................... GL-1
</TABLE>

UNTIL , 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 , 1998

-------

SALOMON SMITH BARNEY

MERRILL LYNCH & CO.

CIBC OPPENHEIMER

DEUTSCHE BANK SECURITIES

GOLDMAN, SACHS & CO.

MORGAN STANLEY DEAN WITTER

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

SUBJECT TO COMPLETION, DATED JULY 27, 1998

PROSPECTUS
21,000,000 SHARES

LOGO

COMMON STOCK

--------

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

--------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 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.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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 $ $ $ $
- ---------------------------------------------------------------------
Total(3) $ $ $ $
</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 $2,400,000 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 $ , $ and $ , 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
, 1998.

--------
Joint Book-Running Managers

SALOMON SMITH BARNEY INTERNATIONAL MERRILL LYNCH INTERNATIONAL

--------
CIBC OPPENHEIMER
DEUTSCHE BANK
GOLDMAN SACHS INTERNATIONAL
MORGAN STANLEY DEAN WITTER

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

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement
among the Company, the Selling Shareholders and the International Underwriters
(the "International Underwriting Agreement"), the Company and the Selling
Shareholders have agreed to sell to each of the International Underwriters
named below (the "International Underwriters"), and each of the International
Underwriters, 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"), has severally agreed to
purchase the number of Shares set forth opposite its name below:

<TABLE>
<CAPTION>
UNDERWRITING
INTERNATIONAL UNDERWRITERS COMMITMENT
-------------------------- ------------
<S> <C>
Smith Barney Inc.................................................
Merrill Lynch International......................................
CIBC Oppenheimer Corp. ..........................................
Deutsche Bank AG (London Branch).................................
Goldman Sachs International......................................
Morgan Stanley & Co. International Limited.......................
---------
Total.......................................................... 4,200,000
=========
</TABLE>

The Company and the Selling Shareholders have been advised by the
International Representatives that the several International 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 $ per Share. The International
Underwriters may allow, and such dealers may re-allow, a concession not in
excess of $. per Share to other dealers. After the Offerings, the Price to
Public and such concessions may be changed.

The Company and the Selling Shareholders have granted to the International
Underwriters and the U.S. underwriters (the "U.S. Underwriters" and,
collectively with the International 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 International Underwriters and the U.S.
Underwriters exercise such options, each of the International Underwriters and
the U.S. Underwriters, as the case may be, will be committed, subject to
certain conditions, to purchase a number of option shares proportionate to
such International Underwriter's or U.S. Underwriter's initial commitment.

The Company has entered into a U.S. Underwriting Agreement with the U.S.
Underwriters named therein, 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" and, together with the
International Representatives, the "Representatives") providing for the
concurrent offer and sale of 16,800,000 Shares (in addition to the shares
covered by the over-allotment options described above) in the United States
and Canada. Both the International Underwriting Agreement and the U.S.
Underwriting Agreement provide that the obligations of the International
Underwriters and the U.S. Underwriters are such that if any of the Shares are
purchased by the International Underwriters pursuant to the International
Underwriting Agreement, or by the U.S. Underwriters pursuant to the U.S.
Underwriting Agreement, all the Shares agreed to be purchased by either the
International Underwriters or the U.S. 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 International Offering and
the U.S. Offering will be identical. The closing of the U.S. Offering is a
condition to the closing of the International Offering and the closing of the
International Offering is a condition to the closing of the U.S. Offering.

73
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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 this
Prospectus 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.
Each U.S. Underwriter has severally agreed that, as part of the distribution
of the 16,800,000 Shares 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 any Prospectus relating to the U.S.
Offering 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.

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 International Underwriters and the U.S.
Underwriters pursuant to the Agreement Between U.S. Underwriters and
International Underwriters, the number of Shares initially available for sale
by the International Underwriters or by the U.S. Underwriters may be more or
less than the amount specified on the cover page of this Prospectus.

Each International Underwriter has severally represented and agreed that (i)
it has not offered or sold and, prior to the expiry of six months from the
closing date of the Offerings, will not offer or sell in the United Kingdom
any Shares other than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (whether as principal
or agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted in and will not result in an offer to the public
within the meaning of the Public Offers of Securities Regulations 1995 (the
"Regulations"); (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 and the Regulations with respect
to anything done by it in relation to the Shares in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on, and
will only issue or pass on, to any person in the United Kingdom any document
received by it in connection with the issue of the Shares to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995, or is a person to whom
the document may otherwise lawfully be issued or passed on.

Purchasers of the Shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the Price to Public set forth in the cover page
hereof.

74
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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

Subject to certain exceptions, the Company, its parent, the Selling
Shareholders and other certain directors and officers of the Company 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, the Selling Shareholders, respectively 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, the U.S. Underwriters have reserved up to
1,050,000 shares of Common Stock (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.

75
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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.

EXPERTS

AVAILABLE INFORMATION

76
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
- --------------------------------------------------------------------------------
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-----------

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.............................................................. 12
Use of Proceeds........................................................... 22
Dividend Policy........................................................... 22
Dilution.................................................................. 22
Capitalization............................................................ 23
Selected Consolidated Financial Data...................................... 24
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 26
Business.................................................................. 32
Management................................................................ 46
Principal and Selling Shareholders........................................ 53
Certain Transactions...................................................... 55
Description of Capital Stock.............................................. 60
Shares Eligible for Future Sale........................................... 64
Description of Certain Indebtedness....................................... 65
Tax Considerations........................................................ 67
Underwriting.............................................................. 73
Legal Matters............................................................. 76
Experts................................................................... 76
Available Information..................................................... 76
Index to Consolidated Financial Statements................................ F-1
Glossary of Certain Defined Terms......................................... GL-1
</TABLE>

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

21,000,000 SHARES

GLOBAL CROSSING LTD.

COMMON STOCK

LOGO GLOBAL CROSSING

-------

PROSPECTUS

DATED , 1998

-------

SALOMON SMITH BARNEY INTERNATIONAL

MERRILL LYNCH INTERNATIONAL

CIBC OPPENHEIMER

DEUTSCHE BANK

GOLDMAN SACHS INTERNATIONAL

MORGAN STANLEY DEAN WITTER

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

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The registrant estimates that expenses in connection with the offering
described in this Registration Statement will be as follows:
<TABLE>
<S> <C>
SEC registration fee........................................... $ 135,361
NASD filing fee................................................ 30,500
NASDAQ National Market listing fee............................. 95,000
Bermuda Stock Exchange listing fee............................. 62,500
Printing and engraving expenses................................ 500,000
Legal fees and expenses........................................ 1,000,000
Accounting fees and expenses................................... 500,000
Blue Sky fees and expenses..................................... 5,000
Transfer agent and registrar fees.............................. 15,000
Miscellaneous.................................................. 56,639
----------
Total...................................................... $2,400,000
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

No provision is made in Bermuda statutory law for indemnification of
officers and directors.

The Bye-laws of the registrant provide for indemnification of the
registrant's officers and directors against all liabilities, loss, damage or
expense incurred or suffered by such party as an officer or director of the
registrant; provided that such indemnification shall not extend to any matter
which would render it void pursuant to the Companies Acts as in effect from
time to time in Bermuda.

The Underwriting Agreements provide for indemnification of directors and
officers of the registrant by the Underwriters against certain liabilities.

The directors and officers of the Company are covered by directors' and
officers' insurance policies maintained by the Company.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In the three years preceding the filing of this Registration Statement, the
registrant and its predecessor, Global Crossing Ltd., LDC ("Old GCL") issued
the following securities that were not registered under the Securities Act of
1933, as amended (the "Securities Act"):

(a) $800,000,000 aggregate principal amount of 9-5/8% Senior Notes Due
2008 (the "GCH Senior Notes") issued by the registrant's wholly-owned
subsidiary, Global Crossing Holdings, Ltd. and sold to each of Salomon
Brothers Inc, Merrill Lynch, Pierce, Fenner & Smith Incorporated, CIBC
Oppenheimer Corp., Morgan Stanley & Co. Incorporated and Deutsche Bank
Securities Inc. (formerly known as Deutsche Morgan Grenfell Inc.);

(b) $150,000,000 aggregate principal amount of 12% Senior Notes Due 2004
(the "GTH Senior Notes") issued by the registrant's indirect wholly-owned
subsidiary, Global Telesystems Holdings, Ltd. ("GTH"), and sold to CIBC
Wood Gundy Securities Corp.;

(c) $100,000,000 million aggregate principal amount of 14% Mandatorily
Redeemable Preference Shares (the "GTH Preference Shares") issued by GTH
and sold to CIBC Wood Gundy Securities Corp.;

II-1
<PAGE>

(d) upon formation of Old GCL, (i) 7,500,000 Class A shares, 31,250,000
Class B shares and 33,750,000 Class C shares of common stock of Old GCL at
$1.00 per share and (ii) 22,058,800 Class D shares of common stock of Old
GCL, valued at $.11 per share, in each case to the initial shareholders
thereof;

(e) 13,235,300 Class A shares of common stock of Old GCL, valued at $1.00
per share, issued for no consideration to CIBC Wood Gundy Securities Corp.
in connection with the sale of the GTH Preference Shares;

(f) 300,000 Class B shares and 125,000 Class E shares of common stock of
Old GCL at $1.00 per share issued on January 21, 1998 to additional
shareholders of Old GCL;

(g) 100,000 Class E shares of common stock of Old GCL at $1.00 per share
issued on April 22, 1998 to an additional shareholder of Old GCL; and

(h) upon formation of the registrant, 1,200,000 shares of its Common
Stock, at its par value of $.01 per share, to its sole stockholder.

The GCH Senior Notes, GTH Senior Notes and GTH Preference Shares have been
resold only to institutional investors that are "qualified institutional
buyers" within the meaning of Rule 144A under the Securities Act or pursuant
to Regulation S under the Securities Act. All issuances specified above were
made in reliance upon an exemption from the registration provisions of the
Securities Act set forth in Section 4(2) thereof relative to transactions by
an issuer not involving any public offering or the rules and regulations
thereunder. All of such shares of Common Stock are deemed restricted
securities within the meaning of Rule 144 under the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
1.1** Form of U.S. Underwriting Agreement
3.1* Memorandum of Association of the Registrant, dated March 5, 1998
3.2* Bye-laws of the Registrant, dated March 18, 1997
3.3* Certificate of Incorporation of Change of Name
3.4* Memorandum of Increase of Share Capital
3.5* Form of Amended and Restated Bye-laws of the Registrant
4.1* Form of Certificate for Common Stock
4.2* Indenture, dated as of May 18, 1998, between Global Crossing
Holdings Ltd. and United States Trust Company of New York, as
Trustee
4.3* Registration Agreement, dated as of May 18, 1998, among the
registrant, Global Crossing Holdings Ltd. and the other parties
named therein
4.4* Form of Registration Rights Agreement among the Registrant and
the investors named therein
4.5* Credit Agreement, dated as of June 27, 1997 (the "Credit
Agreement"), among Global Telesystems Ltd., various financial
institutions names therein, Deutsche Bank AG, New York Branch
and Canadian Imperial Bank of Commerce, as Lead Agents, Deutsche
Bank AG, New York Branch, as Administrative Agent, Canadian
Imperial Bank of Commerce, as Syndication Agent, Documentation
Agent and the Issuing Bank and Deutsche Morgan Grenfell Inc. and
CIBC Gundy Securities Corp, as Arrangers
4.6* First Amendment and Consent, dated as of December 15, 1997, to
Credit Agreement, among Global Telesystems Ltd., the lenders
named therein, Deutsche Bank AG, New York Branch and Canadian
Imperial Bank of Commerce, as Lead Agents, Deutsche Bank AG, New
York Branch, as Administrative Agent, Canadian Imperial Bank of
Commerce, as Syndication Agent, Documentation Agent and the
Issuing Bank and Deutsche Morgan Grenfell Inc. and CIBC Gundy
Securities Corp, as Arrangers
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
4.7* Form of Amended and Restated Stockholders' Agreement among GCT
Pacific Holdings, Ltd., SCS (Bermuda) Ltd., Marubeni Pacific
Cable Limited and Pacific Crossing Ltd.
4.8* Second Amendment and Consent, dated as of June 12, 1998, to the
Credit Agreement, among Atlantic Crossing Ltd. (f/k/a Global
Telesystems Ltd.), the lenders named therein, Deutsche Bank AG,
New York Branch and Canadian Imperial Bank of Commerce, as Lead
Agents, Deutsche Bank AG, New York Branch, as Administrative
Agent, Canadian Imperial Bank of Commerce, as Syndication Agent,
Documentation Agent and the Issuing Bank and Deutsche Morgan
Grenfell Inc. and CIBC Gundy Securities Corp, as Arrangers
5.1* Opinion of Appleby, Spurling & Kempe as to the legality of the
Shares being registered
8.1* Opinion of Simpson Thacher & Bartlett as to tax matters relating
to the Shares being registered
8.2* Opinion of Appleby, Spurling & Kempe as to tax matters relating
to the Shares being registered
9.1* Form of Stockholders Agreement among the Registrant and the
investors named therein
10.1* Form of 1998 Global Crossing Ltd. Stock Incentive Plan
10.2* Project Development and Construction Contract, dated March 18,
1997, among AT&T Submarine Systems, Inc. and Global Telesystems
Ltd.
10.3* Project Development and Construction Contract, dated as of April
21, 1998, among Tyco Submarine Systems, Ltd. and Pacific
Crossing Ltd.
10.4* Project Development and Construction Contract, dated as of June
2, 1998, among Alcatel Submarine Networks and Alcatel Submarine
Networks, Inc. and Mid-Atlantic Crossing Ltd.
10.5* Advisory Services Agreement, dated as of March 25, 1997, among
Global Telesystems Ltd. and PCG Telecom Services LLC
10.6* First Amendment, dated as of June 27, 1997, to the Advisory
Services Agreement, dated as of March 25, 1997, among Global
Telesystems Ltd. and PCG Telecom Services LLC
21.1* Subsidiaries of the Registrant
23.1* Consent of Appleby Spurling & Kempe (included in the opinions
filed as Exhibit 5.1 and Exhibit 8.2)
23.2 Consent of Arthur Andersen & Co.
23.3* Consent of Simpson Thacher & Bartlett (included in the opinion
filed as Exhibit 8.1)
24.1* Power of Attorney (included on signature page II-4 of the
original filing of Registration Statement on Form S-1)
27.1* Financial Data Schedule
99.1* Consent of Nominee Director
99.2* Consent of Nominee Director
99.3* Consent of Nominee Director
</TABLE>
--------
* Previously filed

** To be filed by amendment

(b) Financial Statement Schedules

ITEM 17. UNDERTAKINGS.

(1) The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificate in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

(2) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the

II-3
<PAGE>

registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

(i) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(ii) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 3 to the registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, State of New York on July 27, 1998.

Global Crossing Ltd.

/s/ John M. Scanlon
By __________________________________
NAME: JOHN M. SCANLON
TITLE: CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 3 to the registration statement has been signed on July 27, 1998
by or on behalf of the following persons in the capacities indicated with the
registrant.

SIGNATURE TITLE

/*/ Co-Chairman of the Board and Director
-------------------------------------
Gary Winnick

/*/ Co-Chairman of the Board and Director
-------------------------------------
Lodwrick Cook

/s/ John M. Scanlon Chief Executive Officer and Director
-------------------------------------
John M. Scanlon

/*/ President, Chief Operating Officer
------------------------------------- and Director
David Lee

/*/ Senior Vice President and Director
-------------------------------------
Barry Porter

/*/ Senior Vice President and Director
-------------------------------------
Abbott Brown

/*/ Senior Vice President and Chief
------------------------------------- Financial Officer
Dan J. Cohrs

/*/ Director
-------------------------------------
Hillel Weinberger

II-5
<PAGE>

SIGNATURE TITLE

/*/ Director
------------------------------------
Jay Bloom

/*/ Director
------------------------------------
Dean Kehler

/*/ Director
------------------------------------
Jay Levine

/*/ Director
------------------------------------
William Phoenix

/*/ Director
------------------------------------
Bruce Raben

/*/ Director
------------------------------------
Michael Steed

/s/ John M. Scanlon Authorized Representative in the
------------------------------------ United States
John M. Scanlon

* By Power of Attorney

/s/ John M. Scanlon Attorney-in-Fact
------------------------------------
John M. Scanlon

II-6
<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.

<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT PAGE
------- ------- ----
<C> <S> <C>
1.1** Form of U.S. Underwriting Agreement
3.1* Memorandum of Association of the Registrant, dated March 5,
1998
3.2* Bye-laws of the registrant, dated March 18, 1997
3.3* Certificate of Incorporation of Change of Name
3.4* Memorandum of Increase of Share Capital
3.5* Form of Amended and Restated Bye-laws of the Registrant
4.1* Form of Certificate for Common Stock
4.2* Indenture, dated as of May 18, 1998, between Global Crossing
Holdings Ltd. and United States Trust Company of New York, as
Trustee
4.3* Registration Agreement, dated as of May 18, 1998, among the
Registrant, Global Crossing Holdings Ltd. and the other parties
named therein
4.4* Form of Registration Rights Agreement among the Registrant and
the investors named therein
4.5* Credit Agreement, dated as of June 27, 1997 (the "Credit
Agreement"), among Global Telesystems Ltd., various financial
institutions names therein, Deutsche Bank AG, New York Branch
and Canadian Imperial Bank of Commerce, as Lead Agents,
Deutsche Bank AG, New York Branch, as Administrative Agent,
Canadian Imperial Bank of Commerce, as Syndication Agent,
Documentation Agent and the Issuing Bank and Deutsche Morgan
Grenfell Inc. and CIBC Gundy Securities Corp, as Arrangers
4.6* First Amendment and Consent, dated as of December 15, 1997, to
Credit Agreement, among Global Telesystems Ltd., the lenders
named therein, Deutsche Bank AG, New York Branch and Canadian
Imperial Bank of Commerce, as Lead Agents, Deutsche Bank AG,
New York Branch, as Administrative Agent, Canadian Imperial
Bank of Commerce, as Syndication Agent, Documentation Agent and
the Issuing Bank and Deutsche Morgan Grenfell Inc. and CIBC
Gundy Securities Corp, as Arrangers
4.7* Form of Amended and Restated Stockholders' Agreement among GCT
Pacific Holdings, Ltd., SCS(Bermuda) Ltd., Marubeni Pacific
Cable Limited and Pacific Crossing Ltd.
4.8* Second Amendment and Consent, dated as of June 12, 1998, to the
Credit Agreement, among Atlantic Crossing Ltd. (f/k/a Global
Telesystems Ltd.), the lenders named therein, Deutsche Bank AG,
New York Branch and Canadian Imperial Bank of Commerce, as Lead
Agents, Deutsche Bank AG, New York Branch, as Administrative
Agent, Canadian Imperial Bank of Commerce, as Syndication
Agent, Documentation Agent and the Issuing Bank and Deutsche
Morgan Grenfell Inc. and CIBC Gundy Securities Corp, as
Arrangers
5.1* Opinion of Appleby, Spurling & Kempe as to the legality of the
Shares being registered
8.1* Opinion of Simpson Thacher & Bartlett as to tax matters
relating to the Shares being registered
8.2* Opinion of Appleby, Spurling & Kempe as to tax matters relating
to the Shares being registered
9.1* Form of Stockholders' Agreement among the Registrant and the
investors named therein
10.1* Form of 1998 Global Crossing Ltd. Stock Incentive Plan
10.2* Project Development and Construction Contract, dated March 18,
1997, among AT&T Submarine Systems, Inc. and Global Telesystems
Ltd.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT PAGE
------- ------- ----
<C> <S> <C>
10.3* Project Development and Construction Contract, dated as of
April 21, 1998, among Tyco Submarine Systems, Ltd. and Pacific
Crossing Ltd.
10.4* Project Development and Construction Contract, dated as of June
2, 1998, among Alcatel Submarine Networks and Alcatel Submarine
Networks, Inc. and Mid-Atlantic Crossing Ltd.
10.5* Advisory Services Agreement, dated as of March 25, 1997, among
Global Telesystems Ltd. and PCG Telecom Services LLC
10.6* First Amendment, dated as of June 27, 1997, to the Advisory
Services Agreement, dated as of March 25, 1997, among Global
Telesystems Ltd. and PCG Telecom Services LLC
21.1* Subsidiaries of the Registrant
23.1* Consent of Appleby Spurling & Kempe (included in the opinions
filed as Exhibit 5.1 and Exhibit 8.2)
23.2 Consent of Arthur Andersen & Co.
23.3* Consent of Simpson Thacher & Bartlett (included in the opinion
filed as Exhibit 8.1)
24.1* Power of Attorney (included on signature page II-4 of the
original filing of Registration Statement on Form S-1)
27.1* Financial Data Schedule
99.1* Consent of Nominee Director
99.2* Consent of Nominee Director
99.3* Consent of Nominee Director
</TABLE>
- --------
* Previously filed

** To be filed by amendment

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

As independent public accountants, we hereby consent to the inclusion of our
report on the financial statements of Global Crossing Ltd., LDC and subsidiaries
dated April 21, 1998, in this Pre-Effective Amendment No. 3 Registration
Statement on Form S-1 of Global Crossing Ltd. (Registration No. 333-53393) and
in the related prospectus and to all references to our Firm included in or made
a part of this Registration Statement.

Arthur Andersen LLP

Hamilton, Bermuda
July 24, 1998