<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of
The Securities Exchange Act of 1934
For the years ended December 31, 1999 and 1998
Commission File Number 000-24565
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
(Full name of plan)
GLOBAL CROSSING LTD.
(Name of issuer of securities
held pursuant to the plan)
WESSEX HOUSE
45 REID STREET
HAMILTON HM12, BERMUDA
(Address of principal executive offices)
REQUIRED INFORMATION
Report of Independent Accountant - Arthur Andersen LLP
Report of Independent Accountant - PricewaterhouseCoopers LLP
Index to Financial Statements and Schedules
Statements of Net Assets Available for Benefits
as of December 31, 1999 and 1998 Page 1
Statement of Changes in Net Assets Available for
Benefits, for the Year Ended December 31, 1999 Page 2
Notes to Financial Statements Pages 3-7
Schedule of Assets Held for Investment Schedule I
Purposes as of December 31, 1999
The following exhibits are filed as part of this Report.
Consent of Independent Accountants - Arthur Andersen LLP
Consent of Independent Accountants - PricewaterhouseCoopers LLP
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrator of the
Frontier Group Employees' Retirement Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of Frontier Group Employees' Retirement Savings Plan (the Plan) as of December
31, 1999, and the related statement of changes in net assets available for
benefits, for the year then ended. These financial statements and the schedule
referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and
schedule based upon 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 net assets available for benefits of the Plan as of
December 31, 1999, and the changes in its net assets available for benefits, for
the year then ended, in conformity with accounting principles generally accepted
in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule listed in the
accompanying index is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Arthur Andersen LLP
Rochester, New York
June 1, 2000
<PAGE>
Report of Independent Accountants
To the Participants and Administrator of the
Frontier Group Employees' Retirement Savings Plan
In our opinion, the accompanying statement of net assets available for benefits
presents fairly, in all material respects, the net assets available for benefits
of the Frontier Group Employees' Retirement Savings Plan at December 31, 1998,
in conformity with accounting principles generally accepted in the United
States. This financial statement is the responsibility of the Plan's
management; our responsibility is to express an opinion on this financial
statement based on our audit. We conducted our audit of this statement in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statement is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
February 26, 1999
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
PAGE
<S> <C>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1999 AND 1998 1
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED
DECEMBER 31, 1999 2
NOTES TO FINANCIAL STATEMENTS 3
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1999 8
</TABLE>
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------------ ------------------
<S> <C> <C>
Investments, at fair value:
Registered investment companies-
Putnam Income Fund $ 10,360,302 $ 12,899,159
Putnam Global Growth Fund 36,514,170 23,481,464
Putnam Voyager Fund 76,505,629 52,783,761
Putnam Fund for Growth and Income 5,565,976 3,106,035
Putnam Asset Allocation Fund Balanced Portfolio 1,736,067 1,179,075
Common trust-
Putnam S&P 500 Index Fund 45,017,349 37,889,923
Stable Value Fund 44,038,661 39,410,558
Frontier Corporation common stock - 79,185,985
Global Crossing Ltd. common stock 250,232,062 -
Participant loans 8,333,902 7,314,405
------------------ ------------------
Total investments 478,304,118 257,250,365
------------------ ------------------
Receivables:
Participants' contributions 921,746 844,359
Employer's contributions 337,689 1,441,579
------------------ ------------------
Total receivables 1,259,435 2,285,938
------------------ ------------------
Net assets available for benefits $ 479,563,553 $ 259,536,303
================== ==================
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
1
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
Additions:
Additions to net assets attributed to-
Investment income:
Interest and dividends $ 14,476,926
Realized gain, net 33,129,802
Net appreciation in fair value
of investments 174,116,182
Participant loan interest income 541,301
Contributions:
Participants' contributions 22,955,100
Employer's contributions 8,247,723
------------
Total additions 253,467,034
------------
Deductions:
Deductions from net assets attributed to-
Benefits paid to participants 32,289,862
Excess contributions (1998 plan year) 7,493
Loan fees 32,387
Other expense 11,354
------------
Total deductions 32,341,096
------------
Net increase prior to fund transfers 221,125,938
Transfers from other Frontier sponsored plans 1,204,230
Transfers to non-Frontier sponsored plans (2,302,918)
------------
Net increase 220,027,250
Net assets available for benefits, beginning of year 259,536,303
------------
Net assets available for benefits, end of year $479,563,553
============
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
2
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. DESCRIPTION OF THE PLAN
-----------------------
General
-------
The following brief description of the Frontier Group Employees' Retirement
Savings Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the plan document for more complete information.
The Plan is a defined contribution plan established by the Board of Directors of
Frontier Corporation (the "Company") effective March 1, 1994. The Plan was
amended and restated effective January 1, 1999. The Plan is subject to the
applicable provisions of the Employee Retirement Income Security Act of 1974
(ERISA) as amended.
Participation
-------------
All nonbargaining employees, except for temporary, summer, and leased employees
are eligible to participate in the Plan upon the first of the month after 30
days of employment.
The Plan allows the Company's Employee Benefit Committee to transfer participant
accounts from plans the participants are no longer eligible to participate in to
a substantially similar 401(k) plan sponsored by Frontier Corporation or any
corporation/business entity in which Frontier Corporation has a 50 percent or
more ownership or profits interest. These transfers are included in the
statement of changes in net assets available for benefits, as transfers to other
Frontier sponsored plans.
Administration
--------------
The Plan is administered by the Company's Employee Benefit Committee whose
members are appointed by the Company's Board of Directors. The Trustee of the
Plan is Putnam Fiduciary Trust Company.
Funding Policy
--------------
The Plan provides participants the option of having their basic and supplemental
contributions to the Plan made on a salary reduction basis and on a deferred tax
basis. Upon enrollment in the Plan, a participant may direct contributions into
the following investment options.
. Putnam Income Fund - Funds are primarily invested in corporate bonds and U.S.
------------------
government and agency obligations.
. Putnam Global Growth Fund - Funds are primarily invested in foreign and
-------------------------
domestic common stocks.
. Putnam Voyager Fund - Funds are invested in emerging growth companies and
-------------------
opportunity stocks.
. Putnam Fund for Growth & Income - Funds are primarily invested in common
-------------------------------
stocks.
. Putnam Asset Allocation Fund Balanced Portfolio - Funds are invested in
-----------------------------------------------
stocks, bonds, and money market instruments.
. Putnam S&P 500 Index Fund - Funds are primarily invested in stocks listed in
-------------------------
the S&P 500 Index.
. Stable Value Fund - Funds are invested in a diversified portfolio of high-
-----------------
quality stable value investments offering price stability and liquidity.
3
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
. Frontier Corporation Common Stock Fund - Funds invested in common stock of
--------------------------------------
Frontier Corporation. All investments in this fund were transferred to the
Global Crossing Common Stock Fund upon acquisition of Frontier Corporation by
Global Crossing, Ltd. Each share of Frontier Corporation common stock was
exchanged for 2.05 shares of Global Crossing Ltd. common stock pursuant to
the acquisition of Frontier Corporation by Global Crossing Ltd. effective
September 28, 1999.
. Global Crossing Common Stock Fund - Funds are invested in common stock of
---------------------------------
Global Crossing, Ltd., parent company of Frontier Corporation.
The shares of stock in the Global Crossing Common Stock Fund are qualified
employer securities as defined by ERISA. Each individual's investment in these
funds is recorded in his or her account on a per share basis. All other funds
are tracked on a dollar value basis with each fund's activity allocated to
participants on a pro rata basis. Therefore the plan does not record activity
on a unit value basis.
The Plan provides that each participant may voluntarily make contributions
through a salary reduction agreement for whatever whole percentage a participant
chooses, up to a maximum of 16 percent, subject to maximum contributions imposed
by the Internal Revenue Code under Section 401(k).
Individual accounts which record the participant's contributions, the earnings
on all contributions, and the amount of the participant's interest in each fund,
are maintained for each participant. The participant's contributions during a
month are allocated directly to his or her individual account when the Trustee
receives contributions. Participants have the option to invest their
contributions in any of the funds and may change their allocation between funds
at any time.
Employer contributions consist of three components:
. Company Fixed Contributions - Each payroll period, the Company contributes
---------------------------
0.5 percent of the payroll period compensation for each of its employees who
is a participant in the Plan.
. Company Matching Contributions - Each payroll period, the Company contributes
------------------------------
an amount equal to 100 percent of participant contributions, up to the first
3 percent of compensation.
. Company Profit Sharing Contributions - Each plan year, the Company may elect
------------------------------------
to make a profit sharing contribution to participant accounts based on the
Company's performance.
There were no profit sharing contributions for 1999.
All employer contributions will be invested initially in the Global Crossing
Common Stock Fund. All employer contributions invested in this fund must remain
for five years, while an active participant, after which time the participant
may elect to transfer the amounts to any of the other funds or retain the
amounts in this fund. If the participant terminates service with the Company,
he or she may elect to transfer the amounts in the Global Crossing Common Stock
Fund to any other funds or retain the amounts in this fund.
Vesting
-------
Participants are immediately 100 percent vested in their individual accounts and
all employer matching contributions and earnings thereon.
4
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
Payment of Benefits
-------------------
Payment of benefits generally begins upon termination of service and attaining
normal retirement age (65). A participant may elect to receive either a lump-
sum amount equal to the value of his or her vested account balance, or a
participant may elect to receive installments over a period not to exceed 20
years. However, a participant who has reached age 59 1/2 , but who has not yet
terminated employment, may withdraw all or a portion of his or her accumulated
account balance in accordance with the terms of the Plan.
If upon termination of service, a participant does not attain normal retirement
age and the participant's vested account balance is greater than $5,000, the
participant may elect to receive a lump-sum amount, a direct rollover to a
qualified plan under Section 401 of the Internal Revenue Code, or a direct
rollover to a qualified Individual Retirement Account equal to the value of his
or her vested account balance. If the vested account balance is less than
$5,000, the balance will be distributed to the participant as soon as
administratively feasible.
Individual Participant Loans
----------------------------
Loans are available to participants in the Plan on a nondiscriminatory basis.
Participant loans cannot exceed the lesser of 50 percent of the vested amounts
in the participant's account or $50,000. A participant may only have two loans
outstanding, and they are treated as directed investments by the borrower with
respect to his or her account. The interest rate on loans is established based
on the prime rate, under current Plan provisions. Interest paid on the loan is
credited to the borrower's account and the participant does not share in the
income of the Plan's assets with respect to the amounts outstanding. Loans have
a term of no more than five years except that a loan may be granted for a period
not to exceed 25 years if the proceeds are used to purchase the participant's
principal residence.
Plan Termination
----------------
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Accounting
-------------------
The financial statements have been prepared on the accrual basis of accounting.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan's management to make estimates and
assumptions that affect the accompanying financial statements and disclosures.
Actual results could differ from those estimates.
Contributions and Benefits Paid
-------------------------------
Contributions are recorded by the Plan when withheld from employees and accrued
by the Company. Benefits are recorded when paid.
Participants may receive distributions in cash or in common stock of Global
Crossing Ltd. for amounts invested in the Global Crossing Common Stock Fund.
Purchases and sales of securities are recorded on the trade date.
5
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
Investments and Investment Income
---------------------------------
Investments in registered investment companies and employer securities are
stated at fair value, measured by quoted market prices. Investments in common
trust funds are stated at estimated fair values, which represent the net asset
value of shares held by the Plan at year-end. Adjustments for unrealized
appreciation or depreciation of such values are included in the operating
results of the Plan. Funds invested in the Stable Value Fund are stated at
contract value, measured as cost plus earned interest income. Contract value
approximates fair value at December 31, 1999 and 1998. Participant loans are
valued at cost, which approximates fair value.
Interest and dividend income is recorded as earned on an accrual basis.
Administrative Expenses
-----------------------
Significant expenses associated with the Plan are paid by the Company.
3. PARTY-IN-INTEREST TRANSACTIONS
------------------------------
The Plan's holdings of Frontier Corporation common stock, Global Crossing Ltd.
common stock, the Putnam Investment, Inc. common trust, and the five Putnam
Investment, Inc. registered investment company funds are party-in-interest
investments.
As of December 31, 1999, the Plan held 5,004,641 shares of Global Crossing Ltd.
common stock at a fair market value of $250,232,062. As of December 31, 1998,
the Plan held 2,328,998 shares of Frontier Corporation common stock at a fair
market value of $79,185,985. On September 28, 1999, all shares of Frontier
Corporation common stock was acquired by Global Crossing Ltd. and exchanged for
Global Crossing Ltd. common stock at a ratio of 2.05 shares of Global Crossing
common stock for each share of Frontier Corporation common stock. During the
plan year ended December 31, 1999, the fair market value of Company stock
contributions into the Frontier Corporation Stock Fund and Global Crossing Stock
Fund totaled $8,247,723. During the plan year ended December 31, 1999, the fair
market value of Frontier Corporation and Global Crossing Ltd. common stock
distributed to participants was $6,208,813.
4. FEDERAL INCOME TAX STATUS
-------------------------
The Plan obtained its latest determination letter on February 14, 1995, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code (IRC).
The plan administrator and the Plan's tax counsel believe the Plan is currently
designed and being operated in compliance with the applicable requirements of
the IRC. Therefore, they believe that the Plan was qualified and the related
trust was tax exempt as of the financial statement date.
5. BENEFITS PAYABLE
----------------
In accordance with generally accepted accounting principles, obligations to
terminated employees for claims approved but not yet paid are not shown as a
plan liability (nor as a reduction of net assets available for benefits) and
totaled $674,590 at December 31, 1999.
6
<PAGE>
FRONTIER GROUP
EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
6. INVESTMENTS
-----------
The fair market value of the individual investments that represent 5 percent or
more of the net assets available for plan benefits at December 31, 1999 and 1998
is as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Putnam Global Growth Fund $ 36,514,170 $23,481,464
Putnam Voyager Fund 76,505,629 52,783,761
Putnam S&P 500 Index Fund 45,017,349 37,889,923
Putnam Stable Value Fund 44,038,661 39,410,558
Frontier Corporation common stock N/A 79,185,985
Global Crossing Ltd. common stock 250,232,062 N/A
</TABLE>
7. SUBSEQUENT EVENT
----------------
Effective January 1, 2000, the Plan is amended to provide that participants may
withdraw rollover contributions in addition to pretax contributions for certain
hardship related situations as defined by the Plan.
Effective March 6, 2000, the certificate of incorporation of Frontier
Corporation, the Plan's sponsor, was amended changing the name of the
corporation to Global Crossing North America, Inc.
7
<PAGE>
FRONTIER GROUP SCHEDULE I
EMPLOYEES' RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES EIN: 16-0613330
DECEMBER 31, 1999 PN: 021
<TABLE>
<CAPTION>
Current
Number Value
of December 31,
Shares 1999
---------------- ------------------
<S> <C> <C>
Interests in registered investment companies:
* Putnam Income Fund 1,628,978 $ 10,360,302
* Putnam Global Growth Fund 1,964,183 36,514,170
* Putnam Voyager Fund 2,471,112 76,505,629
* Putnam Fund for Growth and Income 296,852 5,565,976
* Putnam Asset Allocation Fund Balanced Portfolio 133,956 1,736,067
------------------
Total interests in registered investment companies 130,682,144
Common trust:
* Putnam S&P 500 Index Fund 1,288,419 45,017,349
Common stock:
* Global Crossing 5,004,641 250,232,062
Participant loans:
Participant loan accounts (rate 6.0% - 9.0%)
(maturities range from 2000 to 2024) 8,333,902 8,333,902
Insurance company pooled separate account:
Stable Value Fund 44,038,661 44,038,661
------------------
Total investments $478,304,118
==================
</TABLE>
* Denotes party-in-interest
The accompanying notes to financial statements are an integral part of this
schedule.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
Frontier Corporation
Employees' Retirement Savings Plan
Date: June 27, 2000 /s/ Kenneth P. Schirmuhly
-------------------------------
Kenneth P. Schirmuhly,
Vice President, Human
