<PAGE>

                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

            For the fiscal year ended December 31, 1999

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

            For the transition period from _______ to _______

                          Commission file number 1-8519

                              CINCINNATI BELL INC.
                                       DBA
                                 BROADWING INC.

               An Ohio                                   I.R.S. Employer
             Corporation                                 No. 31-1056105

                 201 East Fourth Street, Cincinnati, Ohio 45202
                          Telephone Number 513 397-9900

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

Securities registered pursuant to Section 12(b) of the Act:


<TABLE>
<CAPTION>
                                                   Name of each exchange
         Title of each class                        on which registered
         -------------------                       ----------------------
<S>                                                <C>
Common Shares (par value $0.01 per share)          New York Stock Exchange
Preferred Share Purchase Rights                    Cincinnati Stock Exchange
6.75% Preferred Shares                             New York Stock Exchange
7.25% Preferred Shares                             New York Stock Exchange

</TABLE>


Securities requested pursuant to Section 12(g) of the Act:  None

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

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

    Yes   X     No
         ---       ---

    Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained 
herein, and will not be contained, to the best of registrant's knowledge, in 
definitive proxy or information statements incorporated by reference in Part 
III of this Form 10-K or any amendment to this Form 10-K. [ ]

    At February 25, 2000, there were 202,550,808 Common Shares outstanding.

    At February 25, 2000, the aggregate market value of the voting shares owned
by non-affiliates was $5,880,482,640.

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

                       DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of the registrant's definitive proxy statement dated March 17, 2000
issued in connection with the annual meeting of shareholders (Part III)


<PAGE>

                               TABLE OF CONTENTS


                                     PART I


<TABLE>
<CAPTION>
                                                                                                    Page
<S>        <C>                                                                                      <C>

Item 1.    Business ................................................................................  1


Item 2.    Properties ..............................................................................  9


Item 3.    Legal Proceedings .......................................................................  9


Item 4.    Submission of Matters to a Vote of Security Holders .....................................  9


Item 4A.   Executive Officers of the Registrant .................................................... 10




                                     PART II


Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters ................... 12


Item 6.    Selected Financial Data ................................................................. 13


Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations ... 14


Item 7A.   Quantitative and Qualitative Disclosures About Market Risk .............................. 28


Item 8.    Financial Statements and Supplementary Schedules ........................................ 28


Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .... 57




                                    PART III


Item 10.   Directors and Executive Officers of the Registrant ...................................... 57


Item 11.   Executive Compensation .................................................................. 57


Item 12.   Security Ownership of Certain Beneficial Owners and Management .......................... 57


Item 13.   Certain Relationships and Related Transactions .......................................... 57




                                     PART IV


Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K ........................ 58

Signatures ......................................................................................... 63

</TABLE>


This report contains trademarks, service marks and registered marks of the
Company and its subsidiaries, as indicated.




<PAGE>

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 SAFE HARBOR CAUTIONARY 
STATEMENT

    Form 10-K contains "forward-looking" statements, as defined in the Private
Securities Litigation Reform Act of 1995, that are based on current
expectations, estimates and projections. Statements that are not historical
facts, including statements about the beliefs and expectations of the Company
and its subsidiaries, are forward-looking statements. These statements involve
potential risks and uncertainties; therefore, actual results may differ
materially. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they were
made. The Company does not undertake any obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.

    Important factors that may affect these expectations include, but are not
limited to: changes in the overall economy; changes in competition in markets in
which the Company and its subsidiaries operate; advances in telecommunications
technology; the ability of the Company to generate sufficient cash flow to fund
its business plan and expand its fiber-optic network; changes in the
telecommunications regulatory environment; changes in the demand for the
services and products of the Company and its subsidiaries; the ability of the
Company and its subsidiaries to introduce new service and product offerings in a
timely and cost effective basis; and integration of the Company's new Broadwing
Communications subsidiary.


                                     Part I


ITEM 1.  BUSINESS

GENERAL

    As a result of its merger with IXC Communications Inc., Cincinnati Bell
Inc., an Ohio corporation, announced it would begin doing business as Broadwing
Inc. ("the Company") on November 15, 1999.

    The Company is a diversified telecommunications services holding company.
The Company's segments are strategic business units that offer distinct products
and services to targeted market segments of customers.

    The Local Communications segment provides local service, network access,
data networking, Internet-based services, sales of communications equipment,
local toll, and other ancillary telecommunications services through its
Cincinnati Bell Telephone ("CBT") and ZoomTown.com ("ZT") subsidiaries. These
two subsidiaries function as a fully integrated wireline communications
provider.

    The Broadband segment utilizes an advanced fiber-optic network to provide
data transport, Internet, private line, switched access and other services.
Additionally, network capacity is leased (in the form of indefeasible
right-to-use agreements) to other telecommunications providers and to Internet
service providers.

    The Wireless segment comprises the operations of Cincinnati Bell Wireless
LLC (an 80%-owned venture with AT&T Wireless PCS, Inc.), which provides advanced
digital personal communications services to customers in its Cincinnati and
Dayton, Ohio operating areas.

    The Directory segment comprises the operations of Cincinnati Bell Directory,
which publishes Yellow Pages directories and sells directory advertising and
informational services in Cincinnati Bell Telephone's franchise area. These
services are available to the customer in the form of traditional printed
directories, an Internet-based service known as "Cincinnati Exchange," and on
CD-Rom.

    Other Communications combines the Cincinnati Bell Long Distance (CBLD) (also
doing business as Cincinnati Any Distance), Cincinnati Bell Supply (CBS), and
Broadwing IT Consulting segments. CBLD resells long distance, voice, data, frame
relay, and Internet access services to small- and medium-sized business and
residential customers in a six-state area of the midwest. CBS sells new
computers and resells telecommunications equipment. Broadwing IT Consulting
provides network integration and consulting services as well as the sale of
related equipment.

    The Company is incorporated under the laws of Ohio and has its principal
executive offices at 201 East Fourth Street, Cincinnati, Ohio 45202 (telephone
number (513) 397-9900).


                                                                             1

<PAGE>

STRATEGY

    The Company believes that its reputation for service quality, well-regarded
brand name, telecommunications industry knowledge and focus, and marketing and
provisioning expertise can be successfully transferred to a national audience
via its newly acquired, nationwide fiber-optic network and Internet backbone.
Additionally, the Company seeks to expand on its existing capabilities by
partnering with targeted industry leaders with different capabilities such as
Cisco Systems, PSINet, ZeroPlus.com, Corvis, Lucent Technologies and AT&T.

    By leveraging these competitive strengths, the Company believes that it can
increase the market penetration of its existing services, effectively market new
services, establish and deliver its data network solutions and wireless
capabilities, and capture the full benefit of its strategic relationships.

              The Company is focusing its efforts on several key initiatives:

              -      use its advanced telecommunications network consisting of
                     more than 18,000 total fiber route miles to facilitate the
                     widespread deployment of high-speed data transport
                     services,

              -      stimulate and service the demand for wireless
                     communications services,

              -      maintain market share in voice communications,

              -      create unique product-bundling solutions from the products
                     and services of its subsidiaries.

LOCAL COMMUNICATIONS

    Local Communications services are provided by the Company's Cincinnati Bell
Telephone (CBT) and ZoomTown.com subsidiaries. CBT's product and service
offerings are generally classified into three major categories: local service,
network access, and other services. Revenues from this segment were 66%, 81% and
80%, respectively, of consolidated Company revenues for 1999, 1998 and 1997.

    CBT provides telecommunications services to business and residential
customers in the Cincinnati metropolitan market area. This market is about 2,400
square miles located approximately within a 25-mile radius of Cincinnati and it
includes all or significant parts of four counties of southwestern Ohio, six
counties in northern Kentucky and two counties in southeastern Indiana.
Approximately 98% of Cincinnati Bell Telephone's network access lines are in one
local access transport area.

    Local service revenues are primarily from end-user charges for use of the
public switched telephone network and for value-added services and
custom-calling features. These services are provided to business and residential
customers and represented 57% of CBT's total revenues for 1999. Network access
revenues accounted for 25% of CBT's 1999 revenues and are from interexchange
carriers for access to CBT's local communications network and from business
customers for customized access arrangements. Other services represent the
remaining 18% of CBT's 1999 revenues and are for the sale of telecommunications
equipment, Internet access, sales and installation of communications equipment,
commissions from sales agency agreements and other ancillary services.

    CBT has successfully leveraged its embedded network investment to provide
value-added services and unique product bundling packages, resulting in
additional revenue with minimal incremental costs. CBT's plant, equipment and
network are modern and capable of handling new service offerings as they are
developed. Of its network access lines, 97% are served by digital switches, 100%
have ISDN capability and 100% have Signaling System 7 capability, which supports
enhanced features such as Caller ID, Call Trace and Call Return. The network
also includes more than 2,800 route miles of fiber-optic cable, with nine rings
of cable equipped with SONET technology linking Cincinnati's downtown and other
major business centers. These SONET rings offer increased reliability and
redundancy to CBT's major business customers. CBT's capital investment has been
held relatively constant in recent years, normally ranging between $130 million
and $150 million per year. However, the Company's desire to facilitate
widespread deployment of its high-speed digital subscriber line service
(Zoomtown) and equip its entire network for these types of high-speed data
transport services has required, and will continue to require, additional
capital investment.

    In order to maintain its network, CBT relies on readily available supplies
from a variety of external vendors. Since the majority of CBT's revenues result
from use of the public switched telephone network, its operations follow no
particular seasonal pattern. CBT's franchise area is granted under regulatory
authority, and is subject to increasing competition from a variety of
competitors. CBT is not aware of any regulatory initiative that would restrict
the franchise area in which it is able 


                                                                             2

<PAGE>

to operate. A significant portion of its revenues are derived from pricing plans
that require regulatory overview and approval. In recent years, these pricing
plans have resulted in decreasing or fixed rates for some services, offset by
price increases and more flexibility for other services. As of December 31,
1999, 42 companies were certified to offer telecommunications services in CBT's
local franchise area and have sought interconnection agreements with CBT (13 of
which are still in negotiations). CBT seeks to maintain competitive advantage
over these carriers through its service quality, technologically equivalent or
superior network, innovative products and services, creative bundling ideas for
product and customer billing, and value pricing. CBT continues to report net
gains in access lines in spite of this increased level of competition.

    CBT had approximately 1,055,000 network access lines in service on December
31, 1999, an increase of 2.1% or 22,000 lines from December 31, 1998.
Approximately 68% of CBT's network access lines serve residential customers and
32% serve business customers. In addition, voice-grade equivalents, a measure
used to express the sale of higher-bandwidth services, increased 34% and 40% in
1999 and 1998, respectively.

BROADBAND

    The Broadband segment was created as a result of the Company's merger with
IXC Communications, Inc. (IXC) on November 9, 1999, and reflects the operations
of Broadwing Communications Inc. (formerly IXC) from that date forward.
Broadband revenues constituted only 8.8% of consolidated Company revenues in
1999, which does not fully reflect this segment's importance to the Company's
future operations.

    Broadwing Communications Inc. is a nationwide provider of data and voice
communications services. These services are provided over approximately 16,000
route miles of fiber optic transmission facilities. Revenues for the Broadband
segment come chiefly from its private line and switched services, categories
constituting 46.3% and 48.9%, respectively, of Broadband segment revenues in the
post-merger period.

    Private line services provided by this segment represent the long-haul
transmission of voice, data and Internet traffic over dedicated circuits, and
are provided under bulk contracts with customers. Additionally, the private-line
category includes revenues resulting from indefeasible right-to-use ("IRU")
agreements. IRU agreements typically cover a fixed period of time and represent
the lease of network fibers. The Company currently maintains enough network
capacity and believes that the sale of IRU agreements has no negative impact on
its ability to carry traffic for its retail customers. IRU agreements are
standard practice among Broadwing Communication's competitors.

    Switched services represent billed minutes per use for long distance
services and consist of sales to both retail and wholesale customers. The
Company currently believes that the best opportunity for switched services
margin improvement lies with its retail customers. Accordingly, the Company is
de-emphasizing the sale of switched services to wholesale customers. In the
post-merger period, revenues from wholesale customers represented 42% of
switched services revenue, a significantly smaller percentage than reported for
the comparable 1998 period.

    Data and Internet services represent the sale of high-speed data transport
services such as frame relay, Internet access, and Internet-based services such
as Web hosting to retail customers. In the post-merger period, these revenues
constituted a relatively small 4.8% of Broadband segment revenues. However, the
Company envisions a growing market for these types of services and it expects
that the Data and Internet category will provide a greater share of Broadband
segment revenues in the future.

    The centerpiece of the Broadband segment is its next-generation, fiber-optic
network. This network is not yet fully constructed, and will require significant
expenditures to complete and to maintain. The construction of this network
relies on a supply of readily-available materials and supplies from an
established group of vendors. Construction of the network also relies on the
ability to secure and retain land and rights-of-way for the location of network
facilities, and the Company may incur significant future expenditures in order
to remove these facilities upon expiration of these rights-of-way agreements.

    Since revenues from this segment are conditioned primarily on telephone
usage and the ratable recognition of contract revenues, its operations follow no
particular seasonal pattern. However, this segment does receive a significant
portion of its revenues from a relatively small group of interexchange carriers
that are capable of constructing their own network facilities.

    In order to satisfy the contractual commitments that Broadwing has entered
into with respect to IRU agreements, approximately 1,700 fiber route miles must
still be constructed at an estimated cost of $82 million.


                                                                             3

<PAGE>


    Prices and rates for this segment's services offerings are primarily 
established through contractual agreements. Accordingly, they are influenced 
by marketplace conditions such as the number of competitors, availability of 
comparable service offerings, and the amount of fiber network capacity 
available from these competitors. Broadwing faces significant competition 
from other fiber-based telecommunications companies such as Level 3 
Communications, Qwest Communications International, Global Crossings and 
Williams Communications. These companies have similarly equipped fiber 
networks, are well-financed, and have enjoyed certain competitive advantages 
over Broadwing Communications in the past. Broadwing Communications is 
confident that it is able to match these competitors on the basis of 
technology and is currently pursuing dramatic improvement with regard to 
critical processes, systems, and the execution of its business strategy.

WIRELESS

    The Wireless Segment comprises the operations of Cincinnati Bell Wireless 
LLC, an 80%-owned venture with AT&T PCS, Inc. The Company acquired its 80% 
ownership interest from AT&T PCS on December 31, 1998.

    Revenues for the Wireless segment arise primarily from two sources: 
provision of wireless communications services to its subscribers and the sale 
of handsets and associated equipment and accessories. In 1999, approximately 
88% of revenues for the segment were from services and the remaining 12% were 
from equipment sales and other. The Wireless segment as a whole contributed 
8.1% of current year consolidated Company revenues and also supplied more 
than 37% of the growth in consolidated revenues versus the prior year.

    Service revenues are generated through subscriber use of the Company's 
wireless communications network. This network is maintained by the Company 
with respect to the Greater Cincinnati and Dayton, Ohio operating areas with 
wireless calls beyond these areas being terminated on AT&T PCS' national 
wireless network. Service revenues are generated through a variety of rate 
plans, which typically include a fixed number of minutes for a flat monthly 
rate, with additional minutes being charged at a per-minute-of-use rate. 
Additional revenues are generated by this segment when subscribers of other 
wireless providers initiate wireless calls using their own handsets on the 
Company's network. However, significant expenses are also incurred by this 
segment as its own wireless subscribers use their handsets in the operating 
territory of other wireless providers.

    Nearly all service revenues are primarily generated on a post-paid basis, 
in that subscribers pay in arrears, based on usage. In October 1999, the 
Company introduced a new prepaid wireless service known as i-Wireless-SM-. 
This service is targeted primarily at youth and allows for the purchase of a 
specific number of minutes, in advance, at a fixed price. Since this service 
leverages the Company's existing network and requires no billing 
capabilities, it does not require significant incremental capital investment.

    Sales of handsets and associated equipment take place primarily at the 
Company's retail locations, which consist of store locations and kiosks in 
high-traffic shopping malls and commercial buildings in the Cincinnati and 
Dayton, Ohio areas. The Company sells handsets and equipment from a variety 
of vendors; the Nokia brand is most popular with its customers. The Company 
maintains a supply of equipment and does not envision any shortages that 
would compromise its ability to add new customers. Unlike service revenues 
(which are a function of wireless handset usage), some degree of seasonality 
is experienced with respect to sales of equipment. Reasons for this 
phenomenon are two-fold: (1) handsets and equipment are often given as gifts 
during holiday seasons, and (2) the Company focuses a considerable amount of 
its marketing and promotional efforts towards these seasons. In order to 
attract customers, handsets are typically subsidized by the Company, i.e., 
sold for less than direct costs. This is a typical practice in the wireless 
industry.

    The Wireless segment offers its services over a digital wireless network 
using Time Division Multiple Access (TDMA) technology. The Company believes 
that TDMA technology is sufficiently robust to meet the existing needs of its 
customers and to enable it to introduce new products and services as part of 
its business plan. As previously mentioned, this segment is reliant on AT&T 
PCS' national network for calls outside of its Greater Cincinnati and Dayton, 
Ohio operating areas. The Company believes that AT&T PCS will maintain its 
national digital wireless network in a form and manner that will allow 
Cincinnati Bell Wireless to attract and retain customers.

    Rates and prices for this segment are determined as a function of 
marketplace conditions. As such, rates can and will be influenced by the 
pricing plans of as many as six active wireless service competitors. As 
evidenced by its record of attracting and retaining customers since its entry 
into the wireless business in 1998, the Company believes that its combination 
of technology, pricing and customer service enable it to succeed in its 
current operating environment. The Wireless segment has both consumer and 
business customers and does not believe that the loss of any one customer or 
small group of customers would have a material impact on its operations.


                                                                             4



<PAGE>


    Given that this venture is jointly owned with AT&T PCS, net income or 
losses generated by this segment are shared between Cincinnati Bell Wireless 
and AT&T PCS in accordance with respective ownership percentages. As a 
result, 19.9% of the adjusted net income or loss for this segment is 
reflected as minority interest income or loss in the Company's Consolidated 
Statements of Income and Comprehensive Income (Loss).

DIRECTORY

    The Directory segment is comprised of the operations of Cincinnati Bell 
Directory, which publishes Yellow Pages directories and sells directory 
advertising and informational services in Cincinnati Bell Telephone's 
franchise area. These services are available to more than 1.2 million 
residential and business customers in the form of traditional printed 
directories, an Internet-based service known as "Cincinnati Exchange," and on 
CD-Rom.

    The majority of the revenues for this segment come from publishing, and 
it is the Company's practice to recognize revenues, and associated direct 
expenses over the lifespan of the respective publications (generally twelve 
months). Revenues for this segment constituted 7%, 8% and 9%, respectively, 
of consolidated Company revenues for 1999, 1998 and 1997. Primary expenses of 
this segment are sales commissions paid to sales agents and printing costs 
associated with its directory publications.

OTHER COMMUNICATIONS

    Other Communications combines the operations of the Cincinnati Bell Long 
Distance, Cincinnati Bell Supply, and Broadwing IT Consulting segments. 
Revenues for this segment constituted 12% of consolidated Company revenues 
for 1999 and each of the preceding two years.

    Cincinnati Bell Long Distance Inc. (CBLD)

    CBLD is an integrated communications provider that resells long distance 
telecommunications services and products as well as voice mail and paging 
services mainly in Ohio, Indiana, Michigan, Kentucky and Pennsylvania. CBLD 
is licensed, however, as a long distance provider in every state except 
Alaska. Its principal market focus is small-and medium-sized business and 
residential customers. CBLD augments its high-quality long-distance services 
with calling plans, network features and enhanced calling services to create 
customized packages of communications services for its clients. CBLD has 
added new data communications services for business customers, including 
high-speed dedicated and dial-up Internet access services and other 
high-speed data transport using frame relay technology. The operations of 
CBLD were integrated into Broadwing Communications in January 2000. Also in 
January 2000 CBLD started doing business as Cincinnati Bell Any Distance.

    Cincinnati Bell Supply Company (CBS)

    CBS markets telecommunications and computer equipment. Its principal 
market is the secondary market for refurbished telecommunications systems, 
including AT&T and Lucent branded systems. CBS's competitors include vendors 
of new and used computer and communications equipment operating regionally 
and across the nation. The Company is finalizing plans to sell or exit this 
business in 2000 as it does not fit the Company's long-term strategic plan.

    Broadwing IT Consulting

    Broadwing IT Consulting provides network integration and consulting 
services as well as the sale of related equipment. Its principal market is 
small- to medium-sized businesses. Competitors include Intranet hardware 
vendors, wiring vendors and other network integration and consulting 
businesses. The operations of Broadwing IT Consulting were integrated into 
Broadwing Communications in January 2000.


                                                                             5



<PAGE>


RISK FACTORS

    INCREASED COMPETITION COULD COMPROMISE CBT'S PROFITABILITY AND CASH FLOW

    LOCAL

       With regard to local markets, CBT continues to be the predominate 
    provider of voice and data communications in the Greater Cincinnati and 
    Northern Kentucky areas. This business is becoming increasingly 
    competitive. CBT offers modern telecommunications services (such as its 
    ZoomTown-SM- high-speed Asynchronous Digital Subscriber Line (ADSL) service
    and its FUSE-Registered Trademark- Internet access services) to its local
    customers, but faces competition from cable modem and Internet access 
    providers. The Company believes CBT will face greater competition as more
    competitors surface and focus additional resources on the Greater Cincinnati
    and Northern Kentucky metropolitan areas.

         With the exception of Broadwing Communications (discussed below under 
    "National"), the Company's other subsidiaries operate in a largely local 
    or regional area, and each of these subsidiaries face significant 
    competition. CBD's competitors are directory services companies, 
    newspapers and other media advertising services providers in the 
    Cincinnati metropolitan market area. CBD now competes with its former 
    sales representative for Yellow Pages directory customers; such 
    competition may affect CBD's ability to grow or maintain profits and 
    revenues. CBLD's competitors include interexchange carriers and certain 
    local telecommunications services companies. CBS's competitors include 
    vendors of new and used communications and computer equipment, operating 
    regionally and across the nation. Cincinnati Bell Wireless, LLC is one of 
    six active wireless service providers in the Cincinnati and Dayton 
    metropolitan market areas, most of which are nationally known and well 
    financed. Broadwing IT Consulting provides network integration and 
    consulting services and competes with a variety of Intranet hardware 
    vendors, wiring vendors and other integration and consulting businesses.

         The Company's inability to succeed against these competitors would 
    compromise its profitability and cash flow. This would result in increased 
    reliance on borrowed funds and could affect its ability to continue 
    expansion of its national fiber-optic and regional wireless networks.

    NATIONAL

         The addition of the Broadwing Communications subsidiary presents the
    Company with significant opportunities to reach a nationwide customer base
    and provide new services to local customers. However, the Company's success
    in this regard will depend on its ability to meet customers' price, quality
    and customer service expectations. With entry into this national market, the
    Company now faces competition from well-managed and well-financed companies
    such as Level 3 Communications, Qwest Communications International, Global
    Crossings, and Williams Communications. As with competition in the local
    arena, the Company's failure against these competitors could compromise its
    ability to continue construction of its network, which could have a material
    adverse effect on its business, financial condition and results of
    operations.

         Competition from other national providers could also have another
    effect on the Company. The current and planned fiber network capacity of
    these and other competitors could result in decreasing prices even as the
    demand for high-bandwidth services increases. Most of these competitors have
    announced plans to expand, or are currently in the process of expanding,
    their networks. Increased network capacity and traffic optimization could
    place downward pressure on prices, thereby making it difficult for the
    Company to maintain profit margins.

    INSUFFICIENCY OF CASH FLOW FOR PLANNED INVESTING AND FINANCING ACTIVITIES
    WILL RESULT IN A SUBSTANTIAL AMOUNT OF INDEBTEDNESS

         The Company's recent history of generating sufficient cash flow in
    order to provide for investing and financing needs has changed. Prior to
    1998, the Company consisted largely of mature businesses that benefited from
    a local telephone franchise, an embedded customer base and relative freedom
    from competition.

         The growth in demand for wireless, data and Internet-based
    communications, however, has made it necessary and prudent for the Company
    to diversify into these new businesses. Entering these businesses requires
    the Company to explore new markets in an attempt to reach new customers, and
    has resulted in substantial start-up costs, net operating losses and a drain
    on cash flow. The need to continue construction of the Company's fiber-optic
    network in support of these services will require a significant amount of
    additional funding, aggregating to approximately $1.8 billion over the next
    three years.


                                                                             6



<PAGE>


         In order to provide for these cash requirements, the Company has 
    obtained a $2.1 billion credit facility from a group of 24 banking and 
    non-banking institutions. The Company anticipates that it will 
    substantially increase its indebtedness in 2000 under this credit facility 
    in order to provide for net operating losses, to fund its capital 
    investment program, and to refinance existing debt.

         The Company will not be able to provide for its anticipated growth 
    without borrowing from this credit facility. The ability to borrow from 
    this credit facility is predicated on the Company's ability to satisfy 
    certain debt covenants that have been negotiated with lenders. Failure to 
    satisfy these debt covenants could severely constrain the Company's 
    ability to borrow from the credit facility without receiving a waiver from 
    these lenders. If the Company were unable to continue the construction of 
    its fiber-optic network, current and potential customers could be lost to 
    competitors, which could have a material adverse effect on its business, 
    financial condition and results of operations.

    NETWORK EXPANSION IS DEPENDENT ON ACQUIRING AND MAINTAINING RIGHTS-OF-WAY 
    AND PERMITS

         The expansion of the Company's network also depends on acquiring 
    rights-of-way and required permits from railroads, utilities and 
    governmental authorities on satisfactory terms and conditions and on 
    financing such expansion. In addition, after the network is completed and 
    required rights and permits are obtained, the Company cannot guarantee 
    that it will be able to maintain all of the existing rights and permits. 
    If the Company were to fail to obtain rights and permits or were to lose a 
    substantial number of rights and permits, it could have a material adverse 
    effect on its business, financial condition and results of operations.

    A SIGNIFICANT AMOUNT OF CAPITAL EXPENDITURES WILL BE REQUIRED TO FUND
    EXPANSION OF THE NETWORK

         The Company is committed to the expansion of its nationwide 
    fiber-optic network, the widespread deployment of high-speed data 
    transport services in its local telephone franchise area and continued 
    infrastructure development for its wireless business. These initiatives 
    will require a considerable amount of funding.

         The Company's annual capital expenditures for its local 
    Telecommunications business ranged between $100 million and $160 million 
    over the last four years. In 1999, growth of the wireless business and 
    capital spending in the post-merger period more than doubled these amounts 
    (to nearly $400 million in the current year). The Company's current plans 
    call for more than $800 million in capital spending in 2000 in order to 
    continue expansion of the fiber optic network. Heavy capital spending is 
    also planned in subsequent years, with the Company planning to spend 
    nearly $1 billion over the succeeding two-year period.

         The Company believes that it is imperative to invest heavily in its 
    network in order to offer leading-edge products and services to its 
    customers. Failure to construct and maintain such a network would leave 
    the Company vulnerable to customer loss to other fiber-optic network 
    providers, and would cause slower than anticipated growth. This would have 
    a material adverse effect on our business, financial condition and results 
    of operations.

    REGULATORY INITIATIVES MAY IMPACT THE COMPANY'S PROFITABILITY

         The Company's most profitable subsidiary, CBT, is subject to 
    regulatory oversight of varying degrees at both the state and federal 
    level. Regulatory initiatives that would put CBT at a competitive 
    disadvantage or mandate lower rates for its services could result in lower 
    profitability and cash flow for the Company, thereby increasing its 
    reliance on borrowed funds. This could potentially compromise the 
    expansion of its national fiber-optic network and development of its 
    wireless business.

         A further discussion of specific regulatory matters pertaining to the 
    Company and its operations is contained in Item 7, "Management's 
    Discussion and Analysis of Financial Condition and Results of Operations."


                                                                             7



<PAGE>


    CAPITAL ADDITIONS

    The capital additions of the Company are primarily for its fiber-optic 
transmission facilities, telephone plant in its local service area, and for 
development of the infrastructure for its wireless business. As a result of 
these expenditures, the Company expects to be able to introduce new products 
and services, respond to competitive challenges and increase its operating 
efficiency and productivity.

    The following is a summary of capital additions for the years 1995 
through 1999:


<TABLE>
<CAPTION>
                                                 Dollars in Millions
             ------------------------------------------------------------------------------------------------
             Local Telephone          Fiber-Optic                Wireless                       Total Capital
               Operations       Transmission Facilities      Infrastructure         Other         Additions
               ----------       -----------------------      --------------         -----         ---------
<S>          <C>                <C>                          <C>                    <C>         <C>
1999             $152.2                 $165.0                   $ 55.9             $ 8.3           $381.4
1998             $134.9                   --                       $2.2             $ 6.5           $143.6
1997             $140.0                   --                       --               $18.4           $158.4
1996             $101.4                   --                       --               $ 4.9           $106.3
1995             $ 90.3                   --                       --               $ 2.5           $ 92.8
</TABLE>


    The total investment in local telephone operations plant increased from 
approximately $1,447 million at December 31, 1994, to approximately $1,856 
million at December 31, 1999, after giving effect to retirements but before 
deducting accumulated depreciation at either date.

    Capital additions for 2000 are estimated to be approximately $800 
million, excluding any acquisitions that may occur in 2000.

EMPLOYEES

    At December 31, 1999, the Company and its subsidiaries had approximately 
6,000 employees. CBT had approximately 2,000 employees covered under a 
collective bargaining agreement with the Communications Workers of America, 
which is affiliated with the AFL-CIO. The collective bargaining agreement 
expires in May 2002.

BUSINESS SEGMENT INFORMATION

    The amounts of revenues, intersegment revenues, EBITDA, assets, capital 
additions, depreciation and amortization attributable to each of the business 
segments of the Company for the year ended December 31, 1999, are set forth 
in Note 15 of the Notes to Financial Statements contained in Item 7, 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations."


                                                                             8

<PAGE>



 
   ITEM 2.  PROPERTIES

    The property of the Company is principally composed of its nationwide 
fiber-optic transmission system, telephone plant in its local telephone 
franchise area, and the infrastructure associated with its wireless business 
in the Greater Cincinnati and Dayton, Ohio operating areas. As this 
investment is extensive and geographically dispersed, it does not lend itself 
to description by character and location of principal units. Each of the 
Company's subsidiaries maintains some investment in furniture and office 
equipment, computer equipment and associated operating system software, 
leasehold improvements and other assets. Facilities leased as part of an 
operating lease arrangement are expensed as incurred and are not included in 
the totals below.

    With regard to its local telephone operations, substantially all of the 
central office switching stations are owned and situated on land owned by the 
Company. Some business and administrative offices are located in rented 
facilities, some of which are treated as capitalized leases and included in 
the "Furniture, fixtures, vehicles and other" caption below. Fiber-optic 
transmission facilities consist largely of fiber-optic cable, associated 
optronics and the land and rights-of-way necessary to place these facilities. 
The wireless infrastructure consists primarily of transmitters, receivers, 
towers, antennae and associated land and rights-of-way.

    The gross investment in fiber-optic transmission facilities, telephone 
plant, wireless infrastructure and other property, in millions of dollars, at 
December 31, 1999 and 1998 was as follows:


<TABLE>
<CAPTION>
                                                                  1999              1998
                                                                  ----              ----
<S>                                                           <C>               <C>
Land and rights of way                                        $  155.9          $    5.0
Buildings and leasehold improvements                             428.3             164.0
Telephone plant                                                1,697.2           1,438.5
Transmission system                                            1,074.4              65.9
Furniture, fixtures, vehicles and other                          225.7             187.4
Construction in process                                          232.0              12.4
                                                                 -----              ----
     Total                                                    $3,813.5          $1,873.2
                                                              ========          ========
</TABLE>


    Properties of the Company are divided between operating segments as follows:


<TABLE>
<CAPTION>
                                                                 1999              1998
                                                                 ----              ----
<S>                                                             <C>               <C>
Local Communications                                             48.7%             92.9%
Broadband                                                        46.0%             --
Wireless                                                          4.5%              5.8%
Other Communications                                              0.8%              1.3%
                                                                  ----              ----
     Total                                                      100.0%            100.0%
                                                                ======            ======
</TABLE>



ITEM 3.  LEGAL PROCEEDINGS

    The information required by this Item is included in Note 19 of the Notes 
to Financial Statements that are contained in Item 8, "Financial Statements 
and Supplementary Data."


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS

    On October 29, 1999, the Company conducted a special meeting of its 
security holders in order to vote on the issuance of the Company's common 
stock to stockholders of IXC in the merger of IXC and a subsidiary of the 
Company. This was the only item submitted for a vote of security holders 
during this special meeting. The Company's shareholders approved the merger, 
with 82,156,679 common shares (87.04%) voting in favor of the merger, 
12,238,220 common shares (12.04%) voting against the merger, and 1,417,918 
common shares abstaining from the vote.


                                                                             9



<PAGE>



    ITEM 4A.  EXECUTIVE OFFICERS OF THE REGISTRANT (DURING 1999)

The names, ages and positions of the executive officers of the Company as of 
12/31/99 are as follows:


<TABLE>
<CAPTION>
                  Name                                        Age                            Title    
                  ----                                        ---                            -----    
         <S>                                                  <C>                       <C>
         James D. Kiggen (a)                                   67                       Chairman of the Board

         Richard G. Ellenberger (a)(b)(d)                      46                       President and Chief Executive Officer

         John T. LaMacchia (a)(b)(c)                           57                       President and Chief Executive Officer

         Kevin W. Mooney                                       41                       Executive Vice President and Chief 
                                                                                        Financial Officer

         Thomas E. Taylor                                      53                       General Counsel and Secretary

         Richard S. Pontin                                     46                       President and Chief Operating Officer of
                                                                                        Broadwing Communications Inc.

         John F. Cassidy                                       45                       President, Cincinnati Bell Enterprises

         Jack J. Mueller                                       43                       President, Cincinnati Bell Telephone
</TABLE>


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

(a)      Member of the Board of Directors

(b)      Member of the Executive Committee

(c)      Effective February 28, 1999, Mr. LaMacchia resigned as President and
         Chief Executive Officer of the Company but continues to serve as a
         Director of the Company.

(d)      Effective March 1, 1999, upon Mr. LaMacchia's resignation, Mr.
         Ellenberger became President and Chief Executive Officer of the
         Company.

    Officers are elected annually but are removable at the discretion of the 
Board of Directors.

JAMES D. KIGGEN, Chairman of the Board of the Company since January 1, 1999; 
Chairman of the Board of Xtek, Inc., 1985-1999; Chief Executive Officer of 
Xtek, Inc., 1985-1998; President of Xtek, Inc., 1985-1995. Director of Fifth 
Third Bancorp and its subsidiary, Fifth Third Bank, and The United States 
Playing Card Company.

RICHARD G. ELLENBERGER, President and Chief Executive Officer of the Company 
since March 1, 1999; Chief Operating Officer of the Company since September 
1, 1998; President and Chief Executive Officer of CBT since June, 1997; Chief 
Executive Officer of XLConnect, 1996-1997; President, Business Services of 
MCI Telecommunications, 1995-1996; Senior Vice President, Worldwide Sales of 
MCI Telecommunications, 1994-1995; Senior Vice President, Branch Operations 
of MCI Telecommunications, 1993-1994; Vice President, Southeast Region of MCI 
Telecommunications, 1992-1993.

JOHN T. LAMACCHIA, President and Chief Executive Officer of CellNet Data 
Systems, Inc. since May 1999, President and Chief Executive Officer of the 
Company, 1993 - February 28, 1999; President and Chief Operating Officer of 
the Company, 1988-1993; Chairman of Cincinnati Bell Telephone, 1993 - 1999. 
Director of The Kroger Company, Burlington Resources Inc. and CellNet Data 
Systems, Inc.

KEVIN W. MOONEY, Executive Vice President and Chief Financial Officer of the 
Company since September 1, 1998; Senior Vice President and Chief Financial 
Officer of CBT since January 1998; Vice President and Controller of the 
Company, September 1996 to January 1998; Vice President of Financial Planning 
and Analysis of the Company, January 1994 to September 1996; Director of 
Financial Planning and Analysis of the Company, 1990-1994.

THOMAS E. TAYLOR, General Counsel and Secretary of the Company since 
September 1998; Senior Vice President and General Counsel of Cincinnati Bell 
Telephone from August 1996 to present; Partner at law firm of Frost & Jacobs 
from July 1987 to August 1996.


                                                                            10



<PAGE>


RICHARD S. PONTIN, President and Chief Operating Officer of Broadwing 
Communications since November 1999; President and Chief Operating Officer of 
Cincinnati Bell Telephone, April 1999 to November 1999; Vice President, 
Engineering & Operations of Nextel Communications, 1997 to 1999; Vice 
President, National Accounts, MCI Communications, 1996; Vice President Data 
Services, MCI Communications, 1994-1996; Vice President, Global Alliances, 
MCI Communications, 1992-1994.

JOHN F. CASSIDY, President, Cincinnati Bell Enterprises since August, 1999; 
President of Cincinnati Bell Wireless since 1996; Senior Vice President, 
National Sales & Distribution of Rogers Cantel in Canada from 1992-1996.

JACK J. MUELLER, President of Cincinnati Bell Telephone since November 1999; 
General Manager of Cincinnati Bell Telephone's Residential and Business 
Markets February 1999-November 1999; President and CEO of Cincinnati Bell 
Directory 1996-1999; Vice President of Cincinnati Bell Directory 1990-1996.














                                                                            11



<PAGE>



                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER 
MATTERS.

MARKET INFORMATION

    The Company's common shares (symbol: BRW) are listed on the New York 
Stock Exchange and on the Cincinnati Stock Exchange. As of February 25, 2000, 
there were approximately 127,000 holders of record of the 202,550,808 
outstanding common shares of the Company. The high and low sales prices* and 
dividends declared per common share** each quarter for the last two fiscal 
years are listed below:


<TABLE>
<CAPTION>

Quarter                                 1st              2nd              3rd             4th

<S>         <C>                     <C>               <C>              <C>              <C>
1999        HIGH                    $  23 7/16        $  26 1/2        $ 26 1/2         $  37 7/8
            LOW                     $  16 1/16        $  19 5/8        $ 16 5/16        $  18 3/4
            DIVIDEND DECLARED       $  .10            $  .10           $ --             $  --

1998        High                    $  14 11/16       $  15 5/8        $ 13 9/16        $  15 7/16
            Low                     $  12  9/16       $  11 11/16      $  9 7/16        $   8 13/16
            Dividend Declared       $  .10            $  .10           $  .10            $  .10
------------------------------
</TABLE>


    Effective November 15, 1999, the ticker symbol for the Company's common 
shares changed to BRW from CSN.

      * Prices adjusted to reflect distribution of shares of Convergys 
Corporation on December 31, 1998.

     ** Dividends discontinued after quarterly dividend declared on June 21, 
1999.

DIVIDENDS

    The Company discontinued its dividend payment on its common shares 
effective after the second quarter 1999 dividend payment in August 1999. The 
Company does not intend to pay dividends on its common shares in the 
foreseeable future. Furthermore, the Company's future ability to pay 
dividends is restricted by certain covenants and agreements pertaining to 
outstanding indebtedness. The Company is required to pay dividends on its 6 
3/4% and 7 1/4% preferred shares, and is paying dividends in cash rather than 
shares of Broadwing Communications 12 1/2% preferred shares on February 15, 
2000.

                                                                            12



<PAGE>


    ITEM 6.  SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>

Millions of dollars except per share amounts                         1999         1998         1997         1996         1995
                                                                     ----         ----         ----         ----         ----
<S>                                                              <C>           <C>           <C>          <C>          <C>
RESULTS OF OPERATIONS
Revenues                                                         $1,131.1      $ 885.1       $834.5       $779.8       $736.0
Costs and expenses, less depreciation and amortization              795.4        595.1        539.8        507.9        478.7
                                                                    -----        -----        -----        -----        -----
EBITDA (a)                                                          335.7        290.0        294.7        271.9        257.3
Depreciation and amortization                                       181.0        111.1        124.3        121.0        116.3
Restructuring and other charges (credits) (b)                        10.9         (1.1)       (21.0)       (29.7)       131.6
                                                                    -----        -----        -----        -----        -----
Operating income                                                    143.8        180.0        191.4        180.6          9.4
Equity loss in unconsolidated entities                               15.3         27.3           --           --           --
Minority interest and other income (expense)                          4.5         (2.4)        (2.7)         0.5         (9.1)
Interest expense                                                     61.7         24.2         30.1         27.9         45.4 
                                                                    -----        -----        -----        -----        -----
Income (loss) before income taxes, extraordinary items
     and cumulative effect of change in accounting principle         71.3        126.1        158.6        153.2        (45.1)
Income taxes                                                         33.3         44.3         56.3         53.7        (16.0)
                                                                    -----        -----        -----        -----        -----
Income (loss) from continuing operations                             38.0         81.8        102.3         99.5        (29.1)
Income from discontinued operations, net of taxes (c)                --           69.1         91.3         85.5          3.8 
                                                                    -----        -----        -----        -----        -----
Income (loss) before extraordinary items                             38.0        150.9        193.6        185.0        (25.3)
Extraordinary items and cumulative effect of
     change in accounting principle (d)                              (6.6)        (1.0)      (210.0)          --         (7.0)
                                                                    -----        -----        -----        -----        -----
Net income (loss)                                                    31.4        149.9        (16.4)       185.0        (32.3)
Dividends and accretion applicable to preferred stock                 2.1           --           --           --           -- 
                                                                    -----        -----        -----        -----        -----
Net income (loss) applicable to common shareholders                 $29.3       $149.9       $(16.4)      $185.0       $(32.3)
                                                                    -----        -----        -----        -----        -----
Basic earnings (loss) per common share:
     Income (loss) from continuing operations                       $ .25       $  .60       $  .76       $  .74       $ (.22)
     Income from discontinued operations, net of taxes                 --          .51          .67          .64          .03
     Extraordinary items, net of taxes                               (.05)        (.01)       (1.55)          --         (.05)
     Income (loss)                                                  $ .20       $ 1.10       $ (.12)      $ 1.38       $ (.24)
Diluted earnings (loss) per common share:
     Income (loss) from continuing operations                       $ .24       $  .59       $  .74       $  .73       $ (.22)
     Income from discontinued operations, net of taxes                 --          .50          .67          .62          .03
     Extraordinary items, net of taxes                               (.04)        (.01)       (1.53)          --         (.05)
     Income (loss)                                                  $ .20       $ 1.08       $ (.12)      $ 1.35       $ (.24)
Dividends declared per common share                                 $ .20       $  .40       $  .40       $  .40       $  .40
Weighted average common shares (millions)
     Basic                                                          144.3        136.0        135.2        133.9        132.0
     Diluted                                                        150.7        138.2        137.7        137.2        133.5
FINANCIAL POSITION
Total assets (c) (d)                                            $ 6,508.6    $ 1,041.0    $ 1,275.1    $ 1,415.9    $ 1,363.8
Long-term debt                                                  $ 2,136.0    $   366.8    $   268.0    $   271.2    $   370.0
Redeemable Preferred stock                                      $   228.6           --           --           --           --
Total debt                                                      $ 2,145.2    $   553.0    $   399.5    $   409.0    $   423.7
Common shareowners' equity (c) (d)                              $ 2,132.8    $   142.1    $   579.7    $   634.4    $   478.1
Cash flow from continuing operations                            $   313.9    $   212.3    $   197.4    $   132.0    $   151.5

</TABLE>


(a) EBITDA represents operating income before depreciation, amortization, and 
restructuring and related charges or credits. EBITDA does not represent cash 
flow for the periods presented and should not be considered as an alternative 
to net earnings (loss) as an indicator of the Company's operating performance 
or as an alternative to cash flows as a source of liquidity, and may not be 
comparable with EBITDA as defined by other companies. 

(b) See Note 3 of Notes to Financial Statements.

(c) See Note 12 of Notes to Financial Statements.

(d) See Notes 13 and 5 of Notes to Financial Statements.


                                                                            13

<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND RESULTS AND OPERATIONS

    Broadwing Inc. (the Company) is a full-service provider of wireline and 
wireless telecommunications services that conducts its operations through the 
following reportable segments:

LOCAL COMMUNICATIONS -- The Company provides local service, network access, 
long distance, data and Internet, ADSL, transport, and payphone services, as 
well as sales of communications equipment to customers in southwestern Ohio, 
northern Kentucky and southeastern Indiana. Services are marketed and 
delivered via the Company's Cincinnati Bell Telephone (CBT) and ZoomTown.com 
(ZT) subsidiaries.

BROADBAND -- The Company utilizes its advanced fiber-optic network to provide 
data transport, Internet services, private line, switched access, and other 
services nationwide. This segment also leases network capacity in the form of 
indefeasable right-to-use agreements ("IRUs"). These services are offered 
through the Company's new subsidiary, Broadwing Communications, Inc. 
(formerly IXC Communications, Inc.).

WIRELESS -- The Wireless segment includes the Company's Cincinnati Bell 
Wireless subsidiary (an 80%-owned venture with AT&T Wireless PCS, Inc.) which 
provides advanced digital personal communications to customers in its Greater 
Cincinnati and Dayton, Ohio operating areas.

DIRECTORY -- The Company sells directory advertising and information services 
through printed directories and the Internet, primarily to business customers 
in its Local Communications segment service area. This segment's most 
identifiable product is the Yellow Pages directory produced by the Company's 
Cincinnati Bell Directory (CBD) subsidiary.

OTHER COMMUNICATIONS -- Other Communications combines several of the 
Company's other segments: Cincinnati Bell Long Distance (CBLD) , Cincinnati 
Bell Supply (CBS), and Broadwing IT Consulting. CBLD resells long distance, 
voice, data, frame relay, and Internet access services to small- and 
medium-sized business and residential customers throughout a six-state region 
of the midwest. CBS sells new computers and resells telecommunications 
equipment in the secondary market, and Broadwing IT Consulting provides 
network integration and consulting services.

    This report and the related consolidated financial statements and 
accompanying notes contain certain forward-looking statements that involve 
potential risks and uncertainties. The Company's future results could differ 
materially from those discussed herein. Factors that could cause or 
contribute to such differences include, but are not limited to, those 
discussed herein. Readers are cautioned not to place undue reliance on these 
forward-looking statements, which speak only as of the date hereof. The 
Company undertakes no obligation to review or update these forward-looking 
statements or to reflect events or circumstances after the date hereof or to 
reflect the occurrence of unanticipated events.


-------------------------------------------------------------------------------
CONSOLIDATED OVERVIEW

    The Company is now a full-service, local and national provider of data and
voice telecommunications services, and a regional provider of wireless
communications services. Upon its November 9, 1999 merger with IXC
Communications, Inc. (hereinafter referred to as "the Merger"), the Company
acquired a high-speed fiber-optic network capable of providing private line,
switched access, data, Internet-based, and other advanced communications
services. This complements the strong service offerings that were provided on a
local or regional basis (local service, long distance, data transport, Internet
access and related communications equipment) primarily in the Cincinnati area.
The national network has also contributed an important new source of revenue and
cash flow to the Company: the sale of IRUs.

    The Company seeks to provide world-class service on a national level by
combining two sets of strengths: its well-regarded brand name and reputation for
service in its regional franchise area and its newly acquired, nationwide
fiber-optic network and Internet backbone. The Company further enhances these
capabilities by partnering with targeted industry leaders such as Cisco Systems,
PSINet, ZeroPlus.com, Lucent Technologies and AT&T.

                                                                           14

<PAGE>

RESULTS OF OPERATIONS

1999 COMPARED TO 1998

    In 1999, the Company transformed itself from a provider of local 
communications services into a national provider of voice and data 
communications. The transition began in 1998 with the spin-off of Convergys 
Corporation, a former subsidiary that held the Company's information and 
customer management businesses, and was solidified with the acquisition of 
IXC and its high-speed, fiber optic network and national presence. The 
acquisition of an 80% interest in the wireless business from AT&T-PCS on 
December 31, 1998 also added significant growth to our local and regional 
service offerings.

    The Merger and the acquisition of the wireless business from AT&T-PCS had 
a significant impact on 1999 operating results. Of the $246 million in 
additional revenues in 1999, more than 77% (or $190 million) came from these 
new businesses. While the Company continues to expand its product and service 
offerings, as well as its geographic footprint, all previously existing 
segments reported strong results. Revenues from Local Communications 
increased 4%, or $31.7 million, Directory grew 2%, or $1.3 million, and Other 
Communications grew 24%, or $25.2 million. The growth in the Other 
Communications segments was due to the expansion of the sale of 
communications equipment and the addition of the network integration and 
consulting business through an acquisition in November 1998.

    Costs and expenses, excluding depreciation, amortization and special 
charges, were $795.4 million, up $200.3 million, or 34%. Of this increase, 
$98.7 million was due to the Merger and $116.2 million was due to Cincinnati 
Bell Wireless, which became a consolidated entity upon completion of the 
acquisition of the wireless business from AT&T-PCS on December 31, 1998. 
Excluding these two additions, operating expenses were down $14.6 million 
from the prior year. EBITDA margins excluding Broadwing Communications and 
Cincinnati Bell Wireless increased 5.5 percentage points. Depreciation and 
amortization expense increased $69 million over 1998, with $47 million as a 
result of the Merger and $14 million attributable to the wireless business.

    In December 1999, the Company's management approved restructuring plans 
which included initiatives to integrate operations of the Company and 
Broadwing Communications improve service delivery, and reduce the Company's 
expense structure. Total restructuring costs and impairments of $18.6 million 
were recorded in the fourth quarter related to these initiatives. The $18.6 
million consisted of $7.7 million relating to Broadwing Communications 
(recorded as a component of the preliminary purchase price allocation) and 
$10.9 million relating to the Company (recorded as a cost of operations). The 
$10.9 million relating to the Company consisted of restructuring and other 
liabilities in the amount of $9.5 million and related asset impairments in 
the amount of $1.4 million.

    The Company's estimated restructuring costs were based on management's 
best estimate of those costs based on available information. The 
restructuring costs accrued in 1999 included the costs of involuntary 
employee separation benefits related to 347 employees (263 Broadwing 
Communication employees and 84 other employees). As of December 31, 1999, 
approximately 1% of the employee separations had been completed for a total 
cash expenditure of $0.4 million. Employee separation benefits include 
severance, medical and other benefits, and primarily affect customer support, 
infrastructure, and the Company's long distance operations. The restructuring 
plans also included costs associated with the closure of a variety of 
technical and customer support facilities, the decommissioning of certain 
switching equipment, and the termination of contracts with vendors.

    In connection with the restructuring plan, the Company performed a review 
of its long-lived assets to identify any potential impairments in accordance 
with SFAS 121, "Accounting for the Impairment of Long-Lived Assets to be 
Disposed of." Accordingly, the Company recorded a $1.4 million charge as an 
expense of operations, resulting from the abandonment and write-off of 
certain assets including duplicate network equipment. In total, we expect 
these restructuring related activities to result in cash outlays of $14.8 
million and non-cash items of $3.8 million. The Company expects that most of 
the restructuring actions will be completed by December 31, 2000.

    Operating income decreased by $36.2 million from the prior year 
reflecting the losses of the Broadband and Wireless segments which were $46.5 
million and $40.3 million, respectively. Also included in operating income 
was the $10.9 million charge for business restructuring mentioned above. 
Excluding these items, operating income increased by $57.4 million due 
primarily to the operations of the Local Communications segment.

    The Company recorded equity losses in unconsolidated entities in both 
years. In 1999, the Company recorded a 13% share of the operating losses of 
IXC due to its ownership of IXC common stock from August 16, 1999 to the 
November 9, 1999 closing date of the Merger. In 1998, the Company recorded a 
$27.3 million loss on its wireless venture with AT&T-PCS because 

                                                                           15

<PAGE>

it agreed to fund its proposed share of the wireless business losses from 
inception to the close of the acquisition on December 31, 1998. The Company 
managed the operations of the venture while awaiting regulatory approval of 
the acquisition. As mentioned above, the results for this business are 
consolidated in Company operations in 1999.

    Minority interest and other income (expense) resulted in income of $4.5 
million for the year, a $6.0 million increase over 1998. Of this amount, $9.3 
million of minority interest income was recorded as AT&T PCS' 19.9% share in 
the losses of our wireless subsidiary. This was partially offset by $6.9 
million in preferred stock dividends accreted to the 12.5% preferred 
stockholders of Broadwing Communications and treated as minority interest. 
Remaining amounts in this category are largely attributable to interest 
income.

    Interest expense increased significantly in 1999, owing to higher average 
debt levels associated with the Merger, the issuance of $400 million in 6 3/4% 
Convertible Subordinated Notes in July 1999, and the amortization of debt 
issuance costs and bank commitment fees associated with the Company's new 
$2.1 billion credit facility and these convertible subordinated notes. Of the 
$37.5 million increase in interest expense, $13.4 million is attributable to 
the operations of the Wireless business and approximately $24.0 million is 
related to the Merger.

    Income taxes decreased $11 million, or 25%, in comparison to the prior 
year, as a function of lower pre-tax income and the offsetting impact of 
nondeductible expenses such as goodwill amortization and preferred stock 
dividends.

    Extraordinary items related to the early extinguishment of debt affected 
results for each year. In 1999, costs related to the early extinguishment of 
Broadwing Communications' debt as a result of the Merger resulted in a $6.6 
million charge, net of taxes. The spin-off of Convergys Corporation in 1998 
reduced the borrowing capacity that was needed from the Company's 
then-existing credit facility and some debt and a portion of that credit 
facility were retired, resulting in a $1.0 million extraordinary charge, net 
of tax.

    As a result of the above, income from continuing operations decreased 
from $81.8 million to $38.0 million and earnings per common share (EPS) from 
continuing operations decreased from $.60 in 1998 to $.25 in 1999. Excluding 
the Merger, EPS from continuing operations would have been $.82, a 37% 
increase over 1998.

    Discontinued Operations for 1995 through 1998 includes the results of the 
Convergys Corporation (Convergys), the billing and customer management 
operations that were divested on December 31, 1998 through a tax free 
spin-off.

1998 COMPARED TO 1997

    Revenues were $885.1 million, up 6% from $834.5 million in 1997, 
primarily as a result of increased activities in Local Communications 
segment. Increases in the Company's suite of custom calling services, through 
bundling of services as well a pay-per-use option, and increased data 
transport services accounted for a majority of the increase.

     Costs and expenses, less depreciation, amortization and special charges, 
were $595.1 million, up 10% from $539.8 million in 1998. Of this increase $10 
million, or 20%, was due to an increase Y2K and regulator mandated costs. 
Other increases were primarily due to increased headcount and higher wages. 
As a result, the EBITDA margin decreased two percentage points to 33%.

    Income from continuing operations in 1998 was $81.8 million, or $.59 per 
common share, compared with $102.3 million, or $.74 per common share in 1997. 
In 1998, the Company recognized $1.1 million in special credits resulting 
from the 1995 business restructuring, compared with $21.0 million in 1997 
(see Note 3 of Notes to Financial Statements). The Company also recorded a 
$27.3 million loss on its wireless venture in 1998, while no such loss was 
recorded in 1997. Excluding special credits and the wireless dilution, income 
from continuing operations on a per common share basis was $.72 in 1998 
compared with $.64 in 1997.

    Extraordinary items affected both years. In 1998, retirement of long-term 
debt and a portion of a credit facility resulted in an extraordinary charge 
of $1.0 million, net of taxes. In 1997, the discontinuation of Statement of 
Financial Accounting Standard No. 71,"Accounting for the Effects of Certain 
Types of Regulation," at CBT resulted in a non-cash charge of $210.0 million 
after-tax.

                                                                           16

<PAGE>

-------------------------------------------------------------------------------
LOCAL COMMUNICATIONS

    The Local Communications segment provides local service, network access,
(including high-speed data transport), long distance, data and Internet, ADSL
transport, sales of communications equipment, and other ancillary
telecommunications services through its Cincinnati Bell Telephone (CBT) and
ZoomTown.com (ZT) subsidiaries. These two subsidiaries function as a fully
integrated, wireline communications provider.


<TABLE>
<CAPTION>

                                                                       % Change                       % Change
($ in millions)                                  1999       1998       99 vs. 98        1997          98 vs. 97
----------------------------------------------------------------------------------------------------------------------
<S>                                            <C>        <C>           <C>          <C>              <C>
Revenues:

     Local service                               $426.4     $407.9         5            $386.2             6
     Network access                               185.3      180.9         2             170.0             6
     Other services                               138.4      129.6         7             113.9            14
                                                  -----      -----                       -----
         Total                                    750.1      718.4         4             670.1             7

Costs and expenses:
     Cost of providing service                    282.0      296.6        (5)            267.6            11
     Selling, general and
         administrative expense                   142.7      152.4        (6)            145.6             5
     Y2K and regulator-mandated                     4.6       21.5       (79)             10.6            103
                                                    ---     ------                     -------
     Total                                        429.3       470.5      (9)             423.8            11

EBITDA                                           $320.8     $247.9        29            $246.3            1
EBITDA margin                                      42.8%      34.5%       24              36.8%          (6)

Access lines (thousands)                        1,055      1,033           2           1,005               3
VGEs (thousands)                                  518        387          34             276              40
</TABLE>


1999 COMPARED TO 1998

    The Local Communications segment posted another strong performance in 
1999, with revenues and EBITDA increasing by 4% and 29% respectively. The 
combination of revenue growth and a focus on cost control efforts resulted in 
an 8.3 percentage point increase in EBITDA margin.

REVENUES

    Revenues of $750.1 million were 4% higher than the $718.4 million 
recorded in the prior year, owing to growth in all categories. The local 
service category provided most of the revenue growth for the segment, growing 
5% for the year, or nearly $19 million. Within this category, growth came 
primarily from new product bundling offers (e.g. Complete 
Connections-Registered Trademark- added 110,000 subscribers within the year), 
new products (e.g. the Zoomtown-SM- ADSL product launched late in 1998 grew to 
18,000 subscribers by December 31, 1999), and data transport. These services, 
in the aggregate, contributed more than 80% of the increase for this 
category, or $15 million. Access line growth was responsible for the 
remainder of the increase, with a 2% increase in lines contributing 
approximately $4 million in additional revenue for the year.

    Network access revenues were 2% higher, or $4.4 million. The sale of high 
capacity digital services (expressed in voice grade equivalents, or VGEs) 
increased 34%, resulting in approximately $13 million in new revenues for the 
category. The Company also realized approximately $5 million in additional 
revenues due to the recovery of mandated telecommunications costs. In spite 
of a 7% increase in access minutes of use, switched access revenues were 
approximately $14 million lower due to decreased per-minute rates initiated 
as part of the Company's Commitment 2000 program in Ohio and the optional 
incentive rate regulation at the Federal level.

    Other services revenue increased approximately $9 million, or 7%, for the 
year, with the Company's FUSE-Registered Trademark- Internet access service 
contributing more than $2 million of the increase (a 44% revenue growth for 
this service). Other increases in the category are attributable to higher 
rent and facilities collocation revenue ($6 million). A lower provision for 
loss on receivables in the current year also contributed to the revenue 
increase in the current year.

                                                                           17

<PAGE>

COSTS AND EXPENSES

    Excluding depreciation, amortization and special charges, costs and 
expenses of $429.3 million were $41.2 million less than the prior year, 
representing a 9% decrease.

    Costs of providing services decreased by nearly $15 million for the year, 
$8 million of which is attributable to lower expenditures for payroll and 
temporary labor sources resulting from CBT's continuing efforts at increasing 
productivity. These efforts have resulted in a 4% increase in access lines 
per employee since the beginning of 1999.

    Selling, general and administrative expenses decreased by nearly $10 
million versus the prior year. Advertising expense increased approximately $1 
million for the year in support of new calling services bundles and the 
Company's ZoomTown ADSL service. Consulting and contract services were 
approximately $7 million less, due to lower usage of external labor sources. 
Computer programming expenses and right-to-use fees decreased approximately 
$14 million for the year, due to a reduction in projects initiated and the 
capitalization of approximately $10 million in internal use software as 
required by AICPA Statement of Position 98-1. These expense decreases were 
somewhat offset by approximately $14 million in increases related to 
materials and supplies, rent, and reciprocal compensation to Internet service 
providers.

    Year-2000 programming expenses were approximately $6 million lower than 
in the prior year, reflecting the progress previously made on critical 
systems and the conclusion of remediation efforts by year-end. No mandated 
telecommunications costs were incurred in 1999 since the local portability 
and interconnection requirements were met in the prior year (when the Company 
incurred nearly $11 million of such costs).

    As a result of the revenue increase and expense decrease detailed above, 
EBITDA grew from $247.9 million in 1998 to $320.8 million in 1999, a 29% 
increase.

1998 COMPARED TO 1997

    The Local Communications segment showed strong performance in 1998, 
enjoying the benefits of continued growth in access lines, voice grade 
equivalents and value-added services, such as Caller ID and other custom 
calling features. This, in combination with increased usage of the Company's 
network on a minutes-of-use basis, contributed significantly to the increase 
in revenue over 1997.

REVENUES

    Revenues increased $48.3 million, or 7%. Local service revenues increased 
$21.7 million, primarily due to access line growth of 3% and increased usage 
of the Company's suite of custom calling services.

    Network access revenues increased $10.9 million, or 6%. This was 
primarily due to growth in high-capacity digital service and an associated 
40% increase in voice grade equivalents. Minutes of use increased 7% along 
with an increase in end-user access charges, but these were offset by a 
reduction of interstate per-minute rates instituted by the Federal 
Communications Commission (FCC) and by a reduction in intrastate rates 
instituted as part of the Company's "Commitment 2000" plan as approved by the 
Public Utilities Commission of Ohio.

    Revenues from other services increased $15.7 million, or 14%. Revenues 
from the Company's National Payphone Clearinghouse business and commissions 
associated with the deregulation of the public payphone business increased 
$6.9 million in 1998. The Company's FUSE-Registered Trademark- Internet 
access service increased $2.6 million in 1998. The remainder of the increase 
in this category is attributable to equipment and wiring sales and network 
integration and consulting revenues, partially offset by increased 
uncollectible expense of $4.3 million.

COSTS AND EXPENSES

    Excluding depreciation and amortization, costs and expenses increased 
$35.7 million, or 9%. Approximately $12 million of the increase was 
attributable to higher headcount and associated wages. Right-to-use fees for 
network switching systems decreased by more than $2 million but were offset 
by increased expenditures for contract and consulting services. Expenses also 
increased approximately $5 million due to mandated charges to fund universal 
service initiatives and $2 million for increased advertising.

    Year-2000 programming expenses totaled $10.9 million, representing nearly 
a $7 million increase. Regulator-mandated interconnection and local number 
portability expenses totaled $10.6 million in 1998, over $4 million more than 
the prior year.

                                                                           18

<PAGE>

-------------------------------------------------------------------------------
BROADBAND

     IXC became a subsidiary of the Company on November 9, 1999 as a result 
of the Merger. Subsequent to the acquisition date, the Company changed the 
name of IXC to Broadwing Communications, Inc. (Broadwing Communications). 
Operations of the Broadwing Communications subsidiary comprise the Broadband 
segment and are included in the Company's financial results prospectively 
from November 9, 1999. For purposes of comparability, portions of the 
following discussion assume the Broadband segment existed from January 1, 
1998. These references will generally include a reference to Pro Forma 
results.

    The Broadband segment utilizes an advanced, expansive, fiber-optic 
network to provide data transport, Internet services, private line, switched 
access, and other services. Broadwing Communication's network-based delivery 
solutions are designed to address the speed and capacity requirements of the 
global telecommunications market. Excess network capacity is also leased (in 
the form of IRUs) to other telecommunications and Internet service providers.


<TABLE>
<CAPTION>

                                   Post-merger              Pro Forma               % Change
                                   -----------              ---------               --------
($ in millions)                       1999              1999         1998         1999 vs 1998
-------------------------------------------------------------------------------------------------
<S>                              <C>                <C>         <C>                  <C>
Revenues:
     Private Line                     $45.8            $304.3      $225.4              35
     Switched Services                 48.4             312.1       414.4              (25)
     Data and Internet                  4.8              23.5         9.0              161
     Other                             --                27.3        19.8              38
                                      -----              ----        ----
         Total                         99.0             667.2       668.6              n/m
Cost and expenses:

Cost of providing service              60.7             427.1       433.3              (1)
Selling, general and
     administrative expense            38.1             248.7       144.5              72
                                       ----             -----       -----
         Total                         98.8             675.8       577.8              17
EBITDA                               $  0.2             $(8.6)      $90.8              (109)
EBITDA margin                           n/m              (1)         14                (107)
</TABLE>


1999 COMPARED TO 1998

REVENUES

    Broadband revenues totaled $99 million in the post-merger period. On a 
Pro Forma 1999 basis, revenues were $667.2 million compared to $668.6 million 
in 1998. The reduction in switched services revenues of $102 million resulted 
from the strategic decision to de-emphasize the wholesale switched services 
business, and was offset by increases in all of Broadwing Communications' 
other service offerings. Private line revenues increased $78.9 million, or 
35%, on a Pro Forma basis as a result of an increase in other carriers 
utilizing Broadwing Communication's next-generation broadband network . Data 
and Internet revenues increased $14.5 million, or 161%, as these services 
became a primary focus in 1999.

COSTS AND EXPENSES

    Broadband costs and expenses, excluding depreciation and amortization 
expenses of $46.7 million, were $98.8 million in 1999. Of this amount, $60.7 
million was for cost of providing services and $38.1 million was for selling, 
general and administrative expenses. Broadband's gross margin was 39% and 
EBITDA was $0.2 million.

    On a Pro Forma basis, costs and expenses, excluding depreciation, 
amortization and special charges, were $98 million, or 17% greater than the 
prior year. Costs of providing services decreased by over $6 million, or 1%, 
due mainly to a $22.5 million decrease in access costs. This reduction was a 
direct result of Broadwing Communications making greater utilization of its 
fiber optic network as well as the reduction in minutes of use caused by the 
decision to de-emphasize the switched wholesale business. The decrease in 
access costs was offset somewhat by an increase in transmission and Internet 
expenses of $16.4 million. Gross margin increased to 36% in 1999 due mainly 
to Broadwing's greater focus on higher margin products such as private line 
and data and Internet.

                                                                           19

<PAGE>

    Selling, general and administrative expenses increased by $104.0 million, 
or 72%, versus the prior year. This increase is due in part to increased 
staffing required to support, sell and market the expanded fiber optic 
network. Broadwing Communications is migrating from focusing on network 
construction to sales and marketing as the network increased from 
approximately 9,300 to 15,700 fiber route miles during 1999. Headcount 
increased by approximately 600 in 1999 versus 1998, 60% of which were in 
sales positions and the remaining 40% was for network operations.

-------------------------------------------------------------------------------
WIRELESS

    The Wireless segment comprises the operations of Cincinnati Bell Wireless 
LLC (an 80%-owned venture with AT&T Wireless PCS, Inc.), which provides 
advanced digital personal communications services and sales of related 
communications equipment to customers in its Greater Cincinnati and Dayton, 
Ohio operating areas.

    On December 31, 1998, the Company acquired an 80% ownership interest in 
this business. Accordingly, current year results for the wireless business 
are reflected in the operating results of the Company beginning January 1, 
1999. The agreement between Cincinnati Bell Wireless and AT&T PCS specified 
that, prior to the acquisition, the Company and AT&T PCS would operate under 
an interim agreement whereby losses would be funded in the same percentages 
as the proposed venture. In 1998, this resulted in a loss of $27.3 million, 
which was recorded as an equity loss in unconsolidated entities.


<TABLE>
<CAPTION>

($ in millions)                      1999
---------------------------------------------
<S>                               <C>
Revenues                             $91.4

Costs and expenses:
  Cost of providing service           58.6
  Selling, general and
     administrative expense           58.4
                                      ----
  Total                              117.0

EBITDA                              $(25.6)
EBITDA margin                        (28.0)%
Net Income                          $(28.5)
</TABLE>



REVENUES

    Revenues for this segment have been increasing steadily over the course 
of 1999, with a year-end total of $91.4 million. The vast majority of 
revenues for this segment, or $80 million, were service revenues. An 
additional $13 million in revenues were derived from the sale of handsets and 
associated accessories. Service revenues are growing on the basis of 
increasing subscribership (95,000 and 56,000 postpaid customers were added in 
1999 and 1998, respectively) generating an average monthly revenue per user 
(ARPU) of $65 and low customer churn of 1.43% per month. Although it did not 
drive significant growth in service revenues, the launch of CBW's new 
i-wireless-SM- prepaid service added 11,000 new subscribers in the fourth 
quarter of 1999.

COSTS AND EXPENSES

    The costs of providing service is primarily comprised of incollect 
expense (whereby CBW incurs costs associated with its subscribers using their 
handset while in the territory of another wireless service provider), network 
operations costs, interconnection expenses and cost of equipment sales. These 
costs were 64% of revenue in 1999.

    Selling, general and administrative expenses include the high cost of 
customer acquisition, including the subsidy of customer handsets, 
advertising, distribution and promotional expenses. With the significant 
growth of the wireless business, these costs totaled $46 million, or a cost 
per gross addition (CPGA) of $376 for postpaid subscribers, and contributed 
heavily to our EBITDA loss of $25.6 million.

    The $28.5 million net loss for the current year (which includes interest 
and income tax expense, offset by the minority share of the net loss) was 
dilutive to the Company's earnings in the amount of $.19 per common share.

                                                                           20

<PAGE>

-------------------------------------------------------------------------------
DIRECTORY SERVICES

    The Directory segment is comprised of the operations of the Company's 
Cincinnati Bell Directory subsidiary, which publishes Yellow Pages 
directories and sells directory advertising and informational services in 
Cincinnati Bell Telephone's franchise area. These services are available to 
the customer in the form of traditional printed directory, an Internet-based 
service known as "Cincinnati Exchange," and on CD-Rom.

    The majority of the revenues for this segment come from publishing, and 
it is the Company's practice to recognize revenues, and associated direct 
expenses, over the lifespan of the respective publications (generally twelve 
months). Primary expenses of this segment are sales commissions paid to sales 
agents and printing costs associated with its directory publications.


<TABLE>
<CAPTION>

                                                                       % Change                       % Change
($ in millions)                                  1999       1998       99 vs. 98        1997          98 vs. 97
---------------------------------------------------------------------------------------------------------------------
<S>                                          <C>         <C>          <C>           <C>              <C>
Revenues                                         $74.2       $72.9         2            $72.9            --

Costs and expenses:

  Cost of providing service                       27.5        27.8        (1)            29.8            (7)
  Selling, general and
       administrative expense                     19.5        19.7        (1)            18.2             8
                                               -------     -------                    -------
  Total                                           47.0        47.5                       48.0

EBITDA                                           $27.2       $25.4         7            $24.9             2
EBITDA margin                                     36.7%       34.8%        5             34.1%            2
</TABLE>



1999 COMPARED TO 1998

REVENUES

    Revenues of $74.2 million exceeded results of the prior year by 
approximately $1 million, or 2%, as the positive outcome of the 1999 sales 
campaign began to materialize. The majority of the growth for this segment 
($0.6 million) came from local advertisers, with an additional $0.3 million 
coming from the national advertisers.

COSTS AND EXPENSES

    Costs and expenses of $47.0 million were virtually unchanged for the 
year, decreasing by $0.5 million, or 1%, due primarily to lower sales 
commissions. Printing costs and other SG&A expenses were held constant the 
prior year.

    EBITDA of $27.2 million was $1.8 million higher, or 7%, than in the prior 
year. EBITDA margin of 36.7% represents a five percent improvement over the 
34.8% margin recorded in the prior year.

1998 COMPARED TO 1997

REVENUES

    Despite the arrival of full-scale competition in our market area during 
1998, the Directory segment managed to preserve its revenue stream versus 
1997. While some degree of competitive loss was felt from two new 
competitors, one of which was previously a sales agent for the Company, 
revenues were maintained as a result of the introduction of new listing 
options that resulted in additional revenues.

COSTS AND EXPENSES

    Costs and expenses in 1998 were virtually unchanged in comparison to the 
prior year. Sales commissions decreased as a result of slightly lower sales 
volume and a renegotiated commission rate. Advertising spending increased as 
new campaigns were designed to preserve market share and stimulate demand for 
value-added listings.

                                                                           21

<PAGE>

-------------------------------------------------------------------------------
OTHER COMMUNICATIONS SERVICES

    Other Communications combines the Cincinnati Bell Long Distance (CBLD), 
Cincinnati Bell Supply (CBS), and Broadwing IT Consulting (formerly 
EnterpriseWise) segments. CBLD resells long distance, voice, data, frame 
relay, and Internet access services to small- and medium-sized business and 
residential customers in a regional area consisting mainly of six states. CBS 
sells new computers and resells telecommunications equipment in the secondary 
market, and Broadwing IT Consulting provides network integration and 
consulting services as well as the sale of related equipment.


<TABLE>
<CAPTION>

                                                                       % Change                       % Change
($ in millions)                                  1999       1998       99 vs. 98        1997          98 vs. 97
---------------------------------------------------------------------------------------------------------------------
<S>                                          <C>          <C>        <C>             <C>             <C>
Revenues                                         $131.3     $106.1        24           $ 101.7            4

Cost and expenses:

  Cost of providing service                        93.1       66.3        40              63.9            4
  Selling, general and
       administrative expense                      35.2       24.8        42              20.3           22
                                              ---------    -------                    --------
  Total                                           128.3       91.1        41              84.2            8

EBITDA                                             $3.0      $15.0       (80)             17.5          (14)
EBITDA margin                                       2.3%      14.1%      (84)             17.2%         (18)
</TABLE>



1999 COMPARED TO 1998

REVENUES

     Revenues were up $25.2 million, or 24%, in 1999. CBS accounted for $9.8 
million of the revenue increase as a result of sales of communication 
equipment through its existing sales force and its new call center. Broadwing 
IT Consulting provided additional revenue of $14.3 million, of which slightly 
more than half was derived from the sale of hardware. CBLD contributed $1.7 
million increase in revenues as decreases in its existing voice products were 
offset by sales of new data and Internet services.

COSTS AND EXPENSES

    Costs and expenses increased 41% or $37.2 million. Costs of providing 
services accounted for approximately $27 million of this increase. Of this, 
$13 million was attributable to costs of materials and hardware associated 
with sales, $5 million was for employee-related expenses associated with the 
network integration consulting business added in November 1998, and the 
remainder was for increased cost of service in the new and existing CBLD 
services.

    SG&A expenses were approximately $10 million higher than in the prior 
year, the majority of which can be attributed to employee costs associated 
with entry into new businesses. These were incurred by all subsidiaries 
within this segment, with CBLD incurring the largest increase ($5 million) 
due to its introduction of data transport, high-speed Internet, and local 
exchange services. An additional $4.2 million in SG&A expense is attributable 
to Broadwing IT Consulting, a business that had minimal effect on 1998 
operations due to its acquisition by the Company late in that year. CBS 
incurred approximately $1 million in additional SG&A costs this year in order 
to establish a new call center in support of a sales agency arrangement it 
has with Lucent Technologies.

    For these operations combined, EBITDA of $3 million was $12 million less 
than the prior year for the reasons noted above.

    Coincident with the merger, the Company performed a strategic 
reassessment of its business unit structure. As a result, the Company is 
finalizing plans to sell, or exit, the CBS business in 2000 as it does not 
fit with the Company's long-term strategic plan. Also, the operations of CBLD 
and Broadwing IT Consulting were integrated into Broadwing Communications in 
January 2000.

                                                                           22

<PAGE>

1998 COMPARED TO 1997

REVENUES

    Revenues increased $4.4 million, or 4%. CBLD contributed a substantial 
gain in revenues over the prior year, adding $10 million of revenue as a 
result of increased subscribership and usage. CBS reported a $5.6 million 
decline in its revenues, due to the reduction in sales volume with a major 
customer and lower salvage prices on reclaimed materials for resale.

COSTS AND EXPENSES

    Costs and expenses increased $6.9 million, or 8%. CBLD experienced 
increased selling and administrative expenses to acquire new subscribers and 
enter the data market with the introduction of frame relay service and 
Internet access. CBS reported lower product costs due to the decreased sales 
volume previously discussed.
-------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION

    Depreciation and amortization expense increased $69 million over 1998, of 
which $47 million was a result of the Merger and $14 million was attributable 
to the wireless business. The Company anticipates depreciation and 
amortization expense to be approximately $470 million in 2000 due to a full 
year of the merged company results.

-------------------------------------------------------------------------------
INTEREST EXPENSE


<TABLE>
<CAPTION>

                                                                       % Change                       % Change
($ in millions)                                  1999       1998       99 vs. 98        1997          98 vs. 97
---------------------------------------------------------------------------------------------------------------------
<S>                                           <C>        <C>           <C>           <C>              <C>
                                                 $61.7      $24.2         155           $30.1           (20)
</TABLE>


1999 COMPARED TO 1998

    Interest expense increased significantly in 1999, owing to higher average 
debt levels associated with the Merger, the issuance of $400 million in 6 3/4% 
convertible subordinated notes in July 1999, and the amortization of debt 
issuance costs and bank commitment fees associated with the Company's new 
$2.1 billion credit facility and these convertible subordinated notes.

    Of the $37.5 million increase in interest expense, $13.4 million is 
attributable to the operations of the Wireless business and approximately 
$24.0 million is related to the Merger.

1998 COMPARED TO 1997

    Interest expense declined in 1998 due to lower weighted average interest 
rates and an increase in interest during construction in 1998.

-------------------------------------------------------------------------------
INCOME TAXES


<TABLE>
<CAPTION>

                                                                       % Change                       % Change
($ in millions)                                  1999       1998       99 vs. 98        1997          98 vs. 97
---------------------------------------------------------------------------------------------------------------------
<S>                                           <C>         <C>           <C>          <C>             <C>
Income taxes                                     $33.3       $44.3        (25)          $56.3           (21)
Effective tax rate                                46.7%       35.1%        33            35.5%           (1)
</TABLE>


1999 COMPARED TO 1998 AND 1998 COMPARED TO 1997

    Income tax expense decreased in 1999 primarily due to lower overall 
pretax income resulting from higher pre-tax losses generated by the Wireless 
segment and pre-tax losses generated by the new Broadband segment. The 
Company's previous effective tax rate of approximately 35% will not be 
sustainable for future periods due to significant levels of non-deductible 
expense such as goodwill amortization and minority interest dividends.

    The 1998 decrease (versus 1997) was the result of lower pre-tax income, 
primarily due to the wireless venture loss. The effective tax rates between 
these two years were comparable.

                                                                           23

<PAGE>

-------------------------------------------------------------------------------
EXTRAORDINARY ITEMS, NET OF TAXES


<TABLE>
<CAPTION>

                                                                       % Change                       % Change
($ in millions)                                  1999       1998       99 vs. 98        1997          98 vs. 97
---------------------------------------------------------------------------------------------------------------------
<S>                                            <C>        <C>           <C>         <C>               <C>
                                                  $6.6       $1.0          n/m         $210.0            --
</TABLE>


1999 COMPARED TO 1998 AND 1998 COMPARED TO 1997

    Extraordinary items affected both years. In 1999, costs related to the 
early extinguishment of debt as a result of the Merger resulted in a $6.6 
million charge, net of taxes. In 1998, the spin-off of Convergys resulted in 
the retirement of debt and a portion of a then-existing credit facility, 
resulting in a $1.0 million charge, net of tax.

    In 1997, the Company discontinued the application of SFAS 71 which 
resulted in an extraordinary, non-cash charge of $210.0 million, net of 
income taxes.

-------------------------------------------------------------------------------
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES

CAPITAL INVESTMENT, RESOURCES AND LIQUIDITY

    The Company continued its transformation from a wireline voice 
communications provider focused on its local franchise to a nationwide 
provider of data and voice communications and a regional provider of wireless 
services. As a result, the financing needs of the Company have changed 
significantly. Although the Company generated positive cash flow from 
operations in 1999, and expects to again in 2000, capital expenditures and 
other investing needs will increase the Company's borrowings.

    In anticipation of these funding needs, the Company eliminated the 
dividend payment on common stock and issued $400 million in 6 3/4% 
convertible subordinated notes. The proceeds of these notes were used to 
affect the Merger, namely to purchase shares of IXC for cash and to purchase 
treasury shares of the Company's common stock.

    In order to provide for these cash requirements and other general 
corporate purposes, the Company also obtained a $2.1 billion credit facility 
from a group of 24 lending institutions. The credit facility consists of $900 
million in revolving credit and $750 million in term loans from banking 
institutions and $450 million in term loans from non-banking institutions. At 
December 31, 1999, the Company had drawn approximately $755 million from the 
credit facility in order to refinance its existing debt and debt assumed as 
part of the Merger. In January 2000, the Company borrowed approximately $400 
million in order to redeem the majority of the outstanding 9% senior 
subordinated notes assumed during the Merger as part of a tender offer. This 
tender offer was required under the terms of the note indenture due to the 
change in control provision and resulted in an extraordinary loss of $4 
million, net of tax. Accordingly, the Company has approximately $900 million 
in additional borrowing capacity under this facility as of the date of this 
report. Separately, the Company also has ownership position in four publicly 
traded companies. The value of these holdings was $928.4 million as of 
December 31, 1999. The sale of these securities are subject to limitations 
including registration rights.

    The interest rates to be charged on borrowings from this credit facility 
can range from 100 to 225 basis points above the London Interbank Offering 
Rate (LIBOR), depending on the Company's credit rating. The current borrowing 
rate is approximately 200 basis points. The Company will incur banking fees 
in association with this credit facility ranging from 37.5 basis points to 75 
basis points, applied to the unused amount of borrowings of the facility.

    The Company is also subject to financial covenants in association with 
the credit facility. These financial covenants require that the Company 
maintain certain debt to EBITDA ratios, debt to total capitalization ratios, 
fixed and floating rate debt ratios and interest coverage ratios. This 
facility also contains certain covenants which, among other things, restrict 
the Company's ability to incur additional debt, pay dividends, repurchase 
Company common stock, and sell assets or merge with another company.

                                                                           24

<PAGE>

    As a result of the Merger the Company's corporate credit ratings were
downgraded in 1999. As of the date of this filing, the Company maintains the
following credit ratings:


<TABLE>
<CAPTION>

                                                                          Duff & Phelps               Moody's
Entity        Description                   Standard and Poor's       Credit Rating Service      Investor Service 
------        -----------                   -------------------       ---------------------      ---------------- 
<C>        <S>                                   <C>                      <C>                      <C>
BRW           Corporate Credit Rating               BB+                      BB+                       Ba2
CBT           Corporate Credit Rating               BB+                      BBB+                     Baa3
</TABLE>


    Capital expenditures to maintain and grow the nationwide fiber network, 
complete the wireless network expansion, and maintain the local Cincinnati 
network are expected to be approximately $805 million in 2000, consistent 
with $816 million on a Pro Forma basis in 1999.

BALANCE SHEET

    Nearly all balance sheet categories have increased significantly from the 
prior year due to the Merger. Cash and cash equivalents increased by $70 
million over the prior year largely from the receipt of approximately $76 
million in cash on December 30, 1999 related to an IRU agreement with PSINet. 
The increase in accounts receivable and related allowances are primarily a 
result of the Merger. The increase in the reserve percentage reflects 
accruals for disputes and bad debts arising as a result of provisioning 
issues and the de-emphasis of the switched wholesale business at Broadwing 
Communications. In addition to the Merger, property, plant and equipment 
increased due to the Company's investment in its wireless and local 
communications business. Goodwill and other intangibles increased by nearly 
$2.2 billion and $0.4 billion, respectively, nearly all of which was related 
to the Merger. Investments in unconsolidated entities represents equity 
investments in PSINet, Applied Theory, PurchasePro.com, and ZeroPlus.com 
(which have been adjusted to market value in accordance with SFAS 115). The 
increases to short-term and long-term debt are attributable to the issuance 
of $400 million in 6 3/4% convertible subordinated notes and the refinancing 
of long-term debt upon the Merger. The current and long-term amounts 
associated with unearned revenues relate to the sale of IRU agreements.

    In 1999, the $405 million dollar increase in the Minority Interest 
caption is attributable to 12 1/2% preferred shares previously issued by IXC. 
Effective with the Merger, the Company replaced the previously existing 6 3/4% 
and 7 1/4% preferred stock issues at IXC with its own preferred stock. These 
preferred stock issues were reflected at fair value upon the Merger date, and 
have resulted in the addition of approximately $229 million and $129 million, 
respectively, in additional redeemable and non-redeemable preferred stock. 
Additional paid in capital increased during 1999 primarily from the issuance 
of approximately 68 million new shares of common stock in the Merger. The 
increase in accumulated other comprehensive income is largely attributable to 
unrealized holding gains (net of tax) on the equity investments previously 
discussed. Also, the Company engaged in a share repurchase program that 
reduced shareholders' equity by $145 million.

CASH FLOW

    The cash provided by operating activities of $314 million was $102 
million higher than in the prior year. The increase was largely attributable 
to a $75 million increase in unearned revenues related to IRU agreements.

    The Company engaged in several investment activities of significance in 
1999, several of which were related to the Merger. Capital expenditures of 
approximately $381 million represented a $238 million increase over the prior 
year, with Broadwing Communications spending $165 million in the post-merger 
period and a $53 million increase related to infrastructure development for 
the wireless business. The Company also capitalized $10 million in software 
development costs in 1999 pursuant to its adoption of AICPA Statement of 
Position 98-1.

    In the current year, net cash paid for acquisitions totaled $247 million, 
$233 million of which was attributable to the Merger. Remaining expenditures 
for acquisitions represented additional investment in the wireless business 
and the purchase of a long distance reseller. The purchase of the marketable 
securities of two unaffiliated e-commerce vendors required an additional $13 
million in cash.

    The Company incurred net debt of $429 million more than in the prior 
year, of which $400 million was issued to Oak Hill Capital Partners in July 
1999 in the form of 6.75% convertible subordinated debentures (see Note 5 of 
Notes to Financial Statements). Dividends paid to shareholders of $46 million 
in 1999 were $9 million less than in the prior year. The Company received an 
additional $37 million versus the prior year from the exercise of employee 
stock options. The Company also used $145 million in 1999 in order to 
purchase shares of its own common stock as part of a share repurchase program.

                                                                           25

<PAGE>

REGULATORY MATTERS AND COMPETITIVE TRENDS

FEDERAL - In February 1996, Congress enacted the Telecommunications Act of 
1996 (the 1996 Act), the primary purpose of which was to introduce greater 
competition into the market for telecommunications services. Since February 
1996, the Federal Communications Commission (FCC) has initiated numerous 
rulemaking proceedings to adopt regulations pursuant to the 1996 Act. The 
1996 Act and the FCC's rulemaking proceedings can be expected to impact CBT's 
in-territory local exchange operations in the form of greater competition. 
However, these statutes and regulations also create opportunities for the 
Company to expand the scope of its operations, both geographically and in 
terms of products and services offered.

OHIO - CBT's alternative regulation case dealing with the rates CBT can 
charge to competitive local exchange carriers for unbundled network elements 
is pending. The PUCO issued its decision on the methodology CBT must use to 
calculate these rates on November 4, 1999. On January 20, 2000, the PUCO 
denied all parties' requests for rehearing except for one issue regarding 
nonrecurring charges. CBT was required to submit new cost studies by February 
28, 2000. After a period for review of the studies and resolution of any 
disputes, CBT is to file a tariff implementing the resulting rates.

KENTUCKY - On June 29, 1998, CBT filed an application with the Public Service 
Commission of Kentucky (PSCK) seeking approval of an alternative regulation 
plan similar to the Commitment 2000 plan approved by the PUCO in Ohio. On 
January 25, 1999, the PSCK issued an order approving the Kentucky alternative 
regulation plan with certain modifications. One of the modifications was the 
adoption of an earnings-sharing provision whereby customers would receive 
one-half of earnings on equity in excess of 13.5%. The PSCK also ordered that 
residential rates be frozen for three years and required rate reductions of 
approximately $3 million per year versus current rates. On February 12, 1999, 
CBT filed a petition seeking rehearing of the PSCK's January 25, 1999 order. 
On July 26, 1999, the PSCK issued an order which eliminated the automatic 
earnings-sharing provision and revised the required rate reductions to $2.3 
million per year, instead of the $3 million per year previously ordered.

BUSINESS OUTLOOK

    Evolving technology, the preferences of consumers, the legislative and 
regulatory initiatives of policy makers and the convergence of other 
industries with the telecommunications industry are causes for increasing 
competition. The range of communications services, the equipment available to 
provide and access such services, and the number of competitors offering such 
services continue to increase. These initiatives and developments could make 
it difficult for the Company to maintain current revenue and profit levels.

    CBT's current and potential competitors include other incumbent local 
exchange carriers, wireless services providers, interexchange carriers, 
competitive local exchange carriers and others. To date, CBT has signed 
various interconnection agreements with competitors and approximately 7,200 
net access lines have been transferred to competitors.

    Broadwing Communications faces significant competition from other 
fiber-based telecommunications companies such as Level 3 Communications, 
Qwest Communications International, Global Crossings and Williams 
Communications. These companies have, in the past, enjoyed a competitive 
advantage over Broadwing Communications due to better business execution. The 
Company feels that Broadwing Communications is well equipped to match these 
competitors on the basis of technology and has been working to improve on 
critical processes, systems and the execution of its business strategy.

    The Company's other subsidiaries face intense competition in their 
markets, principally from larger companies. These subsidiaries primarily seek 
to differentiate themselves by leveraging the strength and recognition of the 
Company's brand equity, by providing customers with superior service and by 
focusing on niche markets and opportunities to develop and market customized 
packages of services. CBD's competitors are directory services companies, 
newspapers and other media advertising services providers in the Cincinnati 
metropolitan market area. CBD now competes with its former sales 
representative for Yellow Pages directory customers. This competition may 
affect CBD's ability to grow or maintain profits and revenues. CBW is one of 
six active wireless service providers in the Cincinnati and Dayton, Ohio 
metropolitan market areas. CBS's competitors include vendors of new and used 
computer and communications equipment operating regionally and across the 
nation. Broadwing IT Consulting competes with Intranet hardware vendors, 
wiring vendors, and other network integration and consulting businesses.

                                                                           26

<PAGE>

    The Merger is a response to these competitive pressures and represents a 
belief that the Company's reputation for quality service and innovative 
products can be successfully exported outside of its local franchise area. 
The Company plans to blend its provisioning and marketing expertise with 
Broadwing Communications' next-generation fiber-optic network in order to 
introduce advanced calling and data transport services throughout the U.S. 
The Company intends to retain market share with respect to its current 
service offerings and pursue rapid growth in data transport services. The 
Company also expects that each of its current subsidiaries will benefit from 
this business combination through the addition of new potential customers, 
sales channels and markets.

CONTINGENCIES

    In the normal course of business, the Company is subject to various 
regulatory proceedings, lawsuits, claims and other matters. Such matters are 
subject to many uncertainties and outcomes are not predictable with 
assurance. However, the Company believes that the resolution of such matters 
for amounts in excess of those reflected in the consolidated financial 
statements would not likely have a materially adverse effect on the Company's 
financial condition.

YEAR-2000 READINESS

    In order to ready its network and customer support systems for the Year 
2000 (Y2K), the Company incurred expenses of $4.6 million and $10.9 million 
in 1999 and 1998 respectively. Year 2000 preparations were completed as 
planned, and as a result of this preparedness, major impacts to the Company 
and its customers were avoided. Some degree of minor difficulty was 
experienced with regard to customer payment issues, but these are considered 
insignificant and have been resolved or are currently being resolved.

RECENTLY ISSUED ACCOUNTING STANDARDS

    On January 1, 1999, the Company adopted AICPA Statement of Position (SOP) 
98-1, "Accounting for the Costs of Computer Software Developed or Obtained 
for Internal Use." SOP 98-1 requires the capitalization of certain 
expenditures for software that is purchased or internally developed for use 
in the business. As compared to prior years when these types of expenditures 
were expensed as incurred, the 1999 adoption of SOP 98-1 resulted in the 
capitalization of $10 million of internal use software development costs, 
which are being amortized over a three-year period.

    In June 1998, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standard (SFAS) No. 133, "Accounting for Derivative 
Instruments and Hedging Activities." SFAS 133 establishes accounting and 
reporting standards requiring that a derivative instrument be recorded in the 
balance sheet as either an asset or liability, measured at its fair value. 
SFAS 133 has been subsequently amended through the release of SFAS 137, which 
provides for a deferral of the effective date of SFAS 133 to all fiscal years 
beginning after June 15, 2000. As a result, implementation of SFAS 133 is not 
mandatory for the Company until January 1, 2001. Management is currently 
assessing the impact of SFAS 133 on the Company's results of operations, cash 
flows and financial position.

    In December 1999, the Securities and Exchange Commission (SEC) issued 
Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial 
Statements. In SAB 101, the SEC Staff expresses its views regarding the 
appropriate recognition of revenue with regard to a variety of circumstances, 
some of which are of particular relevance to the Company. The Company is 
currently evaluating SAB 101 to determine its impact on the financial 
statements.

BUSINESS DEVELOPMENT

    In order to enhance shareowner value, the Company actively reviews 
opportunities for acquisitions, divestitures and strategic partnerships.

                                                                           27

<PAGE>


I
TEM 7A.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company is exposed to the impact of interest rate changes. To manage 
its exposure to interest rate changes, the Company uses a combination of 
variable rate short-term and fixed rate long-term financial instruments. The 
Company may, from time to time, employ a small number of financial 
instruments to manage its exposure to fluctuations in interest rates. The 
Company does not hold or issue derivative financial instruments for trading 
purposes or enter into interest rate transactions for speculative purposes. 
Management is reviewing steps necessary to mitigate this exposure.

    Interest Rate Risk Management - The Company's objective in managing its 
exposure to interest rate changes is to limit the impact of interest rate 
changes on earnings and cash flows and to lower its overall borrowing costs.

    The following table describes the financial instruments that were held by 
the Company at December 31, 1999, excluding the PSINet forward sale and 
capital leases:


<TABLE>
<CAPTION>

($ in millions)            2000-2002         2003        Thereafter        Total        Fair Value
---------------------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>           <C>            <C>             <C>
Long-term debt               $20.0          $20.0         $1,917.0       $1,957.0        $1,805.0
Average interest rate        4.4%            6.2%           7.7%            7.5%            --
</TABLE>



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


<TABLE>
<CAPTION>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                                               PAGE
<S>                                                                                     <C>
Consolidated Financial Statements:

     Report of Management .................................................................29

     Report of Independent Accountants ....................................................29

     Consolidated Statements of Income and Comprehensive Income (Loss) ....................30

     Consolidated Balance Sheets ..........................................................31

     Consolidated Statements of Cash Flows ................................................32

     Consolidated Statements of Shareowners' Equity .......................................33

     Notes to Consolidated Financial Statements ...........................................34

Financial Statement Schedule:

     For each of the three years in the period ended December 31, 1999:

     II  - Valuation and Qualifying Accounts ....................................          62
</TABLE>



    Financial statements and financial statement schedules other than that 
listed above have been omitted because the required information is contained 
in the financial statements and notes thereto, or because such schedules are 
not required or applicable.

                                                                           28

<PAGE>

-------------------------------------------------------------------------------
REPORTS OF MANAGEMENT AND INDEPENDENT ACCOUNTANTS                BROADWING INC.

REPORT OF MANAGEMENT

    The management of Cincinnati Bell Inc. dba Broadwing Inc. is responsible 
for the information and representations contained in this report. Management 
believes that the financial statements have been prepared in accordance with 
generally accepted accounting principles and that the other information in 
this report is consistent with those statements. In preparing the financial 
statements, management is required to include amounts based on estimates and 
judgments that it believes are reasonable under the circumstances.

    In meeting its responsibility for the reliability of the financial 
statements, management maintains a system of internal accounting controls, 
which is continually reviewed and evaluated. Our internal auditors monitor 
compliance with the system of internal controls in connection with their 
program of internal audits. However, there are inherent limitations that 
should be recognized in considering the assurances provided by any system of 
internal accounting controls. Management believes that its system provides 
reasonable assurance that assets are safeguarded and that transactions are 
properly recorded and executed in accordance with management's authorization, 
that the recorded accountability for assets is compared with the existing 
assets at reasonable intervals, and that appropriate action is taken with 
respect to any differences. Management also seeks to assure the objectivity 
and integrity of its financial data by the careful selection of its managers, 
by organization arrangements that provide an appropriate division of 
responsibility, and by communications programs aimed at assuring that its 
policies, standards and managerial authorities are understood throughout the 
organization.

    The financial statements have been audited by PricewaterhouseCoopers LLP, 
independent accountants. Their audit was conducted in accordance with 
auditing standards generally accepted in the United States.

    The Audit and Finance Committee of the Board of Directors, which is 
composed of five directors who are not employees, meets periodically with 
management, the internal auditors and PricewaterhouseCoopers LLP to review 
their performance and responsibilities and to discuss auditing, internal 
accounting controls and financial reporting matters. Both the internal 
auditors and the independent accountants periodically meet alone with the 
Audit and Finance Committee and have access to the Audit and Finance 
Committee at any time.

    KEVIN W. MOONEY
    EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER


REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND THE
SHAREOWNERS OF CINCINNATI BELL INC. DBA BROADWING INC.

    In our opinion, the accompanying consolidated financial statements listed 
in the accompanying index present fairly, in all material respects, the 
financial position of Cincinnati Bell Inc. dba Broadwing Inc. (the Company) 
and its subsidiaries at December 31, 1999 and 1998, and the results of their 
operations and their cash flows for each of the three years in the period 
ended December 31, 1999, in conformity with accounting principles generally 
accepted in the United States. In addition, in our opinion, the financial 
statement schedule listed in the accompanying index presents fairly, in all 
material respects, the information set forth therein when read in conjunction 
with the related consolidated financial statements. These financial 
statements and financial statement schedule are the responsibility of the 
Company's management; our responsibility is to express an opinion on these 
financial statements and financial statement schedule based on our audits. We 
conducted our audits of these statements 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 statements are 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 audits provide a 
reasonable basis for the opinion expressed above.

    As discussed in Note 1 to the consolidated financial statements, in 1999 
the Company adopted AICPA Statement of Position 98-1 and changed its method 
of accounting for internal use software development costs.

/s/ PricewaterhouseCoopers LLP
------------------------------
Cincinnati, Ohio
March 8, 2000


                                                                           29

<PAGE>

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME(LOSS)  BROADWING INC.


<TABLE>
<CAPTION>

Millions of dollars except per share amounts         Year ended December 31           1999              1998              1997
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                <C>               <C>
REVENUES                                                                            $1,131.1            $885.1            $834.5
-----------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
     Costs of providing services and products sold                                     508.7             369.6             344.6
     Selling, general and administrative                                               286.7             225.5             195.2
     Depreciation and amortization                                                     181.0             111.1             124.3
     Restructuring and other charges (credits)                                          10.9              (1.1)            (21.0)
                                                                                      ------          ---------          --------
OPERATING INCOME                                                                       143.8             180.0             191.4
                                                                                      ------          ---------          --------
-----------------------------------------------------------------------------------------------------------------------------------
Equity Loss in Unconsolidated Entities                                                  15.3              27.3              --
Minority Interest and Other Income (Expense), Net                                        4.5              (2.4)             (2.7)
Interest Expense                                                                        61.7              24.2              30.1
                                                                                       -----           -------           -------
Income from Continuing Operations Before Income Taxes                                   71.3             126.1             158.6
Income Taxes                                                                            33.3              44.3              56.3
                                                                                      ------           -------           -------
Income from Continuing Operations                                                       38.0              81.8             102.3
Income from Discontinued Operations, Net of Taxes                                         --              69.1              91.3
                                                                                       -----           -------            ------
Income Before Extraordinary Items                                                       38.0             150.9             193.6
Extraordinary Items, Net of Taxes                                                       (6.6)             (1.0)           (210.0)
                                                                                      -------          --------           -------
NET INCOME (LOSS)                                                                       31.4             149.9             (16.4)
Dividends and Accretion Applicable to Preferred Stock                                    2.1              --                --
                                                                                      ------           --------           -------
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS                                    $29.3           $ 149.9            $(16.4)
                                                                                      ------           --------           -------
-----------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                                                      $31.4           $ 149.9            $(16.4)
Other Comprehensive Income (Loss), Net of Tax:
     Unrealized gain on investments                                                    170.0              --                --
     Currency translation adjustments                                                   --                (4.8)             (1.6)
     Additional minimum pension liability adjustment                                     3.6              (2.5)              0.8
                                                                                     -------          ---------          --------
         Total other comprehensive income (loss)                                       173.6              (7.3)             (0.8)
                                                                                     -------          ---------         ---------
COMPREHENSIVE INCOME (LOSS)                                                           $205.0           $ 142.6            $(17.2)
                                                                                     -------          ---------         ---------
-----------------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS (LOSS) PER COMMON SHARE
     Income from Continuing Operations                                              $     .25          $    .60           $   .76
     Income from Discontinued Operations, Net of Taxes                                 --                   .51               .67
     Extraordinary Items, Net of Taxes                                                   (.05)             (.01)            (1.55)
                                                                                     --------         ---------         ---------
     Net Income (Loss)                                                              $     .20          $   1.10           $  (.12)
                                                                                     --------         ---------         ---------
DILUTED EARNINGS (LOSS) PER COMMON SHARE
     Income from Continuing Operations                                              $     .24          $    .59           $   .74
     Income from Discontinued Operations, Net of Taxes                                 --                   .50               .67
     Extraordinary Items, Net of Taxes                                                   (.04)             (.01)            (1.53)
                                                                                     --------         ---------         ---------
     Net Income (Loss)                                                              $     .20          $   1.08           $  (.12)
                                                                                     --------         ---------         ---------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (MILLIONS)
     Basic                                                                             144.3             136.0             135.2
     Diluted                                                                           150.7             138.2             137.7

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


The accompanying notes are an integral part of the financial statements.

                                                                           30

<PAGE>

CONSOLIDATED BALANCE SHEETS                                      BROADWING INC.


<TABLE>
<CAPTION>

Millions of dollars                 at December 31                                             1999              1998
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                <C>
ASSETS

Current Assets
     Cash and cash equivalents                                                                 $ 80.0            $ 10.1
     Receivables, less allowances of $53.6 and $12.0                                            231.0             138.0
     Material and supplies                                                                       30.3              16.9
     Deferred income tax benefits                                                                35.9              13.8
     Prepaid expenses and other current assets                                                   36.2              18.6
                                                                                              -------          --------
     Total current assets                                                                       413.4             197.4

Property, Plant and Equipment, Net                                                            2,500.9             698.2
Goodwill and Other Intangibles, Net                                                           2,679.9             103.3
Investments in Other Entities                                                                   843.3               2.5
Deferred Charges and Other Assets                                                                71.1              39.6
                                                                                              -------           -------
     Total Assets                                                                            $6,508.6          $1,041.0
                                                                                             --------          --------
--------------------------------------------------------------------------------------------------------------------------------
Liabilities, Redeemable Preferred Stock, and Shareowners' Equity

Current Liabilities

     Short-term debt                                                                        $     9.2           $ 186.2
     Accounts payable                                                                           230.5              57.9
     Current portion of unearned revenue and customer deposits                                   82.6              26.8
     Accrued taxes                                                                               88.3              40.6
     Other current liabilities                                                                  157.5              93.8
                                                                                                -----              ----
         Total current liabilities                                                              568.1             405.3

Long-Term Debt, less current portion                                                          2,136.0             366.8

Unearned Revenue, less current portion                                                          633.5              --
Deferred Income Taxes                                                                           221.8               6.3
Other Long-Term Liabilities                                                                     153.8              91.5
                                                                                                -----              ----
     Total liabilities                                                                        3,713.2             869.9
Minority Interest                                                                               434.0              29.0
7 1/4% Convertible Preferred Stock, redeemable, $.01 par value; authorized -
     5,000,000 shares of all classes of Preferred Stock; 1,058,380 shares issued
     and outstanding at December 31, 1999 (aggregate liquidation preference
     of $105.8 at December 31, 1999)                                                            228.6              --

Commitments and Contingencies

Shareowners' Equity
6 3/4% Cumulative Convertible Preferred Stock, $.01 par value; authorized -
     5,000,000 shares of all classes of Preferred Stock; 155,250 shares issued
     and outstanding at December 31, 1999                                                       129.4              --
Common shares, $.01 par value; 480,000,000 shares authorized;
     208,678,058 and 136,381,509 shares issued                                                    2.1               1.4
Additional paid-in capital                                                                    1,979.5             147.4
Retained earnings                                                                                --                --
Accumulated other comprehensive income (loss)                                                   166.9              (6.7)
Common stock in treasury, at cost
     1999 - 7,805,800 shares, 1998 - no shares                                                 (145.1)             --
                                                                                               ------            -------
Total shareowners' equity                                                                     2,132.8             142.1
                                                                                              -------            -------

Total Liabilities, Redeemable Preferred Stock and Shareowners' Equity                        $6,508.6          $1,041.0
                                                                                             --------          --------
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.



                                                                           31

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS                            BROADWING INC.


<TABLE>
<CAPTION>

Millions of dollars                         Year ended December 31                1999             1998              1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

     Net income (loss)                                                             $31.4           $ 149.9           $(16.4)
     Less: income from discontinued operations, net of taxes                        --               (69.1)           (91.3)
                                                                                   -----           -------           ------

     Income (loss) from continuing operations                                       31.4              80.8           (107.7)
     Adjustments to reconcile income (loss) from continuing operations to net
       cash provided by (used in) operating activities:
         Depreciation                                                              159.9             110.5            123.9
         Amortization                                                               21.1               0.6              0.4
         Restructuring and related charges (credits)                                10.6              (1.1)           (21.0)
         Provision for loss on receivables                                          28.5              15.8              7.3
         Extraordinary items, net of taxes                                           6.6               1.0            210.0
         Non-cash interest expense                                                  15.8               1.9             (6.4)
         Minority interest                                                          (3.0)             --               --
         Equity loss in unconsolidated entities                                     15.3              27.3             --
     Change in operating assets and liabilities net of effects from
       acquisitions:

         Decrease (increase) in receivables                                         (3.4)            (24.9)           (26.3)
         Decrease (increase) in prepaid expenses and other current assets          (16.7)              2.1             (7.4)
         Increase (decrease) in accounts payable                                   (17.1)             40.9             45.1
         Increase (decrease) in other current liabilities                           46.3              (7.5)           (43.2)
         Increase in unearned revenues                                              75.0              --               --
         Increase (decrease) in deferred income taxes                              (24.7)            (12.8)            (4.1)
         Decrease (increase) in other assets and liabilities, net                  (31.7)            (22.3)            26.8
                                                                                   ------            -----             ----
            Net cash provided by operating activities of continuing operations     313.9             212.3            197.4
-----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                                         (381.4)           (143.6)          (158.4)
     Payments for acquisitions, net of cash acquired                              (247.0)           (165.6)            --
     Purchase of marketable securities                                             (12.8)             --               --
     Other investing activities, net                                                --                --                4.6
                                                                                   ------            -----            -----
     Net cash used in investing activities of continuing operations               (641.2)           (309.2)          (153.8)
                                                                                   ------            -----            -----
CASH FLOWS FROM FINANCING ACTIVITIES:
     Issuance of long-term debt                                                  1,175.0             150.0             --
     Repayment of long-term debt                                                  (221.2)            (51.2)           (99.6)
     Short-term borrowings, net                                                   (371.4)             54.7            109.5
     Debt issuance costs                                                           (31.5)             --               --
     Issuance of common shares-exercise of stock options                            37.0               0.3              9.1
     Purchase of treasury shares                                                  (145.1)             --               --
     Dividends paid                                                                (45.6)            (54.4)           (54.3) 
                                                                                   ------            -----            -----
     Net cash provided by (used in) financing activities of continuing operations  397.2              99.4            (35.3)
                                                                                                     -----            ------
-----------------------------------------------------------------------------------------------------------------------------------
     Net cash provided by discontinued operations                                   --                (0.2)            (0.2)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                            $   69.9          $    2.3         $    8.1
Cash and cash equivalents at beginning of year                                      10.1               7.8             (0.3)
                                                                                    ----          --------         --------
Cash and cash equivalents at end of year                                        $   80.0          $   10.1         $    7.8
                                                                                --------          --------         --------
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.



                                                                           32

<PAGE>

CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY                  BROADWING INC.


<TABLE>
<CAPTION>
                                6 3/4% Cumulative
                              Convertible Preferred                                                          Accumulated  
                                     Stock           Common Stock     Treasury Stock   Additional              Other      
                                ----------------   ----------------   ----------------  Paid-In   Retained  Comprehensive 
Dollars and shares in millions  Shares    Amount   Shares    Amount   Shares    Amount  Capital   Earnings     Income       Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>       <C>      <C>       <C>      <C>      <C>     <C>        <C>       <C>          <C>
BALANCE AT JANUARY 1, 1997        --        --     135.1      $1.4     --        --      $346.8     $293.5       $(7.3)  $634.4
Shares issued under shareowner
   and employee plans             --        --       1.0      --       --        --        17.7       (0.8)       --       16.9
Net loss                          --        --      --        --       --        --        --        (16.4)       --      (16.4)
Additional minimum pension
   liability adjustment           --        --      --        --       --        --        --         --           0.8      0.8
Currency translation
   adjustments                    --        --      --        --       --        --        --         --          (1.6)    (1.6)
Dividends on common shares,
   $.40 per share                 --        --      --        --       --        --        --        (54.4)       --      (54.4)

-----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1997      --        --     136.1       1.4     --        --       364.5      221.9        (8.1)   579.7

Shares issued under shareowner
   and employee plans             --        --       0.3      --       --        --        --         --          --       --
Net income                        --        --      --        --       --        --        --        149.9        --      149.9
Additional minimum pension
   liability adjustment           --        --      --        --       --        --        --         --          (2.5)    (2.5)
Currency translation
   adjustments                    --        --      --        --       --        --        --         --          (4.8)    (4.8)
Restricted stock issuance         --        --      --        --       --        --        (4.9)      --          --       (4.9)
Dividends on common shares,
   $.40 per share                 --        --      --        --       --        --        --        (54.6)       --      (54.6)
Spin-off of Convergys             --        --      --        --       --        --      (212.2)    (317.2)        8.7   (520.7)

-----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998      --        --     136.4       1.4     --        --       147.4       --          (6.7)   142.1
Shares issued under shareowner
   and employee plans             --        --       3.2      --       --        --        46.3       --          --       46.3
Net income                        --        --      --        --       --        --        --         31.4        --       31.4
Additional minimum pension
   liability adjustment           --        --      --        --       --        --        --         --           3.6      3.6
Unrealized gain on investments    --        --      --        --       --        --        --         --         170.0    170.0
Restricted stock amortization     --        --       0.7      --       --        --         5.1       --          --        5.1
Dividends:
     Common Shares, at
        $.20 per share            --        --      --        --       --        --        --        (27.5)       --      (27.5)
     Preferred Shares             --        --      --        --       --        --         1.8       (3.9)       --       (2.1)
Equity issued in connection
   with Merger                    0.2      129.4    68.4       0.7     --        --     1,778.9       --          --    1,909.0
Treasury shares repurchased       --        --      --        --      (7.8)    (145.1)     --         --          --     (145.1)

-----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999      0.2     $129.4   208.7     $ 2.1    (7.8)   $(145.1) $1,979.5     $ --        $166.9  $2,132.8
                                =====     ======   =====     =====    =====   ======== ========     ======      ======  ========
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


The accompanying notes are an integral part of the financial statements.


                                                                             33

<PAGE>


NOTES TO FINANCIAL STATEMENTS

-------------------------------------------------------------------------------
1. ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

    The Company provides diversified communications services through 
businesses in four material segments: Local Communications, Broadband, 
Wireless, and Directory. On November 9, 1999 the Company merged with IXC 
Communications in a transaction accounted for as a purchase. Accordingly, 
IXC's operations (renamed Broadwing Communications) have been included in the 
consolidated financial statements for all periods subsequent to November 9, 
1999 (See Note 2).

BASIS OF CONSOLIDATION -- The consolidated financial statements include the 
consolidated accounts of Cincinnati Bell Inc. dba Broadwing Inc. (the 
Company), and its majority owned subsidiaries in which the Company exercises 
control. Less-than-majority-owned subsidiaries are accounted for using the 
equity method. For equity method investments, the Company's share of income 
is calculated according to the Company's equity ownership. Any differences 
between the carrying amount of an investment and the amount of the underlying 
equity in the net assets of the investee are amortized over the expected life 
of the asset. Investments over which we do not exercise significant influence 
are reported at fair value. Significant intercompany accounts and 
transactions have been eliminated in the consolidated financial statements.

USE OF ESTIMATES -- Preparation of financial statements in conformity with 
generally accepted accounting principles requires management to make 
estimates and assumptions that affect the amounts reported. Actual results 
could differ from those estimates.

CASH EQUIVALENTS -- Cash equivalents consist of short-term, highly liquid 
investments with original maturities of three months or less.

MATERIALS AND SUPPLIES -- Materials and supplies are carried at the lower of 
average cost or market.

PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are stated at 
cost. The Company's provision for depreciation of telephone plant is 
determined on a straight-line basis using the whole life and remaining life 
methods. As a result of the discontinuation of SFAS 71 in the fourth quarter 
of 1997, CBT recognized shorter, more economically realistic lives than those 
prescribed by regulators and increased its accumulated depreciation balance 
by $309.0 million (see Note 13). Provision for depreciation of other property 
is based on the straight-line method over the estimated useful life. Repairs 
and maintenance expense items are generally charged to expense as incurred. 
Telephone plant is retired at its original cost, net of cost of removal and 
salvage, and is charged to accumulated depreciation. For other property, 
plant and equipment, retired or sold, the gain or loss is recognized in other 
income.

LONG-LIVED ASSETS, OTHER ASSETS AND GOODWILL -- Deferred financing costs are 
costs incurred in connection with obtaining long-term financing; such costs 
are amortized as interest expense over the terms of the related debt 
agreements. Certain costs incurred with the connection of customers to the 
switched long distance network (deferred network costs) are amortized on a 
straight-line basis over two years. Goodwill resulting from the purchase of 
businesses and other intangibles are recorded at cost and amortized on a 
straight-line basis from 5 to 40 years. Broadwing reviews the carrying value 
of long-lived assets and goodwill for impairment when events or changes in 
circumstances indicate that the carrying amount of the assets may not be 
recoverable. An impairment loss would be recognized when estimated future 
undiscounted cash flows expected to result from the use of the asset and its 
eventual disposition are less than its carrying amount, with the loss 
measured based on discounted expected cash flows.

REVENUE RECOGNITION -- Local service revenues are billed monthly, in advance, 
with revenues being recognized when earned. Remaining revenues (with the 
exception of those described below) are billed and recognized as services are 
provided. Directory segment revenues and related directory costs are 
generally deferred and recognized over the life of the associated directory, 
normally twelve months. Indefeasible right-to-use agreements, or IRUs, 
represent the lease of excess network capacity and are recorded as unearned 
revenue at the earlier of the acceptance of the applicable portion of the 
network by the customer or the receipt of cash. Associated IRU revenue is 
then recognized over the life of the agreement as services are provided, 
beginning on the date of customer acceptance. IRU and related maintenance 
revenue are included in the private line category for the Broadband segment.


                                                                             34

<PAGE>

ADVERTISING -- Costs related to advertising are expensed as incurred and 
amounted to $22.3 million, $11.1 million, and $8.1 million in 1999, 1998, and 
1997, respectively.

FIBER EXCHANGE AGREEMENTS -- In connection with the fiber optic network 
expansion, the Company entered into various agreements to exchange fiber 
usage rights. Non-monetary exchanges of fiber usage are recorded at the cost 
of the asset transferred or, if applicable, the fair value of the asset 
received. The Company accounts for agreements with other carriers to exchange 
fiber for capacity by recognizing the fair value of the revenue earned and 
expense incurred under the respective agreements. Exchange agreements 
accounted for non-cash revenue and expense (in equal amounts) of $2.7 million 
in 1999.

INCOME TAXES -- The provision for income taxes consists of an amount for 
taxes currently payable and a provision for tax consequences deferred to 
future periods using the liability method. For financial statement purposes, 
deferred investment tax credits are being amortized as a reduction of the 
provision for income taxes over the estimated useful lives of the related 
property, plant and equipment.

STOCK-BASED COMPENSATION -- Compensation cost is measured under the intrinsic 
value method. Pro forma disclosures of net income and earnings per share are 
presented as if the fair value method had been applied.

FINANCIAL INSTRUMENTS -- In the normal course of business, the Company may, 
from time to time, employ a small number of financial instruments to manage 
its exposure to fluctuations in interest rates. The Company does not hold or 
issue derivative financial instruments for trading purposes.

REGULATORY ACCOUNTING -- In the fourth quarter of 1997, the Company 
discontinued accounting under Statement of Financial Accounting Standards 
(SFAS) 71, "Accounting for the Effects of Certain Types of Regulation," at 
Cincinnati Bell Telephone (see Note 13).

RECLASSIFICATIONS -- Certain prior year amounts have been reclassified to 
conform to the current classifications with no effect on financial results.

RECENTLY ISSUED ACCOUNTING STANDARDS -- On January 1, 1999, the Company 
adopted AICPA Statement of Position (SOP) 98-1, "Accounting for the Costs of 
Computer Software Developed or Obtained for Internal Use." SOP 98-1 requires 
the capitalization of certain expenditures for software that is purchased or 
internally developed for use in the business. As compared to prior years when 
these types of expenditures were expensed as incurred, the 1999 adoption of 
SOP 98-1 resulted in the capitalization of $10 million of internal use 
software development costs, which are being amortized over a three-year 
period.

    In June 1998, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standard (SFAS) No. 133, "Accounting for Derivative 
Instruments and Hedging Activities." SFAS 133 establishes accounting and 
reporting standards requiring that a derivative instrument be recorded in the 
balance sheet as either an asset or liability, measured at its fair value. 
SFAS 133 has been subsequently amended through the release of SFAS 137, which 
provides for a deferral of the effective date of SFAS 133 to all fiscal years 
beginning after June 15, 2000. As a result, implementation of SFAS 133 is not 
mandatory for the Company until January 1, 2001. Management is currently 
assessing the impact of SFAS 133 on the Company's results of operations, cash 
flows and financial position.

    In December 1999, the Securities and Exchange Commission (SEC) issued 
Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial 
Statements." In SAB 101, the SEC Staff expresses its views regarding the 
appropriate recognition of revenue with regard to a variety of circumstances, 
some of which are of particular relevance to the Company. The Company is 
currently evaluating SAB 101 to determine its impact on the financial 
statements.


2. ACQUISITIONS

IXC COMMUNICATIONS INC.:

    On November 9, 1999, the Company merged with IXC Communications, Inc. 
(the Merger). Under the terms of the Merger, each share of IXC common stock 
was exchanged for 2.0976 shares of the Company's common stock. The aggregate 
purchase price of $2.2 billion consisted of (all numbers approximate): $0.3 
billion in cash for the purchase of five million shares of IXC stock from GE 
Capital Pension Trust; the issuance of 68 million shares of the Company's 
common stock valued at $1.6 billion, 155,000 shares of 6 3/4% convertible 
preferred stock valued at $0.1 billion; and the issuance of 14 million 
options to purchase Broadwing common stock valued at $0.2 billion. These 
options were issued coincident with the merger to replace the then 
outstanding and unexercised options exercisable for shares of IXC common 
stock. These options were granted on the same 


                                                                             35

<PAGE>

terms and conditions as the IXC options, except that the exercise price and 
the number of shares issuable upon exercise were divided and multiplied, 
respectively, by 2.0976. The Merger was accounted for as a purchase and, 
accordingly, the operating results of IXC (Broadwing Communications) have 
been included in the Company's consolidated financial statements since the 
Merger date of November 9, 1999.

    The cost of the Merger has been preliminarily allocated to the assets 
acquired and liabilities assumed according to their estimated fair values at 
the acquisition date and is subject to adjustment when the assumptions 
relating to the asset and liability valuations are finalized. In addition, 
the allocation may be impacted by changes in pre-acquisition contingencies 
identified during the allocation period by the Company relating to certain 
environmental, litigation, and other matters. The results of a preliminary 
allocation of the purchase price are as follows:

Fair market value adjustments:


<TABLE>
<S>                                       <C>
Property, Plant & Equipment               $   207.0
Other intangibles                             397.0
Debt                                         (168.0)
Deferred tax Liabilities                     (113.0)
Other                                           7.0
-------------------------------------------------------------------------------
Subtotal                                     $330.0
-------------------------------------------------------------------------------
Goodwill                                   $2,187.5
-------------------------------------------------------------------------------
Total                                      $2,517.5
-------------------------------------------------------------------------------
</TABLE>


    The amount allocated to goodwill represents the excess of price paid over
the fair value of assets realized and liabilities assumed in the Merger. These
amounts will be amortized to expense over a 30-year period.

CINCINNATI BELL WIRELESS:

    On December 31, 1998 the Company paid approximately $162 million in cash 
to AT&T PCS in exchange for an 80% interest in the Wireless business, 
including a PCS license and other assets and liabilities. The goodwill, 
licenses, and other intangibles related to this purchase were approximately 
$96 million and are being amortized to expense on a straight-line basis over 
a 20- to 40-year period.

    The following summarized unaudited Pro forma financial information 
assumes both the Merger and the acquisition of the wireless business occurred 
at the beginning of each year:


<TABLE>
<CAPTION>
Millions of dollars (except per share amounts)         Year ended December 31         1999              1998
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>              <C>
Revenues                                                                            $1,699.4          $1,572.0
EBITDA                                                                                 326.8             341.8
Loss from continuing operations                                                       (349.5)           (202.7)
Net Loss                                                                             $(356.1)          $(140.2)
--------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations per common share                                       $(1.76)           $(1.02)
Loss per common share                                                                  $(1.79)            $(.72)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    These unaudited Pro forma results of operations have been prepared for
comparative purposes only and do not purport to be indicative of the results of
operations which actually would have resulted had the Merger and the acquisition
of the wireless business had occurred on January 1, 1998.


                                                                             36

<PAGE>

3. RESTRUCTURING AND OTHER CHARGES (CREDITS)

1999 RESTRUCTURING PLAN

    In December 1999, the Company's management approved restructuring plans
which included initiatives to integrate operations of the Company and Broadwing
Communications, improve service delivery, and reduce the Company's expense
structure. Total restructuring costs and impairments of $18.6 million were
recorded in the fourth quarter related to these initiatives. The $18.6 million
consisted of $7.7 million relating to Broadwing Communications (recorded as a
component of the preliminary purchase price allocation) and $10.9 million
relating to the Company (recorded as a cost of operations). The $10.9 million
relating to the Company consisted of restructuring and other liabilities in the
amount of $9.5 million and related asset impairments in the amount of $1.4
million. The restructuring related liabilities recorded in the fourth quarter of
1999 were comprised of the following:


<TABLE>
<CAPTION>
                                       Broadwing,excluding
Millions of dollars                  Broadwing Communications           Broadwing Communications          Total
--------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                <C>                              <C>
Employee separations                           $6.0                              $2.2                       $8.2
Facility closure costs                          2.3                               2.1                        4.4
Relocation                                      ---                               0.2                        0.2
Other exit costs                                1.2                               3.2                        4.4
                                             ------                            ------                     ------
Total accrued restructuring costs            $  9.5                            $  7.7                     $ 17.2
                                             ------                            ------                     ------
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    The Company's estimated restructuring costs were based on management's best
estimate of those costs based on available information. The restructuring costs
accrued in 1999 included the costs of involuntary employee separation benefits
related to 347 employees (263 Broadwing Communication employees and 84 other
employees). As of December 31, 1999, approximately 1% of the employee
separations had been completed for a total cash expenditure of $0.4 million.
Employee separation benefits include severance, medical and other benefits, and
primarily affect customer support, infrastructure, and the Company's long
distance operations. The restructuring plans also included costs associated with
the closure of a variety of technical and customer support facilities, the
decommissioning of certain switching equipment, and the termination of contracts
with vendors.

    In connection with the restructuring plan, the Company performed a review of
our long-lived assets to identify any potential impairments in accordance with
SFAS 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed
of." Accordingly, the Company recorded a $1.4 million charge as an expense of
operations, resulting from the abandonment of certain assets including duplicate
network equipment.

    In total, the Company expects these restructuring related activities to
result in cash outlays of $14.8 million and non-cash items of $3.8 million, and
that most of the restructuring actions will be completed by December 31, 2000.

1995 RESTRUCTURING PLAN

    In 1995, the Company implemented a restructuring plan to provide for the
voluntary and involuntary separation of more than 1,300 employees. The Company
recorded charges of $131.6 million to reflect the cost of this plan. The Company
recorded $21 million of non-cash pension settlement gains in 1997 and reversed
$1.1 million in restructuring liabilities in 1998 upon substantial completion of
the 1995 restructuring plan.


                                                                             37

<PAGE>

-------------------------------------------------------------------------------
4. INVESTMENTS IN OTHER ENTITIES

    Investments in Equity Method Securities - The Company holds a 27% ownership
investment in Applied Theory. The book value and market value of this investment
at December 31, 1999 were $61.0 million and $157.1 million, respectively.

    Investments in Marketable Securities - Investments held in PSINet, Purchase
Pro and ZeroPlus.com are classified as an "available-for-sale" securities under
the provisions of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" (SFAS 115).
Accordingly, the Company recorded these investments at fair value and recorded
the unrealized holding gains net of tax in comprehensive income, and adjusted
the carrying value of these investments. The book value and related market value
of these securities were $524.3 million and $771.3 million, respectively, as of
December 31, 1999.

-------------------------------------------------------------------------------
5. DEBT

Debt Consists of the Following:

<TABLE>
<CAPTION>
Millions of dollars                         at December 31                            1999              1998
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                 <C>
Short-Term Debt:
     Commercial paper                                                                   --              $185.5
     Current maturities of long-term debt                                               $9.2               0.7
                                                                                        ----            ------
     Total short-term debt                                                              $9.2            $186.2
--------------------------------------------------------------------------------------------------------------------------------
Long-Term Debt
     Bank Notes                                                                       $755.0              --
     9.0% Senior subordinated notes                                                    450.0              --
     6.75% Convertible notes                                                           412.0              --
     Various CBT Notes                                                                 290.0            $290.0
     7.25% Senior subordinated notes                                                    50.0              50.0
     PSINet forward sale                                                               133.9              --
     Capital lease obligations                                                          37.0              26.8
     Other                                                                               8.1              --
--------------------------------------------------------------------------------------------------------------------------------
     Total long-term debt                                                           $2,136.0            $366.8
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


Average balances of short-term debt and related interest rates for the last
three years are as follows:


<TABLE>
<CAPTION>
Millions of dollars                                                         1999             1998            1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>              <C>            <C>
Average amounts of short-term debt
outstanding during the year*                                                $190.0            $87.5          $64.2
Maximum amounts of short-term debt
at any month-end during the year                                            $230.0           $185.5         $129.5
Weighted average interest rate
during the year**                                                              4.9%             5.6%           5.7%
</TABLE>


* Amounts represent the average daily face amount of notes.
** Weighted average interest rates are computed by dividing the daily average
face amount of notes into the aggregate related interest expense.


                                                                             38

<PAGE>

9% SENIOR SUBORDINATED NOTES

    In 1998 IXC issued $450.0 million of 9% senior subordinated notes due 2008
("the 9% notes"). The 9% notes are general unsecured obligations and are
subordinate in right of payment to all existing and future senior indebtedness
and other liabilities of our subsidiaries. The indenture related to the 9% notes
requires us to comply with various financial and other covenants and restricts
the Company from incurring certain additional indebtedness.

    In January 2000, $404 million of these 9% notes were redeemed through a
tender offer as a result of the change of control terms of the bond indenture.
As a result, the Company recorded an extraordinary charge for the debt
extinguishment of approximately $4.4 million, net of taxes.

6.75% CONVERTIBLE NOTES

    In July 1999, the Company issued $400 million of 10-year, convertible
subordinated debentures to Oak Hill Capital Partners, L.P. These notes are
convertible into common stock of the Company at a price of $29.89 per common
share at the option of the holder. For as long as this debt is outstanding,
these notes bear a coupon rate of 6.75% per annum, with the associated interest
expense being added to the debt principal amount. Through December 31, 1999, the
Company has recorded $12.0 million in interest expense and has adjusted the
carrying amount of the debt accordingly.

PSINET FORWARD SALE

    The Company's investment in PSINet consists of 21.6 million shares after
adjusting for their February 2000 two-for-one stock split. In June and July
1999, Broadwing Communications received approximately $111.8 million
representing amounts from a financial institution in connection with two prepaid
forward sale contracts on six million shares of the PSINet common stock. This
amount is accounted for as notes payable and is collateralized by these six
million shares of PSINet common stock owned by the Company. Each forward-sale
obligation for three million shares of PSINet stock may be settled at specified
dates in the first and second quarter of 2002 for a maximum amount of three
million shares of PSINet stock, or at the Company's option, the equivalent value
in cash. Since it is the Company's current intention to settle these obligations
in PSINet stock, the carrying amount of the liability is marked-to-market each
period with an offsetting adjustment to the "unrealized gain on investments"
caption within other comprehensive income.

BANK NOTES

    In November 1999, the Company obtained a $2.1 billion credit facility from a
group of 24 lending institutions. The credit facility consists of $900 million
in revolving credit and $750 million in term loans from banking institutions and
$450 million in term loans from non-banking institutions. At December 31, 1999,
the Company had drawn approximately $755 million from the credit facility in
order to refinance its existing debt and debt assumed as part of the Merger. In
January 2000, the Company borrowed approximately $400 million in order to redeem
the outstanding 9% Senior Subordinated Notes assumed during the Merger as part
of a tender offer. This tender offer was required under the terms of the bond
indenture due to the change in control provision. Accordingly, the Company has
approximately $900 million in additional borrowing capacity under this facility
as of the date of this report. This facility's financial covenants require that
the Company maintain certain debt to EBITDA ratios, debt to capitalization
ratios, fixed to floating rate debt ratios and interest coverage ratios. This
facility also contains covenants which, among other things, restrict the
Company's ability to incur additional debt, pay dividends, repurchase Company
common stock, sell assets or merge with another company.

    The interest rates to be charged on borrowings from this credit facility can
range from 100 to 225 basis points above the London Interbank Offering Rate
(LIBOR), depending on the Company's credit rating. The current borrowing rate is
approximately 200 basis points. The Company will incur banking fees in
association with this credit facility ranging from 37.5 basis points to 75 basis
points, applied to the unused amount of borrowings of the facility.


                                                                             39


<PAGE>


Annual maturities of long-term debt and minimum payments under capital leases 
for the five years subsequent to December 31, 1999 are as follows:


<TABLE>
<CAPTION>
Millions of dollars        at December 31                   1999
-----------------------------------------------------------------------
<S>                                                     <C>
Debentures/Notes
Year of Maturity
2000                                                    $     --
2001                                                          --
2002                                                        20.0
2003                                                        20.0
2004                                                          --
2005                                                       325.0
Thereafter                                               1,592.0
-----------------------------------------------------------------------
     Subtotal                                            1,957.0
PSINet Forward Sale                                        133.9
Capital leases and other                                    45.1
-----------------------------------------------------------------------
     Total                                              $2,136.0
-----------------------------------------------------------------------
</TABLE>


Interest expense recognized on the Company's debt is as follows:


<TABLE>
<CAPTION>
Millions of dollars     Year ended December 31        1999             1998              1997
---------------------------------------------------------------------------------------------
<S>                                                  <C>             <C>               <C>
Interest expense:
     Long-term debt                                  $55.8           $ 20.8            $ 23.2
     Short-term debt                                   5.5              4.9               6.1
     Other                                             0.4             (1.5)              0.8
---------------------------------------------------------------------------------------------
         Total                                       $61.7           $ 24.2            $ 30.1
---------------------------------------------------------------------------------------------
</TABLE>


    Interest capitalized during 1999, 1998 and 1997 was $3.8 million, $1.9 
million and $1.3 million, respectively.

    Extraordinary items related to the early extinguishment of debt affected 
both years. In 1999, costs related to the early extinguishment of Broadwing 
Communications' debt as a result of to the Merger resulted in a $6.6 million 
charge, net of taxes. The spin-off of Convergys Corporation in 1998 reduced 
the borrowing capacity that was needed from the Company's then-existing 
credit facility and some debt and a portion of that credit facility were 
retired, resulting in a $1.0 million extraordinary charge, net of tax.

------------------------------------------------------------------------------
6. MINORITY INTEREST


<TABLE>
<CAPTION>

Millions of dollars            Year ended December 31           1999         1998
---------------------------------------------------------------------------------
<S>                                                           <C>           <C>
     Minority interest consists of:
     12.5% Exchangeable Preferred Stock                       $418.2        $  --
     Minority Interest in Cincinnati Bell
       Wireless held by AT&T PCS                                13.1         29.0
       Other                                                     2.7             
---------------------------------------------------------------------------------
         Total                                                $434.0        $29.0
---------------------------------------------------------------------------------
</TABLE>




                                                                            40



<PAGE>


    Broadwing Communications has outstanding approximately $400 million, or 
400,000 shares of 12 1/2% Junior Exchangeable Preferred Stock (12 1/2% 
Preferreds). The 12 1/2% Preferreds are mandatorily redeemable on August 15, 
2009 at a price equal to their liquidation preference ($1,000 a share), plus 
accrued and unpaid dividends. Dividends on the 12 1/2% Preferreds are 
currently being effected through additional shares of the 12 1/2% Preferreds. 
This option is available to the Company until February 15, 2001, at which 
time all dividends are required to be paid in cash. The Company converted to 
a cash pay option for these dividends on February 15, 2000. Dividends on the 
12 1/2% Preferreds are classified as minority interest expense in the 
Consolidated Statements of Income and Comprehensive Income. At the Merger 
date, and as part of purchase accounting, the 12 1/2% Preferreds were 
adjusted to fair market value which exceeds the redemption value. As such, 
the accretion of the difference between the new carrying value and the 
mandatory redemption value is treated as an offsetting reduction to minority 
interest expense.

     AT&T PCS maintains a 19.9% ownership in the Company's Cincinnati Bell 
Wireless (CBW) subsidiary. The balance is adjusted as a function of AT&T PCS' 
19.9% share of the adjusted net income (or loss) of CBW, with an offsetting 
amount being reflected in the Consolidated Statements of Income and 
Comprehensive Income under the caption "Minority Interest and Other Income 
(Expense), Net."

------------------------------------------------------------------------------
7. COMMON AND PREFERRED SHARES

COMMON SHARES

    Par value of the common shares is $.01 per share. At December 31, 1999 
and 1998, common shares outstanding were 200.9 million and 136.4 million, 
respectively. Common shares outstanding at December 31, 1999 include the 
issuance of 68.4 million shares in association with the Merger. In July 1999, 
the Company's Board of Directors approved a share repurchase program 
authorizing the repurchase of as much as $200 million in common shares of the 
Company. As of December 31, 1999, the Company had repurchased approximately 
7.8 million shares of Company common stock at a cost of $145 million.

COMMON SHARE PURCHASE RIGHTS PLAN

    In the first quarter of 1997, the Company's Board of Directors adopted a 
Share Purchase Rights Plan by granting a dividend of one preferred share 
purchase right for each outstanding common share to shareowners of record at 
the close of business on May 2, 1997. Under certain conditions, each right 
entitles the holder to purchase one-thousandth of a Series A Preferred Share. 
The rights cannot be exercised or transferred apart from common shares, 
unless a person or group acquires 15% or more of the Company's outstanding 
common shares. The rights will expire May 2, 2007, if they have not been 
redeemed.

PREFERRED SHARES

    The Company is authorized to issue up to four million voting preferred 
shares and one million nonvoting preferred shares.

    In connection with the Merger, the Company issued 155,250 shares of 6 3/4% 
cumulative convertible preferred stock. The 6 3/4% convertible preferred 
stock can be converted at any time at the option of the holder into common 
stock of the Company. The conversion rate is 28.84 shares of Company common 
stock per share of 6 3/4% convertible preferred stock. Dividends on the 6 3/4%
convertible preferred stock are payable quarterly in arrears in cash or 
common stock.

    Also in connection with the Merger, the Company issued approximately $100 
million (1,074,000 shares) of 7 1/4% junior convertible preferred stock due 
2007. As of the date of this report 1,058,380 shares remain outstanding. The 
7 1/4% convertible preferred stock is convertible at the option of the Holder 
into shares of common stock at a conversion rate of 8.94 shares of common 
stock for each share of 7 1/4% convertible preferred stock. The shares are 
redeemable at a price of 104.83% on April 3, 2000. On March 31, 2007, the 
7 1/4% convertible preferred stock must be redeemed at a price equal to the 
liquidation preference ($100 per share) plus accrued and unpaid dividends. If 
paid in kind, dividends accrue at 8 3/4%. The difference between the carrying 
value of the 7 1/4% convertible preferred stock and its redemption value is 
being accreted to additional paid-in-capital through the mandatory redemption 
date, and this accretion is included in dividends and accretion applicable to 
preferred stock. Since this preferred stock is mandatorily redeemable, it is 
not classified within shareowners' equity.


                                                                            41



<PAGE>

------------------------------------------------------------------------------
8. EARNINGS PER COMMON SHARE

    Basic earnings per common share are based upon the weighted average 
number of common shares outstanding during the period. Diluted earnings per 
common share reflects the potential dilution that would occur if common stock 
equivalents were exercised. The following table is a reconciliation of the 
numerators and denominators of the basic and diluted earnings per common 
share computations for income from continuing operations, before 
extraordinary items, for the following periods:


<TABLE>
<CAPTION>

Shares and dollars
in millions (except
per share amounts)                  Year ended December 31                1999          1998         1997
------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>           <C>         <C>
Numerator:

     Income from continuing operations                                   $38.0         $81.8       $102.3
     Preferred Stock dividends                                             2.1            --           --
     Numerator for basic earnings per common
     share and earnings per common share
     assuming dilution - income
     applicable to common shareowners                                    $35.9         $81.8       $102.3
------------------------------------------------------------------------------------------------------------------
Denominator:
     Denominator for basic earnings
     per common share - weighted average
     common shares                                                       144.3         136.0        135.2
     Potential dilution:
     Stock options                                                         5.6           1.7          1.9
     Stock-based compensation                                               .8            .5           .6
     arrangements
------------------------------------------------------------------------------------------------------------------
     Denominator for diluted earnings
       per common share                                                  150.7         138.2        137.7
------------------------------------------------------------------------------------------------------------------
Basic earnings from continuing
     operations per common share                                          $.25          $.60         $.76
------------------------------------------------------------------------------------------------------------------
Earnings from continuing
     operations per common share
     assuming dilution                                                    $.24          $.59         $.74
------------------------------------------------------------------------------------------------------------------
</TABLE>


    Options to purchase 4,107,471 weighted average shares of common stock at 
an average of $20.75 per share were outstanding during the year ended 
December 31, 1999, but were not included in the computation of diluted EPS 
because the options' exercise price was greater than the average market price 
of the common shares. The 6 3/4% convertible debentures and 7 1/4% 
convertible preferred stocks are also excluded from the diluted EPS 
calculation because they are anti-dilutive. The inclusion of the convertible 
debentures and preferred stocks would have added 13.8 million and 9.5 million 
shares, respectively, to the denominator of the EPS calculation.


                                                                            42



<PAGE>

------------------------------------------------------------------------------
9. INCOME TAXES

Income tax expense consists of the following:


<TABLE>
<CAPTION>

Millions of dollars            Year ended December 31           1999             1998               1997
--------------------------------------------------------------------------------------------------------------
<S>                                                            <C>              <C>               <C>
Current:
     Federal                                                   $52.3            $51.1             $57.3 
     State and local                                             6.9              7.6               4.3 
                                                               -----            -----             ----- 
     Total current                                              59.2             58.7              61.6 
Deferred:
     Federal                                                   (21.2)           (12.1)             (5.0)
     State and local                                            (3.5)            (0.7)              0.9 
                                                               -----            -----             ----- 
     Total deferred                                            (24.7)           (12.8)             (4.1)
     Investment tax credits                                     (1.2)            (1.6)             (1.2)
                                                               -----            -----             ----- 
     Total                                                     $33.3            $44.3             $56.3 
--------------------------------------------------------------------------------------------------------------
</TABLE>


    Income taxes decreased $11 million in comparison to the prior year as a 
function of lower pre-tax income and the offsetting impact of nondeductible 
expenses such as goodwill amortization and preferred stock dividends.

The following is a reconciliation of the statutory Federal income tax rate 
with the effective tax rate for each year:


<TABLE>
<CAPTION>
                                                               1999             1998              1997
--------------------------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>                <C>
U.S. Federal statutory rate                                    35.0%            35.0%             35.0%
State and local income taxes, net of
      federal income tax benefit                                3.4              3.3               0.9
Amortization of non-deductible
      intangible assets                                         4.6               --                --
Dividends on preferred stock                                    3.2               --                --
Investment and research tax credits                            (0.9)            (1.6)             (1.5)
Other differences                                               1.4             (1.6)              1.1 
                                                               ----             ----              ----
Effective rate                                                 46.7%            35.1%             35.5%
--------------------------------------------------------------------------------------------------------------
</TABLE>


    The income tax effects relating to other comprehensive income components 
were $104.0 million in 1999. These tax impacts were not significant in 1998 
and 1997.

The components of the Company's deferred tax assets and liabilities are as 
follows:


<TABLE>
<CAPTION>
Millions of dollars                    at December 31                  1999             1998
--------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                <C>
Deferred tax assets:
     Loss carryforwards                                             $ 126.2              ---
     Unearned revenues                                                193.9              ---
     Investment in subsidiaries                                        46.5              9.6
     Other                                                             80.0             39.3
                                                                    -------            -----
     Total deferred tax asset                                       $ 446.6            $48.9
--------------------------------------------------------------------------------------------------------------
Deferred tax liabilities:
     Depreciation and amortization                                  $ 400.8            $22.3
     Unrealized gain on investments                                   227.1               --
     Other                                                              4.6               --
                                                                    -------            -----
     Total deferred tax liabilities                                 $ 632.5            $22.3
                                                                    -------            -----
     Net deferred tax (liability) asset                             $(185.9)           $26.6
--------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                            43



<PAGE>


    The Company recorded gross deferred tax assets of approximately $346.3 
million and gross deferred tax liabilities of approximately $484.3 million 
upon the Merger. Tax loss carryforwards will generally expire between 2001 
and 2018. U.S. tax laws limit the annual utilization of tax loss 
carryforwards of acquired entities. These limitations should not materially 
impact the utilization of the tax carryforwards.

------------------------------------------------------------------------------
10. EMPLOYEE BENEFIT PLANS

PENSIONS AND POST-RETIREMENT PLANS

    The Company sponsors three noncontributory defined benefit pension plans: 
one for eligible management employees, one for non-management employees and 
one supplementary, nonqualified, unfunded plan for certain senior managers.

    The pension benefit formula for the management plan is a cash balance 
plan; the pension benefit is determined by a combination of 
compensation-based credits and annual guaranteed interest credits. The 
non-management pension is also a cash balance plan; the pension benefit is 
determined by a combination of service and job-classification-based credits 
and annual interest credits. Benefits for the supplementary plan are based on 
years of service and eligible pay. Funding of the management and 
non-management plans is achieved through contributions to an irrevocable 
trust fund. The contributions are determined using the aggregate cost method.

    The Company uses the projected unit credit cost method for determining 
pension cost for financial reporting purposes. It accounts for certain 
benefits provided under early retirement packages, discussed in Note 3 as a 
special termination benefit.

    The Company also provides health care and group life insurance benefits 
for retirees with a service pension. The Company funds its group life 
insurance benefits through Retirement Funding Accounts and funds health care 
benefits using Voluntary Employee Benefit Association (VEBA) trusts. It is 
the Company's practice to fund amounts as deemed appropriate from time to 
time. Contributions are subject to IRS limitations developed using the 
aggregate cost method. The associated plan assets are primarily equity 
securities and fixed income investments. The Company recorded an accrued 
post-retirement benefit liability of $44.9 million at December 31, 1999.

    The following information relates to all Company non-contributory 
defined-benefit pension plans, post-retirement healthcare, and life insurance 
benefit plans.

    Effective January 1, 1999, after the spin-off of Convergys, pension 
assets were divided between the pension trusts of the Company and Convergys 
so that each company's plans had the required assets to meet the minimum 
requirements set forth in applicable benefit and tax regulations. The 
remaining assets in excess of the minimum requirements were divided between 
the pension trusts of the Company and Convergys in accordance with the 
Employee Benefits Agreement between the two companies.



                                                                            44



<PAGE>


Pension and post-retirement benefit cost are as follows:


<TABLE>
<CAPTION>
                                                                   Pension Benefits           Postretirement and Other Benefits
                                                               -----------------------        ---------------------------------
Millions of dollars        Year ended December 31              1999      1998     1997           1999         1998      1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>         <C>      <C>          <C>          <C>         <C>
Service cost (benefits earned
during the period)                                              $6.0       $4.8  $   3.7         $1.8         $1.5        $1.3
Interest cost on projected
benefit obligation                                              30.3       18.1     20.0         14.4         15.3        15.2
Expected return on plan assets                                 (37.8)     (23.3)   (23.0)       (10.3)        (9.4)       (7.3)
--------------------------------------------------------------------------------------------------------------------------------
Settlement gains                                                --         --      (21.0)        --           --          --
Curtailment loss                                                --          1.4      0.2         --           --          --
Amortization of:
     Transition (asset)/obligation                              (2.4)      (1.3)    (1.5)         4.9          4.9         4.9
     Prior service cost                                          1.5        0.7      0.7          0.3          0.2         0.2
     Net (gain)/loss                                             0.3        0.3      0.3         (0.3)        (0.2)       (0.1)
--------------------------------------------------------------------------------------------------------------------------------
Actuarial net pension cost (income)                         $   (2.1)   $   0.7  $ (20.6)     $  10.8      $  12.3     $  14.2
                                                            --------    -------  -------      -------      -------     -------
</TABLE>


Reconciliation of the beginning and ending balance of the plans' funded 
status were:


<TABLE>
<CAPTION>
                                                                   Pension Benefits           Postretirement and Other Benefits
Millions of dollars        Year ended December 31                 1999          1998              1999               1998
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>           <C>             <C>                  <C>
Change in benefit obligation:

     Benefit obligation at January 1                             $476.5          $457.5          $234.8              $222.3
       Service cost                                                 6.0             4.8             1.8                 1.5
       Interest cost                                               30.2            18.1            14.4                15.2
       Amendments                                                   8.9             1.4            (0.4)               --
       Actuarial  (gain) loss                                     (44.1)           34.3           (34.1)               12.3
       Curtailment                                                 --               0.9            --                  --
       Benefits paid                                              (42.8)          (40.5)          (15.3)              (16.5)
                                                                 ------          ------          ------              ------
       Benefit obligation at December 31                         $434.7          $476.5          $201.2              $234.8
                                                                 ------          ------          ------              ------
Change in plan assets:
     Fair value of plan assets at January 1                      $579.3          $543.2          $127.9              $112.1
       Actual return on plan assets                               125.0            71.8             9.3                17.5
       Employer contribution                                        4.7             4.8            13.4                14.8
       Benefits paid                                              (42.8)          (40.5)          (15.3)              (16.5) 
                                                                 ------          ------          ------              ------
       Fair value of plan assets at December 31                  $666.2          $579.3          $135.3              $127.9
                                                                 ------          ------          ------              ------
Reconciliation to Balance Sheet:
     Funded status                                               $231.5          $102.8          $(65.9)            $(106.9)
     Unrecognized transition asset                                (12.0)          (14.4)           62.9                68.6
     Unrecognized prior service cost                               26.6            19.2             2.7                 2.6
     Unrecognized net gain                                       (237.1)         (105.5)          (44.6)              (11.8)
--------------------------------------------------------------------------------------------------------------------------------
         Net amount recognized                                     $9.0            $2.1          $(44.9)             $(47.5)
    ----------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                            45



<PAGE>


The combined net prepaid benefit expense consists of:


<TABLE>
<CAPTION>
                                                                          Pension Benefits
                                                                       ---------------------
Millions of dollars        Year ended December 31                        1999              1998
--------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>               <C>
Prepaid benefit cost                                                    $42.0             $38.2
Accrued benefit liability                                               (39.1)            (44.2)
Intangible asset                                                          1.3               1.2
Accumulated other comprehensive income                                    4.8               6.9
                                                                      -------           -------
     Net amount recognized                                            $   9.0           $   2.1
                                                                      -------           -------
--------------------------------------------------------------------------------------------------------------
</TABLE>


    At December 31, 1999 and 1998, Pension plan assets include $51.4 million 
in Company common stock and $52.8 million in Company and Convergys common 
stocks, respectively.

The following are the weighted average assumptions as of December 31:


<TABLE>
<CAPTION>
                                                               Pension Benefits                 Other Benefits
                                                        --------------------------          ------------------------
At December 31                                          1999       1998       1997          1999       1998      1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>       <C>         <C>           <C>        <C>       <C>
Discount rate - projected
     benefit obligation                                 7.75 %    6.50%       7.00%         7.75%      6.50%     7.00%
Expected long-term rate of return
     on Pension and VEBA plan assets                    8.25 %    8.25%       8.25%         8.25%      8.25%     8.25%
Expected long-term rate of return
     on retirement fund account assets                    --        --          --          8.00%      8.00%     8.00%

Future compensation growth rate                         4.50 %    4.00%       4.00%         4.50%      4.00%     4.00%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    The assumed health care cost trend rate used to measure the 
post-retirement health benefit obligation at December 31, 1999, was 7.43% and 
is assumed to decrease gradually to 4.5% by the year 2004. In addition, a one 
percentage point change in assumed health care cost trend rates would have 
the following effect on the post-retirement benefit costs and obligation:


<TABLE>
<CAPTION>
Millions of dollars                           1% Increase           1% Decrease
---------------------------------------------------------------------------------
<S>                                           <C>                   <C>
1999 service and interest costs                   $ 0.5               $ (0.4)
Post-retirement benefit obligation
     at December 31, 1999                         $ 6.6               $ (5.8)
---------------------------------------------------------------------------------
</TABLE>


SAVINGS PLANS

    The Company sponsors several defined contribution plans covering 
substantially all employees. The Company's contributions to the plans are 
based on matching a portion of the employee contributions or on a percentage 
of employee earnings or net income for the year. Total Company contributions 
to the defined contribution plans were $4.5 million, $4.0 million and $3.4 
million for 1999, 1998, and 1997, respectively. These amounts exclude $6.8 
million and $5.8 million in 1998 and 1997 respectively, related to the 
spin-off of Convergys.

------------------------------------------------------------------------------
11. STOCK-BASED COMPENSATION PLANS

    During 1999 and in prior years, certain employees of the Company were 
granted stock options and other stock-based awards under the Company's 
Long-Term Incentive Plan (Company LTIP). Under the Company LTIP, options are 
granted with exercise prices that are no less than market value of the stock 
at the grant date. Generally, stock options have ten-year terms and vesting 
terms of three to five years. There were no Company stock appreciation rights 
granted or outstanding during the three-year period ended December 31, 1999. 
The number of shares authorized and available for grant (excluding those 
granted in the Merger) under this plan were approximately 20 million and 8 
million, respectively at December 31, 1999.


                                                                            46



<PAGE>


    Effective December 31, 1998, awards outstanding under the Company LTIP 
were modified such that, for each Company option or share award, the holder 
also received a Convergys option or share award pursuant to Convergys' 
Long-Term Incentive Plan (Convergys LTIP). These Convergys stock options or 
share awards have the same vesting provisions, option periods and other terms 
and conditions as the original Company options. In addition, upon completion 
of the Merger, the historic IXC options were exchanged for Company options 
with the same vesting provisions, option periods, and other terms and 
conditions of the original IXC options.

    The Company follows the disclosure-only provisions of SFAS 123, 
"Accounting for Stock-Based Compensation," but applies Accounting Principles 
Board Opinion 25 and related interpretations in accounting for its plans. If 
the Company had elected to recognize compensation cost for the issuance of 
the Company or Convergys options to employees based on the fair value at the 
grant dates for awards consistent with the method prescribed by SFAS 123, net 
income and earnings per share would have been impacted as follows:


<TABLE>
<CAPTION>
Millions of dollars                Year ended
except per share amounts           December 31              1999                1998                1997
--------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>              <C>
Net income (loss):
     As reported                                             $31.4            $149.9           $(16.4)
--------------------------------------------------------------------------------------------------------------
     Pro forma compensation expense,
     net of tax benefits                                      (7.8)             (2.1)            (5.1)
     Total pro forma                                         $23.6            $147.8           $(21.5)
--------------------------------------------------------------------------------------------------------------
Diluted earnings (loss) per share:
     As reported                                          $    .20            $ 1.08           $ (.12)
     Pro forma                                            $    .14            $ 1.06           $ (.16)
--------------------------------------------------------------------------------------------------------------
</TABLE>


    The pro forma effect on net income (loss) for all periods shown above is 
not representative of the pro forma effect on net income in future years 
because it does not take into consideration pro forma compensation expense 
related to grants made prior to 1995. In addition, the pro forma disclosure 
for all periods shown does not take into consideration pro forma IXC option 
grants prior to the Merger. Additionally, the pro forma disclosure for 1998 
includes incremental compensation expense based on the difference in the fair 
value of the replacement options issued at the date of the distribution to 
employees who held Company options.

    The weighted average fair values at the date of grant for the Company 
options granted to employees during 1999 and 1998 were $8.40 and $8.73, 
respectively. Such amounts were estimated using the Black-Scholes 
option-pricing model with the following weighted average assumptions:


<TABLE>
<CAPTION>
                                                   1999              1998             1997
--------------------------------------------------------------------------------------------------------------
<S>                                                <C>               <C>              <C>
Expected dividend yield                              --               1.4%             1.8%
Expected volatility                                48.0%             25.0%            29.9%
Risk-free interest rate                             6.4%              5.7%             6.2%
Expected holding
period -- years                                       4                 4                4
--------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                            47

<PAGE>


    Presented below is a summary of the status of outstanding Company stock
options issued to employees, the issuance of Convergys options to Company option
holders at the date of distribution, and related transactions:


<TABLE>
<CAPTION>
                                                                   Weighted Average
                                                       Shares        Exercise Price
---------------------------------------------------------------------------------------------------
<S>                                                   <C>          <C>                                           
Company options held by
employees at January 1, 1997                           2,518             $13.14
Granted                                                  357             $30.01
Exercised                                               (196)            $10.08
Forfeited/expired                                        (15)            $23.90
---------------------------------------------------------------------------------------------------
Company options held by
employees at December 31, 1997                         2,664             $17.16
Granted                                                  374             $31.25
Exercised                                               (124)            $12.02
Forfeited/expired                                        (80)            $28.26
---------------------------------------------------------------------------------------------------
Company options held by
employees at December 31, 1998                         2,834             $20.33
Effect of Convergys Split                              4,450             $11.61
---------------------------------------------------------------------------------------------------
Company options held by
employees at January 1, 1999                           7,284              $8.72
Granted in IXC acquisition                            14,583             $15.78
Granted to employees                                  11,341             $19.38
Exercised                                             (3,198)            $11.57
Forfeited/expired                                     (1,308)            $17.55
---------------------------------------------------------------------------------------------------
Company options held by
employees at December 31, 1999                        28,702             $15.81
---------------------------------------------------------------------------------------------------
</TABLE>


The following table summarizes the status of Company stock options outstanding
and exercisable at December 31, 1999:


<TABLE>
<CAPTION>

Shares in thousands                                 Options Outstanding                            Options Exercisable
                                        --------------------------------------------            -------------------------------
                                          Weighted Average
Range of                                Remaining Contractual       Weighted Average                           Weighted Average
Exercise Prices           Shares            Life in Years            Exercise Price             Shares          Exercise Price
--------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>             <C>                         <C>                        <C>             <C>              
$1.440 to $12.981        7,785                  6.14                       $8.02                5,802                $6.80
$12.994 to $16.781      11,150                  9.11                      $16.13                2,515               $15.38
$17.500 to $25.406       7,993                  9.36                      $20.18                2,169               $20.48
$25.450 to $31.563       1,774                  6.08                       28.36                  520                26.80
                         -----                                             -----               ------                -----
     Total              28,702                                            $15.81               11,006               $12.40
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    Restricted stock awards during 1999, 1998 and 1997 were 739,250 shares,
320,000 shares, and 126,000 shares, respectively. The weighted average market
value of the shares on the grant date were $17.37 in 1999 and, on a pre-spin-off
basis, $32.59, and $29.48 in 1998 and 1997, respectively. Restricted stock
awards generally vest within one to five years. Total compensation expense for
restricted stock awards during 1999, 1998, and 1997 was $5.7 million, $.6
million and $.6 million, respectively.


                                                                             48

<PAGE>

    On January 4, 1999, the Company announced stock option grants to each of its
approximately 3,500 employees. According to the terms of this program, stock
option grant recipients remaining with the Company until January 4, 2002, can
exercise their options to purchase up to 500 common shares each. The exercise
price for these options is $16.75 per share, the average of the opening and
closing prices for the Company's common stock on the date of the grant. This
plan includes a provision for option grants to future employees, in smaller
amounts and at an exercise price based on the month of hire. Grant recipients
must exercise their options prior to January 4, 2009. The Company does not
expect a significant amount of dilution as a result of this grant.

12. DISCONTINUED OPERATIONS

    On December 31, 1998, the Company completed the tax-free spin-off of its
Convergys subsidiary by distributing shares of Convergys common stock to Company
shareowners on a one-for-one basis, resulting in a $520.7 million reduction in
the Company's common shareowners' equity in 1998.

    For 1998 and all prior periods, the consolidated financial statements have
been restated to reflect the disposition of Convergys as discontinued
operations. Accordingly, the revenues, costs and expenses, assets and
liabilities, and cash flows of Convergys have been reported as discontinued
operations in the financial statements.

Summarized financial information for the discontinued operations is as follows:


<TABLE>
<CAPTION>

Millions of dollars            Year ended December 31                1998             1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                <C>
RESULTS OF OPERATIONS
Revenues                                                           $1,387.3           $922.3
Income before income taxes                                            118.3            138.3
Income taxes                                                           49.2             47.0
--------------------------------------------------------------------------------------------------------------------------------
Net income                                                         $   69.1           $ 91.3
FINANCIAL POSITION
Current assets                                                     $  360.5           $265.8
Total assets                                                        1,450.9            654.4
Current liabilities                                                   697.9            216.7
Total liabilities                                                     930.2            223.6
Net assets of discontinued operations                              $  520.7           $430.8
</TABLE>


    Income before income taxes includes allocated interest expense of $33.7
million and $5.4 million in 1998 and 1997, respectively. Interest expense was
allocated based on the capital structure of Convergys anticipated at the date of
distribution and the Company's weighted average interest rates. The effective
tax rates for discontinued operations were 42% and 34%, respectively.

    In 1998 and 1997, the Company had revenues from Convergys of $10.1 million
and $18.6 million, respectively, resulting from the provision of communications
and other services.

    In 1998 and 1997, the Company incurred costs for services provided by
Convergys of $49.8 million and $49.6 million, respectively, resulting from
billing and customer management services.

    The Company and Convergys entered into the Plan of Reorganization and
Distribution Agreement (the Plan) dated July 20, 1998. The Plan provided, among
other things, that the Company indemnify Convergys for all liabilities arising
from the Company's business and operations and for all contingent liabilities
related to the Company's business and operations otherwise assigned to the
Company. The Plan provided for the equal sharing of contingent liabilities not
allocated to one of the companies. In addition, the Company has a number of
other agreements with Convergys regarding federal, state and local tax
allocation and sharing, employee benefits, general services, billing and
information services provided to the Company by Convergys, and
telecommunications support services provided by the Company to Convergys.


                                                                             49

<PAGE>

13. DISCONTINUATION OF SFAS 71

    In the fourth quarter of 1997, the Company determined that the application
of SFAS 71, "Accounting for the Effects of Certain Types of Regulation", was no
longer appropriate as a result of changes in CBT's competitive and regulatory
environment. Accordingly, the application of SFAS 71 was discontinued at CBT,
resulting in an extraordinary non-cash charge of $210.0 million, which is net of
a related tax benefit of $129.2 million.

The components of the charge are as follows:


<TABLE>
<CAPTION>

Millions of dollars
--------------------------------------------------------------------------------
<S>                                                                <C>
Reduction in plant-related balances                                $327.7
Elimination of other net regulatory assets and liabilities           11.5
--------------------------------------------------------------------------------
Total pre-tax charge                                               $339.2
Total after-tax charge                                             $210.0
--------------------------------------------------------------------------------
</TABLE>


    The change in plant balances primarily represents an increase in accumulated
depreciation of $309.0 million for the removal of an embedded regulatory asset
resulting from the use of regulatory lives for depreciation of plant assets
which have typically been longer than the estimated economic lives. The
adjustment was supported by a discounted cash flow analysis which estimated
amounts of plant that may not be recoverable from future cash flows. The
adjustment also included elimination of accumulated depreciation reserve
deficiencies recognized by regulators and amortized as part of depreciation
expense and an adjustment of approximately $9.5 million to fully depreciate
analog switching equipment scheduled for replacement.

    The discontinuance of SFAS 71 also required CBT to eliminate from its
balance sheet the effects of any other actions of regulators that had been
recognized as assets and liabilities pursuant to SFAS 71, but would not have
been recognized as assets and liabilities by enterprises in general. Prior to
the discontinuance of SFAS 71, CBT had recorded deferred income taxes (and a
regulatory asset) based upon the cumulative amount of income tax benefits
previously flowed through to ratepayers. The discontinuation of SFAS 71 at CBT
had no effect on the accounting for the Company's other subsidiaries.


                                                                             50

<PAGE>

14. ADDITIONAL FINANCIAL INFORMATION

BALANCE SHEET


<TABLE>
<CAPTION>

Millions of dollars        Year ended December 31                    1999             1998             Depreciable Lives (Yrs.)
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>              <C>                <C>
PROPERTY PLANT AND EQUIPMENT, NET:
     Land and rights of way                                        $  155.9         $    5.0                    0 - 30
     Buildings and Leasehold Improvements                             428.3            164.0                    5 - 40
     Telephone Plant                                                1,697.2          1,438.5                    6 - 29
     Transmission system                                            1,074.4             65.9                    5 - 20
     Furniture, vehicles, and other                                   225.7            187.4                    8 - 15
     Construction in Process                                          232.0             12.4                      --
--------------------------------------------------------------------------------------------------------------------------------
                                                                    3,813.5          1,873.2
     Less: Accumulated depreciation                                 1,312.6          1,175.0
--------------------------------------------------------------------------------------------------------------------------------
     Property Plant and Equipment, Net                             $2,500.9         $  698.2
--------------------------------------------------------------------------------------------------------------------------------

Millions of dollars        Year ended December 31                    1999             1998             Amortization Lives (Yrs.)
--------------------------------------------------------------------------------------------------------------------------------
GOODWILL AND OTHER INTANGIBLES:
Goodwill                                                           $2,247.7         $   94.6                    5 - 40
Assembled workforce                                                    24.0             --                       2 - 4
Installed customer base                                               373.0             --                      2 - 20
Other Intangibles                                                      60.6             14.3                    3 - 40
--------------------------------------------------------------------------------------------------------------------------------
                                                                    2,705.3            108.9
Less: Accumulated amortization                                        (25.4)            (5.6)
--------------------------------------------------------------------------------------------------------------------------------
Goodwill and Other Intangibles                                     $2,679.9         $  103.3
--------------------------------------------------------------------------------------------------------------------------------

Millions of dollars        Year ended December 31                    1999             1998
--------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES:
Accrued payroll and benefits                                       $   48.9         $   33.9
Accrued interest                                                       18.8             15.1
Accrued restructuring costs                                            30.2              0.5
Other current liabilities                                              59.6             44.3
--------------------------------------------------------------------------------------------------------------------------------
     Total                                                         $  157.5         $   93.8
--------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
     Unrealized gain on investments                                $  170.0              --
     Additional minimum pension liability                              (3.1)            (6.7)
--------------------------------------------------------------------------------------------------------------------------------
         Total                                                     $  166.9         $   (6.7)
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF CASH FLOWS
Millions of dollars        Year ended December 31                    1999             1998              1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                <C>               <C>
CASH PAID FOR:
     Interest (net of amount capitalized)                          $   53.8         $    26.8            $29.6
     Income taxes (net of refunds)                                 $   40.2         $    81.4            $82.8
NONCASH INVESTING AND FINANCING ACTIVITIES:
     Common stock, warrants and options
         issued in purchase of business                            $1,909.0              --               --
     Preferred stock dividends                                     $   12.0              --               --
     Accretion of preferred stock                                  $    2.4              --               --
     Fiber exchange agreements                                     $    2.7              --               --
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                             51

<PAGE>

15. BUSINESS SEGMENT INFORMATION

    The Company is organized on the basis of products and services. The
Company's segments are strategic business units that offer distinct products and
services and are aligned with specific subsidiaries of the Company. The Company
operates in the five business segments described below.

    The Local Communications segment provides local, long distance, data
networking and transport, Internet and payphone services, as well as sales of
communications equipment, in southwestern Ohio, northern Kentucky, and
southeastern Indiana. Services are marketed and sold to both residential and
business customers and delivered via the Company's Cincinnati Bell Telephone and
Zoomtown.com subsidiaries.

    The Broadband segment utilizes an advanced, fiber-optic network to provide
private line, switched access, data transport, Internet-based, and other
services to end user customers. Additionally, excess network capacity is leased
(in the form of indefeasible right-to-use agreements) to other
telecommunications providers and to Internet service providers.

    The Wireless segment holds the Company's Cincinnati Bell Wireless subsidiary
(an 80%-owned venture with AT&T Wireless PCS, Inc.) which provides advanced
digital personal communications and sales of related communications equipment to
customers in its Greater Cincinnati and Dayton, Ohio operating areas.

    The Directory segment sells directory advertising and information services
primarily to business customers in the aforementioned area. This segment's
identifiable product is the Yellow Pages directory delivered via the Company's
Cincinnati Bell Directory subsidiary.

    Other Communications combines the operations of Cincinnati Bell Long
Distance (CBLD), Cincinnati Bell Supply (CBS), and Broadwing IT Consulting
segments. CBLD resells long distance, voice, data, frame relay, and Internet
access services to small- and medium-sized business customers in a regional area
consisting mainly of six states. CBS sells new computers and resells
telecommunications equipment in the secondary market, and Broadwing IT
Consulting provides network integration and consulting services.

    The Company evaluates performance of its segments and allocates resources to
them based on EBITDA (earnings before interest, taxes, depreciation,
amortization, and restructuring and other charges/credits). EBITDA is commonly
used in the communications industry to measure operating performance. EBITDA is
not intended to represent cash flows for the periods. Because EBITDA is not
calculated identically by all companies, the amounts presented for the Company
may not be comparable to similarly titled measures of other companies.

    The Company generally accounts for intersegment sales and transfers as if
the sales or transfers were to third parties, i.e., at current market prices.
The accounting policies of the business segments are the same as those described
in Accounting Policies (see Note 1). Certain corporate administrative expenses
have been allocated to segments based upon the nature of the expense.


                                                                             52

<PAGE>


<TABLE>
<CAPTION>

Millions of dollars        Year ended December 31                    1999             1998              1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>              <C>                <C>
REVENUES
     Local Communications                                          $  750.1         $  718.4           $ 670.1
     Broadband                                                         99.0             --                --
     Wireless                                                          91.4             --                --
     Directory                                                         74.2             72.9              72.9
     Other Communications                                             131.3            106.1             101.7
     Intersegment                                                     (14.9)           (12.3)            (10.2)
--------------------------------------------------------------------------------------------------------------------------------
     Total                                                         $1,131.1         $  885.1           $ 834.5
--------------------------------------------------------------------------------------------------------------------------------
INTERSEGMENT REVENUES
     Local Communications                                          $    6.8         $    6.8           $   6.0
     Broadband                                                         --               --                --
     Wireless                                                          --               --                --
     Directory                                                          0.4              0.4              --
     Other Communications                                               7.7              5.1               4.2
--------------------------------------------------------------------------------------------------------------------------------
     Total                                                         $   14.9         $   12.3           $  10.2
--------------------------------------------------------------------------------------------------------------------------------
EBITDA
     Local Communications                                          $  320.8         $  247.9           $ 246.3
     Broadband                                                          0.2             --                --
     Wireless                                                         (25.6)            (0.8)             (2.8)
     Directory                                                         27.2             25.5              25.0
     Other Communications                                               3.0             14.6              17.2
     Corporate and Eliminations                                        10.1              2.8               9.0
--------------------------------------------------------------------------------------------------------------------------------
     Total                                                         $  335.7         $  290.0           $ 294.7
--------------------------------------------------------------------------------------------------------------------------------
ASSETS
     Local Communications                                          $  781.4         $  749.5           $ 706.4
     Broadband                                                      5,154.0             --                --
     Wireless                                                         268.4            212.1              --
     Directory                                                         26.9             28.4              30.6
     Other Communications                                              55.7             35.2              32.6
     Corporate and Eliminations                                       222.2             15.8              74.7
--------------------------------------------------------------------------------------------------------------------------------
     Total                                                         $6,508.6         $1,041.0           $ 844.3
--------------------------------------------------------------------------------------------------------------------------------
CAPITAL ADDITIONS
     Local Communications                                          $  152.2         $  134.9           $ 140.0
     Broadband                                                        165.0             --                --
     Wireless                                                          55.9              2.2               1.5
     Directory                                                          0.2              0.1             --
     Other Communications                                               8.1              3.9               5.6
     Corporate                                                         --                2.5              11.3
--------------------------------------------------------------------------------------------------------------------------------
     Total                                                         $  381.4         $  143.6           $ 158.4
--------------------------------------------------------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
     Local Communications                                          $  113.8         $  106.2           $ 120.6
     Broadband                                                         46.7             --                --
     Wireless                                                          14.3             --                --
     Directory                                                          0.1              0.1              --
     Other Communications                                               6.1              3.7               3.3
     Corporate                                                         --                1.1               0.4
--------------------------------------------------------------------------------------------------------------------------------
     Total                                                         $  181.0         $  111.1           $ 124.3
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                             53

<PAGE>

16. FAIR VALUE OF FINANCIAL INSTRUMENTS

    The following methods and assumptions were used to estimate, where
practicable, the fair value of each class of financial instruments:

    Cash and cash equivalents, and short-term debt -- the carrying amount
approximates fair value because of the short-term maturity of these instruments.

    Accounts receivable and accounts payable - the carrying amounts reported in
the balance sheets for accounts receivable and accounts payable approximate fair
value.

    Notes receivable - the carrying amounts reported in the balance sheet for
notes receivable approximate fair value because of the short-term nature of the
notes and because their interest rates are comparable to current rates.

    Long-term debt -- the fair value is estimated based on year-end closing
market prices of the Company's debt and of similar liabilities. The carrying
amounts at December 31, 1999, and 1998 were $1,957.0 million and $340.0 million,
respectively. The estimated fair values at December 31, 1999 and 1998 were
$1,805.0 million and $355.1 million, respectively. Long-term debt also includes
the forward sale of six million shares of PSINet common stock, as further
described in Note 5. The Company is adjusting the carrying amount of this
liability as required by the forward sale agreement. The carrying amount of this
obligation at December 31, 1999 was $133.9 million.

    Convertible preferred stock - the fair values of the 7 1/4% Convertible
Preferred Stock and the 12 1/2% Exchangeable Preferred Stock were $285.8 million
and $435.5 million, respectively, and were based on the trading values of these
items at December 31, 1999.

    Interest rate risk management --The Company is exposed to the impact of
interest rate changes. The Company's objective is to manage the impact of
interest rate changes on earnings and cash flows and to lower its overall
borrowing costs. The Company continuously monitors the ratio of variable to
fixed interest rate debt to maximize its total return. As of December 31, 1999,
approximately 61% of debt was long-term, fixed-rate debt and approximately 39%
was bank loans with variable interest rates.

17. CINCINNATI BELL TELEPHONE COMPANY

The following summarized financial information is for the Company's consolidated
wholly owned subsidiary, Cincinnati Bell Telephone Company:


<TABLE>
<CAPTION>

INCOME STATEMENT
Millions of dollars        Year ended December 31                    1999             1998              1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>               <C>
Revenues                                                             $750.1         $  718.4          $  670.1
Costs and expenses                                                   $544.2         $  576.6          $  523.3
Net income before extraordinary item                                 $119.3         $   81.7          $   85.2
Net income (loss)                                                    $119.3         $   81.1          $ (124.8)
--------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
BALANCE SHEET
Millions of dollars        at December 31                            1999             1998
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>
Current assets                                                       $148.5         $  151.6
Telephone plant - net                                                 606.9            580.8
Other noncurrent assets                                                26.0             17.1
--------------------------------------------------------------------------------------------------------------------------------
     Total assets                                                    $781.4         $  749.5
--------------------------------------------------------------------------------------------------------------------------------
Current liabilities                                                  $161.6         $  144.2
Noncurrent liabilities                                                 45.1             38.7
Long-term debt                                                        322.0            317.1
Shareowner's equity                                                   252.7            249.5
--------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and shareowner's equity                       $781.4         $  749.5
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                             54

<PAGE>

18. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

All adjustments necessary for a fair statement of income for each period have 
been included.


<TABLE>
<CAPTION>

Millions of dollarsexcept
per common share amounts          1st              2nd               3rd              4th               Total
--------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>              <C>               <C>              <C>             <C>
1999

REVENUES                         $ 242.2          $ 253.6           $ 262.4          $ 372.9         $ 1,131.1
EBITDA                           $  77.6          $  84.4           $  91.6          $  82.1         $   335.7
OPERATING INCOME                 $  45.3          $  51.8           $  58.3          $ (11.6)        $   143.8 
INCOME FROM:
     CONTINUING
     OPERATIONS                  $  24.7          $  28.3           $  25.8          $ (40.8)        $    38.0
EXTRAORDINARY ITEM               $   -            $   -             $   -            $  (6.6)        $    (6.6)
NET INCOME                       $  24.7          $  28.3           $  25.8          $ (47.4)        $    31.4
BASIC EARNINGS
     PER COMMON SHARE            $    .18         $    .21          $    .19         $   (.29)       $      .20
DILUTED EARNINGS
     PER COMMON SHARE            $    .18         $    .20          $    .19         $   (.29)       $      .20
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    In the fourth quarter of 1999, the extraordinary item was for the early
extinguishment of long-term debt associated with the Merger. This reduced net
income by $6.6 million, or $.04 per common share, net of tax. The third quarter
results have been restated to reflect an equity share of IXC's losses as part of
the step acquisition that was finalized on November 9, 1999.


<TABLE>
<CAPTION>

Millions of dollars except
per common share amounts          1st              2nd               3rd              4th               Total
--------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>              <C>               <C>             <C>               <C>
1998
Revenues                          $216.5           $219.5            $222.6          $ 226.5           $ 885.1
EBITDA                            $ 68.1           $ 66.5            $ 75.5          $  79.9           $ 290.0
Operating Income                  $ 41.2           $ 39.5            $ 47.1          $  52.2           $ 180.0
Income from:
     Continuing
     Operations                   $ 22.5           $ 16.1            $ 21.0          $  22.2           $  81.8
     Discontinued
     Operations,
     Net of Taxes                 $  0.3           $ 26.4            $ 27.4          $  15.0           $  69.1
Extraordinary Item                $  --            $  --             $  --           $  (1.0)          $  (1.0)
Net Income                        $ 22.8           $ 42.5            $ 48.4          $  36.2           $ 149.9
Basic Earnings
     Per Common Share             $   .17          $   .31           $   .36         $    .26          $   1.10
Diluted Earnings
     Per Common Share             $   .16          $   .31           $   .35         $    .26          $   1.08
</TABLE>


    In the fourth quarter of 1998, the extraordinary items were for the early
extinguishment of long-term debt and a portion of a credit facility. Net of tax,
this reduced net income by $1.0 million or $.01 per common share.


                                                                             55

<PAGE>


19. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

    The Company leases certain facilities and equipment used in its 
operations. Total rental expenses were approximately $23.4 million, $11.7 
million and $10.5 million in 1999, 1998 and 1997, respectively.

At December 31, 1999, the total minimum annual rental commitments under 
noncancelable leases are as follows:


<TABLE>
<CAPTION>
                                                Operating                    Capital
Millions of dollars                               Leases                     Leases
--------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                          <C>
2000                                                $49.9                      $ 7.5
2001                                                 36.1                        7.5
2002                                                 27.8                        7.4
2003                                                 24.1                        4.5
2004                                                 10.6                        4.7
Thereafter                                           20.1                       36.3
--------------------------------------------------------------------------------------------------------------------------------
Total                                              $168.6                       67.9

Amount representing interest                                                    32.0
--------------------------------------------------------------------------------------------------------------------------------
Present value of net minimum lease payments                                    $35.9
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


COMMITMENTS

    In order to satisfy the contractual commitments that Broadwing has 
entered into with respect to IRU agreements, approximately 1,700 fiber route 
miles must be constructed at an approximate cost of $82 million.

CONTINGENCIES

    In the normal course of business, the Company is subject to various 
regulatory proceedings, lawsuits, claims and other matters. Such matters are 
subject to many uncertainties and outcomes are not predictable with assurance.

    The Company, as well as certain former members of IXC's board of 
directors, has been named as a defendant in five stockholder class action 
suits filed in the Delaware Court of Chancery (the Court). These suits were 
filed in July 1999 and pertain to the Company's recently completed merger 
with IXC. The complaints allege, among other things, that the defendants 
breached their fiduciary duties to IXC's former stockholders by failing to 
maximize stockholder value in connection with entering into the merger 
agreement and sought a court order enjoining completion of the merger. In an 
October 27, 1999 ruling, the Court denied plaintiffs' request for a 
preliminary injunction. The Merger has since closed and management believes 
that the performance of the Company's share price has rendered plaintiffs' 
arguments moot. While these suits currently remain outstanding and subject to 
further litigation, the Company does not believe any of plaintiffs' arguments 
have merit. The Company intends to continue exploring all available options 
to bring this matter to a close, including discussions toward a possible 
settlement.

    A total of twenty-seven Equal Employment Opportunity Commission ("EEOC") 
charges were filed beginning in September 1999 by current Broadwing 
Telecommunications Inc. employees located in the Houston office (formerly 
Coastal Telephone, acquired by IXC in May 1999) alleging sexual harassment, 
race discrimination and retaliation. The Company is continuing its 
investigation of these charges and is cooperating with the EEOC. Many 
employee interviews have been conducted by the EEOC and discovery is ongoing 
at the present time.

    In the course of closing Merger, the Company became aware of IXC's 
possible non-compliance with reporting requirements under certain federal 
environmental statutes. Since it was impossible to conduct a thorough 
investigation of all IXC facilities within the 10-day period required to take 
advantage of the EPA's self-policing policy, IXC, by letter dated November 8, 
1999, elected to voluntarily disclose its possible non-compliance to the EPA. 
By letter dated January 19, 2000, the EPA determined that IXC appears to have 
satisfied the "prompt disclosure" requirement of the self-policing policy, 
and established a deadline of May 1, 2000 for the Company to complete its 
environmental audit of all IXC facilities and report any violations to the 
Agency. The Company intends to complete its environmental audit of these 
facilities within the time frame established by the


                                                                            56



<PAGE>


EPA and take whatever corrective actions are indicated.

    The Company believes that the resolution of such matters for amounts in 
excess of those reflected in the consolidated financial statements would not 
likely have a materially adverse effect on the Company's financial condition.


I
TEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE

    No disagreements with accountants on any accounting or financial 
disclosure or auditing scope or procedure occurred during the period covered 
by this report.


                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information required by this Item regarding directors of Broadwing 
can be found in the Proxy Statement for the Company's 2000 Annual Meeting of 
Shareholders, dated March 17, 2000, and incorporated herein by reference.

    Information regarding executive officers required by Item 401 of 
Regulation S-K is furnished in a separate disclosure in Part I of this report 
under the caption "Executive Officers of the Registrant" since the registrant 
did not furnish such information in its definitive proxy statement prepared 
in accordance with Schedule 14A.


ITEMS 11 AND 12. EXECUTIVE COMPENSATION AND SECURITY OWNERSHIP OF CERTAIN 
                 BENEFICIAL OWNERS AND MANAGEMENT

    The information required by these items can be found in the Proxy 
Statement for the Company's 2000 Annual Meeting of Shareholders dated March 
17, 2000, and incorporated herein by reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Not Applicable.












                                                                            57



<PAGE>



    ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K.

EXHIBITS

    Exhibits identified in parenthesis below, on file with the Securities and 
Exchange Commission ("SEC"), are incorporated herein by reference as exhibits 
hereto.


<TABLE>
<CAPTION>

Exhibit
Number                                 DESCRIPTION
<S>                        <C>

(2.1)(a)                   Agreement and Plan of Merger, dated as of July 20,
                           1999, among Cincinnati Bell Inc., an Ohio
                           corporation, IXC Communications, Inc., a Delaware
                           corporation, and Ivory Merger Inc., a Delaware
                           corporation. (Exhibit 2.1 to Form 8-K date of report
                           July 23, 1999, File No. 1-8519).

(2.1)(b)                   Amendment No. 1 dated as of October 13, 1999, among
                           Cincinnati Bell Inc., an Ohio corporation, IXC
                           Communications, Inc. a Delaware corporation, and
                           Ivory Merger, Inc. a Delaware corporation, to the
                           Agreement and Plan of Merger dated as of July 23,
                           1999, among Cincinnati Bell Inc., IXC Communications,
                           Inc. and Ivory Merger Inc. (Exhibit 2.1 to Form 8-K,
                           date of report October 14, 1999 File No. 1-8519).

(3)(a)                     Amended Articles of Incorporation effective November
                           9, 1989. (Exhibit (3)(a) to Form 10-K for 1989, File
                           No. 1-8519).

(3)(b)+                    Certificate of Amendment by the Board of Directors to
                           the Amended Articles of Incorporation including the
                           description of each of the Cincinnati Bell 7 1/4%
                           Junior Convertible Preferred Shares Due 2007 and the
                           Cincinnati Bell 6 3/4% Cumulative Convertible
                           Preferred Shares effective November 9, 1999.

(3)(c)                     Amended Regulations of the registrant. (Exhibit 3.2
                           to Registration Statement No. 2-96054).

(4)(a)                     Provisions of the Amended Articles of Incorporation
                           and the Amended Regulations of the registrant which
                           define the rights of holders of Common Shares and the
                           Preferred Shares are incorporated by reference to
                           such Amended Articles filed as Exhibits (3)(a) and
                           3(b) hereto and such Amended Regulations filed as
                           Exhibit (3)(c) hereto.

(4)(b)(i)                  Rights Agreement dated as of April 29, 1997, between
                           the Company and The Fifth Third Bank which includes
                           the form of Certificate of Amendment to the Amended
                           Articles of Incorporation of the Company as Exhibit
                           A, the form of Rights Certificate as Exhibit B and
                           the Summary of Rights to Purchase Preferred Stock as
                           Exhibit C (Exhibit 4.1 to the Company's Registration
                           Statement on Form 8-A filed on May 1, 1997).

(4)(b)(ii)                 Amendment No. 1 to the Rights Agreement dated as of
                           July 20, 1999, between the Company and The Fifth
                           Third Bank (Exhibit 1 to Amendment No. 1 of the
                           Company's Registration Statement on Form 8-A filed on
                           August 6, 1999).

(4)(b)(iii)                Amendment No. 2 to the Rights Agreement dated as of
                           November 2, 1999, between the Company and The Fifth
                           Third Bank (Exhibit 1 to Amendment No. 2 of the
                           Company's Registration Statement on Form 8-A filed on
                           November 8, 1999).

(4)(c)(i)                  Indenture dated July 1, 1993, between Cincinnati Bell
                           Inc., Issuer, and The Bank of New York, Trustee, in
                           connection with $50,000,000 of Cincinnati Bell Inc.
                           7 1/4% Notes Due June 15, 2023. (Exhibit 4-A to Form
                           8-K, date of report July 12, 1993, File No. 1-8519).

(4)(c)(ii)                 Indenture dated August 1, 1962, between Cincinnati
                           Bell Telephone Company and Bank of New York, Trustee
                           (formerly, The Central Trust Company was trustee), in
                           connection with $20,000,000 of Cincinnati Bell
                           Telephone Company Forty Year 4 3/8% Debentures, Due
                           August 1, 2002. (Exhibit 4(c)(iii) to Form 10-K for
                           1992, File No. 1-8519).


                                                                            58



<PAGE>


(4)(c)(iii)                Indenture dated as of October 27, 1993, among
                           Cincinnati Bell Telephone Company, as Issuer,
                           Cincinnati Bell Inc., as Guarantor, and The Bank of
                           New York, as Trustee. (Exhibit 4-A to Form 8-K, date
                           of report October 27, 1993, File No. 1-8519).

(4)(c)(iv)                 Indenture dated as of November 30, 1998 among
                           Cincinnati Bell Telephone Company, as Issuer,
                           Cincinnati Bell Inc., as Guarantor, and The Bank of
                           New York, as Trustee. (Exhibit 4-A to Form 8-K, date
                           of report November 30, 1998, File No. 1-8519).

(4)(c)(v)                  Investment Agreement dated as of July 21, 1999, among
                           Cincinnati Bell, Oak Hill Capital Partners L.P. and
                           certain related parties of Oak Hill (Exhibit 4.9 to
                           Form S-4 filed on September 13,1999, File No.
                           1-8519).

(4)(c)(vi)                 Indenture dated as of July 21, 1999 among Cincinnati
                           Bell Inc., and The Bank of New York, as Trustee
                           (Exhibit 4.10 to Form S-3 filed on November 10,
                           19999, File No. 1-8519).

(4)(c)(vii)                No other instrument which defines the rights of
                           holders of long term debt of the registrant is filed
                           herewith pursuant to Regulation S-K, Item
                           601(b)(4)(iii)(A). Pursuant to this regulation, the
                           registrant hereby agrees to furnish a copy of any
                           such instrument to the SEC upon request. (4)(b)(ii)
                           Amendment No. 1 to the Rights Agreement dated as of
                           July 20, 1999, between the Company and The Fifth
                           Third Bank (Exhibit 1 to Amendment No. 1 of the
                           Company's Registration Statement on Form 8-A filed on
                           August 6, 1999).

(10)(i)(1)                 Credit Agreement dated as of November 9, 1999 among
                           Cincinnati Bell and IXCS as the Borrowers, Cincinnati
                           Bell as Parent Guarantor, the Initial Lenders,
                           Initial Issuing Banks and Swing Line Banks named
                           herein, Bank of America, N.A., as Syndication Agent,
                           Citicorp USA, Inc., as Administrative Agent, Credit
                           Suisse First Boston and The Bank of New York, as
                           Co-Documentation Agents, PNC Bank, N.A., as Agent and
                           Salomon Smith Barney Inc. and Banc of America
                           Securities LLC, as Joint Lead Arrangers. (Exhibit
                           10.1 to Form 8-K, date of report November 12, 1999,
                           File No. 1-8519).

(10)(iii)(A)(1)*           Short Term Incentive Plan of Cincinnati Bell Inc., as
                           amended January 1, 1995. (Exhibit (10)(iii)(A)(1)(i)
                           to Form 10-K for 1995, File No. 1-8519).

(10)(iii)(A)(2)*           Cincinnati Bell Inc. Deferred Compensation Plan for
                           Outside Directors, as amended and restated effective
                           February 1, 1999. (Exhibit (10)(iii)(A)(2) to Form
                           10-K for 1998, File No. 1-8519).

(10)(iii)(A)(3)(i)*        Cincinnati Bell Inc. Pension Program, as amended
                           effective November 4, 1991. (Exhibit
                           (10)(iii)(A)(4)(ii) to Form 10-K for 1994, File No.
                           1-8519).

(10)(iii)(A)(3)(ii)*       Cincinnati Bell Pension Program, as amended and
                           restated effective March 3, 1997. (Exhibit
                           (10)(iii)(A)(3)(ii) to Form 10-K for 1997, File No.
                           1-8519).

(10)(iii)(A)(4)*           Employment Agreement dated January 1, 1999 between
                           the Company and Richard G. Ellenberger. (Exhibit
                           (10)(iii)(A)(9) to Form 10-K for 1998, File No.
                           1-8519).

(10)(iii)(A)(5)*           Employment Agreement effective January 1, 1999
                           between the Company and Kevin W. Mooney. (Exhibit
                           (10)(iii)(A)(ii) to Form 10-K for 1998, File No.
                           1-8519).

(10)(iii)(A)(6)*           Employment Agreement dated January 1, 1999 between
                           the Company and Thomas E. Taylor. (Exhibit
                           (10)(iii)(A)(12) to Form 10-K for 1998, File No.
                           1-8519).

(10)(iii)(A)(7)*           Employment Agreement effective April 9, 1999 between
                           the Company and Richard S. Pontin. (Exhibit
                           (10)(iii)(A)(1) to Form 10-Q for the quarter ended
                           June 30, 1999, File No. 1-8519).

(10)(iii)(A)(8)*+          Employment Agreement dated January 1, 1999 between
                           the Company and John F. Cassidy.

 (10)(iii)(A)(9)*          Cincinnati Bell Inc. Executive Deferred Compensation
                           Plan, as amended and restated effective October 25,
                           1998. (Exhibit (10)(iii)(A)(13) to Form 10-K for
                           1998, File No. 1-8519).

 (10)(iii)(A)(10)*         Cincinnati Bell Inc. 1997 Long Term Incentive Plan.
                           (Exhibit (10)(iii)(A)(14)(iii) to Form 10-K for 1997,
                           File No. 1-8519).

                                                                            59



<PAGE>

(10)(iii)(A)(11)*          Cincinnati Bell Inc. 1997 Stock Option Plan for
                           Non-Employee Directors, as revised and restated
                           effective February 1, 1999. (Exhibit (10)(iii)(A)(15)
                           to Form 10-K for 1998, File No. 1-8519).

(10)(iii)(A)(12)*          Cincinnati Bell Inc. 1989 Stock Option Plan. (Exhibit
                           (10)(iii)(A)(14) to Form 10-K for 1989, File No.
                           1-8519).

(12)+                      Computation of Ratio of Earnings to Combined Fixed
                           Charges and Preferred Dividends.

(21)+                      Subsidiaries of the Registrant.

(23)+                      Consent of Independent Accountants.

(24)+                      Powers of Attorney.

(27.1, 27.2, 27.3)         Financial Data Schedules.

</TABLE>


+        Filed herewith.

*        Management  contract or  compensatory  plan  required to be filed as 
an exhibit  pursuant to Item 14(c) of Form 10-K.

    The Company will furnish, without charge, to a security holder upon 
request, a copy of the Proxy Statement, portions of which are incorporated by 
reference, and will furnish any other exhibit at cost.


                                                                            60



<PAGE>


REPORTS ON FORM 8-K.

    Form 8-K, date of report October 13, 1999, reporting that certain 
sections of the Company's merger agreement with IXC Communications, Inc. had 
been amended in response to a decision of the Delaware Court of Chancery in 
the case of Phelps Dodge Corporation vs. Cyprus Amax Minerals Company. The 
Company's merger agreement with IXC Communications, Inc was previously filed 
in a Form 8-K, date of report July 23, 1999.

    Form 8-K, date of report October 22, 1999, reporting on the Company's 
results of operations for the three months ended September 30, 1999.

    Form 8-K, date of report November 8, 1999, setting forth certain 
historical financial statements of the Company's merger partner, IXC 
Communications, Inc.

    Form 8-K, date of report November 12, 1999, reporting that the Company's 
merger with IXC Communications, Inc. was successfully completed on November 
9, 1999.

    Form 8-K, date of report December 30, 1999, setting forth certain 
historical financial statements of IXC Communications, Inc.

    Form 8-K, date of report December 30, 1999, setting forth certain 
proforma historical financial statements of the Company and IXC 
Communications, Inc.






                                                                            61



<PAGE>


SCHEDULE II


                               BROADWING INC.
              SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                           (MILLIONS OF DOLLARS)


<TABLE>
<CAPTION>
                                                                          Additions
                                                                  --------------------------
                                                   Balance at                      Charged                        Balance
                                                   Beginning       Charged to      to Other                        At End
                                                   of Period        Expenses       Accounts       Deductions     of Period
------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>             <C>            <C>            <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS                                                                                         

Year 1999                                            $12.0           $21.1         $51.6(a)        $31.1(b)        $53.6

Year 1998                                            $ 9.1           $18.1         $11.0(a)        $26.2(b)        $12.0

Year 1997                                            $ 6.1           $12.2         $ 5.5(a)        $14.7(b)        $ 9.1

RESERVES RELATED TO BUSINESS RESTRUCTURING                                                                              

Year 1999                                            $  .5           $10.9         $33.9(c)        $15.1           $30.2

Year 1998                                            $ 5.3           $  --         $  --           $ 4.8           $  .5

Year 1997                                            $ 8.7           $  --         $  --           $ 3.4           $ 5.3
------------------------------------------------------------------------------------------------------------------------------
</TABLE>


     (a)   Primarily includes amounts previously written off which were 
credited directly to this account when recovered and an allocation of the 
purchase price for receivables purchased from Interexchange Carriers. In 
1999, amounts include $45.3 million assumed on 11/9/99 as part of the 
Company's merger with IXC Communications, Inc. (IXC).

     (b)   Primarily includes amounts written off as uncollectible.

     (c)   Includes amounts assumed as part of the Company's merger with IXC.




                                                                            62



<PAGE>



SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized.

                                       CINCINNATI BELL INC.

March 17, 2000                         By /s/Kevin W. Mooney
                                       Kevin W. Mooney
                                       Chief Financial Officer

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.


<TABLE>
<CAPTION>

SIGNATURE                              TITLE                                                      DATE
---------                              -----                                                      ----
<S>                                    <C>                                                        <C>

                                       Principal Executive Officer;
                                       President, Chief Executive
RICHARD G. ELLENBERGER*                Officer and Director
---------------------------------
Richard G. Ellenberger

                                       Principal Accounting and
                                       Financial Officer;
KEVIN W. MOONEY*                       Executive  Vice  President  and  Chief  Financial Officer
---------------------------------
Kevin W. Mooney

PHILLIP R. COX*                        Director
---------------------------------
Phillip R. Cox

J. TAYLOR CRANDALL*                    Director
---------------------------------
J. Taylor Crandall

WILLIAM A. FRIEDLANDER*                Director
---------------------------------
William A. Friedlander

KAREN M. HOGUET*                       Director
---------------------------------
Karen M. Hoguet

RICHARD D. IRWIN*                      Director
---------------------------------
Richard D. Irwin

JAMES D. KIGGEN*                       Chairman of the Board and Director
---------------------------------
James D. Kiggen

JOHN T. LAMACCHIA*                     Director
---------------------------------
John T. LaMacchia

DANIEL J. MEYER*                       Director
---------------------------------
Daniel J. Meyer

MARY D. NELSON*                        Director
---------------------------------
Mary D. Nelson

DAVID B. SHARROCK*                     Director
---------------------------------
David B. Sharrock

JOHN M. ZRNO*                          Director
---------------------------------
John M. Zrno

*By:   /s/ Kevin W. Mooney                                                                                         March 17, 2000
       Kevin W. Mooney
       as attorney-in-fact and on his behalf
       as Chief Financial Officer
</TABLE>



                                                                            63








<PAGE>

                                 Exhibit (3)(b)

                            CERTIFICATE OF AMENDMENT
                            BY THE BOARD OF DIRECTORS
                                     TO THE

                      AMENDED ARTICLES OF INCORPORATION OF
                              CINCINNATI BELL INC.

         Thomas E. Taylor, who is the General Counsel and Secretary of 
Cincinnati Bell Inc., an Ohio corporation, hereby certifies that at a meeting 
of the board of directors of Cincinnati Bell Inc., duly called and held on 
October 26, 1999, the following resolution was unanimously adopted pursuant 
to Section 1701.70(B) of the Ohio Revised Code:

                  RESOLVED, that, pursuant to the authority vested in the 
         Board of Directors of the corporation in accordance with the 
         provisions of the Ohio General Corporation Law, as amended, and by 
         Article Fourth of the corporation's Amended Articles of 
         Incorporation, such Article Fourth is amended as follows:

                  (i) (a) All references to "100" in Paragraph 9 thereto are 
         deleted and (b) the number "1000" is substituted therefor.

                  (ii) A new Paragraph 11 and a new Paragraph 12 are added 
         providing for a series of 7 1/4% Junior Convertible Preferred Shares 
         Due 2007 and a series of 6 3/4% Cumulative Convertible Preferred 
         Shares, respectively, and that the designations and the authorized 
         number of shares of, and the relative rights, preferences and 
         limitations of, each such series are
 as set forth on Annexes 1 and 
         2, respectively, hereto.

         IN WITNESS WHEREOF, the above named officer, acting for and on 
behalf of the corporation, has hereunto subscribed his name on November 5, 
1999.

                        By:
                           ----------------------------------

                        Title:  General Counsel and Secretary


                                     ANNEX 1

11. Of the 4,000,000 Voting Preferred Shares of the corporation, 1,400,000 
shall constitute a series of Voting Preferred Shares designated as 7 1/4% 
Junior Convertible Preferred Shares Due 2007 (the "7 1/4% Preferred Shares") 
with a Liquidation Preference of $100 per share (the "Liquidation 
Preference"), and have, subject and in addition to the other provisions of 
this Article Fourth, the following relative rights, preferences and 
limitations:


<PAGE>

         (1) RANK. The 7 1/4% Preferred Shares will, with respect to dividend 
rights and rights on liquidation, winding-up and dissolution, rank (i) senior 
to all classes of Common Shares and to each other class or series of 
Preferred Shares established hereafter by the Board of Directors, the terms 
of which do not expressly provide that it ranks senior to, or on a parity 
with, the 7 1/4% Preferred Shares as to dividend rights and rights on 
liquidation, winding-up and dissolution of the corporation (collectively 
referred to, together with all classes of Common Shares of the corporation, 
as "Junior Shares"); (ii) on a parity with each other class or series of 
Preferred Shares established hereafter by the Board of Directors, the terms 
of which expressly provide that such class or series will rank on a parity 
with the 7 1/4% Preferred Shares as to dividend rights and rights on 
liquidation, winding-up and dissolution of the corporation (collectively 
referred to as "Parity Shares"); and (iii) junior to each class or series of 
Preferred Shares established hereafter by the Board of Directors, the terms 
of which hereafter established classes or series expressly provide that such 
class or series will rank senior to the 7 1/4% Preferred Shares as to 
dividend rights or rights on liquidation, winding-up and dissolution of the 
corporation (collectively referred to as "Senior Shares"). The corporation 
may not authorize, create or increase the authorized amount of any class or 
series of Senior Shares without the approval of the Holders of at least 
two-thirds of the outstanding 7 1/4% Preferred Shares, voting as one class. 
All claims of the Holders of the 7 1/4% Preferred Shares, including claims 
with respect to dividend payments, redemption payments, mandatory repurchase 
payments or rights upon liquidation, winding-up or dissolution of the 
corporation, shall rank junior to the claims of the holders of any debt of 
the corporation and all other creditors of the corporation.

         (2) DIVIDENDS. (i) Holders of the outstanding 7 1/4% Preferred 
Shares will be entitled to receive, when, as and if declared by the Board of 
Directors, out of funds legally available therefor, dividends on each 7 1/4% 
Preferred Share at a rate per annum equal to 7 1/4% of the Liquidation 
Preference of such share payable quarterly (each such quarterly period being 
herein called a "Dividend Period").

In addition to the dividends described in the preceding sentence, a Holder of 
any outstanding 7 1/4% Preferred Shares will be entitled to (A) additional 
dividends (the "Additional Dividends"), when, as and if declared by the Board 
of Directors, out of funds legally available therefor, with respect to the 
7 1/4% Preferred Shares, which Additional Dividends shall accrue as follows if 
such Holder becomes unable to sell or transfer outstanding 7 1/4% Preferred 
Shares (including Common Shares received upon conversion of the 7 1/4% 
Preferred Shares) without filing a registration statement under the 
Securities Act (such event a "Registration Default") and (B) a dividend in an 
additional amount (the "Supplemental Dividend"), to the extent not previously 
paid on the 7 1/4% Preferred Shares, equal to all accumulated and unpaid 
dividends on the shares of IXC 7 1/4% Preferred Stock (as defined) 
outstanding on the effective date of the merger of Ivory Merger Inc., a 
wholly-owned Subsidiary of the corporation ("Ivory Merger"), with and into 
IXC Communications, Inc. ("IXC"), pursuant to which outstanding shares of IXC 
7 1/4% Preferred Stock were converted into the right to receive 7 1/4% 
Preferred Shares. The Supplemental Dividend, until paid by the corporation on 
the 7 1/4% Preferred Shares, shall for all purposes of this Article Fourth be 
deemed included with the accrued and unpaid dividends on the 7 1/4% Preferred 
Shares.

Additional Dividends shall accrue on 7 1/4% Preferred Shares which trigger a 
Registration Default from and including the date on which any such 
Registration Default shall occur, but 

                                      2

<PAGE>

excluding the date on which such Registration Default has been cured, at a 
rate of 7 3/4% per annum.

A Registration Default shall be deemed not to have occurred if (x) the Holder 
is an "affiliate" as defined under the Securities Act, (y) such Registration 
Default has occurred solely as a result of (1) the filing of a post-effective 
amendment to the S-4 Registration Statement (as defined) or (2) other 
material events with respect to the corporation that would need to be 
described in the S-4 Registration Statement or the related prospectus and (z) 
in the case of clause (2), the corporation proceeds promptly and in good 
faith to amend or supplement the S-4 Registration Statement and related 
prospectus to describe such events unless the corporation has determined in 
good faith that there are material legal or commercial impediments in doing 
so; PROVIDED, HOWEVER, that in the case of clauses (y) and (z), if such 
Registration Default occurs for a continuous period in excess of 45 days, 
Additional Dividends shall be payable in accordance with the immediately 
preceding paragraphs of this paragraph (2)(i) from the day such Registration 
Default initially occurs until such Registration Default is cured.

Any amounts of Additional Dividends due pursuant to this paragraph (2)(i) or 
pursuant to the proviso contained in the preceding sentence, and any amounts 
of Supplemental Dividends due pursuant to this paragraph 2(i) will be payable 
on the regular dividend payment dates with respect to the 7 1/4% Preferred 
Shares and on the same terms and conditions and subject to the same 
limitations as pertain at such time for the payment of regular dividends. The 
amount of Additional Dividends will be determined by multiplying the 
applicable Additional Dividends rate by the aggregate liquidation preference 
of the outstanding 7 1/4% Preferred Shares, multiplied by a fraction, the 
numerator of which is the number of days such Additional Dividend rate was 
applicable during such period (determined on the basis of a 360-day year 
comprised of twelve 30-day months), and the denominator of which is 360.

All dividends on the 7 1/4% Preferred Shares, including Additional Dividends 
and Supplemental Dividends, to the extent accrued, shall be cumulative, 
whether or not earned or declared, on a daily basis from the Issue Date or, 
in the case of additional 7 1/4% Preferred Shares issued in payment of a 
dividend, from the date of issuance of such additional 7 1/4% Preferred 
Shares, and shall be payable quarterly in arrears on March 31, June 30, 
September 30 and December 31 of each year (each a "Dividend Payment Date"), 
to Holders of record on the March 15, June 15, September 15 and December 15 
immediately preceding the relevant Dividend Payment Date. All dividends shall 
be payable in cash; PROVIDED, HOWEVER, that to the extent and for so long as 
the corporation is prohibited by the terms of any of its indebtedness then 
outstanding of the corporation or any agreement or instrument to which the 
corporation is then subject, from paying cash dividends on the 7 1/4% 
Preferred Shares, such dividends will accrue on each share at the rate per 
annum equal to 8 3/4% of the Liquidation Preference per share (instead of the 
7 1/4% rate set forth in the first paragraph of this paragraph (2)(i)) 
(together with any Additional Dividends then payable and the Supplemental 
Dividend, which for purposes of this paragraph shall be payable at a rate of 
0.50% over and above the 8 3/4% rate) payable through the issuance of a 
number of additional shares (rounded to the nearest whole share) of 7 1/4% 
Preferred Shares (the "Additional Shares") equal to the dividend amount on 
such share divided by the Liquidation Preference of such Additional Shares on 
the relevant Dividend Payment Date. Except as provided herein, accrued and 
unpaid dividends, if any, will not bear interest or bear dividends thereon.

                                      3

<PAGE>

         (ii) All dividends paid with respect to the 7 1/4% Preferred Shares 
pursuant to paragraph (2)(i) shall be paid pro rata to the Holders entitled 
thereto.

          (iii) No full dividends may be declared or paid or set apart for 
the payment of dividends by the corporation on any Parity Shares for any 
period unless full cumulative dividends in respect of each Dividend Period 
ending on or before such period shall have been or contemporaneously are 
declared and paid (or are deemed declared and paid) in full or declared and, 
if payable in cash, a sum in cash sufficient for such payment is set apart 
for such payment on the 7 1/4% Preferred Shares. If full dividends are not so 
paid, the 7 1/4% Preferred Shares will share dividends pro rata with the 
Parity Shares.

         (iv) The corporation will not (A) declare, pay or set apart funds 
for the payment of any dividend or other distribution with respect to any 
Junior Shares or (B) redeem, purchase or otherwise acquire for consideration 
any Junior Shares through a sinking fund or otherwise, unless (1) all accrued 
and unpaid dividends with respect to the 7 1/4% Preferred Shares and any 
Parity Shares at the time such dividends are payable have been paid or funds 
have been set apart for payment of such dividends and (2) sufficient funds 
have been paid or set apart for the payment of the dividend for the current 
dividend period with respect to the 7 1/4% Preferred Shares and any Parity 
Shares. As used herein, the term "dividend" does not include dividends 
payable solely in Junior Shares on Junior Shares or in options, warrants or 
rights to holders of Junior Shares to subscribe or purchase any Junior Shares.

         (v) Dividends on account of arrears for any past Dividend Period and 
dividends in connection with any optional redemption may be declared and paid 
at any time, without reference to any regular Dividend Payment Date, to 
Holders of record on such date, not more than 45 days prior to the payment 
thereof, as may be fixed by the Board of Directors of the corporation.

         (vi) Dividends payable on the 7 1/4% Preferred Shares for any period 
other than a Dividend Period shall be computed on the basis of a 360-day year 
consisting of twelve 30-day months and the actual number of days elapsed in 
the period for which payable. Dividends payable on the 7 1/4% Preferred 
Shares for a full Dividend Period will be computed by dividing the per annum 
dividend rate by four.

         (vii) Certificates of Common Shares relating to 7 1/4% Preferred 
Shares surrendered for conversion by a registered Holder during the period 
from the close of business on any regular record date next preceding any 
Dividend Payment Date to the opening of business on such Dividend Payment 
Date (except 7 1/4% Preferred Shares called for redemption on a Redemption 
Date within such period) must be accompanied by payment in cash of an amount 
equal to the accrued but unpaid dividends thereon which such registered 
Holder is to receive on such Dividend Payment Date with respect to the 7 1/4% 
Preferred Shares so surrendered.

          (3) LIQUIDATION PREFERENCE. (i) Upon any voluntary or involuntary 
liquidation, dissolution or winding-up of the corporation, Holders of 7 1/4% 
Preferred Shares will be entitled to be paid, out of the assets of the 
corporation available for distribution to its shareholders, the Liquidation 
Preference of the outstanding 7 1/4% Preferred Shares, plus, without 
duplication, an 

                                      4

<PAGE>

amount in cash equal to all accumulated and unpaid dividends (whether or not 
earned or declared and including Additional Dividends and Supplemental 
Dividends, if any) thereon to the date fixed for liquidation, dissolution or 
winding-up of the corporation (including an amount equal to a prorated 
dividend for the period from the last Dividend Payment Date to the date fixed 
for liquidation, dissolution or winding-up of the corporation that would have 
been payable had the 7 1/4% Preferred Shares been the subject of an Optional 
Redemption on such date) before any distribution is made on any Junior 
Shares. If, upon any voluntary or involuntary liquidation, dissolution or 
winding-up of the corporation, the amounts payable with respect to the 7 1/4% 
Preferred Shares and all Parity Shares are not paid in full, the 7 1/4% 
Preferred Shares and the Parity Shares will share equally and ratably (in 
proportion to the respective amounts that would be payable on such 7 1/4% 
Preferred Shares and the Parity Shares, respectively, if all amounts payable 
thereon had been paid in full) in any distribution of assets of the 
corporation to which each is entitled. After payment of the full amount of 
the Liquidation Preference of the outstanding 7 1/4% Preferred Shares (and, 
if applicable, an amount equal to a prorated dividend), the Holders of 7 1/4% 
Preferred Shares will not be entitled to any further participation in any 
distribution of assets of the corporation.

         (ii) For the purposes of this paragraph (3), neither the sale, 
conveyance, exchange or transfer (for cash, shares of stock, securities or 
other consideration) of all or substantially all of the property or assets of 
the corporation nor the consolidation or merger of the corporation with or 
into one or more other entities shall be deemed to be a liquidation, 
dissolution or winding-up of the corporation.

         (4) REDEMPTION. (i) OPTIONAL REDEMPTION. (A) The 7 1/4% Preferred 
Shares shall not be redeemable prior to April 3, 2000. On or after April 3, 
2000, each 7 1/4% Preferred Share may be redeemed (subject to the legal 
availability of funds therefor) at any time, in whole or in part, at the 
option of the corporation, at the redemption prices (expressed as a 
percentage of the Liquidation Preference of such share) set forth below, 
plus, without duplication, an amount in cash equal to all accrued and unpaid 
Liquidated Damages and all accrued and unpaid dividends to the date fixed for 
redemption (the "Optional Redemption Date") (including the Supplemental 
Dividend and an amount in cash equal to a prorated dividend for the period 
from the Dividend Payment Date immediately prior to the Optional Redemption 
Date) (the "Optional Redemption Price"). Notwithstanding the foregoing, prior 
to April 1, 2002, the corporation shall only have the option to redeem 7 1/4% 
Preferred Shares if, during the period of 30 consecutive Trading Days ending 
on the Trading Day immediately preceding the date that the Redemption Notice 
is mailed to Holders, the Closing Bid Price for the Common Shares exceeded 
150% of the Conversion Price effective on the date of such Redemption Notice 
for at least 20 of such Trading Days. If redeemed during the 12-month period 
beginning April 1 of each of the years set forth below (or in the case of the 
year 2000, April 3), the Optional Redemption Price per share shall be the 
applicable percentage of the Liquidation Preference of such share set forth 
below plus, without duplication, in each case, an amount in cash equal to all 
accrued and unpaid Liquidated Damages and all accrued and unpaid dividends 
(including an amount equal to a prorated dividend from the immediately 
preceding Dividend Payment Date to the Optional Redemption Date), if any, to 
the Optional Redemption Date:


<TABLE>
<CAPTION>

         YEAR IN WHICH REDEMPTION OCCURS        PERCENTAGE
         <S>                                    <C>
         2000 ....................................104.83%

                                      5

<PAGE>

         2001 ....................................104.03%
         2002 ....................................103.22%
         2003 ....................................102.42%
         2004 ....................................101.61%
         2005 ....................................100.81%
         2006 ....................................100.00%
</TABLE>


         (B) In the event of a redemption of only a portion of the 
outstanding 7 1/4% Preferred Shares, the corporation shall effect such 
redemption on a pro rata basis, except that the corporation may redeem all of 
the shares held by Holders of fewer than 100 shares (or all of the shares 
held by Holders who would hold less than 100 shares as a result of such 
redemption), as may be determined by the corporation.

          (ii) MANDATORY REDEMPTION. Each 7 1/4% Preferred Share (if not 
earlier redeemed or converted) shall be subject to mandatory redemption in 
whole (to the extent of lawfully available funds therefor) on March 31, 2007 
(the "Mandatory Redemption Date") at a price equal to 100% of the Liquidation 
Preference of such share, plus, without duplication, all accrued and unpaid 
Liquidated Damages and all accrued and unpaid dividends thereon (including 
the Supplemental Dividend and an amount equal to a prorated dividend thereon 
from the immediately preceding Dividend Payment Date to the Mandatory 
Redemption Date), if any, to the Mandatory Redemption Date (the "Mandatory 
Redemption Price").

         (iii) PROCEDURE FOR REDEMPTION. (A) On and after the Optional 
Redemption Date or the Mandatory Redemption Date, as the case may be 
(the"Redemption Date"), unless the corporation defaults in the payment of the 
applicable redemption price, dividends will cease to accumulate on 7 1/4% 
Preferred Shares called for redemption and all rights of Holders of such 
shares will terminate except for the right to receive the Optional Redemption 
Price or the Mandatory Redemption Price, as the case may be, without 
interest; PROVIDED, HOWEVER, that if a notice of redemption shall have been 
given as provided in paragraph (iii)(B) and the funds necessary for 
redemption (including the Supplemental Dividend and an amount in respect of 
all dividends that will accrue to the Redemption Date) shall have been 
segregated and irrevocably set apart by the corporation, in trust for the 
benefit of the Holders of the shares called for redemption, then dividends 
shall cease to accumulate on the Redemption Date on the shares to be redeemed 
and, at the close of business on the day on which such funds are segregated 
and set apart, the Holders of the shares to be redeemed shall, with respect 
to the shares to be redeemed, cease to be shareholders of the corporation and 
shall be entitled only to receive the Optional Redemption Price or the 
Mandatory Redemption Price, as the case may be, for such shares without 
interest from the Redemption Date.

         (B) With respect to a redemption pursuant to paragraph (4)(i) or 
(4)(ii), the corporation will send a written notice of redemption by first 
class mail to each Holder of record of 7 1/4% Preferred Shares, not fewer 
than 15 days nor more than 60 days prior to the Redemption Date at its 
registered address (the "Redemption Notice"); PROVIDED, HOWEVER, that no 
failure to give such notice nor any deficiency therein shall affect the 
validity of the procedure for the redemption of any 7 1/4% Preferred Shares 
to be redeemed except as to the Holder or Holders to whom the corporation has 
failed to give said notice or except as to the Holder or Holders whose notice 
was defective. The Redemption Notice shall state:

                                      6

<PAGE>

         (1)      whether the redemption is pursuant to paragraph (4)(i) or 
                  (4)(ii) hereof;

         (2)      the Optional Redemption Price or the Mandatory Redemption 
                  Price, as the case may be;

         (3)      whether all or less than all the outstanding 7 1/4% 
                  Preferred Shares are to be redeemed and the total number of 
                  7 1/4% Preferred Shares being redeemed;

         (4)      the Redemption Date;

         (5)      that the Holder is to surrender to the corporation, in the 
                  manner, at the place or places and at the price designated, 
                  his certificate or certificates representing the 7 1/4% 
                  Preferred Shares to be redeemed; and

         (6)      that dividends on the 7 1/4% Preferred Shares to be 
                  redeemed shall cease to accumulate on such Redemption Date 
                  unless the corporation defaults in the payment of the 
                  Optional Redemption Price or the Mandatory Redemption 
                  Price, as the case may be.

         (C)      Each Holder of 7 1/4% Preferred Shares shall surrender the 
certificate or certificates representing such 7 1/4% Preferred Shares to the 
corporation, duly endorsed (or otherwise in proper form for transfer, as 
determined by the corporation), in the manner and at the place designated in 
the Redemption Notice, and on the Redemption Date the full Optional 
Redemption Price or Mandatory Redemption Price, as the case may be, for such 
shares shall be payable in cash to the person whose name appears on such 
certificate or certificates as the owner thereof, and each surrendered 
certificate shall be canceled and retired. In the event that less than all of 
the shares represented by any such certificate are redeemed, a new 
certificate shall be issued representing the unredeemed shares.

         (5) VOTING RIGHTS. (i) Each Holder of 7 1/4% Preferred Shares, 
except as required under Ohio law or as set forth in paragraphs (ii) and 
(iii) below, shall be entitled to one vote for each 7 1/4% Preferred Share 
held by such Holder on any matter required or permitted to be voted upon by 
the shareholders of the corporation.

         (ii) (A) If (1) dividends on the 7 1/4% Preferred Shares are in 
arrears and unpaid for six or more Dividend Periods (whether or not 
consecutive) (a "Dividend Default"); or (2) the corporation fails to redeem 
the 7 1/4% Preferred Shares on March 31, 2007, or fails to otherwise 
discharge any redemption obligation with respect to the 7 1/4% Preferred 
Shares, then the number of directors constituting the Board of Directors will 
be increased by two and the Holders of the outstanding 7 1/4% Preferred 
Shares (together with the holders of Parity Shares upon which like rights 
have been conferred and are exercisable), voting separately and as a class, 
shall have the right and power to elect such two additional directors. Each 
such event described in clause (1) or (2) above is a "Voting Rights 

                                      7

<PAGE>

Triggering Event". A Voting Rights Triggering Event shall not be deemed to 
have occurred if at the time of such event there are less than 200,000 
outstanding 7 1/4% Preferred Shares.

         (B) The voting rights set forth in subparagraph (5)(ii)(A) above 
will continue until such time as (x) in the case of a Dividend Default, all 
dividends in arrears on the 7 1/4% Preferred Shares are paid in full in cash, 
(y) in all other cases, any failure, breach or default giving rise to such 
Voting Rights Triggering Event is remedied or waived by the Holders of at 
least two-thirds of the outstanding 7 1/4% Preferred Shares or (z) at any 
time there are less than 200,000 outstanding 7 1/4% Preferred Shares, at 
which time the term of any directors elected pursuant to the provisions of 
subparagraph (5)(ii)(A) above shall terminate and the number of directors 
constituting the Board of Directors shall be decreased by two (until the 
occurrence of any subsequent Voting Rights Triggering Event). At any time 
after voting power to elect directors shall have become vested and be 
continuing in the Holders of 7 1/4% Preferred Shares (together with the 
holders of Parity Shares upon which like rights have been conferred and are 
exercisable) pursuant to subparagraph (5)(ii)(A) hereof, or if vacancies 
shall exist in the offices of directors elected by such holders, a proper 
officer of the corporation may, and upon the written request of the Holders 
of record of at least 25% of the outstanding 7 1/4% Preferred Shares or the 
holders of 25% of the outstanding Parity Shares upon which like rights have 
been confirmed and are exercisable addressed to the Secretary of the 
corporation shall, call a special meeting of the Holders of 7 1/4% Preferred 
Shares and the holders of such Parity Shares for the purpose of electing the 
directors which such holders are entitled to elect pursuant to the terms 
hereof; PROVIDED, HOWEVER, that no such special meeting shall be called if 
the next annual meeting of shareholders of the corporation is to be held 
within 60 days after the voting power to elect directors shall have become 
vested, in which case such meeting shall be deemed to have been called for 
such next annual meeting. If such meeting shall not be called by a proper 
officer of the corporation within 20 days after personal service to the 
Secretary of the corporation at its principal executive offices, then the 
Holders of record of at least 25% of the outstanding 7 1/4% Preferred Shares 
or the holders of 25% of the Parity Shares upon which like rights have been 
confirmed and are exercisable may designate in writing one of their members 
to call such meeting at the expense of the corporation, and such meeting may 
be called by the person so designated upon the notice required for the annual 
meetings of shareholders of the corporation and shall be held at the place 
for holding the annual meetings of shareholders. Any holder of 7 1/4% 
Preferred Shares or such Parity Shares so designated shall have, and the 
corporation shall provide, access to the lists of Holders of 7 1/4% Preferred 
Shares and the holders of such Parity Shares to be called pursuant to the 
provisions hereof. If no special meeting of the Holders of 7 1/4% Preferred 
Shares and the holders of such Parity Shares is called as provided in this 
paragraph (5)(ii), then such meeting shall be deemed to have been called for 
the next annual meeting of shareholders of the corporation or special meeting 
of the holders of any other capital shares of the corporation.

                                      8


<PAGE>


         (C) At any meeting held for the purposes of electing directors at 
which the Holders of 7 1/4% Preferred Shares (together with the holders of 
Parity Shares upon which like rights have been conferred and are exercisable) 
shall have the right, voting together as a separate class, to elect directors 
as aforesaid, the presence in person or by proxy of the Holders of at least a 
majority in voting power of the outstanding 7 1/4% Preferred Shares (and such 
Parity Shares) shall be required to constitute a quorum thereof.

         (D) Any vacancy occurring in the office of a director elected by the 
Holders of 7 1/4% Preferred Shares (and such Parity Shares) may be filled by 
the remaining director elected by the Holders of 7 1/4% Preferred Shares (and 
such Parity Shares) unless and until such vacancy shall be filled by the 
Holders of 7 1/4% Preferred Shares (and such Parity Shares).

         (iii) (A) So long as any of the 7 1/4% Preferred Shares are 
outstanding, the corporation will not authorize, create or increase the 
authorized amount of any class or series of Senior Shares without the 
affirmative vote of Holders of at least two-thirds of the outstanding 7 1/4% 
Preferred Shares, voting as one class, given in person or by proxy, either in 
writing or by resolution adopted at an annual or special meeting.

         (B) So long as any 7 1/4% Preferred Shares are outstanding, the 
corporation will not amend this Article Fourth so as to affect adversely the 
specified rights, preferences, privileges or voting rights of Holders of 
7 1/4% Preferred Shares or to authorize the issuance of any additional 7 1/4% 
Preferred Shares (except to authorize the issuance of additional 7 1/4% 
Preferred Shares to be paid as dividends on the 7 1/4% Preferred Shares, for 
which no vote shall be necessary) without the affirmative vote of Holders of 
at least two-thirds of the issued and outstanding shares of 7 1/4% Preferred 
Shares, voting as one class, given in person or by proxy, either in writing 
or by resolution adopted at an annual or special meeting.

         (C) Except as set forth in paragraph (5)(iii)(A) or (B) above or as 
otherwise required by Ohio law, (x) the creation, authorization or issuance 
of any Junior Shares, Parity Shares or Senior Shares, including the 
designation of a series of 7 1/4% Preferred Shares, or (y) the increase or 
decrease in the amount of authorized capital shares of any class, including 
Preferred Shares, shall not require the vote of Holders of 7 1/4% Preferred 
Shares and shall not be deemed to affect adversely the rights, preferences, 
privileges or voting rights of Holders of 7 1/4% Preferred Shares.

          (iv) In any case in which the Holders of 7 1/4% Preferred Shares 
shall be entitled to vote pursuant to this paragraph (5) or pursuant to Ohio 
law, each Holder of 7 1/4% Preferred Shares entitled to vote with respect to 
such matters shall be entitled to one vote for each 7 1/4% Preferred Share 
held.

         (6) CONVERSION. (i) At any time, at the option of the Holder 
thereof, any 7 1/4% Preferred Share may be converted at the Liquidation 
Preference thereof into fully paid and nonassessable Common Shares 
(calculated as to each conversion to the nearest 1/100 of a share), at the 
Conversion Price, determined as hereinafter provided, in effect at the time 
of conversion. Such conversion right shall expire at the close of business on 
the Mandatory Redemption Date. 

                                      9

<PAGE>

In the event a 7 1/4% Preferred Share is called for optional redemption, such 
conversion right in respect of the 7 1/4% Preferred Share so called shall 
expire at the close of business on the applicable Optional Redemption Date, 
unless the corporation defaults in making the payment due upon redemption.

The price at which Common Shares shall be delivered upon conversion (herein 
called the "Conversion Price") shall be initially $11.18 per Common Share. 
The Conversion Price shall be adjusted in certain instances as provided in 
paragraph (6)(iv) and paragraph (6)(v).

         (ii) In order to exercise the conversion privilege, the Holder of 
any 7 1/4% Preferred Shares to be converted shall surrender the certificate 
for such 7 1/4% Preferred Shares, duly endorsed or assigned to the 
corporation or in blank, at the office of the Transfer Agent or at any office 
or agency of the corporation maintained for that purpose, accompanied by 
written notice to the corporation in the form of Exhibit B that the Holder 
elects to convert such 7 1/4% Preferred Shares or, if fewer than all of the 
7 1/4% Preferred Shares represented by a single share certificate are to be 
converted, the number of shares represented thereby to be converted. Except 
as provided in paragraph (2)(vii), no payment or adjustment shall be made 
upon any conversion on account of any dividends accrued on the 7 1/4% 
Preferred Shares surrendered for conversion or on account of any dividends on 
the Common Shares issued upon conversion. Such notice shall also contain the 
office or the address to which the corporation should deliver Common Shares 
issuable upon conversion (and any other payments or certificates related 
thereto). Except as provided in paragraph (2)(vii), in no event shall the 
corporation be obligated to pay any converting Holder any unpaid dividend, 
whether or not in arrears, on converted shares or any dividends on the Common 
Shares issued upon such conversion.

7 1/4% Preferred Shares shall be deemed to have been converted immediately 
prior to the close of business on the day of surrender of 7 1/4% Preferred 
Shares for conversion in accordance with the foregoing provisions, and at 
such time the rights of the Holders of such 7 1/4% Preferred Shares as 
Holders shall cease, and the person or persons entitled to receive the Common 
Shares issuable upon conversion shall be treated for all purposes as the 
record holder or holders of such Common Shares at such time. As promptly as 
practicable on or after the conversion date, the corporation shall issue and 
shall deliver to such office or agency as the converting Holder shall have 
designated in its written notice to the corporation a certificate or 
certificates for the number of full Common Shares issuable upon conversion, 
together with payment in lieu of any fraction of a share, as provided in 
paragraph (6)(iii) hereof.

In the case of any conversion of fewer than all of the 7 1/4% Preferred 
Shares evidenced by a certificate, upon such conversion the corporation shall 
execute and the Transfer Agent shall authenticate and deliver to the Holder 
thereof (at the address designated by such Holder), at the expense of the 
corporation, a new certificate or certificates representing the number of 
unconverted 7 1/4% Preferred Shares.

          (iii) No fractional Common Shares shall be issued upon the 
conversion of a 7 1/4% Preferred Share. If more than one 7 1/4% Preferred 
Share shall be surrendered for conversion at one time by the same Holder, the 
number of full Common Shares which shall be issuable upon conversion thereof 
shall be computed on the basis of the aggregate 7 1/4% Preferred Shares so 
surrendered. Instead of any fractional Common Share which would otherwise be 
issuable upon 

                                      10

<PAGE>

conversion of any 7 1/4% Preferred Share, the corporation shall pay a cash 
adjustment in respect of such fraction in an amount equal to the same 
fraction of the closing price (as defined in paragraph (6)(iv)(7)) per Common 
Share at the close of business on the Business Day prior to the day of 
conversion.

         (iv) The Conversion Price shall be adjusted from time to time by the 
corporation as follows:

         (1) If the corporation shall hereafter pay a dividend or make a 
distribution in Common Shares to all holders of any outstanding class or 
series of Common Shares of the corporation, the Conversion Price in effect at 
the opening of business on the date following the date fixed for the 
determination of shareholders entitled to receive such dividend or other 
distribution shall be reduced by multiplying such Conversion Price by a 
fraction of which the numerator shall be the number of Common Shares 
outstanding at the close of business on the Record Date (as defined in 
paragraph (6)(iv)(7)) fixed for such determination and the denominator shall 
be the sum of such number of outstanding shares and the total number of 
shares constituting such dividend or other distribution, such reduction to 
become effective immediately after the opening of business on the day 
following the Record Date. If any dividend or distribution of the type 
described in this paragraph (6)(iv)(1) is declared but not so paid or made, 
the Conversion Price shall again be adjusted to the Conversion Price which 
would then be in effect if such dividend or distribution had not been 
declared.

         (2) If the corporation shall offer or issue rights or warrants to 
all holders of its outstanding Common Shares entitling them to subscribe for 
or purchase Common Shares at a price per share less than the Current Market 
Price (as defined in paragraph (6)(iv)(7)) on the Record Date fixed for the 
determination of shareholders entitled to receive such rights or warrants, 
the Conversion Price shall be adjusted so that the same shall equal the price 
determined by multiplying the Conversion Price in effect at the opening of 
business on the date after such Record Date by a fraction of which the 
numerator shall be the number of Common Shares outstanding at the close of 
business on the Record Date plus the number of Common Shares which the 
aggregate offering price of the total number of Common Shares subject to such 
rights or warrants would purchase at such Current Market Price and of which 
the denominator shall be the number of Common Shares outstanding at the close 
of business on the Record Date plus the total number of additional Common 
Shares subject to such rights or warrants for subscription or purchase. Such 
adjustment shall become effective immediately after the opening of business 
on the day following the Record Date fixed for determination of shareholders 
entitled to purchase or receive such rights or warrants. To the extent that 
Common Shares are not delivered pursuant to such rights or warrants, upon the 
expiration or termination of such rights or warrants the Conversion Price 
shall again be adjusted to be the Conversion Price which would then be in 
effect had the adjustments made upon the issuance of such rights or warrants 
been made on the basis of delivery of only the number of Common Shares 
actually delivered. If such rights or warrants are not so issued, the 
Conversion Price shall again be adjusted to be the Conversion Price which 
would then be in effect if such date fixed for the determination of 
shareholders entitled to receive such rights or warrants had not been fixed. 
In determining whether any rights or warrants entitle the holders to 
subscribe for or purchase Common Shares at less than such Current Market 
Price, and in determining the aggregate offering price of such shares of 
Common Shares, there shall be taken into account any consideration received 
for such rights or warrants, 

                                      11

<PAGE>

with the value of such consideration, if other than cash, to be determined by 
the Board of Directors.

          (3) If the outstanding Common Shares shall be subdivided into a 
greater number of Common Shares, the Conversion Price in effect at the 
opening of business on the day following the day upon which such subdivision 
becomes effective shall be proportionately reduced, and, conversely, if the 
outstanding Common Shares shall be combined into a smaller number of Common 
Shares, the Conversion Price in effect at the opening of business on the day 
following the day upon which such combination becomes effective shall be 
proportionately increased, such reduction or increase, as the case may be, to 
become effective immediately after the opening of business on the day 
following the day upon which such subdivision or combination becomes 
effective.

         (4) If the corporation shall, by dividend or otherwise, distribute 
to all holders of its Common Shares of any class of capital stock of the 
corporation (other than any dividends or distributions to which paragraph 
(6)(iv)(1) applies) or evidences of its indebtedness, cash or other assets 
(including securities, but excluding any rights or warrants of a type 
referred to in paragraph (6)(iv)(2) and excluding dividends and distributions 
paid exclusively in cash and excluding any capital stock, evidences of 
indebtedness, cash or assets distributed upon a merger or consolidation to 
which paragraph (6)(v) applies) (the foregoing hereinafter in this paragraph 
(6)(iv)(4) called the "Distributed Securities"), then, in each such case, the 
Conversion Price shall be reduced so that the same shall be equal to the 
price determined by multiplying the Conversion Price in effect immediately 
prior to the close of business on the Record Date (as defined in paragraph 
(6)(iv)(7)) with respect to such distribution by a fraction of which the 
numerator shall be the Current Market Price (determined as provided in 
paragraph (6)(iv)(7)) of the Common Shares on such date less the fair market 
value (as determined by the Board of Directors, whose determination shall be 
conclusive and described in a resolution of the Board of Directors) on such 
date of the portion of the Distributed Securities so distributed applicable 
to one Common Share and the denominator shall be such Current Market Price, 
such reduction to become effective immediately prior to the opening of 
business on the day following the Record Date; PROVIDED, HOWEVER, that, in 
the event the then fair market value (as so determined) of the portion of the 
Distributed Securities so distributed applicable to one Common Share is equal 
to or greater than the Current Market Price on the Record Date, in lieu of 
the foregoing adjustment, adequate provision shall be made so that each 
Holder of 7 1/4% Preferred Shares shall have the right to receive upon 
conversion of a 7 1/4% Preferred Share (or any portion thereof) the amount of 
Distributed Securities such Holder would have received had such Holder 
converted such 7 1/4% Preferred Share (or portion thereof) immediately prior 
to such Record Date. If such dividend or distribution is not so paid or made, 
the Conversion Price shall again be adjusted to be the Conversion Price which 
would then be in effect if such dividend or distribution had not been 
declared. If the Board of Directors determines the fair market value of any 
distribution for purposes of this paragraph (6)(iv)(4) by reference to the 
actual or when issued trading market for any securities comprising all or 
part of such distribution, it must in doing so consider the prices in such 
market over the same period used in computing the Current Market Price 
pursuant to paragraph (6)(iv)(7) to the extent possible.

Rights or warrants distributed by the corporation to all holders of Common 
Shares entitling the holders thereof to subscribe for or purchase shares of 
the corporation's capital stock (either 

                                      12

<PAGE>

initially or under certain circumstances), which rights or warrants, until 
the occurrence of a specified event or events ("Dilution Trigger Event"): (i) 
are deemed to be transferred with such Common Shares; (ii) are not 
exercisable; and (iii) are also issued in respect of future issuances of 
Common Shares, shall be deemed not to have been distributed for purposes of 
this paragraph (6)(iv)(4) (and no adjustment to the Conversion Price under 
this paragraph (6)(iv)(4) shall be required) until the occurrence of the 
earliest Dilution Trigger Event, whereupon such rights and warrants shall be 
deemed to have been distributed and an appropriate adjustment to the 
Conversion Price under this paragraph (6)(iv)(4) shall be made. If any such 
rights or warrants, including any such existing rights or warrants 
distributed prior to the date hereof, are subject to subsequent events, upon 
the occurrence of each of which such rights or warrants shall become 
exercisable to purchase different securities, evidences of indebtedness or 
other assets, then the occurrence of each such event shall be deemed to be 
such date of issuance and record date with respect to new rights or warrants 
(and a termination or expiration of the existing rights or warrants without 
exercise by the holder thereof). In addition, in the event of any 
distribution (or deemed distribution) of rights or warrants, or any Dilution 
Trigger Event with respect thereto, that was counted for purposes of 
calculating a distribution amount for which an adjustment to the Conversion 
Price under this paragraph (6)(iv)(4) was made, (1) in the case of any such 
rights or warrants which shall all have been redeemed or repurchased without 
exercise by any holders thereof, the Conversion Price shall be readjusted 
upon such final redemption or repurchase to give effect to such distribution 
or Dilution Trigger Event, as the case may be, as though it were a cash 
distribution, equal to the per share redemption or repurchase price received 
by a holder or holders of Common Shares with respect to such rights or 
warrants (assuming such holder had retained such rights or warrants), made to 
all holders of Common Shares as of the date of such redemption or repurchase, 
and (2) in the case of such rights or warrants which shall have expired or 
been terminated without exercise by any holders thereof, the Conversion Price 
shall be readjusted as if such rights and warrants had not been issued.

Notwithstanding any other provision of this paragraph (6)(iv)(4) to the 
contrary, capital stock, rights, warrants, evidences of indebtedness, other 
securities, cash or other assets (including, without limitation, any rights 
distributed pursuant to any shareholder rights plan) shall be deemed not to 
have been distributed for purposes of this paragraph (6)(iv)(4) if the 
corporation makes proper provision so that each Holder of 7 1/4% Preferred 
Shares who converts a 7 1/4% Preferred Share (or any portion thereof) after 
the date fixed for determination of shareholders entitled to receive such 
distribution shall be entitled to receive upon such conversion, in addition 
to the Common Shares issuable upon such conversion, the amount and kind of 
such distributions that such holder would have been entitled to receive if 
such holder had, immediately prior to such determination date, converted such 
7 1/4% Preferred Share into Common Shares.

For purposes of this paragraph (6)(iv)(4) and paragraphs (6)(iv)(1) and (2), 
any dividend or distribution to which this paragraph (6)(iv)(4) is applicable 
that also includes Common Shares, or rights or warrants to subscribe for or 
purchase Common Shares to which paragraph (6)(iv)(2) applies (or both), shall 
be deemed instead to be (1) a dividend or distribution of the evidences of 
indebtedness, cash, assets, shares of capital stock, rights or warrants other 
than (A) such Common Shares or (B) rights or warrants to which paragraph 
(6)(iv)(2) applies (and any Conversion Price reduction required by this 
paragraph (6)(iv)(4) with respect to such dividend or distribution shall then 
be made) immediately followed by (2) a dividend or distribution of such 
Common Shares or such rights or warrants (and any further Conversion Price 
reduction required 

                                      13

<PAGE>

by paragraph (6)(iv)(1) and (2) with respect to such dividend or distribution 
shall then be made), except that (1) the Record Date of such dividend or 
distribution shall be substituted as "the Record Date fixed for the 
determination of shareholders entitled to receive such dividend or other 
distribution", "Record Date fixed for such determination" and "Record Date" 
within the meaning of paragraph (6)(iv)(1) and as "the Record Date fixed for 
the determination of shareholders entitled to receive such rights or 
warrants", "the date fixed for the determination of the shareholders entitled 
to receive such rights or warrants" and "such Record Date" within the meaning 
of paragraph (6)(iv)(2), and (2) any Common Shares included in such dividend 
or distribution shall not be deemed "outstanding at the close of business on 
the date fixed for such determination" within the meaning of paragraph 
(6)(iv)(1).

         (5) If the corporation shall, by dividend or otherwise, distribute 
to all holders of its Common Shares cash (excluding any cash that is 
distributed upon a merger or consolidation to which paragraph (6)(v) applies 
or as part of a distribution referred to in paragraph (6)(iv)) in an 
aggregate amount that, combined together with (1) the aggregate amount of any 
other such distributions to all holders of its Common Shares made exclusively 
in cash within the 12 months preceding the date of payment of such 
distribution, and in respect of which no adjustment pursuant to this 
paragraph (6)(iv)(5) has been made, and (2) the aggregate of any cash plus 
the fair market value (as determined by the Board of Directors, whose 
determination shall be conclusive and described in a resolution of the Board 
of Directors) of consideration payable in respect of any tender offer by the 
corporation or a Subsidiary of the corporation for all or any portion of the 
Common Shares concluded within the 12 months preceding the date of payment of 
such distribution, and in respect of which no adjustment pursuant to 
paragraph (6)(iv)(4) has been made, exceeds 12.5% of the product of the 
Current Market Price (determined as provided in paragraph (6)(iv)(7)) on the 
Record Date with respect to such distribution times the number of Common 
Shares outstanding on such date, then, and in each such case, immediately 
after the close of business on such date, the Conversion Price shall be 
reduced so that the same shall equal the price determined by multiplying the 
Conversion Price in effect immediately prior to the close of business on such 
Record Date by a fraction (i) the numerator of which shall be equal to the 
Current Market Price on the Record Date less an amount equal to the quotient 
of (x) the excess of such combined amount over such 12.5% amount divided by 
(y) the number of Common Shares outstanding on the Record Date and (ii) the 
denominator of which shall be equal to the Current Market Price on such 
Record Date; PROVIDED, HOWEVER, that, if the portion of the cash so 
distributed applicable to one Common Share is equal to or greater than the 
Current Market Price of the Common Shares on the Record Date, in lieu of the 
foregoing adjustment, adequate provision shall be made so that each Holder of 
7 1/4% Preferred Shares shall have the right to receive upon conversion of a 
7 1/4% Preferred Share (or any portion thereof) the amount of cash such 
Holder would have received had such Holder converted such 7 1/4% Preferred 
Share (or portion thereof) immediately prior to such Record Date. If such 
dividend or distribution is not so paid or made, the Conversion Price shall 
again be adjusted to be the Conversion Price which would then be in effect if 
such dividend or distribution had not been declared.

      (6) If a tender or exchange offer made by the corporation or any of its 
Subsidiaries for all or any portion of the Common Shares expires and such 
tender or exchange offer (as amended upon the expiration thereof) requires 
the payment to shareholders (based on the acceptance (up to any maximum 
specified in the terms of the tender offer) of Purchased Shares (as defined 
below)) of 

                                      14

<PAGE>

an aggregate consideration having a fair market value (as determined by the 
Board of Directors, whose determination shall be conclusive and described in 
a resolution of the Board of Directors) that, combined together with (1) the 
aggregate of the cash plus the fair market value (as determined by the Board 
of Directors, whose determination shall be conclusive and described in a 
resolution of the Board of Directors), as of the expiration of such tender 
offer, of consideration payable in respect of any other tender offers, by the 
corporation or any of its Subsidiaries for all or any portion of the Common 
Shares expiring within the 12 months preceding the expiration of such tender 
offer and in respect of which no adjustment pursuant to this paragraph 
(6)(iv)(6) has been made and (2) the aggregate amount of any distributions to 
all holders of the Common Shares made exclusively in cash within 12 months 
preceding the expiration of such tender offer and in respect of which no 
adjustment pursuant to paragraph (6)(iv)(5) has been made, exceeds 12.5% of 
the product of the Current Market Price (determined as provided in paragraph 
(6)(iv)(7)) as of the last time (the "Expiration Time") tenders could have 
been made pursuant to such tender offer (as it may be amended) times the 
number of Common Shares outstanding (including any tendered shares) at the 
Expiration Time, then, and in each such case, immediately prior to the 
opening of business on the day after the date of the Expiration Time, the 
Conversion Price shall be adjusted so that the same shall equal the price 
determined by multiplying the Conversion Price in effect immediately prior to 
the close of business on the date of the Expiration Time by a fraction of 
which the numerator shall be the number of Common Shares outstanding 
(including any tendered shares) at the Expiration Time multiplied by the 
Current Market Price of the Common Shares on the Trading Day next succeeding 
the Expiration Time and the denominator shall be the sum of (x) the fair 
market value (determined as aforesaid) of the aggregate consideration payable 
to shareholders based on the acceptance (up to any maximum specified in the 
terms of the tender offer) of all shares validly tendered and not withdrawn 
as of the Expiration Time (the shares deemed so accepted, up to any such 
maximum, being referred to as the "Purchased Shares") and (y) the product of 
the number of Common Shares outstanding (less any Purchased Shares) at the 
Expiration Time and the Current Market Price of the Common Shares on the 
Trading Day next succeeding the Expiration Time, such reduction (if any) to 
become effective immediately prior to the opening of business on the day 
following the Expiration Time. If the corporation is obligated to purchase 
shares pursuant to any such tender offer, but the corporation is permanently 
prevented by applicable law from effecting any such purchases or all such 
purchases are rescinded, the Conversion Price shall again be adjusted to be 
the Conversion Price which would then be in effect if such tender offer had 
not been made. If the application of this paragraph (6)(iv)(6) to any tender 
offer would result in an increase in the Conversion Price, no adjustment 
shall be made for such tender offer under this paragraph (6)(iv)(6).

     (7) For purposes of this paragraph (6)(iv), the following terms shall 
have the meaning indicated:

"closing price" with respect to any securities on any day means the closing 
price on such day or, if no such sale takes place on such day, the average of 
the reported high and low prices on such day, in each case on The Nasdaq 
National Market or the New York Stock Exchange, as applicable, or, if such 
security is not listed or admitted to trading on such national market or 
exchange, on the principal national securities exchange or quotation system 
on which such security is quoted or listed or admitted to trading, or, if not 
quoted or listed or admitted to trading on any national securities exchange 
or quotation system, the average of the high and low prices 

                                      15

<PAGE>

of such security on the over-the-counter market on the day in question as 
reported by the National Quotation Bureau Incorporated or a similar generally 
accepted reporting service, or, if not so available, in such manner as 
furnished by any New York Stock Exchange member firm selected from time to 
time by the Board of Directors for that purpose, or a price determined in 
good faith by the Board of Directors, whose determination shall be conclusive 
and described in a resolution of the Board of Directors.

"Current Market Price" means the average of the daily closing prices per 
Common Share for the 10 consecutive trading days immediately prior to the 
date in question; PROVIDED, HOWEVER, that (A) if the "ex" date (as 
hereinafter defined) for any event (other than the issuance or distribution 
requiring such computation) that requires an adjustment to the Conversion 
Price pursuant to paragraphs (6)(iv)(1), (2), (3), (4), (5) or (6) occurs 
during such 10 consecutive trading days, the closing price for each trading 
day prior to the "ex" date for such other event shall be adjusted by 
multiplying such closing price by the same fraction by which the Conversion 
Price is so required to be adjusted as a result of such other event, (B) if 
the "ex" date for any event (other than the issuance or distribution 
requiring such computation) that requires an adjustment to the Conversion 
Price pursuant to paragraphs (6)(iv)(1), (2), (3), (4), (5) or (6) occurs on 
or after the "ex" date for the issuance or distribution requiring such 
computation and prior to the day in question, the closing price for each 
trading day on and after the "ex" date for such other event shall be adjusted 
by multiplying such closing price by the reciprocal of the fraction by which 
the Conversion Price is so required to be adjusted as a result of such other 
event and (C) if the "ex" date for the issuance or distribution requiring 
such computation is prior to the day in question, after taking into account 
any adjustment required pursuant to clause (A) or (B) of this proviso, the 
closing price for each trading day on or after such "ex" date shall be 
adjusted by adding thereto the amount of any cash and the fair market value 
(as determined by the Board of Directors in a manner consistent with any 
determination of such value for purposes of paragraphs (6)(iv)(4) or (5), 
whose determination shall be conclusive and described in a resolution of the 
Board of Directors) of the evidence of indebtedness, shares of capital stock 
or assets being distributed applicable to one Common Share as of the close of 
business on the day before such "ex" date. For purposes of any computation 
under paragraph (6)(vi), the Current Market Price on any date shall be deemed 
to be the average of the daily closing prices per Common Share for such day 
and the next two succeeding trading days; PROVIDED, HOWEVER, that, if the 
"ex" date for any event (other than the tender offer requiring such 
computation) that requires an adjustment to the Conversion Price pursuant to 
paragraph (6)(iv)(1), (2), (3), (4), (5) or (6) occurs on or after the 
Expiration Time for the tender or exchange offer requiring such computation 
and prior to the day in question, the closing price for each trading day on 
and after the "ex" date for such other event shall be adjusted by multiplying 
such closing price by the reciprocal of the fraction by which the Conversion 
Price is so required to be adjusted as a result of such other event. For 
purposes of this paragraph, the term "ex" date (I) when used with respect to 
any issuance or distribution, means the first date on which the Common Shares 
trade regular way on the relevant exchange or in the relevant market from 
which the closing price was obtained without the right to receive such 
issuance or distribution, (II) when used with respect to any subdivision or 
combination of Common Shares, means the first date on which the Common Shares 
trade regular way on such exchange or in such market after the time at which 
such subdivision or combination becomes effective and (III) when used with 
respect to any tender or exchange offer means the first date on which the 
Common Shares trade regular way on such exchange or in such market after the 
Expiration Time of such offer.

                                      16



<PAGE>

Notwithstanding the foregoing, whenever successive adjustments to the 
Conversion Price are called for pursuant to this paragraph (6)(iv), such 
adjustments shall be made to the Current Market Price as may be necessary or 
appropriate to effectuate the intent of this paragraph (6)(iv) and to avoid 
unjust or inequitable results, as determined in good faith by the Board of 
Directors.

"fair market value" shall mean the amount which a willing buyer would pay a 
willing seller in an arm's-length transaction.

"Record Date" shall mean, with respect to any dividend, distribution or other 
transaction or event in which the holders of Common Shares have the right to 
receive any cash, securities or other property or in which the Common Shares 
(or other applicable security) are exchanged for or converted into any 
combination of cash, securities or other property, the date fixed for 
determination of shareholders entitled to receive such cash, securities or 
other property (whether such date is fixed by the Board of Directors or by 
statute, contract or otherwise).

     (8) No adjustment in the Conversion Price shall be required unless such 
adjustment would require an increase or decrease of at least 1% in such 
price; PROVIDED, HOWEVER, that any adjustments which by reason of this 
paragraph (6)(iv)(8) are not required to be made shall be carried forward and 
taken into account in any subsequent adjustment. All calculations under this 
paragraph (6)(iv)(8) shall be made by the corporation and shall be made to 
the nearest cent or to the nearest one-hundredth of a share, as the case may 
be. No adjustment need be made for a change in the par value or no par value 
of the Common Shares.

     (9) Whenever the Conversion Price is adjusted as herein provided, the 
corporation shall promptly file with the Transfer Agent an Officers' 
Certificate setting forth the Conversion Price after such adjustment and 
setting forth a brief statement of the facts requiring such adjustment. 
Promptly after delivery of such certificate, the corporation shall prepare a 
notice of such adjustment of the Conversion Price setting forth the adjusted 
Conversion Price and the date on which each adjustment becomes effective and 
shall mail such notice of such adjustment of the Conversion Price to each 
Holder of 7 1/4% Preferred Shares at such Holder's last address appearing on 
the register of Holders maintained for that purpose within 20 days of the 
effective date of such adjustment. Failure to deliver such notice shall not 
affect the legality or validity of any such adjustment.

     (10) In any case in which this paragraph (6)(iv) provides that an 
adjustment shall become effective immediately after a Record Date for an 
event, the corporation may defer until the occurrence of such event issuing 
to the Holder of any 7 1/4% Preferred Share converted after such Record Date 
and before the occurrence of such event the additional Common Shares issuable 
upon such conversion by reason of the adjustment required by such event over 
and above the Common Shares issuable upon such conversion before giving 
effect to such adjustment.

      (11) For purposes of this paragraph (6)(iv), the number of Common 
Shares at any time outstanding shall not include shares held in the treasury 
of the corporation but shall include shares issuable in respect of scrip 
certificates issued in lieu of fractions of Common Shares. The corporation 
shall not pay any dividend or make any distribution on Common Shares held in 
the treasury of the corporation.

                                      17

<PAGE>

     (v) In case of any consolidation of the corporation with, or merger of 
the corporation into, any other corporation, or in case of any merger of 
another corporation into the corporation (other than a merger which does not 
result in any reclassification, conversion, exchange or cancelation of 
outstanding Common Shares of the corporation), or in case of any conveyance 
or transfer of the properties and assets of the corporation substantially as 
an entirety, the Holder of each outstanding 7 1/4% Preferred Share shall have 
the right thereafter, during the period such 7 1/4% Preferred Shares shall be 
convertible as specified in paragraph (6)(i), to convert such 7 1/4% 
Preferred Shares only into the kind and amount of securities, cash and other 
property receivable upon such consolidation, merger, conveyance or transfer 
by a holder of the number of Common Shares of the corporation into which such 
7 1/4% Preferred Share might have been converted immediately prior to such 
consolidation, merger, conveyance or transfer, assuming such holder of Common 
Shares of the corporation failed to exercise his rights of election, if any, 
as to the kind or amount of securities, cash and other property receivable 
upon such consolidation, merger, conveyance or transfer (provided that, if 
the kind or amount of securities, cash and other property receivable upon 
such consolidation, merger, conveyance or transfer is not the same for each 
Common Share of the corporation in respect of which such rights of election 
shall not have been exercised ("nonelecting share"), then for the purpose of 
this paragraph (6)(v) the kind and amount of securities, cash and other 
property receivable upon such consolidation, merger, conveyance or transfer 
by each nonelecting share shall be deemed to be the kind and amount so 
receivable per share by a plurality of the nonelecting shares). Such 
securities shall provide for adjustments which, for events subsequent to the 
effective date of the triggering event, shall be as nearly equivalent as may 
be practicable to the adjustments provided for in this paragraph (6)(v). The 
above provisions of this Section shall similarly apply to successive 
consolidations, mergers, conveyances or transfers.

     (vi) In case:

     (1) the corporation shall declare a dividend (or any other distribution) 
on its Common Shares payable otherwise than in cash out of its earned 
surplus; or

     (2) the corporation shall authorize the granting to all holders of its 
Common Shares of rights or warrants to subscribe for or purchase any shares 
of capital stock of any class or of any other rights; or

     (3) of any reclassification of the Common Shares of the corporation 
(other than a subdivision or combination of its outstanding Common Shares), 
or of any consolidation or merger to which the corporation is a party and for 
which approval of any shareholders of the corporation is required, or the 
sale or transfer of all or substantially all the assets of the corporation; or

      (4) of the voluntary or involuntary dissolution, liquidation or 
winding-up of the corporation; then the corporation shall cause to be filed 
with the Transfer Agent and at each office or agency maintained for the 
purpose of conversion of the 7 1/4% Preferred Shares, and shall cause to be 
mailed to all Holders at their last addresses as they shall appear in the 
7 1/4% Preferred Shares Register, at least 20 days (or 10 days in any case 
specified in clause (1) or (2) above) prior to the applicable date 
hereinafter specified, a notice stating (x) the date on which a record is to 
be taken for the purpose of such dividend, distribution, rights or warrants, 
or, if a record is not to be taken, 

                                      18

<PAGE>

the date as of which the holders of Common Shares of record to be entitled to 
such dividend, distribution, rights or warrants are to be determined or (y) 
the date on which such reclassification, consolidation, merger, sale, 
transfer, dissolution, liquidation or winding-up of the corporation is 
expected to become effective, and the date as of which it is expected that 
holders of Common Shares of record shall be entitled to exchange their Common 
Shares for securities, cash or other property deliverable upon such 
reclassification, consolidation, merger, sale, transfer, dissolution, 
liquidation or winding-up of the corporation. Failure to give the notice 
requested by this Section or any defect therein shall not affect the legality 
or validity of any dividend, distribution, right, warrant, reclassification, 
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up 
of the corporation, or the vote upon any such action.

     (vii) The corporation shall at all times reserve and keep available, 
free from preemptive rights, out of its authorized but unissued Common Shares 
(or out of its authorized Common Shares held in the treasury of the 
corporation), for the purpose of effecting the conversion of the 7 1/4% 
Preferred Shares, the full number of Common Shares then issuable upon the 
conversion of all outstanding 7 1/4% Preferred Shares.

     (viii) The corporation will pay any and all document, stamp or similar 
issue or transfer taxes that may be payable in respect of the issue or 
delivery of Common Shares on conversion of the 7 1/4% Preferred Shares 
pursuant hereto. The corporation shall not, however, be required to pay any 
tax which may be payable in respect of any transfer involved in the issue and 
delivery of Common Shares in a name other than that of the Holder of the 
7 1/4% Preferred Shares or the 7 1/4% Preferred Shares to be converted, and no 
such issue or delivery shall be made unless and until the person requesting 
such issue has paid to the corporation the amount of any such tax, or has 
established to the satisfaction of the corporation that such tax has been 
paid.

     (ix) (1) Notwithstanding any other provision in the preceding paragraphs 
to the contrary, if any Change in Control occurs then, if the corporation 
does not elect to make a Change in Control Offer, the Conversion Price in 
effect shall be adjusted immediately after such Change in Control as 
described below. In addition, in the event of a Common Shares Change in 
Control (as defined in this paragraph (6)(ix)), each 7 1/4% Preferred Share 
shall be convertible solely into common shares of the kind received by 
holders of Common Shares as the result of such Common Shares Change in 
Control. For purposes of calculating any adjustment to be made pursuant to 
this paragraph in the event of a Change in Control, immediately after such 
Change in Control:

     (A) in the case of a Non-Stock Change in Control (as defined in this 
paragraph (6)(ix)), the Conversion Price shall thereupon become the lower of 
(x) the Conversion Price in effect immediately prior to such Non-Stock Change 
in Control, but after giving effect to any other prior adjustments, and (y) 
the result obtained by multiplying the greater of the Applicable Price (as 
defined in this paragraph (6)(ix)) or the then applicable Reference Market 
Price (as defined in this paragraph (6)(ix)) by a fraction of which the 
numerator shall be $100.00 and the denominator shall be the then current 
Optional Redemption Price per share; and

      (B) in the case of a Common Shares Change in Control, the Conversion 
Price in effect immediately prior to such Common Shares Change in Control, 
but after giving effect to any prior adjustments, shall thereupon be adjusted 
by multiplying such Conversion Price by a fraction, of which the numerator 
shall be the Purchaser Shares Price (as defined in this paragraph (6)(ix)) 

                                      19

<PAGE>

and the denominator shall be the Applicable Price; PROVIDED, HOWEVER, that in 
the event of a Common Shares Change in Control in which (x) 100% of the value 
of the consideration received by a holder of Common Shares is common stock of 
the successor, acquiror, or other third party (and cash, if any, is paid with 
respect to any fractional interests in such common stock resulting from such 
Common Shares Change in Control) and (y) all of the Common Shares will have 
been exchanged for, converted into, or acquired for, common stock (and cash 
with respect to fractional interests) of the successor, acquiror or other 
third party, the Conversion Price in effect immediately prior to such Common 
Shares Change in Control shall thereupon be adjusted by multiplying such 
Conversion Price by a fraction, of which the numerator shall be one (1) and 
the denominator shall be the number of shares of common stock of the 
successor, acquiror, or other third party received by a holder of one Common 
Share as a result of such Common Shares Change in Control.

     (2) For purposes of this paragraph (ix), the following terms shall have 
the meanings indicated:

"Applicable Price" means (i) in the event of a Non-Stock Change in Control in 
which the holders of the Common Shares receive only cash, the amount of cash 
received by the holder of one Common Share and (ii) in the event of any other 
Non-Stock Change in Control or any Common Shares Change in Control, the 
average of the Closing Bid Prices for the Common Shares during the ten 
Trading Days prior to and including the record date for the determination of 
the holders of Common Shares entitled to receive cash, securities, property 
or other assets in connection with such Non-Stock Change in Control or Common 
Shares Change in Control or, if there is no such record date, the date upon 
which the holders of the Common Shares shall have the right to receive such 
cash, securities, property or other assets, in each case, as adjusted in good 
faith by the Board of Directors to appropriately reflect any of the events 
referred to in paragraph (6)(iv)(1) through (6).

"Common Shares Change in Control" means any Change in Control in which more 
than 50% of the value (as determined in good faith by the Board of Directors 
of the corporation) of the consideration received by holders of Common Shares 
consists of common stock that for each of the ten consecutive Trading Days 
referred to in the preceding paragraph has been admitted for listing or 
admitted for listing subject to notice of issuance on a national securities 
exchange or quoted on The Nasdaq National Market; PROVIDED, HOWEVER, that a 
Change in Control shall not be a Common Shares Change in Control unless 
either (i) the corporation continues to exist after the occurrence of such 
Change in Control and the outstanding 7 1/4% Preferred Shares continue to 
exist as outstanding 7 1/4% Preferred Shares or (ii) not later than the 
occurrence of such Change in Control, the outstanding 7 1/4% Preferred Shares 
are converted into or exchanged for shares of convertible preferred stock of 
a corporation succeeding to the business of the corporation (which shall 
include a corporation that is the direct or indirect owner of all the equity 
interests of the surviving corporation in the merger) (hereinafter, a 
"successor"), which convertible preferred stock has powers, preferences and 
relative, participating, optional or other rights, and qualifications, 
limitations and restrictions, substantially similar to those of the 7 1/4% 
Preferred Shares.

"Non-Stock Change in Control" means any Change in Control other than a Common 
Shares Change in Control.

                                      20

<PAGE>

"Purchaser Shares Price" means, with respect to any Common Shares Change in 
Control, the product of (i) the number of shares of common stock received in 
such Common Shares Change of Control for each Common Share and (ii) the 
average of the per share Closing Prices for the common stock received in such 
Common Shares Change in Control for the ten consecutive Trading Days prior to 
and including the record date for the determination of the holders of Common 
Shares entitled to receive such common stock, or if there is no such record 
date, the date upon which the holders of the Common Shares shall have the 
right to receive such common stock, in each case, as adjusted in good faith 
by the Board of Directors to appropriately reflect any of the events referred 
to in paragraph (6)(iv)(1) through (6); PROVIDED, HOWEVER, that if no such 
Closing Prices exist, then the Purchaser Shares Price shall be set at a price 
determined in good faith by the Board of Directors of the corporation.

"Reference Market Price" shall initially mean $6.44 (which is equal to $13.50 
divided by 2.096 (which is the exchange ratio for shares of common stock of 
IXC in the Agreement and Plan of Merger, dated as of July 20, 1999 among the 
corporation, Ivory Merger, Inc. and IXC)), and in the event of any adjustment 
to the conversion prices other than as a result of a Change in Control, the 
Reference Market Price shall also be adjusted so that the ratio of the 
Reference Market Price to the Conversion Price after giving effect to any 
such adjustment shall always be the same as the ratio of $6.44 to the initial 
Conversion Price set forth in paragraph (6)(i).

     (7) CHANGE IN CONTROL. (i) Upon the occurrence of a Change of Control 
(the date of such occurrence being the "Change in Control Date"), the 
corporation shall be obligated to (1) purchase all or a portion of each 
Holder's 7 1/4% Preferred Shares in cash pursuant to the offer described in 
paragraph (7)(iii) (the "Change of Control Offer") at a purchase price equal 
to 100% of the Liquidation Preference, plus, without duplication, all accrued 
and unpaid Liquidated Damages and all accrued and unpaid dividends, if any, 
to the Change of Control Payment Date, including an amount in cash equal to a 
prorated dividend for the period from the Dividend Payment Date immediately 
prior to the Change of Control Payment Date to the Change of Control Payment 
Date or (2) adjust the conversion price as provided under paragraph (6)(ix).

     (ii) Prior to the mailing of the notice referred to in paragraph 
(7)(iii), but in any event within 15 days following the date on which the 
corporation knows or reasonably should have known that a Change in Control 
has occurred, the corporation covenants that it shall promptly determine if 
the purchase of the 7 1/4% Preferred Shares would violate or constitute a 
default under any indebtedness of the corporation.

     (iii) Within 15 days following the date on which the corporation knows 
or reasonably should have known that a Change in Control has occurred, the 
corporation must send, by first-class mail, postage prepaid, a notice to each 
Holder of 7 1/4% Preferred Shares. Such notice shall state whether the Change 
of Control Offer would be permitted under any indebtedness of the 
corporation, and if permitted, such notice shall contain all instructions and 
materials necessary to enable such Holders to tender 7 1/4% Preferred Shares 
pursuant to the Change of Control Offer. If the Change of Control Offer would 
be permitted under any indebtedness of the corporation, such notice shall 
state:

                                      21

<PAGE>

     (A) that a Change of Control has occurred, that the Change of Control 
Offer is being made pursuant to this paragraph (7) and that all 7 1/4% 
Preferred Shares validly tendered and not withdrawn will be accepted for 
payment;

     (B) the purchase price (including the amount of accrued dividends, if 
any) and the purchase date (which must be no earlier than 30 days nor later 
than 75 days from the date such notice is mailed, other than as may be 
required by law) (the "Change of Control Payment Date");

     (C) that any 7 1/4% Preferred Shares not tendered will continue to 
accrue dividends;

     (D) that, unless the corporation defaults in making payment therefor, 
any 7 1/4% Preferred Share accepted for payment pursuant to the Change of 
Control Offer shall cease to accrue dividends after the Change of Control 
Payment Date;

     (E) that Holders electing to have any 7 1/4% Preferred Shares purchased 
pursuant to a Change of Control Offer will be required to surrender such 
7 1/4% Preferred Shares, properly endorsed for transfer, together with such 
other customary documents as the corporation and the Transfer Agent may 
reasonably request to the Transfer Agent and registrar for the 7 1/4% 
Preferred Shares at the address specified in the notice prior to the close of 
business on the Business Day prior to the Change of Control Payment Date;

      (F) that Holders will be entitled to withdraw their election if the 
corporation receives, not later than five Business Days prior to the Change 
of Control Payment Date, a telegram, telex, facsimile transmission or letter 
setting forth the name of the Holder, the number of 7 1/4% Preferred Shares 
the Holder delivered for purchase and a statement that such Holder is 
withdrawing his election to have such 7 1/4% Preferred Shares purchased;

     (G) that Holders whose 7 1/4% Preferred Shares are purchased only in 
part will be issued a new certificate representing the unpurchased 7 1/4% 
Preferred Shares; and

     (H) the circumstances and relevant facts regarding such Change of 
Control. If the Change of Control Offer would not be permitted under any 
indebtedness of the corporation, such notice shall state the Conversion Price 
as adjusted pursuant to paragraph (6)(ix).

     (iv) The corporation will comply with any tender offer rules under the 
Exchange Act which then may be applicable, including Rules 13e-4 and 14e-1, 
in connection with any offer required to be made by the corporation to 
repurchase the 7 1/4% Preferred Shares as a result of a Change of Control. To 
the extent that the provisions of any securities laws or regulations conflict 
with provisions of this Article Fourth, the corporation shall comply with the 
applicable securities laws and regulations and shall not be deemed to have 
breached its obligations under this Article Fourth by virtue thereof.

     (v) On the Change of Control Payment Date the corporation shall (A) 
accept for payment the 7 1/4% Preferred Shares validly tendered pursuant to 
the Change of Control Offer, (B) pay to the Holders of shares so accepted the 
purchase price therefor in cash and (C) cancel and retire each surrendered 
certificate. Unless the corporation defaults in the payment for the 7 1/4% 
Preferred Shares tendered pursuant to the Change of Control Offer, dividends 
will cease to accrue with 

                                      22

<PAGE>

respect to the 7 1/4% Preferred Shares tendered and all rights of Holders of 
such tendered shares will terminate, except for the right to receive payment 
therefor, on the Change of Control Payment Date.

     (vi) To accept the Change of Control Offer, the Holder of a 7 1/4% 
Preferred Share shall deliver, on or before the 10th day prior to the Change 
of Control Payment Date, written notice to the corporation (or an agent 
designated by the corporation for such purpose) of such Holder's acceptance, 
together with certificates evidencing the 7 1/4% Preferred Shares with 
respect to which the Change of Control Offer is being accepted, duly endorsed 
for transfer.

     (8) REISSUANCE OF 7 1/4% PREFERRED SHARES. 7 1/4% Preferred Shares that 
have been issued and reacquired in any manner, including shares purchased or 
redeemed or exchanged, shall not be reissued as 7 1/4% Preferred Shares and 
shall (upon compliance with any applicable provisions of the laws of Ohio) 
have the status of authorized and unissued Preferred Shares undesignated as 
to series and may be redesignated and reissued as part of any series of 
Preferred Shares (except as otherwise provided by Ohio law); PROVIDED, 
HOWEVER, that so long as any 7 1/4% Preferred Shares are outstanding, any 
issuance of such shares must be in compliance with the terms hereof.

     (9) BUSINESS DAY. If any payment, redemption or exchange shall be 
required by the terms hereof to be made on a day that is not a Business Day, 
such payment, redemption or exchange shall be made on the immediately 
succeeding Business Day.

      (10) LIMITATION ON MERGERS AND ASSET SALES. The corporation may not 
consolidate with or merge with or into, or convey, transfer or lease all or 
substantially all its assets to, any person unless: (1) the successor, 
transferee or lessee (if not the corporation) is organized and existing under 
the laws of the United States of America or any State thereof or the District 
of Columbia and the 7 1/4% Preferred Shares shall be converted into or 
exchanged for and shall become shares of such successor, transferee or 
lessee, having in respect of such successor, transferee or lessee 
substantially the same powers, preference and relative participating, 
optional or other special rights and the qualifications, limitations or 
restrictions thereon, that the 7 1/4% Preferred Shares had immediately prior 
to such transaction; and (2) the corporation delivers to the Transfer Agent 
an Officers' Certificate and an Opinion of Counsel stating that such 
consolidation, merger or transfer complies with this Article Fourth. The 
successor, transferee or lessee will be the successor company.

     (11) CERTIFICATES. (i) FORM AND DATING. The 7 1/4% Preferred Shares 
certificate may have notations, legends or endorsements required by law, 
stock exchange rule, agreements to which the corporation is subject, if any, 
or usage (provided that any such notation, legend or endorsement is in a form 
acceptable to the corporation). Each 7 1/4% Preferred Shares certificate 
shall be dated the date of its authentication. The terms of the 7 1/4% 
Preferred Shares certificate set forth in Exhibit A are part of the terms of 
this Article Fourth.

     (ii) EXECUTION AND AUTHENTICATION. Two Officers shall sign the 7 1/4% 
Preferred Shares certificates for the corporation by manual or facsimile 
signature. The corporation's seal shall be impressed, affixed, imprinted or 
reproduced on the 7 1/4% Preferred Shares certificates and may be in 
facsimile form.

                                      23

<PAGE>

If an Officer whose signature is on the 7 1/4% Preferred Shares certificates 
no longer holds that office at the time the Transfer Agent authenticates the 
7 1/4% Preferred Shares certificates, the 7 1/4% Preferred Shares 
certificates shall be valid nevertheless.

A 7 1/4% Preferred Share shall not be valid until an authorized signatory of 
the Transfer Agent manually signs the certificate of authentication on the 
7 1/4% Preferred Shares certificates. The signature shall be conclusive 
evidence that the 7 1/4% Preferred Shares have been authenticated under this 
Article Fourth.

The Transfer Agent shall authenticate and deliver 1,400,000 7 1/4% Preferred 
Shares for original issue upon a written order of the corporation signed by 
two Officers or by an Officer and either an Assistant Treasurer or an 
Assistant Secretary of the corporation. In addition, the Transfer Agent shall 
authenticate and deliver, from time to time, Additional Shares for original 
issue upon order of the corporation signed by two Officers or by an Officer 
or either an Assistant Treasurer or Assistant Secretary of the corporation. 
Such orders shall specify the number of 7 1/4% Preferred Shares to be 
authenticated and the date on which the original issue of 7 1/4% Preferred 
Shares is to be authenticated.

     The Transfer Agent may appoint an authenticating agent reasonably 
acceptable to the corporation to authenticate the 7 1/4% Preferred Shares. 
Unless limited by the terms of such appointment, an authenticating agent may 
authenticate 7 1/4% Preferred Shares whenever the Transfer Agent may do so. 
Each reference in this Article Fourth to authentication by the Transfer Agent 
includes authentication by such agent. An authenticating agent has the same 
rights as the Transfer Agent or agent for service of notices and demands.

     (iii) TRANSFER AND EXCHANGE. (A) TRANSFER AND EXCHANGE OF 7 1/4% 
PREFERRED SHARES. When 7 1/4% Preferred Shares certificates are presented to 
the Transfer Agent with a request to register the transfer of such 7 1/4% 
Preferred Shares or to exchange such 7 1/4% Preferred Shares certificates for 
an equal number of 7 1/4% Preferred Shares certificates of other authorized 
denominations, the Transfer Agent shall register the transfer or make the 
exchange as requested if its reasonable requirements for such transaction are 
met; PROVIDED, HOWEVER, that the 7 1/4% Preferred Shares certificates 
surrendered for transfer or exchange shall be duly endorsed or accompanied by 
a written instrument of transfer in form reasonably satisfactory to the 
corporation and the Transfer Agent, duly executed by the Holder thereof or 
its attorney duly authorized in writing.

      (B) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF 7 1/4% 
PREFERRED SHARES. (1) To permit registrations of transfers and exchanges, the 
corporation shall execute and the Transfer Agent shall authenticate 7 1/4% 
Preferred Shares certificates as required pursuant to the provisions of this 
paragraph (iii).

     (2) All 7 1/4% Preferred Shares certificates issued upon any 
registration of transfer or exchange of 7 1/4% Preferred Shares certificates 
shall be the valid obligations of the corporation, entitled to the same 
benefits under this Article Fourth as the 7 1/4% Preferred Shares 
certificates surrendered upon such registration of transfer or exchange.

                                      24



<PAGE>

     (3) Prior to due presentment for registration of transfer of any 7 1/4% 
Preferred Shares, the Transfer Agent and the corporation may deem and treat 
the person in whose name such 7 1/4% Preferred Shares are registered as the 
absolute owner of such 7 1/4% Preferred Shares and neither the Transfer Agent 
nor the corporation shall be affected by notice to the contrary.

     (4) No service charge shall be made to a Holder for any registration of 
transfer or exchange upon surrender of any 7 1/4% Preferred Shares 
certificate at the office of the Transfer Agent maintained for that purpose. 
However, the corporation may require payment of a sum sufficient to cover any 
tax or other governmental charge that may be imposed in connection with any 
registration of transfer or exchange of 7 1/4% Preferred Shares certificates.

     (iv) REPLACEMENT CERTIFICATES. If a mutilated 7 1/4% Preferred Shares 
certificate is surrendered to the Transfer Agent or if the Holder of a 7 1/4% 
Preferred Shares certificate claims that the 7 1/4% Preferred Shares 
certificate has been lost, destroyed or wrongfully taken, the corporation 
shall issue and the Transfer Agent shall countersign a replacement 7 1/4% 
Preferred Shares certificate if the reasonable requirements of the Transfer 
Agent and of section 8-405 of the Uniform Commercial Code as in effect in the 
State of New York are met. If required by the Transfer Agent or the 
corporation, such Holder shall furnish an indemnity bond sufficient in the 
judgment of the corporation and the Transfer Agent to protect the corporation 
and the Transfer Agent from any loss which either of them may suffer if a 
7 1/4% Preferred Shares certificate is replaced. The corporation and the 
Transfer Agent may charge the Holder for their expenses in replacing a 7 1/4% 
Preferred Shares certificate.

     (v) CANCELATION. (A) In the event the corporation shall purchase or 
otherwise acquire 7 1/4% Preferred Shares certificates, the same shall 
thereupon be delivered to the Transfer Agent for cancelation.

     (B) The Transfer Agent and no one else shall cancel and destroy all 
7 1/4% Preferred Shares certificates surrendered for transfer, exchange, 
replacement or cancelation and deliver a certificate of such destruction to 
the corporation unless the corporation directs the Transfer Agent to deliver 
canceled 7 1/4% Preferred Shares certificates to the corporation. The 
corporation may not issue new 7 1/4% Preferred Shares certificates to replace 
7 1/4% Preferred Shares certificates to the extent they evidence 7 1/4% 
Preferred Shares which the corporation has purchased or otherwise acquired.

     (12) CERTAIN DEFINITIONS. As used in this Article Fourth, the following 
terms shall have the following meanings (and (1) terms defined in the 
singular have comparable meanings when used in the plural and vice versa, (2) 
"including" means including without limitation, (3) "or" is not exclusive and 
(4) an accounting term not otherwise defined has the meaning assigned to it 
in accordance with United States generally accepted accounting principles as 
in effect on the Issue Date and all accounting calculations will be 
determined in accordance with such principles), unless the content otherwise 
requires:

"BUSINESS DAY" means each day which is not a Legal Holiday.

"CAPITAL SHARE" of any person means any and all shares, interests, rights to 
purchase, warrants, options, participations or other equivalents of or 
interests in (however designated) 

                                      25

<PAGE>

equity of such person, including any Preferred Shares, but excluding any debt 
securities convertible into or exchangeable for such equity.

"CHANGE IN CONTROL" or "CHANGE OF CONTROL" means: (i) the sale, lease, 
transfer, conveyance or other disposition (other than by way of merger or 
consolidation), in one or a series of related transactions, of all or 
substantially all of the assets of the corporation and its Subsidiaries taken 
as a whole to any "person" (as such term is used in section 13(d)(3) of the 
Exchange Act), (ii) the adoption of a plan relating to the liquidation or 
dissolution of the corporation, (iii) the consummation of any transaction 
(including, without limitation, any merger or consolidation) the result of 
which is that any "person" (as defined above), (other than officers, 
directors and shareholders of the corporation and their affiliates on the 
date of this Certificate of Amendment) becomes the beneficial owner (as 
determined in accordance with Rules 13d-3 and 13d-5 under the Exchange Act), 
directly or indirectly, of more than 50% of the voting shares of the 
corporation or (iv) the first day on which a majority of the members of the 
Board of Directors (excluding the directors elected pursuant to paragraph (f) 
are not Continuing Directors).

"CLOSING BID PRICE" means on any day the last reported bid price on such day, 
or in case no bid takes place on such day, the average of the reported 
closing bid and asked prices, in each case on the New York Stock Exchange or, 
if the stock is not quoted on such exchange, on The Nasdaq National Market or 
the principal national securities exchange on which such stock is listed or 
admitted to trading, or if not listed or admitted to trading on The Nasdaq 
National Market or any national securities exchange, the average of the 
closing bid and asked prices as furnished by any independent registered 
broker-dealer firm, selected by the corporation for that purpose.

"CONTINUING DIRECTORS" means, as of any date of determination, any member of 
the Board of Directors who (i) was a member of such Board of Directors on the 
date of this Certificate of Amendment or (ii) was nominated for election or 
elected to such Board of Directors with the approval of a majority of the 
Continuing Directors who were members of such Board of Directors at the time 
of such nomination or election.

"DEFAULT" means any event which is, or after notice or passage of time or 
both would be, a Voting Rights Triggering Event.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"HOLDERS" means the registered holders from time to time of the 7 1/4% 
Preferred Shares.

"ISSUE DATE" means the date on which the 7 1/4% Preferred Shares are 
initially issued.

"IXC 7 1/4% PREFERRED STOCK" means 7 1/4% Junior Convertible Preferred Stock 
Due 2007, par value $.01 per share, of IXC that was converted into the right 
to receive 7 1/4% Preferred Shares pursuant to the Agreement and Plan of 
Merger dated as of July 20, 1999, by and among the corporation, Ivory Merger 
and IXC.

"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking 
institutions are not required to be open in the State of New York.

                                      26

<PAGE>

"LIQUIDATED DAMAGES" means, with respect to any 7 1/4% Preferred Shares, the 
Additional Dividends and Supplemental Dividends then accrued, if any, on such 
share pursuant to paragraph (2).

"OFFICER" means the Chairman of the Board of Directors, the President, any 
Vice President, the Treasurer, the Secretary or any Assistant Secretary of 
the corporation.

"OFFICERS' CERTIFICATE" means a certificate signed by two Officers.

"OPINION OF COUNSEL" means a written opinion from legal counsel who is 
acceptable to the Transfer Agent. The counsel may be an employee of or 
counsel to the corporation or the Transfer Agent.

"PERSON" means any individual, corporation, partnership, joint venture, 
limited liability company, association, joint-stock company, trust, 
unincorporated organization, government or any agency or political 
subdivision thereof or any other entity.

"PREFERRED SHARES" means, as applied to the Capital Shares of any 
corporation, Capital Shares of any class or classes (however designated) 
which is preferred as to the payment of dividends, or as to the distribution 
of assets upon any voluntary or involuntary liquidation or dissolution of 
such corporation, over Capital Shares of any other class of such corporation.

"SEC" means the Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"S-4 REGISTRATION STATEMENT" means the S-4 Registration Statement on Form S-4 
under the Securities Act of 1933, dated September 13, 1999, with respect to 
the 7 1/4% Preferred Shares filed with the SEC. The S-4 Registration 
Statement was filed pursuant to the Agreement and Plan of Merger dated as of 
July 20, 1999, by and among the corporation, Ivory Merger Inc. and IXC 
Communications, Inc.

"SUBSIDIARY" means any corporation, association, partnership, limited 
liability company or other business entity of which more than 50% of the 
total voting power of shares of capital stock or other interests entitled 
(without regard to the occurrence of any contingency) to vote in the election 
of directors, managers or trustees thereof is at the time owned or 
controlled, directly or indirectly, by the corporation, the corporation and 
one or more Subsidiaries or one or more Subsidiaries and any partnership the 
sole general partner or the managing partner of which the corporation or any 
Subsidiary or the only general partners of which are the corporation and one 
or more Subsidiaries or one or more Subsidiaries.

"TRADING DAY" means, in respect of any securities exchange or securities 
market, each Monday, Tuesday, Wednesday, Thursday and Friday, other than any 
day on which securities are not traded on the applicable securities exchange 
or in the applicable securities market.

                                      27

<PAGE>

"TRANSFER AGENT" means the transfer agent for the 7 1/4% Preferred Shares 
appointed by the corporation.

"VOTING SHARES" of a corporation means all classes of Capital Shares of such 
corporation then outstanding and normally entitled to vote in the election of 
directors.

                                                                    EXHIBIT A

                       FORM OF CONVERTIBLE PREFERRED SHARE

                                FACE OF SECURITY

Certificate Number                               Number of Shares of Convertible
                                                                Preferred Shares
[   ]                                                                      [   ]

                                                                CUSIP NO.: [   ]

                 7 1/4% Junior Convertible Preferred Shares Due
                      2007 (without par value) (liquidation
                                 preference $100
                      per share of 7 1/4% Preferred Shares)

                                       of

                              Cincinnati Bell Inc.

         Cincinnati Bell Inc., an Ohio corporation (the "corporation"), 
hereby certifies that [ ] (the "Holder") is the registered owner of fully 
paid and non-assessable preferred securities of the corporation designated 
the 7 1/4% Junior Convertible Preferred Shares Due 2007 (without par value) 
(liquidation preference $100 per share of 7 1/4% Preferred Shares) (the "7 1/4%
Preferred Shares"). The 7 1/4% Preferred Shares are transferable on the 
books and records of the Registrar, in person or by a duly authorized 
attorney, upon surrender of this certificate duly endorsed and in proper form 
for transfer. The designation, rights, privileges, restrictions, preferences 
and other terms and provisions of the 7 1/4% Preferred Shares represented 
hereby are issued and shall in all respects be subject to the provisions of 
the Cincinnati Bell Amended Articles of Incorporation dated [ ], as the same 
may be amended from time to time (the "Articles"). Capitalized terms used 
herein but not defined shall have the meaning given them in the Articles. The 
corporation will provide a copy of the Articles to a Holder without charge 
upon written request to the corporation at its principal place of business.

                                      28

<PAGE>

         Reference is hereby made to select provisions of the 7 1/4% 
Preferred Shares set forth on the reverse hereof, and to the Articles, which 
select provisions and the Articles shall for all purposes have the same 
effect as if set forth at this place.

         Upon receipt of this certificate, the Holder is bound by the 
Articles and is entitled to the benefits thereunder.

         Unless the Transfer Agent's Certificate of Authentication hereon has 
been properly executed, these shares of 7 1/4% Preferred Shares shall not be 
entitled to any benefit under the Articles or be valid or obligatory for any 
purpose.

         IN WITNESS WHEREOF, the corporation has executed this certificate 
this [ ] day of [ ], [ ].

                                       CINCINNATI BELL INC.,

                                       By:
                                          Name:
                                          Title:

[Seal]

                                       By:
                                          ------------------------------------
                                          Name:
                                          Title:

                                      29

<PAGE>

                 TRANSFER AGENT'S CERTIFICATE OF AUTHENTICATION

         This is one of the 7 1/4% Preferred Shares referred to in the within 
mentioned ArticleS.

Dated:   [      ], [    ]

                                       [THE FIFTH THIRD BANK]
                                       as Transfer Agent,

                                       By:
                                          -----------------------------------
                                          Authorized Signatory

                                      30

<PAGE>

                               REVERSE OF SECURITY

         Dividends on each 7 1/4% Preferred Share shall be payable at a rate 
per annum set forth in the face hereof or as provided in the Articles 
(including Additional Dividends).

         The 7 1/4% Preferred Shares shall be redeemable as provided in the 
Articles. The 7 1/4% Preferred Shares shall be convertible into the 
corporation's Common Shares in the manner and according to the terms set 
forth in the Articles.

         As required under Ohio law, the corporation shall furnish to any 
Holder upon request and without charge, a full summary statement of the 
designations, voting rights preferences, limitations and special rights of 
the shares of each class or series authorized to be issued by the corporation 
so far as they have been fixed and determined and the authority of the Board 
of Directors to fix and determine the designations, voting rights, 
preferences, limitations and special rights of the class and series of shares 
of the corporation.

                                      31

<PAGE>

                                                                    EXHIBIT B

                              NOTICE OF CONVERSION

                    (To be Executed by the Registered Holder
             in order to Convert the Convertible, Preferred Shares)

The undersigned hereby irrevocably elects to convert (the "Conversion") 7 1/4%
Junior Convertible Preferred Shares (the "7 1/4% Preferred Shares"), 
represented by stock certificate No(s).________ (the "7 1/4% Preferred Shares 
Certificates") into shares of common stock ("Common Shares") of Cincinnati 
Bell Inc. (the "corporation") according to the conditions of the 
corporation's Amended Articles of Incorporation (the "Articles"), as of the 
date written below. If shares are to be issued in the name of a person other 
than the undersigned, the undersigned will pay all transfer taxes payable 
with respect thereto and is delivering herewith such certificates.* No fee 
will be charged to the Holder for any Conversion, except for transfer taxes, 
if any. A copy of each 7 1/4% Preferred Shares Certificate is attached hereto 
(or evidence of loss, theft or destruction thereof).

The undersigned represents and warrants that all offers and sales by the 
undersigned of the shares of Common Shares issuable to the undersigned upon 
conversion of the 7 1/4% Preferred Shares shall be made pursuant to 
registration of the Common Shares under the Securities Act of 1933 (the 
"Act"), or pursuant to any exemption from registration under the Act.

Any Holder, upon the exercise of its conversion rights in accordance with the 
terms of the Articles and the 7 1/4% Preferred Shares, agrees to be bound by 
the terms of the Registration Rights Agreement.

Capitalized terms used but not defined herein shall have the meanings 
ascribed thereto in or pursuant to the Articles.

                         Date of Conversion:

                         Applicable Conversion Price:

                         Number of shares of Convertible 
                         Preferred Shares to be Converted:

                         Number of shares of
                         Common Shares to be Issued:

                         Signature:

                                      32



<PAGE>


                         Name:

                         Address:**

                         Fax No.:

*The corporation is not required to issue shares of Common Shares until the 
original 7 1/4% Preferred Shares Certificate(s) (or evidence of loss, theft 
or destruction thereof) to be converted are received by the corporation or 
its Transfer Agent. The corporation shall issue and deliver shares of Common 
Shares to an overnight courier not later than three business days following 
receipt of the original 7 1/4% Preferred Shares Certificate(s) to be 
converted.

**Address where shares of Common Shares and any other payments or 
certificates shall be sent by the corporation.

                                     ANNEX 2

     12. Of the 4,000,000 Voting Preferred Shares of the corporation, 155,250 
shall constitute a series of Voting Preferred Shares designated as 6 3/4% 
Cumulative Convertible Preferred Shares (the "6 3/4% Preferred Shares") with 
a Liquidation Preference of $1,000 per share (the "Liquidation Preference"), 
and have, subject and in addition to the other provisions of this Article 
Fourth, the following relative rights, preferences and limitations:

     (1) ISSUE DATE. The date the 6 3/4% Preferred Shares are first issued is 
referred to as the "Issue Date".

     (2) RANK. The 6 3/4% Preferred Shares will, rank (i) PARI PASSU in right 
of payment with the corporation's 7 1/4% Junior Convertible Preferred Shares 
Due 2007 (the "7 1/4% Preferred Shares") and each other class of Capital 
Shares or series of Preferred Shares established hereafter by the Board of 
Directors, the terms of which expressly provide that such class or series 
ranks on a parity with the 6 3/4% Preferred Shares as to dividend rights and 
rights on liquidation, dissolution and winding-up of the corporation 
(collectively referred to as "Parity Securities"); (ii) junior in right of 
payment to any Senior Securities (as defined) as to dividends and upon 
liquidation, dissolution or winding-up of the corporation and (iii) senior in 
right of payment as to dividend rights and upon liquidation, dissolution or 
winding-up of the corporation to the Common Shares or any Capital Shares of 
the corporation that expressly provide that they will rank junior to the 
6 3/4% Preferred Shares as to dividend rights or rights on liquidation, 
winding-up and dissolution of the corporation (collectively referred to as 
"Junior Securities"). The corporation may not authorize, create (by way of 
reclassification or otherwise) or issue 

                                      33

<PAGE>

any class or series of Capital Shares of the corporation ranking senior in 
right of payment as to dividend rights or upon liquidation, dissolution or 
winding-up of the corporation to the 6 3/4% Preferred Shares ("Senior 
Securities") or any obligation or security convertible or exchangeable into, 
or evidencing a right to purchase, shares of any class or series of Senior 
Securities without the affirmative vote or consent of the Holders of at least 
66 2/3% of the outstanding 6 3/4% Preferred Shares.

      (3) DIVIDENDS. The Holders of the 6 3/4% Preferred Shares will be 
entitled to receive, when, as and if dividends are declared by the Board of 
Directors out of funds of the corporation legally available therefor, 
cumulative preferential dividends from the Issue Date of the 6 3/4% Preferred 
Shares accruing at the rate of $67.50 per 6 3/4% Preferred Share per annum, 
or $16.875 per 6 3/4% Preferred Share per quarter, payable quarterly in 
arrears on January 1, April 1, July 1, and October 1 of each year or, if any 
such date is not a Business Day, on the next succeeding Business Day (each, a 
"Dividend Payment Date"), to the Holders of record as of the next preceding 
December 15, March 15, June 15, and September 15 (each, a "Record Date"). In 
addition to the dividends described in the preceding sentence, a Holder of 
any outstanding 6 3/4% Preferred Shares will be entitled to a dividend in an 
additional amount (the "Supplemental Dividend"), to the extent not previously 
paid on the 6 3/4% Preferred Shares, equal to all accumulated and unpaid 
dividends on the shares of IXC 6 3/4% Preferred Stock (as defined) 
outstanding on the effective date of the merger of Ivory Merger Inc., a 
wholly-owned subsidiary of the corporation ("Ivory Merger"), with and into 
IXC Communications, Inc. ("IXC"), pursuant to which outstanding shares of IXC 
6 3/4% Preferred Stock were converted into the right to receive 6 3/4% 
Preferred Shares. The Supplemental Dividend, until paid by the corporation, 
shall for all purposes of this 6 3/4% Article Fourth be deemed included with 
the accrued and unpaid dividends on the 6 3/4% Preferred Shares. Accrued but 
unpaid dividends, if any, may be paid on such dates as determined by the 
Board of Directors. Dividends will be payable in cash except as set forth 
below. Dividends payable on the 6 3/4% Preferred Shares will be computed on 
the basis of a 360-day year of twelve 30-day months and will be deemed to 
accrue on a daily basis. Dividends (other than the Supplemental Dividend) 
may, at the option of the corporation, be paid in Common Shares if, and only 
if, the documents governing the corporation's indebtedness that exist on the 
Issue Date then prohibit the payment of such dividends in cash. If the 
corporation elects to pay dividends in Common Shares, the number of Common 
Shares to be distributed will be calculated by dividing the amount of such 
dividend otherwise payable in cash by 95% of the arithmetic average of the 
Closing Price (as defined) for the five Trading Days (as defined) preceding 
the Dividend Payment Date. The 6 3/4% Preferred Shares will not be redeemable 
unless all dividends (including the Supplemental Dividend) accrued through 
such redemption date shall have been paid in full. Notwithstanding anything 
to the contrary herein contained, the corporation shall not be required to 
declare or pay a dividend if another person (including, without limitation, 
any of its subsidiaries) pays an amount to the Holders equal to the amount of 
such dividend on behalf of the corporation and, in such event, the dividend 
will be deemed paid for all purposes.

Dividends on the 6 3/4% Preferred Shares (including the Supplemental 
Dividend) will accrue whether or not the corporation has earnings or profits, 
whether or not there are 

                                      34

<PAGE>

funds legally available for the payment of such dividends and whether or not 
dividends are declared. Dividends will accumulate to the extent they are not 
paid on the Dividend Payment Date for the quarter to which they relate. 
Accumulated unpaid dividends (including the Supplemental Dividend) will 
accrue and cumulate at a rate of 6.75% per annum. The corporation will take 
all reasonable actions required or permitted under Ohio law to permit the 
payment of dividends on the 6 3/4% Preferred Shares.

No dividend whatsoever shall be declared or paid upon, or any sum set apart 
for the payment of dividends upon, any outstanding 6 3/4% Preferred Share 
with respect to any dividend period unless all dividends for all preceding 
dividend periods (including the Supplemental Dividend) have been declared and 
paid upon, or declared and a sufficient sum set apart for the payment of such 
dividend upon, all outstanding 6 3/4% Preferred Shares. Unless full 
cumulative dividends on all outstanding 6 3/4% Preferred Shares (including 
the Supplemental Dividend) due for all past dividend periods shall have been 
declared and paid, or declared and a sufficient sum for the payment thereof 
set apart, then: (i) no dividend (other than a dividend payable solely in 
shares of Junior Securities or options, warrants or rights to purchase Junior 
Securities) shall be declared or paid upon, or any sum set apart for the 
payment of dividends upon, any shares of Junior Securities; (ii) no other 
distribution shall be declared or made upon, or any sum set apart for the 
payment of any distribution upon, any shares of Junior Securities; (iii) no 
shares of Junior Securities shall be purchased, redeemed or otherwise 
acquired or retired for value (excluding an exchange for shares of other 
Junior Securities or a purchase, redemption or other acquisition from the 
proceeds of a substantially concurrent sale of Junior Securities) by the 
corporation or any of its Subsidiaries; and (iv) no monies shall be paid into 
or set apart or made available for a sinking or other like fund for the 
purchase, redemption or other acquisition or retirement for value of any 
shares of Junior Securities by the corporation or any of its Subsidiaries. 
Holders of the 6 3/4% Preferred Shares will not be entitled to any dividends, 
whether payable in cash, property or stock, in excess of the full cumulative 
dividends as herein described.

      (4) LIQUIDATION PREFERENCE. Upon any voluntary or involuntary 
liquidation, dissolution or winding-up of the affairs of the corporation 
after payment in full of the Liquidation Preference (and any accrued and 
unpaid dividends) on any Senior Securities, each Holder of 6 3/4% Preferred 
Shares shall be entitled, on an equal basis with the holders of the 7 1/4% 
Preferred Shares and any other outstanding Parity Securities, to payment out 
of the assets of the corporation available for distribution of the 
Liquidation Preference per 6 3/4% Preferred Share held by such Holder, plus 
an amount equal to the accrued and unpaid dividends (if any), Liquidated 
Damages (as defined) (if any) and the Supplemental Dividend (if any) on the 
6 3/4% Preferred Shares to the date fixed for liquidation, dissolution, or 
winding-up of the corporation before any distribution is made on any Junior 
Securities, including, without limitation, Common Shares of the corporation. 
After payment in full of the Liquidation Preference and an amount equal to 
the accrued and unpaid dividends, Liquidated Damages (if any) and the 
Supplemental Dividend (if any) to which Holders of the 6 3/4% Preferred 
Shares are entitled, such Holders will not be entitled to any further 
participation in any distribution of assets of the corporation. However, 
neither the voluntary sale, conveyance, exchange or transfer (for cash, 
shares of stock, securities or other consideration) of all or substantially 
all of the 

                                      35

<PAGE>

property or assets of the corporation nor the consolidation or merger of the 
corporation with or into one or more corporations will be deemed to be a 
voluntary or involuntary liquidation, dissolution or winding-up of the 
corporation, unless such sale, conveyance, exchange, transfer, consolidation 
or merger shall be in connection with a liquidation, dissolution or 
winding-up of the affairs of the corporation or reduction or decrease in 
capital stock.

     (5) REDEMPTION. The 6 3/4% Preferred Shares may not be redeemed at the 
option of the corporation on or prior to April 5, 2000. After April 5, 2000 
the corporation may redeem the 6 3/4% Preferred Shares (subject to the legal 
availability of funds therefor). Notwithstanding the foregoing, prior to 
April 1, 2002, the corporation shall only have the option to redeem the 6 3/4%
Preferred Shares if, during the period of 30 consecutive Trading Days ending 
on the Trading Day immediately preceding the date that the notice of 
redemption is mailed to Holders, the Closing Price for the Common Shares 
exceeded $75 divided by the Conversion Rate effective on the date of such 
notice for at least 20 of such Trading Days. Subject to the immediately 
preceding sentence, the 6 3/4% Preferred Shares may be redeemed, in whole or 
in part, at the option of the corporation after April 5, 2000, at the 
redemption prices specified below (expressed as percentages of the 
Liquidation Preference thereof), in each case, together with an amount equal 
to accrued and unpaid dividends on the 6 3/4% Preferred Shares (excluding any 
declared dividends for which the Record Date has passed), Liquidated Damages 
(if any) and the Supplemental Dividend (if any) to the date of redemption, 
upon not less than 15 nor more than 60 days' prior written notice, if 
redeemed during the period commencing on April 5, 2000 to March 31, 2001 at 
105.40%, and thereafter during the 12-month period commencing on April 1 of 
each of the years set forth below:


<TABLE>
<CAPTION>

YEAR                                              REDEMPTION RATE
<S>                                               <C>
2001..................................................104.73%
2002..................................................104.05%
2003..................................................103.38%
2004..................................................102.70%
2005..................................................102.03%
2006..................................................101.35%
2007..................................................100.68%
2008 and thereafter...................................100.00%
</TABLE>


Except as provided in the preceding sentence, no payment or allowance will be 
made for accrued dividends on any of the 6 3/4% Preferred Shares called for 
redemption.

On and after any date fixed for redemption (the "Redemption Date"), provided 
that the corporation has made available at the office of the Transfer Agent a 
sufficient amount of cash to effect the redemption, dividends will cease to 
accrue on the 6 3/4% Preferred Shares called for redemption (except that, in 
the case of a Redemption Date after a dividend payment Record Date and prior 
to the related Dividend Payment Date, Holders of the 6 3/4% Preferred Shares 
on the dividend payment Record Date will be entitled on such Dividend Payment 
Date to receive the dividend payable on such shares), such shares shall no 
longer be deemed to be outstanding and all rights of the Holders of such 
shares 

                                      36

<PAGE>

as Holders of 6 3/4% Preferred Shares shall cease except the right to receive 
the cash deliverable upon such redemption, without interest from the 
Redemption Date.

In the event of a redemption of only a portion of the 6 3/4% Preferred Shares 
then outstanding, the corporation shall effect such redemption on a pro rata 
basis, except that the corporation may redeem all of the shares held by 
Holders of fewer than 100 shares (or all of the shares held by Holders who 
would hold less than 100 shares as a result of such redemption), as may be 
determined by the corporation.

With respect to a redemption pursuant hereto, the corporation will send a 
written notice of redemption by first class mail to each Holder of record of 
the 6 3/4% Preferred Shares, not fewer than 15 days nor more than 60 days 
prior to the Redemption Date at its registered address (the "Redemption 
Notice"); PROVIDED, HOWEVER, that no failure to give such notice nor any 
deficiency therein shall affect the validity of the procedure for the 
redemption of the 6 3/4% Preferred Shares to be redeemed except as to the 
Holder or Holders to whom the corporation has failed to give said notice or 
except as to the Holder or Holders whose notice was defective. The Redemption 
Notice shall state:

a. the redemption price;

b. whether all or less than all the outstanding 6 3/4% Preferred Shares are 
to be redeemed and the total number of 6 3/4% Preferred Shares being redeemed;

c. the Redemption Date;

d. that the Holder is to surrender to the corporation, in the manner, at the 
place or places and at the price designated, his certificate or certificates 
representing the 6 3/4% Preferred Shares to be redeemed; and

e. that dividends on the 6 3/4% Preferred Shares to be redeemed shall cease 
to accumulate on such Redemption Date unless the corporation defaults in the 
payment of the redemption price.

Each Holder of the 6 3/4% Preferred Shares shall surrender the certificate or 
certificates representing such 6 3/4% Preferred Shares to the corporation, 
duly endorsed (or otherwise in proper form for transfer, as determined by the 
corporation), in the manner and at the place designated in the Redemption 
Notice, and on the Redemption Date the full redemption price for such shares 
shall be payable in cash to the person whose name appears on such certificate 
or certificates as the owner thereof, and each surrendered certificate shall 
be canceled and retired. In the event that less than all of the shares 
represented by any such certificate are redeemed, a new certificate shall be 
issued representing the unredeemed shares.

      (6) VOTING RIGHTS. Each Holder of record of the 6 3/4% Preferred 
Shares, except as required under Ohio law or as provided in paragraph (6) and 
in paragraphs (2), (8) and (13) hereof, will be entitled to one vote for each 
6 3/4% Preferred Share held by such 

                                      37

<PAGE>

Holder on any matter required or permitted to be voted upon by the 
shareholders of the corporation.

Upon the accumulation of accrued and unpaid dividends on the outstanding 
6 3/4% Preferred Shares in an amount equal to six full quarterly dividends 
(whether or not consecutive) (together with any event with a similar effect 
pursuant to the terms of any other series of Preferred Shares upon which like 
rights have been conferred, a "Voting Rights Triggering Event"), the number 
of members of the corporation's Board of Directors will be immediately and 
automatically increased by two (unless previously increased pursuant to the 
terms of any other series of Preferred Shares upon which like rights have 
been conferred), and the Holders of a majority of the outstanding 6 3/4% 
Preferred Shares, voting together as a class (pro rata, based on Liquidation 
Preference) with the holders of any other series of Preferred Shares upon 
which like rights have been conferred and are exercisable, will be entitled 
to elect two members to the Board of Directors of the corporation. Voting 
rights arising as a result of a Voting Rights Triggering Event will continue 
until such time as all dividends in arrears on the 6 3/4% Preferred Shares 
are paid in full. Notwithstanding the foregoing, however, such voting rights 
to elect directors will expire when the number of outstanding 6 3/4% 
Preferred Shares is reduced to 13,500 or less.

In the event such voting rights expire or are no longer exercisable because 
dividends in arrears have been paid in full, the term of any directors 
elected pursuant to the provisions of this paragraph 6 above shall terminate 
forthwith and the number of directors constituting the Board of Directors 
shall be immediately and automatically decreased by two (until the occurrence 
of any subsequent Voting Rights Triggering Event). At any time after voting 
power to elect directors shall have become vested and be continuing in 
Holders of the 6 3/4% Preferred Shares (together with the holders of any 
other series of Preferred Shares upon which like rights have been conferred 
and are exercisable) pursuant to this paragraph 6, or if vacancies shall 
exist in the offices of directors elected by such holders, a proper officer 
of the corporation may, and upon the written request of Holders of record of 
at least 25% of the outstanding 6 3/4% Preferred Shares or holders of 25% of 
outstanding shares of any other series of Preferred Shares upon which like 
rights have been conferred and are exercisable addressed to the Secretary of 
the corporation shall call a special meeting of Holders of the 6 3/4% 
Preferred Shares and the holders of such other series of Preferred Shares for 
the purpose of electing the directors which such holders are entitled to 
elect pursuant to the terms hereof; PROVIDED, HOWEVER, that no such special 
meeting shall be called if the next annual meeting of shareholders of the 
corporation is to be held within 60 days after the voting power to elect 
directors shall have become vested (or such vacancies arise, as the case may 
be), in which case such meeting shall be deemed to have been called for such 
next annual meeting. If such meeting shall not be called, pursuant to the 
provision of the immediately preceding sentence, by a proper officer of the 
corporation within 20 days after personal service to the Secretary of the 
corporation at its principal executive offices, then Holders of record of at 
least 25% of the outstanding 6 3/4% Preferred Shares or holders of 25% of 
shares of any other series of Preferred Shares upon which like rights have 
been conferred and are exercisable may designate in writing one of their 
members to call such meeting at the expense of the corporation, and such 
meeting may be called by the person so designated 

                                      38

<PAGE>

upon the notice required for the annual meetings of shareholders of the 
corporation and shall be held at the place for holding the annual meetings of 
shareholders. Any Holder of the 6 3/4% Preferred Shares or such other series 
of Preferred Shares so designated shall have, and the corporation shall 
provide, access to the lists of Holders of the 6 3/4% Preferred Shares and 
the holders of such other series of Preferred Shares for any such meeting of 
the holders thereof to be called pursuant to the provisions hereof. If no 
special meeting of Holders of the 6 3/4% Preferred Shares and the holders of 
such other series of Preferred Shares is called as provided in this paragraph 
6, then such meeting shall be deemed to have been called for the next meeting 
of shareholders of the corporation.

At any meeting held for the purposes of electing directors at which Holders 
of the 6 3/4% Preferred Shares (together with the holders of any other series 
of Preferred Shares upon which like rights have been conferred and are 
exercisable) shall have the right, voting together as a separate class, to 
elect directors as aforesaid, the presence in person or by proxy of Holders 
of at least a majority in voting power of the outstanding 6 3/4% Preferred 
Shares (and such other series of Preferred Shares) shall be required to 
constitute a quorum thereof.

Any vacancy occurring in the office of a director elected by Holders of the 
6 3/4% Preferred Shares (and such other series of Preferred Shares) may be 
filled by the remaining director elected by Holders of the 6 3/4% Preferred 
Shares (and such other series of Preferred Shares) unless and until such 
vacancy shall be filled by Holders of the 6 3/4% Preferred Shares (and such 
other series of Preferred Shares).

So long as any 6 3/4% Preferred Shares are outstanding, the corporation will 
not amend this Article Fourth so as to affect adversely the specified rights, 
preferences, privileges or voting rights of Holders of the 6 3/4% Preferred 
Shares or to authorize the issuance of any additional 6 3/4% Preferred Shares 
without the affirmative vote of Holders of at least two-thirds of the issued 
and outstanding 6 3/4% Preferred Shares, voting as one class, given in person 
or by proxy, either in writing or by resolution approved at an annual or 
special meeting.

Except as set forth above and otherwise required by applicable law, the 
creation, authorization or issuance of any shares of any Junior Securities, 
Parity Securities or Senior Securities, or the increase or decrease in the 
amount of authorized Capital Shares of any class, including Preferred Shares, 
shall not require the affirmative vote or consent of Holders of the 6 3/4% 
Preferred Shares and shall not be deemed to affect adversely the rights, 
preferences, privileges or voting rights of the 6 3/4% Preferred Shares.

In any case in which the Holders of the 6 3/4% Preferred Shares shall be 
entitled to vote pursuant hereto or pursuant to Ohio law, each Holder of the 
6 3/4% Preferred Shares entitled to vote with respect to such matters shall 
be entitled to one vote for each 6 3/4% Preferred Share held by such Holder.

     (7) CONVERSION RIGHTS. The 6 3/4% Preferred Shares will be convertible 
at the option of the Holder, into Common Shares at any time, unless 
previously redeemed or repurchased, at a conversion rate of 28.838 Common 
Shares per 6 3/4% Preferred Share 

                                      39

<PAGE>

(as adjusted pursuant to the provisions hereof, the "Conversion Rate") 
(subject to the adjustments described below). The right to convert a 6 3/4% 
Preferred Share called for redemption or delivered for repurchase will 
terminate at the close of business on the Redemption Date for such 6 3/4% 
Preferred Shares or at the time of the repurchase, as the case may be.

The right of conversion attaching to any 6 3/4% Preferred Share may be 
exercised by the Holder thereof by delivering the certificate for such share 
to be converted to the office of the Transfer Agent, or any agency or office 
of the corporation maintained for that purpose, accompanied by a duly signed 
and completed notice of conversion in form reasonably satisfactory to the 
Transfer Agent of the corporation, such as that which is set forth in Exhibit 
B hereto. The conversion date will be the date on which the share certificate 
and the duly signed and completed notice of conversion are so delivered. As 
promptly as practicable on or after the conversion date, the corporation will 
issue and deliver to the Transfer Agent a certificate or certificates for the 
number of full Common Shares issuable upon conversion, with any fractional 
shares rounded up to full shares or, at the corporation's option, payment in 
cash in lieu of any fraction of a share, based on the Closing Price of the 
Common Shares on the Trading Day preceding the conversion date. Such 
certificate or certificates will be delivered by the Transfer Agent to the 
appropriate Holder on a book-entry basis or by mailing certificates 
evidencing the additional shares to the Holders at their respective addresses 
set forth in the register of Holders maintained by the Transfer Agent. All 
Common Shares issuable upon conversion of the 6 3/4% Preferred Shares will be 
fully paid and nonassessable and will rank PARI PASSU with the other Common 
Shares outstanding from time to time. Any 6 3/4% Preferred Shares surrendered 
for conversion during the period from the close of business on any Record 
Date to the opening of business on the next succeeding Dividend Payment Date 
must be accompanied by payment of an amount equal to the dividends payable on 
such Dividend Payment Date on the 6 3/4% Preferred Shares being surrendered 
for conversion. No other payment or adjustment for dividends, or for any 
dividends in respect of Common Shares, will be made upon conversion. The 
holders of Common Shares issued upon conversion will not be entitled to 
receive any dividends payable to holders of Common Shares as of any record 
time before the close of business on the conversion date.

The Conversion Rate shall be adjusted from time to time by the corporation as 
follows:

a. If the corporation shall hereafter pay a dividend or make a distribution 
in Common Shares to all holders of any outstanding class or series of Common 
Shares of the corporation, the Conversion Rate in effect at the opening of 
business on the date following the date fixed for the determination of 
shareholders entitled to receive such dividend or other distribution shall be 
increased by multiplying such Conversion Rate by a fraction of which the 
denominator shall be the number of Common Shares outstanding at the close of 
business on the Record Date (as defined below) fixed for such determination 
and the numerator shall be the sum of such number of outstanding shares and 
the total number of shares constituting such dividend or other distribution, 
such increase to become effective immediately after the opening of business 
on the day following the Record Date. If any dividend or distribution of the 
type described in this provision (a) is declared but not so paid or made, the 
Conversion Rate shall again be 

                                      40



<PAGE>

adjusted to the Conversion Rate which would then be in effect if such 
dividend or distribution had not been declared.

b. If the outstanding Common Shares shall be subdivided into a greater number 
of Common Shares, the Conversion Rate in effect at the opening of business on 
the day following the day upon which such subdivision becomes effective shall 
be proportionately increased and, conversely, if the outstanding Common 
Shares shall be combined into a smaller number of Common Shares, the 
Conversion Rate in effect at the opening of business on the day following the 
day upon which such combination becomes effective shall be proportionately 
reduced, such increase or reduction, as the case may be, to become effective 
immediately after the opening of business on the day following the day upon 
which such subdivision or combination becomes effective.

c. If the corporation shall offer or issue rights, options or warrants to all 
holders of its outstanding Common Shares entitling them to subscribe for or 
purchase Common Shares at a price per share less than the Current Market 
Price (as defined below) on the Record Date fixed for the determination of 
shareholders entitled to receive such rights or warrants, the Conversion Rate 
shall be adjusted so that the same shall equal the rate determined by 
multiplying the Conversion Rate in effect at the opening of business on the 
date after such Record Date by a fraction of which the denominator shall be 
the number of Common Shares outstanding at the close of business on the 
Record Date plus the number of Common Shares which the aggregate offering 
price of the total number of Common Shares subject to such rights, options or 
warrants would purchase at such Current Market Price and of which the 
numerator shall be the number of Common Shares outstanding at the close of 
business on the Record Date plus the total number of additional Common Shares 
subject to such rights, options or warrants for subscription or purchase. 
Such adjustment shall become effective immediately after the opening of 
business on the day following the Record Date fixed for determination of 
shareholders entitled to purchase or receive such rights or warrants. To the 
extent that Common Shares are not delivered pursuant to such rights, options 
or warrants, upon the expiration or termination of such rights or warrants 
the Conversion Rate shall again be adjusted to be the Conversion Rate which 
would then be in effect had the adjustments made upon the issuance of such 
rights or warrants been made on the basis of delivery of only the number of 
Common Shares actually delivered. If such rights or warrants are not so 
issued, the Conversion Rate shall again be adjusted to be the Conversion Rate 
which would then be in effect if such date fixed for the determination of 
shareholders entitled to receive such rights or warrants had not been fixed. 
In determining whether any rights or warrants entitle the holders to 
subscribe for or purchase Common Shares at less than such Current Market 
Price, and in determining the aggregate offering price of such Common Shares, 
there shall be taken into account any consideration received for such rights 
or warrants, with the value of such consideration, if other than cash, to be 
determined by the Board of Directors.

d. If the corporation shall, by dividend or otherwise, distribute to all 
holders of its Common Shares of any class of Capital Stock of the corporation 
(other than any dividends or distributions to which provision (a) of this 
paragraph applies) or evidences of its indebtedness, cash or other assets 
(including securities, but excluding any rights or 

                                      41

<PAGE>

warrants of a type referred to in paragraph (c) of this paragraph) (the 
foregoing hereinafter called the "Distributed Securities"), then, in each 
such case, the Conversion Rate shall be increased so that the same shall be 
equal to the rate determined by multiplying the Conversion Rate in effect 
immediately prior to the close of business on the Record Date (as defined 
below) with respect to such distribution by a fraction of which the 
denominator shall be the Current Market Price (determined as provided in 
provision g(i) of this paragraph) of the Common Shares on such date less the 
Fair Market Value (as defined below) on such date of the portion of the 
Distributed Securities so distributed applicable to one Common Share and the 
numerator shall be such Current Market Price, such increase to become 
effective immediately prior to the opening of business on the day following 
the Record Date; PROVIDED, HOWEVER, that, in the event the then Fair Market 
Value (as so determined) of the portion of the Distributed Securities so 
distributed applicable to one Common Share is equal to or greater than the 
Current Market Price on the Record Date, in lieu of the foregoing adjustment, 
adequate provision shall be made so that each Holder of the 6 3/4% Preferred 
Shares shall have the right to receive upon conversion of a 6 3/4% Preferred 
Share (or any portion thereof) the amount of Distributed Securities such 
Holder would have received had such Holder converted such 6 3/4% Preferred 
Share (or portion thereof) immediately prior to such Record Date. If such 
dividend or distribution is not so paid or made, the Conversion Rate shall 
again be adjusted to be the Conversion Rate which would then be in effect if 
such dividend or distribution had not been declared. If the Board of 
Directors determines the Fair Market Value of any distribution for purposes 
hereof by reference to the actual or when issued trading market for any 
securities comprising all or part of such distribution, it must in doing so 
consider the prices in such market over the same period used in computing the 
Current Market Price pursuant to provision g(i) of this paragraph to the 
extent possible.

Rights or warrants distributed by the corporation to all holders of Common 
Shares entitling the holders thereof to subscribe for or purchase shares of 
the corporation's Capital Stock (either initially or under certain 
circumstances), which rights or warrants, until the occurrence of a specified 
event or events ("Dilution Trigger Event"): (i) are deemed to be transferred 
with such Common Shares; (ii) are not exercisable; and (iii) are also issued 
in respect of future issuances of Common Shares, shall be deemed not to have 
been distributed for purposes of this provision (d) (and no adjustment to the 
Conversion Rate under this provision (d) shall be required) until the 
occurrence of the earliest Dilution Trigger Event, whereupon such rights and 
warrants shall be deemed to have been distributed and an appropriate 
adjustment to the Conversion Rate under this provision (d) shall be made. If 
any such rights or warrants, including any such existing rights or warrants 
distributed prior to the date hereof, are subject to subsequent events, upon 
the occurrence of each of which such rights or warrants shall become 
exercisable to purchase different securities, evidences of indebtedness or 
other assets, then the occurrence of each such event shall be deemed to be 
such date of issuance and record date with respect to new rights or warrants 
(and a termination or expiration of the existing rights or warrants without 
exercise by the holder thereof). In addition, in the event of any 
distribution (or deemed distribution) of rights or warrants, or any Dilution 
Trigger Event with respect thereto, that was counted for purposes of 
calculating a distribution amount for which an adjustment to the Conversion 
Rate under this provision (d) was made, (1) in 

                                      42

<PAGE>

the case of any such rights or warrants which shall all have been redeemed or 
repurchased without exercise by any holders thereof, the Conversion Rate 
shall be readjusted upon such final redemption or repurchase to give effect 
to such distribution or Dilution Trigger Event, as the case may be, as though 
it were a cash distribution, equal to the per share redemption or repurchase 
price received by a holder or holders of Common Shares with respect to such 
rights or warrants (assuming such holder had retained such rights or 
warrants), made to all holders of Common Shares as of the date of such 
redemption or repurchase, and (2) in the case of such rights or warrants 
which shall have expired or been terminated without exercise by any holders 
thereof, the Conversion Rate shall be readjusted as if such rights and 
warrants had not been issued.

Notwithstanding any other provision of this provision (d) to the contrary, 
Capital Stock, rights, warrants, evidences of indebtedness, other securities, 
cash or other assets (including, without limitation, any rights distributed 
pursuant to any shareholder rights plan) shall be deemed not to have been 
distributed for purposes of this provision (d) if the corporation makes 
proper provision so that each Holder of 6 3/4% Preferred Shares who converts 
a 6 3/4% Preferred Share (or any portion thereof) after the date fixed for 
determination of shareholders entitled to receive such distribution shall be 
entitled to receive upon such conversion, in addition to the Common Shares 
issuable upon such conversion, the amount and kind of such distributions that 
such Holder would have been entitled to receive if such Holder had, 
immediately prior to such determination date, converted such 6 3/4% Preferred 
Share into Common Shares.

For purposes of this provision (d), provision (a) and provision (b), any 
dividend or distribution to which this provision (d) is applicable that also 
includes Common Shares, or rights or warrants to subscribe for or purchase 
Common Shares to which provision (b) applies (or both), shall be deemed 
instead to be (1) a dividend or distribution of the evidences of 
indebtedness, cash, assets, shares of Capital Stock, rights or warrants other 
than (A) such Common Shares or (B) rights or warrants to which provision (b) 
applies (and any Conversion Rate increase required by this provision (d) with 
respect to such dividend or distribution shall then be made) immediately 
followed by (2) a dividend or distribution of such Common Shares or such 
rights or warrants (and any further Conversion Rate increase required by 
provisions (a) and (b) with respect to such dividend or distribution shall 
then be made), except that (1) the Record Date of such dividend or 
distribution shall be substituted as "the Record Date fixed for the 
determination of shareholders entitled to receive such dividend or other 
distribution", "Record Date fixed for such determination" and "Record Date" 
within the meaning of provision (a) and as "the Record Date fixed for the 
determination of shareholders entitled to receive such rights or warrants", 
"the date fixed for the determination of the shareholders entitled to receive 
such rights or warrants" and "such Record Date" within the meaning of 
provision (b), and (2) any Common Shares included in such dividend or 
distribution shall not be deemed "outstanding at the close of business on the 
date fixed for such determination" within the meaning of provision (a).

e. If the corporation shall, by dividend or otherwise, distribute to all 
holders of its Common Shares cash (excluding any cash that is part of a 
distribution referred to in provision (d)) in an aggregate amount that, 
combined together with (1) the aggregate 

                                      43

<PAGE>

amount of any other such distributions to all holders of its Common Shares 
made exclusively in cash within the 12 months preceding the date of payment 
of such distribution, and in respect of which no adjustment pursuant to this 
provision (e) has been made and (2) the aggregate of any cash plus the Fair 
Market Value (as determined by the Board of Directors, whose determination 
shall be conclusive and described in a resolution of the Board of Directors) 
of consideration payable in respect of any tender offer by the corporation or 
a Subsidiary of the corporation for all or any portion of the Common Shares 
concluded within the 12 months preceding the date of payment of such 
Distribution, and in respect of which no adjustment pursuant to provision (d) 
has been made, exceeds 10% of the product of the Current Market Price 
(determined as provided below) on the Record Date with respect to such 
distribution times the number of Common Shares outstanding on such date, 
then, and in each such case, immediately after the close of business on such 
date, the Conversion Rate shall be increased so that the same shall equal the 
price determined by multiplying the Conversion Rate in effect immediately 
prior to the close of business on such Record Date by a fraction (i) the 
denominator of which shall be equal to the Current Market Price on the Record 
Date less an amount equal to the quotient of (x) the excess of such combined 
amount over such 10% amount divided by (y) the number of Common Shares 
outstanding on the Record Date and (ii) the numerator of which shall be equal 
to the Current Market Price on such Record Date; PROVIDED, HOWEVER, that, if 
the portion of the cash so distributed applicable to one Common Share is 
equal to or greater than the Current Market Price of the Common Shares on the 
Record Date, in lieu of the foregoing adjustment, adequate provision shall be 
made so that each Holder of 6 3/4% Preferred Shares shall have the right to 
receive upon conversion of each 6 3/4% Preferred Share (or any portion 
thereof) the amount of cash such Holder would have received had such Holder 
converted such 6 3/4% Preferred Share (or portion thereof) immediately prior 
to such Record Date. If such dividend or distribution is not so paid or made, 
the Conversion Rate shall again be adjusted to be the Conversion Rate which 
would then be in effect if such dividend or distribution had not been 
declared.

f. If a tender or exchange offer made by the corporation or any of its 
Subsidiaries for all or any portion of Common Shares expires and such tender 
or exchange offer (as amended upon the expiration thereof) requires the 
payment to shareholders (based on the acceptance (up to any maximum specified 
in the terms of the tender offer) of Purchased Shares (as defined below)) of 
an aggregate consideration having a Fair Market Value that, combined together 
with (1) the aggregate of the cash plus the Fair Market Value, as of the 
expiration of such tender offer, of consideration payable in respect of any 
other tender offers, by the corporation or any of its subsidiaries for all or 
any portion of the Common Shares expiring within the 12 months preceding the 
expiration of such tender offer and in respect of which no adjustment 
pursuant to this provision (f) has been made and (2) the aggregate amount of 
any distributions to all holders of the Common Shares made exclusively in 
cash within 12 months preceding the expiration of such tender offer and in 
respect of which no adjustment pursuant to provision (e) has been made, 
exceeds 10% of the product of the Current Market Price as of the last time 
(the "Expiration Time") tenders could have been made pursuant to such tender 
offer (as it may be amended) times the number of Common Shares outstanding 
(including any tendered shares) at the Expiration Time, then, and in each 
such case, immediately prior to the 

                                      44

<PAGE>

opening of business on the day after the date of the Expiration Time, the 
Conversion Rate shall be adjusted so that the same shall equal the price 
determined by multiplying the Conversion Rate in effect immediately prior to 
the close of business on the date of the Expiration Time by a fraction of 
which the denominator shall be the number of Common Shares outstanding 
(including any tendered shares) at the Expiration Time multiplied by the 
Current Market Price of the Common Shares on the Trading Day next succeeding 
the Expiration Time and the numerator shall be the sum of (x) the Fair Market 
Value of the aggregate consideration payable to shareholders based on the 
acceptance (up to any maximum specified in the terms of the tender offer) of 
all shares validly tendered and not withdrawn as of the Expiration Time (the 
shares deemed so accepted, up to any such maximum, being referred to as the 
"Purchased Shares") and (y) the product of the number of Common Shares 
outstanding (less any Purchased Shares) at the Expiration Time and the 
Current Market Price of the Common Shares on the Trading Day next succeeding 
the Expiration Time, such reduction (if any) to become effective immediately 
prior to the opening of business on the day following the Expiration Time. If 
the corporation is obligated to purchase shares pursuant to any such tender 
offer, but the corporation is permanently prevented by applicable law from 
effecting any such purchases or all such purchases are rescinded, the 
Conversion Rate shall again be adjusted to be the Conversion Rate which would 
then be in effect if such tender offer had not been made. If the application 
of this provision (f) to any tender offer would result in a decrease in the 
Conversion Rate, no adjustment shall be made for such tender offer under this 
provision (f). The corporation may make voluntary increases in the Conversion 
Rate in addition to those required in the foregoing provisions, provided that 
each such increase is in effect for at least 20 calendar days.

In addition, in the event that any other transaction or event occurs as to 
which the foregoing Conversion Rate adjustment provisions are not strictly 
applicable but the failure to make any adjustment would adversely affect the 
conversion rights represented by the 6 3/4% Preferred Shares in accordance 
with the essential intent and principles of such provisions, then, in each 
such case, either (i) the corporation will appoint an investment banking firm 
of recognized national standing, or any other financial expert that does not 
(or whose directors, officers, employees, affiliates or shareholders do not) 
have a direct or material indirect financial interest in the corporation or 
any of its Subsidiaries, who has not been, and, at the time it is called upon 
to give independent financial advice to the corporation, is not (and none of 
its directors, officers, employees, affiliates or shareholders are) a 
promoter, director or officer of the corporation or any of its subsidiaries, 
which will give their opinion upon or (ii) the Board of Directors shall, in 
its sole discretion, determine consistent with the Board of Directors' 
fiduciary duties to the holders of the corporation's Common Shares, the 
adjustment, if any, on a basis consistent with the essential intent and 
principles established in the foregoing Conversion Rate adjustment 
provisions, necessary to preserve, without dilution, the conversion rights 
represented by the 6 3/4% Preferred Shares. Upon receipt of such opinion or 
determination, the corporation will promptly mail a copy thereof to the 
Holders of the 6 3/4% Preferred Shares and will, subject to the fiduciary 
duties of the Board of Directors, make the adjustments described therein.

                                      45

<PAGE>

The corporation will provide to Holders of the 6 3/4% Preferred Shares 
reasonable notice of any event that would result in an adjustment to the 
Conversion Rate pursuant to this section so as to permit the Holders to 
effect a conversion of the 6 3/4% Preferred Shares into Common Shares prior 
to the occurrence of such event.

g. For purposes of this paragraph, the following terms shall have the meaning 
indicated:

i. "Current Market Price" means the average of the daily closing prices per 
Common Shares for the 10 consecutive trading days immediately prior to the 
date in question.

ii. "Fair Market Value" shall mean the amount which a willing buyer would pay 
a willing seller in an arm's-length transaction, under usual and ordinary 
circumstances and after consideration of all available uses and purposes 
without any compulsion upon the seller to sell or the buyer to buy, as 
determined by the Board of Directors, whose determination shall be made in 
good faith and shall be conclusive and described in a resolution of the Board 
of Directors.

iii. "Record Date" shall mean, with respect to any dividend, distribution or 
other transaction or event in which the holders of Common Shares have the 
right to receive any cash, securities or other property or in which the 
Common Shares (or other applicable security) are exchanged for or converted 
into any combination of cash, securities or other property, the date fixed 
for determination of shareholders entitled to receive such cash, securities 
or other property (whether such date is fixed by the Board of Directors or by 
statute, contract or otherwise).

h. No adjustment in the Conversion Rate shall be required unless such 
adjustment would require an increase or decrease of at least 1% in such rate; 
PROVIDED, HOWEVER, that any adjustments which by reason of this paragraph are 
not required to be made shall be carried forward and taken into account in 
any subsequent adjustment. All calculations under this paragraph shall be 
made by the corporation and shall be made to the nearest cent or to the 
nearest one hundredth of a share, as the case may be. No adjustment need be 
made for a change in the par value or no par value of the Common Shares.

i. Whenever the Conversion Rate is adjusted as herein provided, the 
corporation shall promptly file with the Transfer Agent an Officers' 
Certificate setting forth the Conversion Rate after such adjustment and 
setting forth a brief statement of the facts requiring such adjustment. 
Promptly after delivery of such certificate, the corporation shall prepare a 
notice of such adjustment of the Conversion Rate setting forth the adjusted 
Conversion Rate and the date on which each adjustment becomes effective and 
shall mail such notice of such adjustment of the Conversion Rate to each 
Holder of the 6 3/4% Preferred Shares at such Holder's last address appearing 
on the register of Holders maintained for that purpose within 20 days of the 
effective date of such adjustment. Failure to deliver such notice shall not 
affect the legality or validity of any such adjustment.

j. In any case in which this paragraph provides that an adjustment shall 
become effective immediately after a Record Date for an event, the 
corporation may defer until the occurrence of such event issuing to the 
Holder of any 6 3/4% Preferred Shares converted 

                                      46

<PAGE>

after such Record Date and before the occurrence of such event the additional 
Common Shares issuable upon such conversion by reason of the adjustment 
required by such event over and above the Common Shares issuable upon such 
conversion before giving effect to such adjustment.

k. For purposes of this paragraph, the number of Common Shares at any time 
outstanding shall not include shares held in the treasury of the corporation 
but shall include shares issuable in respect of scrip certificates issued in 
lieu of fractions of Common Shares. The corporation shall not pay any 
dividend or make any distribution on Common Shares held in the treasury of 
the corporation.

(8) CERTAIN COVENANTS.

a. TRANSACTIONS WITH AFFILIATES

Without the affirmative vote or consent of the Holders of a majority of the 
outstanding 6 3/4% Preferred Shares, the corporation will not, and will not 
permit any of its Subsidiaries to, make any payment to, or sell, lease, 
transfer or otherwise dispose of any of its properties or assets to, or 
purchase any property or assets from, or enter into or make or amend any 
contract, agreement, understanding, loan, advance or guarantee with, or for 
the benefit of, any Affiliate (each of the foregoing, an "Affiliate 
Transaction"), unless (i) such Affiliate Transaction is on terms that are no 
less favorable to the corporation or the relevant Subsidiary than those that 
would have been obtained in a comparable transaction by the corporation or 
such Subsidiary with an unrelated Person and (ii) the corporation files in 
its minute books with respect to any Affiliate Transaction or series of 
related Affiliate Transactions involving aggregate consideration in excess of 
$1.0 million, a resolution of the Board of Directors set forth in an 
Officers' Certificate certifying that such Affiliate Transaction complies 
with clause (i) above and that such Affiliate Transaction has been approved 
by a majority of the members of the Board of Directors that are disinterested 
as to such Affiliate Transaction.

As used herein, "Affiliate" of any specified Person means any other Person 
directly or indirectly controlling or controlled by or under direct or 
indirect common control with such specified Person. For purposes of this 
definition, "control" (including, with correlative meanings, the terms 
"controlling," "controlled by" and "under common control with"), as used with 
respect to any Person, shall mean the possession, directly or indirectly, of 
the power to direct or cause the direction of the management or policies of 
such Person, whether through the ownership of voting securities, by agreement 
or otherwise; provided that beneficial ownership of 10% or more of the voting 
securities of a Person shall be deemed to be control.

The provisions of the foregoing paragraph shall not prohibit (i) any issuance 
of securities, or other payments, awards or grants in cash, securities or 
otherwise pursuant to, or the funding of, employment arrangements, stock 
options and stock ownership plans approved by the Board of Directors, (ii) 
the grant of stock options or similar rights to employees and directors of 
the corporation pursuant to plans approved by the Board of Directors, (iii) 
any employment or consulting arrangement or agreement entered into by the 

                                      47

<PAGE>

corporation or any of its Subsidiaries in the ordinary course of business and 
consistent with the past practice of the corporation or such Subsidiary, (iv) 
the payment of reasonable fees to directors of the corporation and its 
Subsidiaries who are not employees of the corporation or its Subsidiaries, 
(v) any Affiliate Transaction between the corporation and a Subsidiary 
thereof or between such Subsidiaries (for purposes of this paragraph, 
"Subsidiary" includes any entity deemed to be an Affiliate because the 
corporation or any of its Subsidiaries own securities in such entity or 
controls such entity), or (vi) transactions between IXC or any subsidiary 
thereof specifically contemplated by the PSINet Agreement dated as of July 
22, 1997 between a subsidiary of IXC and PSINet, as amended as of the date 
hereof.

b. PAYMENTS FOR CONSENT

Neither the corporation nor any of its Subsidiaries will, directly or 
indirectly, pay or cause to be paid any consideration, whether by way of 
dividend or other distribution, fee or otherwise, to any Holder of 6 3/4% 
Preferred Shares for or as an inducement to any consent, waiver or amendment 
of any of the terms or provisions of this Article Fourth or the 6 3/4% 
Preferred Shares unless such consideration is offered to be paid and is paid 
to all Holders of the 6 3/4% Preferred Shares that consent, waive or agree to 
amend in the time frame set forth in the solicitation documents relating to 
such consent, waiver or agreement.

c. REPORTS

Whether or not required by the rules and regulations of the SEC, so long as 
any 6 3/4% Preferred Shares are outstanding, the corporation will furnish to 
the Holders of the 6 3/4% Preferred Shares (i) all quarterly and annual 
financial information that would be required to be contained in a filing with 
the SEC on Forms 10-Q and 10-K if the corporation were required to file such 
Forms, including "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" and, with respect to the annual information only, 
a report thereon by the corporation's certified independent accountants and 
(ii) all information that would be required to be contained in a current 
report on Form 8-K if the corporation were required to file such reports. In 
the event the corporation has filed any such report with the SEC, it will not 
be obligated to separately furnish the report to any Holder unless and until 
such Holder requests a copy of the report. In addition, whether or not 
required by the rules and regulations of the SEC, the corporation will file a 
copy of all such information and reports with the SEC for public availability 
(unless the SEC will not accept such a filing) and make such information 
available to securities analysts and prospective investors upon request.

     (9) MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE CORPORATION. In the 
event that the corporation is party to any Fundamental Change or transaction 
(including, without limitation, a merger other than a merger that does not 
result in a reclassification, conversion, exchange or cancellation of Common 
Shares), consolidation, sale of all or substantially all of the assets of the 
corporation, recapitalization or reclassification of Common Shares (other 
than a change in par value, or from par value to no par value, or from no par 
value to par value or as a result of a 

                                      48

<PAGE>

subdivision or combination of Common Shares) or any compulsory share exchange 
(each of the foregoing, including any Fundamental Change, being referred to 
as a "Transaction"), the corporation will be obligated, subject to applicable 
provisions of state law, either to offer (a "Repurchase Offer") to purchase 
all of the 6 3/4% Preferred Shares on the date (the "Repurchase Date") that 
is 75 days after the date the corporation gives notice of the Transaction, at 
a price (the "Repurchase Price") equal to $1,000.00 per 6 3/4% Preferred Share,
together with an amount equal to accrued and unpaid dividends on the 6 3/4% 
Preferred Shares through the Repurchase Date or to adjust the Conversion Rate 
as described below. If a Repurchase Offer is made, the corporation shall 
deposit, on or prior to the Repurchase Date, with a paying agent an amount of 
money sufficient to pay the aggregate Repurchase Price of the 6 3/4% 
Preferred Shares which is to be paid on the Repurchase Date.

On or before the 15th day after the corporation knows or reasonably should 
know that a Transaction has occurred, the corporation will be required to 
mail to all Holders a notice of the occurrence of such Transaction and 
whether or not the documents governing the corporation's indebtedness permit 
at such time a Repurchase Offer, and, as applicable, either the new 
Conversion Rate (as adjusted at the option of the corporation) or the date by 
which the Repurchase Offer must be accepted, the Repurchase Price for the 
6 3/4% Preferred Shares and the procedures which the Holder must follow to 
accept the Repurchase Offer. To accept the Repurchase Offer, the Holder of a 
6 3/4% Preferred Share will be required to deliver, on or before the 10th day 
prior to the Repurchase Date, written notice to the corporation (or an agent 
designated by the corporation for such purpose) of Holder's acceptance, 
together with the certificates evidencing the 6 3/4% Preferred Shares with 
respect to which the offer is being accepted, duly endorsed for transfer.

In the event the corporation does not make a Repurchase Offer with respect to 
a Transaction and such Transaction results in Common Shares being converted 
into the right to receive, or being exchanged for, (i) in the case of any 
Transaction other than a Transaction involving a Common Shares Fundamental 
Change (as defined below) (and subject to funds being legally available for 
such purpose under applicable law at the time of such conversion), 
securities, cash or other property, each 6 3/4% Preferred Share shall 
thereafter be convertible into the kind and, in the case of a Transaction 
which does not involve a Fundamental Change (as defined below), amount of 
securities, cash and other property receivable upon the consummation of such 
Transaction by a holder of that number of Common Shares into which a 6 3/4% 
Preferred Share was convertible immediately prior to such Transaction or (ii) 
in the case of a Transaction involving a Common Shares Fundamental Change, 
each 6 3/4% Preferred Share shall thereafter be convertible (in the manner 
described therein) into common stock of the kind received by holders of 
Common Shares (but in each case after giving effect to any adjustment 
discussed below relating to a Fundamental Change if such Transaction 
constitutes a Fundamental Change), other than as required by Ohio law.

If any Fundamental Change occurs, then the Conversion Rate in effect will be 
adjusted immediately after such Fundamental Change as described below. In 
addition, in the event of a Common Shares Fundamental Change, each share of 
the 6 3/4% Preferred 

                                      49



<PAGE>

Shares shall be convertible solely into common stock of the kind received by 
holders of Common Shares as a result of such Common Shares Fundamental Change.

The Conversion Rate in the case of any Transaction involving a Fundamental 
Change will be adjusted immediately after such Fundamental Change:

(i) in the case of a Non-Stock Fundamental Change (as defined below), the 
Conversion Rate will thereupon become the higher of (A) the Conversion Rate 
in effect immediately prior to such Non-Stock Fundamental Change, but after 
giving effect to any other prior adjustments effected, and (B) a fraction, 
the numerator of which is (x) the redemption rate for one 6 3/4% Preferred 
Share if the redemption date were the date of such Non-Stock Fundamental 
Change (or, for the twelve-month period commencing April 1, 1999, 106.075%), 
multiplied by $1,000 plus (y) the amount of any then-accrued and unpaid 
dividends on one 6 3/4% Preferred Share, and the denominator of which is the 
greater of the Applicable Price or the then applicable Reference Market 
Price; and

 (ii) in the case of a Common Shares Fundamental Change, the Conversion Rate 
in effect immediately prior to such Common Shares Fundamental Change, but 
after giving effect to any other prior adjustments effected, will thereupon 
be adjusted by multiplying such Conversion Rate by a fraction of which the 
denominator will be the Purchaser Stock Price (as defined below) and the 
numerator will be the Applicable Price; PROVIDED, HOWEVER, that in the event 
of a Common Shares Fundamental Change in which (A) 100% of the value of the 
consideration received by a holder of Common Shares is common stock of the 
successor, acquiror, or other third party (and cash, if any, is paid only 
with respect to any fractional interests in such common stock resulting from 
such Common Shares Fundamental Change) and (B) all Common Shares will have 
been exchanged for, converted into, or acquired for common stock (and cash 
with respect to fractional interests) of the successor, acquiror, or other 
third party, the Conversion Rate in effect immediately prior to such Common 
Shares Fundamental Change will thereupon be adjusted by multiplying such 
Conversion Rate by the number of shares of common stock of the successor, 
acquirer, or other third party received by a holder of one Common Share as a 
result of such Common Shares Fundamental Change.

The term "Applicable Price" means (i) in the case of a Non-Stock Fundamental 
Change in which the holders of Common Shares receive only cash, the amount of 
cash received by the holder of one Common Share and (ii) in the event of any 
other Non-Stock Fundamental Change or any Common Shares Fundamental Change, 
the average of the Closing Price (as defined below) for Common Shares during 
the ten Trading Days prior to the record date for the determination of the 
holders of Common Shares entitled to receive such securities, cash, or other 
property in connection with such Non-Stock Fundamental Change or Common 
Shares Fundamental Change or, if there is no such record date, the date upon 
which the holders of Common Shares shall have the right to receive such 
securities, cash, or other property (such record date or distribution date 
being hereinafter referred to as the "Entitlement Date") in each case as 
adjusted in good faith by the corporation to appropriately reflect any of the 
events referred to above.

                                      50

<PAGE>

The term "Common Shares Fundamental Change" means any Fundamental Change in 
which more than 50% of the value (as determined in good faith by the Board of 
Directors of the corporation) of the consideration received by holders of 
Common Shares consists of common stock that for each of the ten consecutive 
Trading Days prior to the Entitlement Date has been admitted for listing or 
admitted for listing subject to notice of issuance on a national securities 
exchange or quoted on the Nasdaq National Market; provided, however, that a 
Fundamental Change shall not be a Common Shares Fundamental Change unless 
either (i) the corporation continues to exist after the occurrence of such 
Fundamental Change and the outstanding 6 3/4% Preferred Shares continue to 
exist as outstanding 6 3/4% Preferred Shares or (ii) not later than the 
occurrence of such Fundamental Change, the outstanding 6 3/4% Preferred 
Shares are converted into or exchanged for convertible Preferred Shares of an 
entity succeeding to the business of the corporation or a subsidiary thereof, 
which convertible Preferred Shares has powers, preferences, and relative, 
participating, optional, or other rights and qualifications, limitations, and 
restrictions, substantially similar to those of the 6 3/4% Preferred Shares.

The term "Fundamental Change" means the occurrence of any Transaction or 
event in connection with a plan pursuant to which all or substantially all 
Common Shares shall be exchanged for, converted into, acquired for, or 
constitute solely the right to receive securities, cash, or other property 
(whether by means of an exchange offer, liquidation, tender offer, 
consolidation, merger, combination, reclassification, recapitalization, or 
otherwise), provided, that, in the case of a plan involving more than one 
such Transaction or event, for purposes of adjustment of the Conversion Rate, 
such Fundamental Change shall be deemed to have occurred when substantially 
all Common Shares shall be exchanged for, converted into, or acquired for or 
constitute solely the right to receive securities, cash, or other property, 
but the adjustment shall be based upon the consideration that a holder of 
Common Shares received in such Transaction or event as a result of which more 
than 50% of Common Shares shall have been exchanged for, converted into, or 
acquired or constitute solely the right to receive securities, cash, or other 
property.

The term "Non-Stock Fundamental Change" means any Fundamental Change other 
than a Common Shares Fundamental Change.

The term "Purchaser Stock Price" means, with respect to any Common Shares 
Fundamental Change, the average of the Closing Prices for the common stock 
received in such Common Shares Fundamental Change for the ten consecutive 
Trading Days prior to and including the Entitlement Date, as adjusted in good 
faith by the corporation to appropriately reflect any of the events referred 
to above.

The term "Reference Market Price" shall initially mean $18.51 (which is equal 
to $38.79 divided by 2.096 (which is the exchange ratio for shares of common 
stock of IXC in the Agreement and Plan of Merger dated as of July 20, 1999 
among the corporation, Ivory Merger and IXC)), and in the event of any 
adjustment of the Conversion Rate other than as a result of a Non-Stock 
Fundamental Change, the Reference Market Price shall also be adjusted so that 
the ratio of the Reference Market Price to the Conversion Rate after 

                                      51

<PAGE>

giving effect to any such adjustment shall always be the same as the ratio of 
the initial Reference Market Price to the initial Conversion Rate.

In case (1) the corporation shall declare a dividend (or any other 
distribution) on its Common Shares payable otherwise than in cash out of its 
earned surplus, (2) the corporation shall authorize the granting to all 
holders of its Common Shares of rights or warrants to subscribe for or 
purchase any shares of Capital Stock of any class or of any other rights, (3) 
of any reclassification of the Common Shares of the corporation (other than a 
subdivision or combination of its outstanding Common Shares), (4) of any 
consolidation or merger to which the corporation is a party and for which 
approval of any shareholders of the corporation is required, (5) of the sale 
or transfer of all or substantially all the assets of the corporation, or (6) 
of the voluntary or involuntary dissolution, liquidation or winding-up of the 
corporation, then the corporation shall cause to be filed with the Transfer 
Agent and at each office or agency maintained for the purpose of conversion 
of the 6 3/4% Preferred Shares, and shall cause to be mailed to all Holders 
at their last addresses as they shall appear in the 6 3/4% Preferred Shares 
Register, at least 20 days (or 10 days in any case specified in clause (1) or 
(2) above) prior to the applicable date hereinafter specified, a notice 
stating (x) the date on which a record is to be taken for the purpose of such 
dividend, distribution, rights or warrants, or, if a record is not to be 
taken, the date as of which the holders of Common Shares of record to be 
entitled to such dividend, distribution, rights or warrants are to be 
determined or (y) the date on which such reclassification, consolidation, 
merger, sale, transfer, dissolution, liquidation or winding-up of the 
corporation is expected to become effective, and the date as of which it is 
expected that holders of Common Shares of record shall be entitled to 
exchange their Common Shares for securities, cash or other property 
deliverable upon such reclassification, consolidation, merger, sale, 
transfer, dissolution, liquidation or winding-up of the corporation. Failure 
to give the notice requested by this paragraph or any defect therein shall 
not affect the legality or validity of any dividend, distribution, right, 
warrant, reclassification, consolidation, merger, sale, transfer, 
dissolution, liquidation or winding-up of the corporation, or the vote upon 
any such action. The corporation shall at all times reserve and keep 
available, free from preemptive rights, out of its authorized but unissued 
Common Shares (or out of its authorized Common Shares held in the treasury of 
the corporation), for the purpose of effecting the conversion of the 6 3/4% 
Preferred Shares, the full number of Common Shares then issuable upon the 
conversion of all outstanding 6 3/4% Preferred Shares.

The corporation will pay any and all document, stamp or similar issue or 
transfer taxes that may be payable in respect of the issue or delivery of 
Common Shares on conversion of the 6 3/4% Preferred Shares pursuant hereto. 
The corporation shall not, however, be required to pay any tax which may be 
payable in respect of any transfer involved in the issue and delivery of 
Common Shares in a name other than that of the Holder of a 6 3/4% Preferred 
Share or 6 3/4% Preferred Shares to be converted, and no such issue or 
delivery shall be made unless and until the Person requesting such issue has 
paid to the corporation the amount of any such tax, or has established to the 
satisfaction of the corporation that such tax has been paid.

                                      52

<PAGE>

(10) REISSUANCE OF THE 6 3/4% PREFERRED SHARES. 6 3/4% Preferred Shares 
redeemed for or converted into Common Shares or that have been reacquired in 
any manner shall not be reissued as 6 3/4% Preferred Shares and shall (upon 
compliance with any applicable provisions of Ohio law) have the status of 
authorized and unissued Preferred Shares undesignated as to series and may be 
redesignated and reissued as part of any series of Preferred Shares (except 
as provided by Ohio law); PROVIDED, however, that so long as any 6 3/4% 
Preferred Shares are outstanding, any issuance of such shares must be in 
compliance with the terms hereof.

(11) BUSINESS DAY. If any payment, redemption or exchange shall be required 
by the terms hereof to be made on a day that is not a Business Day, such 
payment, redemption or exchange shall be made on the immediately succeeding 
Business Day.

(12) AMENDMENT, SUPPLEMENT AND WAIVER. Except as set forth in paragraph (6), 
the corporation may amend this Paragraph 12 to Article Fourth with the 
affirmative vote of the Holders of a majority of the outstanding 6 3/4% 
Preferred Shares (including votes obtained in connection with a tender offer 
or exchange offer for the 6 3/4% Preferred Shares) and, except as otherwise 
provided by applicable law, any past default or failure to comply with any 
provision of this Article Fourth may also be waived with the consent of such 
Holders. Notwithstanding the foregoing and except as set forth in paragraph 
(6), however, without the consent of each Holder affected, an amendment or 
waiver may not (with respect to any 6 3/4% Preferred Shares held by a 
non-consenting Holder): (i) alter the voting rights with respect to the 6 3/4%
 Preferred Shares or reduce the number of 6 3/4% Preferred Shares whose 
Holders must consent to an amendment, supplement or waiver, (ii) reduce the 
Liquidation Preference of the 6 3/4% Preferred Shares or adversely alter the 
provisions with respect to the redemption of the 6 3/4% Preferred Shares, 
(iii) reduce the rate of or change the time for payment of dividends on the 
6 3/4% Preferred Shares, (iv) waive a default in the payment of dividends 
(including the Supplemental Dividend) or Liquidated Damages on the 6 3/4% 
Preferred Shares, (v) make any 6 3/4% Preferred Share payable in money other 
than United States dollars, (vi) make any change in the provisions of 
Paragraph 12 to Article Fourth relating to waivers of the rights of Holders 
of the 6 3/4% Preferred Shares to receive either the Liquidation Preference, 
Liquidated Damages (if any), the Supplemental Dividend (if any) or dividends 
on the 6 3/4% Preferred Shares or (vii) make any change in the foregoing 
amendment and waiver provisions.

Notwithstanding the foregoing, without the consent of any Holder of the 
6 3/4% Preferred Shares, the corporation may (to the extent permitted by, and 
subject to the requirements of, Ohio law) amend or supplement this Paragraph 
12 to Article Fourth to cure any ambiguity, defect or inconsistency, to 
provide for uncertificated 6 3/4% Preferred Shares in addition to or in place 
of certificated 6 3/4% Preferred Shares, to make any change that would 
provide any additional rights or benefits to the Holders of the 6 3/4% 
Preferred Shares or to make any change that the Board of Directors 
determines, in good faith, is not materially adverse to Holders of the 6 3/4% 
Preferred Shares.

                                      53

<PAGE>

(13) FORM S-4 REGISTRATION STATEMENT; LIQUIDATED DAMAGES. Pursuant to the 
Agreement and Plan of Merger dated as of July 20, 1999, by and among the 
corporation, Ivory Merger and IXC. (the "Merger Agreement"), the corporation 
has filed with the SEC on September 13, 1999, and the SEC has declared 
effective, a Registration Statement on Form S-4 under the Securities Act (the 
"S-4 Registration Statement") with respect to the 6 3/4% Preferred Shares, 
Depositary Shares representing a one-twentieth interest in a 6 3/4% Preferred 
Share ("the Depositary Shares") and Common Shares issuable upon conversion 
thereof or paid as dividends thereon (collectively, the "S-4 Registered 
Securities"), thereby providing that a holder thereof will be able to sell or 
transfer such S-4 Registered Securities without filing a registration 
statement under the Securities Act.

The corporation will use its best efforts to maintain the effectiveness of 
the S-4 Registration Statement until all S-4 Registered Securities that are 
not held by affiliates of the corporation (A) may be resold without 
restriction under Rule 144 of the Securities Act or (B) have been sold 
pursuant to the S-4 Registration Statement (subject to the corporation's 
right to notify Holders that the Prospectus contained therein ceases to be 
accurate and complete as a result of material business developments for up to 
120 days during such three-year period, provided that (x) no single period 
may exceed 45 days and (y) such periods in the aggregate may not exceed 60 
days in any calendar year). If a holder of S-4 Restricted Securities that is 
not an affiliate of the corporation becomes unable to sell or transfer 
outstanding S-4 Registered Securities without filing a registration statement 
under the Securities Act (such event a "Registration Default"), then the 
corporation will pay Liquidated Damages to such holder with respect to the 
first 45-day period immediately following the occurrence of such Registration 
Default in an amount equal to $0.25 per year per Depositary Share ($5.00 per 
year per $ 1,000 in Liquidation Preference of the 6 3/4% Preferred Shares) 
held by such Holder. The amount of the Liquidated Damages will increase by an 
additional $2.50 per year per $1,000 in Liquidation Preference of the 6 3/4% 
Preferred Shares with respect to any subsequent period until any Registration 
Default has been cured. In addition, Holders of 6 3/4% Preferred Shares which 
are S-4 Registered Securities may receive Liquidated Damages with respect to 
Common Shares which are S-4 Registered Securities issued in lieu of paying 
dividends in cash. The Liquidated Damages amount per Common Share will be 
equal to the Liquidated Damages per 6 3/4% Preferred Share, divided by the 
Conversion Rate. All accrued Liquidated Damages will be paid by the 
corporation, to the extent permitted by applicable law, on each Dividend 
Payment Date and, to the extent the net dividend payable on such date may be 
paid through the issuance of Common Shares, may be paid in Common Shares 
(valued on the same basis as for the dividend then payable). Following the 
cure of all Registration Defaults, the accrual of Liquidated Damages will 
cease. Notwithstanding anything to the contrary herein contained, during any 
period, the corporation will not be required to pay Liquidated Damages with 
respect to more than one Registration Default.

(14) TRANSFER AND EXCHANGE. When a 6 3/4% Preferred Share certificate is 
presented to the Transfer Agent with a request to register the transfer of 
such 6 3/4% Preferred Share or to exchange 6 3/4% Preferred Shares for an 
equal number of 6 3/4% Preferred Shares of other authorized denominations, 
the Transfer Agent shall register the 

                                      54

<PAGE>

transfer or make the exchange as requested if its reasonable requirements for 
such transaction are met and such transfer or exchange is in compliance with 
applicable laws or regulations.

(15) CERTAIN DEFINITIONS. As used in this paragraph 12 of Article Fourth, the 
following terms shall have the following meanings (and (1) terms defined in 
the singular have comparable meanings when used in the plural and vice versa, 
(2) "including" means including without limitation, (3) "or" is not exclusive 
and (4) an accounting term not otherwise defined has the meaning assigned to 
it in accordance with United States generally accepted accounting principles 
as in effect on the Issue Date and all accounting calculations will be 
determined in accordance with such principles), unless the content otherwise 
requires:

"BOARD OF DIRECTORS" mean the Board of Directors of the corporation or any 
committee thereof duly authorized to act on behalf of the Board.

"BUSINESS DAY" means each day which is not a legal holiday.

"CAPITAL STOCK" of any person means any and all shares, interests, rights to 
purchase, warrants, options, participations or other equivalents of or 
interests in (however designated) equity of such person, including any 
Preferred Shares, but excluding any debt securities convertible into or 
exchangeable for such equity.

"CLOSING PRICE" means on any day the reported last bid price on such day, or 
in case no sale takes place on such day, the average of the reported closing 
bid and asked prices on the principal national securities exchange on which 
such stock is listed or admitted to trading, or if not listed or admitted to 
trading on any national securities exchange, the average of the closing bid 
and asked prices as furnished by any independent registered broker-dealer 
firm, selected by the corporation for that purpose, in each case adjusted for 
any stock split during the relevant period.

"DEFAULT" means any event which is, or after notice or passage of time or 
both would be, a Voting Rights Triggering Event.

"HOLDERS" means the registered holders from time to time of the 6 3/4% 
Preferred Shares and the Depositary Shares.

"LIQUIDATED DAMAGES" means, with respect to any 6 3/4% Preferred Share, the 
additional amounts payable pursuant to paragraph 13 hereof.

"OFFICERS' CERTIFICATE" means a certificate signed by two officers of the 
corporation.

"PERSON" means any individual, corporation, partnership, joint venture, 
limited liability company, association, joint-stock company, trust, 
unincorporated organization, government or any agency or political 
subdivision thereof or any other entity.

                                      55

<PAGE>

"SEC" means the Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SUBSIDIARY" means any corporation, association, partnership, limited 
liability company or other business entity of which more than 50% of the 
total voting power of shares of Capital Stock or other interests entitled 
(without regard to the occurrence of any contingency) to vote in the election 
of directors, managers or trustees thereof is at the time owned or 
controlled, directly or indirectly, by the corporation, the corporation and 
one or more Subsidiaries or one or more Subsidiaries and any partnership the 
sole general partner or the managing partner of which the corporation or any 
Subsidiary or the only general partners of which are the corporation and one 
or more Subsidiaries or one or more Subsidiaries.

"TRADING DAY" means, in respect of any securities exchange or securities 
market, each Monday, Tuesday, Wednesday, Thursday and Friday, other than any 
day on which securities are not traded on the applicable securities exchange 
or in the applicable securities market.

"TRANSFER AGENT" means the transfer agent for the 6 3/4% Preferred Shares 
appointed by the corporation.

                                      56



<PAGE>

                                                                    EXHIBIT A

                       FORM OF THE 6 3/4 PREFERRED SHARES

                                FACE OF SECURITY

Certificate Number                                            Number of Shares
                                               of Convertible Preferred Shares
[    ]                                                                    [  ]
                                                              CUSIP NO.: [   ]

                          6 3/4% Cumulative Convertible
               (par value $0.0 1) (liquidation preference $ 1,000
                      per share of 6 3/4% Preferred Shares
                                       of
                              Cincinnati Bell Inc.

                  Cincinnati Bell Inc., an Ohio corporation (the 
"corporation"), hereby certifies that [ ] (the "Holder") is the registered 
owner of fully paid and non-assessable preferred securities of the 
corporation designated the 6 3/4% Cumulative Convertible Preferred Shares 
(without par value) (liquidation preference $1,000 per share of the 6 3/4% 
Preferred Shares) (the "6 3/4% Preferred Shares"). The shares of the 6 3/4% 
Preferred Shares are transferable on the books and records of the Registrar, 
in person or by a duly authorized attorney, upon surrender of this 
certificate duly endorsed and in proper form for transfer. The designation, 
rights, privileges, restrictions, preferences and other terms and provisions 
of the 6 3/4% Preferred Shares represented hereby are issued and shall in all 
respects be subject to the provisions of the Amended Articles of 
Incorporation of the corporation, as the same may be amended from time to 
time (the "Articles"). Capitalized terms used herein but not defined shall 
have the meaning given them in the Articles. The corporation will provide a 
copy of the Articles to a Holder without charge upon written request to the 
corporation at its principal place of business.

                  Reference is hereby made to select provisions of the 6 3/4% 
Preferred Shares set forth on the reverse hereof, and to the Articles, which 
select provisions and the Articles shall for all purposes have the same 
effect as if set forth at this place.

                  Upon receipt of this certificate, the Holder is bound by 
the Articles and is entitled to the benefits thereunder.

                                      1

<PAGE>

                  Unless the Transfer Agent's Certificate of Authentication 
hereon has been properly executed, these shares of the 6 3/4% Preferred 
Shares shall not be entitled to any benefit under the Articles or be valid or 
obligatory for any purpose.

                  IN WITNESS WHEREOF, the corporation has executed this 
certificate this [ ] day of [ ], [ ].

                                        CINCINNATI BELL INC.

                                        By:
                                           Name:
                                           Title:

[Seal]

                                        By:
                                           Name:
                                           Title:

                                       2

<PAGE>

                 TRANSFER AGENT'S CERTIFICATE OF AUTHENTICATION

                           This is one of the 6 3/4% Preferred Shares 
referred to in the within mentioned Articles.

Dated:  [     ], [    ]

                                       [THE FIFTH THIRD BANK]

                                       as Transfer Agent,

                                       By:
                                                  Authorized Signatory

                                      3

<PAGE>

                               REVERSE OF SECURITY

                  Dividends on each share of the 6 3/4% Preferred Shares 
shall be payable at a rate per annum set forth in the face hereof or as 
provided in the Articles.

                  The shares of the 6 3/4% Preferred Shares shall be 
redeemable as provided in the Articles. The shares of the 6 3/4% Preferred 
Shares shall be convertible into the corporation's Common Shares in the 
manner and according to the terms set forth in the Articles.

                  As required under Ohio law, the corporation shall furnish 
to any Holder upon request and without charge, a full summary statement of 
the designations, voting rights preferences, limitations and special rights 
of the shares of each class or series authorized to be issued by the 
corporation so far as they have been fixed and determined and the authority 
of the Board of Directors to fix and determine the designations, voting 
rights, preferences, limitations and special rights of the class and series 
of shares of the corporation.

                                      4

<PAGE>

                                                                    EXHIBIT B

                              NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to Convert the Convertible Preferred Shares)

The undersigned hereby irrevocably elects to convert (the "Conversion") 
shares of the 6 3/4% Cumulative Convertible Preferred Shares (the "6 3/4% 
Preferred Shares"), represented by stock certificate No(s).--(the "6 3/4% 
Preferred Share Certificates") into shares of common stock ("Common Shares") 
of Cincinnati Bell Inc. (the "corporation") according to the conditions of 
the Amended Articles of Incorporation of the corporation (the "Articles"), as 
of the date written below. If shares are to be issued in the name of a person 
other than the undersigned, the undersigned will pay all transfer taxes 
payable with respect thereto and is delivering herewith such certificates.* 
No fee will be charged to the holder for any conversion, except for transfer 
taxes, if any. A copy of each 6 3/4% Preferred Share Certificate is attached 
hereto (or evidence of loss, theft or destruction thereof).

The undersigned represents and warrants that all offers and sales by the 
undersigned of the shares of Common Shares issuable to the undersigned upon 
conversion of the 6 3/4% Preferred Shares shall be made pursuant to 
registration of the Common Shares under the Securities Act of 1933 (the 
"Act"), or pursuant to any exemption from registration under the Act.

Any holder, upon the exercise of its conversion rights in accordance with the 
terms of the Article Fourth and the 6 3/4% Preferred Shares, agrees to be 
bound by the terms of the Registration Rights Agreement.

                                      5

<PAGE>

Capitalized terms used but not defined herein shall have the meanings 
ascribed thereto in or pursuant to the Articles.

                    Date of Conversion:

                    Applicable Conversion Rate:

                    Number of shares of Convertible 
                    Preferred Shares to be Converted:

                    Number of shares of Common Shares to be Issued:

                    Signature:

                    Name:

                    Address:**

                    Fax No.:

*  The corporation is not required to issue shares of Common Shares until the 
   original 6 3/4% Preferred Share Certificate(s) (or evidence of loss, theft 
   or destruction thereof) to be converted are received by the corporation or 
   its Transfer Agent. The corporation shall issue and deliver shares of 
   Common Shares to an overnight courier not later than three business days 
   following receipt of the original 6 3/4% Preferred Share Certificate(s) to 
   be converted.

** Address where shares of Common Shares and any other payments or 
   certificates shall be sent by the corporation.

                                      6





<PAGE>

                               Exhibit (10)(iii)(A)(8)

                                 EMPLOYMENT AGREEMENT


     This Agreement is made as of the Effective Date between Cincinnati Bell 
Inc., an Ohio corporation ("Employer"), and John F. Cassidy ("Employee").  
For purposes of this Agreement, "Effective Date" means the date following the 
day which Employer distributes to its shareholders all of the common shares 
of Convergys Corporation owned by Employer after the initial public offering 
of Convergys Corporation common shares.

     Employer and Employee agree as follows:

1.   EMPLOYMENT.  By this Agreement, Employer and Employee set forth the 
terms of Employer's employment of Employee on and after the Effective Date.  
Any prior agreements or understandings with respect to Employee's employment 
by Employer, including Employee's Employment Agreement with Cincinnati Bell 
Telephone Company dated April 8, 1996, are canceled as of the Effective Date. 
Notwithstanding the preceding sentence, all stock options granted to 
Employee prior to the Effective Date shall continue in effect in accordance 
with their respective terms and shall not be modified, amended or canceled by 
this Agreement.

2.    TERM OF AGREEMENT. The term of this Agreement initially shall be the 
four year period commencing
 on the Effective Date.  On the third anniversary 
of the Effective Date and on each subsequent  anniversary of the Effective 
Date, the term of this Agreement automatically shall be extended for a period 
of one additional year.  Notwithstanding the foregoing, the term of this 
Agreement is subject to termination as provided in Section 13.

3.   DUTIES.

     A.   Employee will serve as President Cincinnati Bell Wireless of 
Employer or in such other equivalent capacity as may be designated by the 
President of Employer.  Employee will report to the Chief Operating Officer 
of Employer or to such other officer as the President of Employer may direct. 

     B.   Employee shall furnish such managerial, executive, financial, 
technical, and other skills, advice, and assistance in operating employer and 
its Affiliates as Employer may reasonably request.  For purposes of this 
Agreement, "Affiliate" means each corporation which is a member of a 
controlled group of corporations (within the meaning of section 1563(a) of 
the Internal Revenue Code of 1986, as amended (the "Code")) which includes 
Employer.

     C.   Employee shall also perform such other duties, consistent with the 
provisions of Section 3.A., as are reasonably assigned to Employee by the 
President of Employer.



<PAGE>

     D.   Employee shall devote Employee's entire time, attention, and 
energies to the business of Employer and its Affiliates.  The words "entire 
time, attention, and energies" are intended to mean that Employee shall 
devote Employee's full effort during reasonable working hours to the business 
of Employer and its Affiliates and shall devote at least 40 hours per week to 
the business of Employer and its Affiliates.  Employee shall travel to such 
places as are necessary in the performance of Employee's duties.

4.   COMPENSATION.

     A.   Employee shall receive a base salary (the "Base Salary") of at 
least $190,000 per year, payable not less frequently than monthly, for each 
year during the term of this Agreement, subject to proration for any partial 
year. Such Base Salary, and all other amounts payable under this Agreement, 
shall be subject to withholding as required by law.

     B.   In addition to the Base Salary, Employee shall be entitled to 
receive an annual bonus (the "Bonus") for each calendar year for which 
services are performed under this Agreement.  Any Bonus for a calendar year 
shall be payable after the conclusion of the calendar year in accordance with 
Employer's regular bonus payment policies.  Each year, Employee shall be 
given a Bonus target of not less than $70,000 subject to proration for a 
partial year.

     C.   On at least an annual basis, Employee shall receive a formal 
performance review and be considered for Base Salary and/or Bonus target 
increases.

5.   EXPENSES.  All reasonable and necessary expenses incurred by Employee in 
the course of the performance of Employee's duties to Employer shall be 
reimbursable in accordance with Employer's then current travel and expense 
policies.

6.   BENEFITS.  

     A.   While Employee remains in the employ of Employer, Employee shall be 
entitled to participate in all of the various employee benefit plans and 
programs, or equivalent plans and programs, which are made available to 
similarly situated officers of Employer, including the benefits set forth in 
Attachment A.

     B.   Notwithstanding anything contained herein to the contrary, the Base 
Salary and Bonuses otherwise payable to Employee shall be reduced by any 
benefits paid to Employee by Employer under any disability plans made 
available to Employee by Employer.

     C.   As of the Effective Date, Employee shall be granted options to 
purchase 30,000 common shares of Employer under Employer's 1997 Long Term 
Incentive Plan.  In each year of this Agreement after 1998, Employee will be 
granted stock options under Employer's 1997 Long Term Incentive Plan or any 
similar plan made available to employees of Employer.  


                                       2

<PAGE>

     D.   As of the Effective Date, Employee shall receive a restricted stock 
award of 40,000 common shares of Employee. Such award shall be made under 
Employer's 1997 Long Term Incentive Plan on the terms set forth in Attachment 
B. 

     E.   A supplemental, non-qualified pension will be provided to Employee 
by Employer in accordance with this Section 6(G).

          (i)   If Employee's employment with Employer terminates on or after 
April 8, 2001 and prior to April 7, 2006, Employee's non-qualified pension 
shall be equal to that portion of Employee's accrued pension under Employer's 
Management Pension Plan ("CBMPP") which is attributable to Employee's first 
five years of service with Employer.
          
          (ii)  If Employee's employment with Employer terminates on or after 
April 8, 2006, the non-qualified pension shall be equal to that portion of 
Employee's accrued pension under CBMPP which is attributable to Employee's 
first ten years of service with Employer.

          (iii) Employee's non-qualified pension under this Section 6(E) 
shall be paid in one lump sum within 90 days after Employee's termination of 
employment. If Employee's employment with Employer terminates by reason of 
Employee's death, the non-qualified pension shall be paid to Employee's 
Estate.

          (iv)  Nothing contained in this section 6(G) shall be construed to 
give Employee any right to continued employment except under the express 
terms of this Agreement. The provision of this section 6(G) shall survive the 
term of Employee's employment under this Agreement.

7.   CONFIDENTIALITY.  Employer and its Affiliates are engaged in the 
telecommunications industry within the U.S.  Employee acknowledges that in 
the course of employment with the Employer, Employee will be entrusted with 
or obtain access to information proprietary to the Employer and its 
Affiliates with respect to the following (all of which information is 
referred to hereinafter collectively as the "Information"); the organization 
and management of Employer and its Affiliates; the names, addresses, buying 
habits, and other special information regarding past, present and potential 
customers, employees and suppliers of Employer and its Affiliates; customer 
and supplier contracts and transactions or price lists of Employer, its 
Affiliates and their suppliers; products, services, programs and processes 
sold, licensed or developed by the Employer or its Affiliates; technical 
data, plans and specifications, present and/or future development projects of 
Employer and its Affiliates; financial and/or marketing data respecting the 
conduct of the present or future phases of business of Employer and its 
Affiliates; computer programs, systems and/or software; ideas, inventions, 
trademarks, business information, know-how, processes, improvements, designs, 
redesigns, discoveries and developments of Employer and its Affiliates; and 
other information considered confidential by any of the Employer, its 
Affiliates or customers or suppliers of  Employer, its Affiliates.  Employee 
agrees to retain the Information in absolute 


                                       3

<PAGE>

confidence and not to disclose the Information to any person or organization 
except as required in the performance of Employee's duties for Employer, 
without the express written consent of Employer; provided that Employee's 
obligation of confidentiality shall not extend to any Information which 
becomes generally available to the public other than as a result of 
disclosure by Employee.

8.   NEW DEVELOPMENTS.  All ideas, inventions, discoveries, concepts, 
trademarks, or other developments or improvements, whether patentable or not, 
conceived by the Employee, alone or with others, at any time during the term 
of Employee's employment, whether or not during working hours or on 
Employer's premises, which are within the scope of or related to the business 
operations of Employer or its Affiliates ("New Developments"), shall be and 
remain the exclusive property of Employer.  Employee shall do all things 
reasonably necessary to ensure ownership of such New Developments by 
Employer, including the execution of documents assigning and transferring to 
Employer, all of Employee's rights, title and interest in and to such New 
Developments, and the execution of all documents required to enable Employer 
to file and obtain patents, trademarks, and copyrights in the United States 
and foreign countries on any of such New Developments.

9.   SURRENDER OF MATERIAL UPON TERMINATION.  Employee hereby agrees that 
upon cessation of Employee's employment, for whatever reason and whether 
voluntary or involuntary, Employee will immediately surrender to Employer all 
of the property and other things of value in his possession or in the 
possession of any person or entity under Employee's control that are the 
property of Employer or any of its Affiliates, including without any 
limitation all personal notes, drawings, manuals, documents, photographs, or 
the like, including copies and derivatives thereof, relating directly or 
indirectly to any confidential information or materials or New Developments, 
or relating directly or indirectly to the business of Employer or any of its 
Affiliates.

10.  REMEDIES.

     A.   Employer and Employee hereby acknowledge and agree that the 
services rendered by Employee to Employer, the information disclosed to 
Employee during and by virtue of Employee's employment, and Employee's 
commitments and obligations to Employer and its Affiliates herein are of a 
special, unique and extraordinary character, and that the breach of any 
provision of this Agreement by Employee will cause Employer irreparable 
injury and damage, and consequently the Employer shall be entitled to, in 
addition to all other remedies available to it, injunctive and equitable 
relief to prevent a breach of Sections 7, 8, 9, 11 and 12 of this Agreement 
and to secure the enforcement of this Agreement.

     B.   Except as provided in Section 10.A., the parties agree to submit to 
final and binding arbitration any dispute, claim or controversy, whether for 
breach of this Agreement or for violation of any of Employee's statutorily 
created or protected rights, arising between the parties that either party 
would have been otherwise entitled to file or 


                                       4

<PAGE>

pursue in court or before any administrative agency (herein "claim"), and 
waives all right to sue the other party.

          (i)   This agreement to arbitrate and any resulting arbitration 
award are enforceable under and subject to the Federal Arbitration Act, 9 
U.S.C. Section 1 et seq. ("FAA").  If the FAA is held not to apply for any 
reason then Ohio Revised Code Chapter 2711 regarding the enforceability of 
arbitration agreements and awards will govern this Agreement and the 
arbitration award.

          (ii)  (a) All of a party's claims must be presented at a single 
arbitration hearing.  Any claim not raised at the arbitration hearing is 
waived and released.  The arbitration hearing will take place in Cincinnati, 
Ohio.

                (b) The arbitration process will be governed by the 
Employment Dispute Resolution Rules of the American Arbitration Association 
("AAA") except to the extent they are modified by this Agreement.

                (c) Employee has had an opportunity to review the AAA rules 
and the requirements that Employee must pay a filing fee for which the 
Employer has agreed to split on an equal basis.

                (d) The arbitrator will be selected from a panel of 
arbitrators chosen by the AAA in White Plains, New York.  After the filing of 
a Request for Arbitration, the AAA will send simultaneously to Employer and 
Employee an identical list of names of five persons chosen from the panel.  
Each party will have 10 days from the transmittal date in which to strike up 
to two names, number the remaining names in order of preference and return 
the list to the AAA.

                (e) Any pre-hearing disputes will be presented to the 
arbitrator for expeditious, final and binding resolution.

                (f) The award of the arbitrator will be in writing and will 
set forth each issue considered and the arbitrator's finding of fact and 
conclusions of law as to each such issue.

                (g) The remedy and relief that may be granted by the 
arbitrator to Employee are limited to lost wages, benefits, cease and desist 
and affirmative relief, compensatory, liquidated and punitive damages and 
reasonable attorney's fees, and will not include reinstatement or promotion.  
If the arbitrator would have awarded reinstatement or promotion, but for the 
prohibition in this Agreement, the arbitrator may award front pay.  The 
arbitrator may assess to either party, or split, the arbitrator's fee and 
expenses and the cost of the transcript, if any, in accordance with the 
arbitrator's determination of the merits of each party's position, but each 
party will bear any cost for its witnesses and proof.


                                       5

<PAGE>

                (h) Employer and Employee recognize that a primary benefit 
each derives from arbitration is avoiding the delay and costs normally 
associated with litigation.  Therefore, neither party will be entitled to 
conduct any discovery prior to the arbitration hearing except that:  (i) 
Employer will furnish Employee with copies of all non-privileged documents in 
Employee's personnel file; (ii) if the claim is for discharge, Employee will 
furnish Employer with records of earnings and benefits relating to Employee's 
subsequent employment (including self-employment) and all documents relating 
to Employee's efforts to obtain subsequent employment; (iii) the parties will 
exchange copies of all documents they intend to introduce as evidence at the 
arbitration hearing at least 10 days prior to such hearing; (iv) Employee 
will be allowed (at Employee's expense) to take the depositions, for a period 
not to exceed four hours each, of two representatives of Employer, and 
Employer will be allowed (at its expense) to depose Employee for a period not 
to exceed four hours; and (v) Employer or Employee may ask the arbitrator to 
grant additional discovery to the extent permitted by AAA rules upon a 
showing that such discovery is necessary.

                (i) Nothing herein will prevent either party from taking the 
deposition of any witness where the sole purpose for taking the deposition is 
to use the deposition in lieu of the witness testifying at the hearing and 
the witness is, in good faith, unavailable to testify in person at the 
hearing due to poor health, residency and employment more than 50 miles from 
the hearing site, conflicting travel plans or other comparable reason.

                (j) Arbitration must be requested in writing no later than 6 
months from the date of the party's knowledge of the matter disputed by the 
claim. A party's failure to initiate arbitration within the time limits 
herein will be considered a waiver and release by that party with respect to 
any claim subject to arbitration under this Agreement.

                (k) Employer and Employee consent that judgment upon the 
arbitration award may be entered in any federal or state court that has 
jurisdiction.

                (l) Except as provided in Section 10.A., neither party will 
commence or pursue any litigation on any claim that is or was subject to 
arbitration under this Agreement.

                (m) All aspects of any arbitration procedure under this 
Agreement, including the hearing and the record of the proceedings, are 
confidential and will not be open to the public, except to the extent the 
parties agree otherwise in writing, or as may be appropriate in any 
subsequent proceedings between the parties, or as may otherwise be 
appropriate in response to a governmental agency or legal process.


                                      6

<PAGE>

11.  COVENANT NOT TO COMPETE.  For purposes of this Section 11 only, the term 
"Employer" shall mean, collectively, Employer and each of its Affiliates. 
During the two-year period following termination of Employee's employment 
with Employer for any reason (or if this period is unenforceable by law, then 
for such period as shall be enforceable) Employee will not engage in any 
business offering services related to the current business of Employer, 
whether as a principal, partner, joint venture, agent, employee, salesman, 
consultant, director or officer, where such position would involve Employee 
in any business activity in competition with Employer.  This restriction will 
be limited to the geographical area where Employer is then engaged in such 
competing business activity or to such other geographical area as a court 
shall find reasonably necessary to protect the goodwill and business of the 
Employer.

     During the two-year period following termination of Employee's 
employment with Employer for any reason (or if this period is unenforceable 
by law, then for such period as shall be enforceable) Employee will not 
interfere with or adversely affect, either directly or indirectly, Employer's 
relationships with any person, firm, association, corporation or other entity 
which is known by Employee to be, or is included on any listing to which 
Employee had access during the course of employment as a customer, client, 
supplier, consultant or employee of Employer and that Employee will not 
divert or change, or attempt to divert or change, any such relationship to 
the detriment of Employer or to the benefit of any other person, firm, 
association, corporation or other entity.    

     During the two-year period following termination of Employee's 
employment with Employer for any reason (or if this period is unenforceable 
by law, then for such period as shall be enforceable) Employee shall not, 
without the prior written consent of Employer, accept employment, as an 
employee, consultant, or otherwise, with any company or entity which is a 
customer or supplier of Employer at any time during the final year of 
Employee's employment with Employer.

     Employee will not, during or at any time within three years after the 
termination of Employee's employment with Employer, induce or seek to induce, 
any other employee of Employer to terminate his or her employment 
relationship with Employer.

12.  GOODWILL.  Employee will not disparage Employer or any of its Affiliates 
in any way which could adversely affect the goodwill, reputation and business 
relationships of Employer or any of its Affiliates with the public generally, 
or with any of their customers, suppliers or employees.  Employer will not 
disparage Employee.

13.  TERMINATION.

     A.   (i)   Employer or Employee may terminate this Agreement upon 
Employee's failure or inability to perform the services required hereunder 
because of any physical or mental infirmity for which Employee receives 
disability benefits under any disability benefit plans made available to 
Employee by Employer (the "Disability Plans"), 


                                       7

<PAGE>

over a period of one hundred twenty consecutive working days during any 
twelve consecutive month period (a "Terminating Disability").

          (ii)  If Employer or Employee elects to terminate this Agreement in 
the event of a Terminating Disability, such termination shall be effective 
immediately upon the giving of written notice by the terminating party to the 
other.

          (iii) Upon termination of this Agreement on account of Terminating 
Disability, Employer shall pay Employee Employee's accrued compensation 
hereunder, whether Base Salary, Bonus or otherwise (subject to offset for any 
amounts received pursuant to the Disability Plans), to the date of 
termination. For as long as such Terminating Disability may exist, Employee 
shall continue to be an employee of Employer for all other purposes and 
Employer shall provide Employee with disability benefits and all other 
benefits according to the provisions of the Disability Plans and any other 
Employer plans in which Employee is then participating.

          (iv)  If the parties elect not to terminate this Agreement upon an 
event of a Terminating Disability and Employee returns to active employment 
with Employer prior to such a termination, or if such disability exists for 
less than one hundred twenty consecutive working days, the provisions of this 
Agreement shall remain in full force and effect.

     B.   This Agreement terminates immediately and automatically on the 
death of the Employee, provided, however, that the Employee's estate shall be 
paid Employee's accrued compensation hereunder, whether Base Salary, Bonus or 
otherwise, to the date of death.

     C.  Employer may terminate this Agreement immediately, upon written 
notice to Employee, for Cause.  For purposes of this Agreement, Employer 
shall have "Cause" to terminate this Agreement only if Employer's Board of 
Directors determines that there has been fraud, misappropriation or 
embezzlement on the part of Employee.

     D.  Employer may terminate this Agreement immediately, upon written 
notice to Employee, for any reason other than those set forth in Sections 
13.A., B. and C.; provided, however, that Employer shall have no right to 
terminate under this Section 13.D. within two years after a Change in 
Control.   In the event of a termination by Employer under this Section 
13.D., Employer shall, within five days after the termination, pay Employee 
an amount equal to the greater of (i) two times the sum of the annual Base 
Salary rate in effect at the time of termination plus the Bonus target in 
effect at the time of termination or (ii) if the Current Term is longer than 
two years, the sum of the Base Salary for the remainder of the Current Term 
(at the rate in effect at the time of termination) plus the Bonus targets (at 
the amount in effect at the time of termination) for each calendar year 
commencing or ending during the remainder of the Current Term (subject to 
proration in the case of any calendar year ending after the Current Term). 
For the remainder of the Current Term, Employer shall continue to provide 
Employee with medical, dental, vision and life insurance coverage comparable 
to the medical, dental, vision and life insurance coverage in effect for 
Employee immediately prior to the  termination; and, to the extent that 
Employee would have been eligible for any post-retirement medical, dental, 
vision or life insurance benefits from Employer if Employee 


                                       8

<PAGE>

had continued in employment through the end of the Current Term,  Employer 
shall provide such post-retirement benefits to Employee after the end of the 
Current Term. All stock options shall become immediately exercisable (and 
Employee shall be afforded the opportunity to exercise them), the 
restrictions applicable to all restricted stock shall lapse and any long term 
awards shall be paid out at target. In addition, Employee shall be entitled 
to receive, as soon as practicable after termination, an amount equal to the 
sum of (i) any forfeitable benefits under any qualified or nonqualified 
pension, profit sharing, 401(k) or deferred compensation plan of Employer or 
any Affiliate which would have vested prior to the end of the Current Term if 
Employee's employment had not terminated plus (ii) if Employee is 
participating in a qualified or nonqualified defined benefit plan of Employer 
or any Affiliate at the time of termination, an amount equal to the present 
value of the additional vested benefits which would have accrued for Employee 
under such plan if Employee's employment had not terminated prior to the end 
of the Current Term and if Employee's annual Base Salary and Bonus target had 
neither increased nor decreased after the termination.  For purposes of this 
Section 13.D., "Current Term" means the longer of (i) the two year period 
beginning at the time of termination or (ii) the unexpired term of this 
Agreement at the time of the termination, determined as provided in Section 2 
but assuming that there is no automatic extension of the Agreement term after 
the termination.  For purposes of this Section 13.D. and Section 13.E.,  
"Change in Control" means a change in control as defined in Employer's 1997 
Long Term Incentive Plan.

     E.   This Agreement shall terminate automatically in the event that 
there is a Change in Control and Employee's employment with Employer is 
actually or constructively terminated by Employer within two years after the 
Change in Control for any reason other than those set forth in Sections 
13.A., B. and C. For purposes of the preceding sentence, a "constructive" 
termination of Employee's employment shall be deemed to have occurred if, 
without Employee's consent, there is a material reduction in Employee's 
authority or responsibilities or if there is a reduction in Employee's Base 
Salary or Bonus target from the amount in effect immediately prior to the 
Change in Control or if Employee is required by Employer to relocate from the 
city where Employee is residing immediately prior to the Change in Control.  
In the event of a termination under this Section 13.E., Employer shall pay 
Employee an amount equal to two times the sum of the annual Base Salary rate 
in effect at the time of termination plus the Bonus target in effect at the 
time of termination, all stock options shall become immediately exercisable 
(and Employee shall be afforded the opportunity to exercise them), the 
restrictions applicable to all restricted stock shall lapse and any long term 
awards shall be paid out at target. For the remainder of the Current Term, 
Employer shall continue to provide Employee with medical, dental, vision and 
life insurance coverage comparable to the medical, dental, vision and life 
insurance coverage in effect for Employee immediately prior to the 
termination; and, to the extent that Employee would have been eligible for 
any post-retirement medical, dental, vision or life insurance benefits from 
Employer if Employee had continued in employment through the end of the 
Current Term,  Employer shall provide such post-retirement benefits to 
Employee after the end of the Current Term. Employee's accrued benefit under 
any nonqualified pension or deferred compensation plan maintained by Employer 
or any Affiliate shall become immediately vested and nonforfeitable and 
Employee also shall be entitled to receive a payment equal to the sum of (i) 
any forfeitable benefits under any qualified pension or 

                                       9

<PAGE>

profit sharing or 401(k) plan maintained by Employer or any Affiliate plus 
(ii) if Employee is participating in a qualified or nonqualified defined 
benefit plan of Employer or any Affiliate at the time of termination, an 
amount equal to the present value of the additional benefits which would have 
accrued for Employee under such plan if Employee's employment had not 
terminated prior to the end of the Current Term and if Employee's annual Base 
Salary and Bonus target had neither increased nor decreased after the 
termination. Finally, to the extent that Employee is deemed to have received 
an excess parachute payment by reason of the Change in Control, Employer 
shall pay Employee an additional sum sufficient to pay (i) any taxes imposed 
under section 4999 of the Code plus (ii) any federal, state and local taxes 
applicable to any taxes imposed under section 4999 of the Code.  For purposes 
of this Section 13.E., "Current Term" means the longer of (i) the two 
year period beginning at the time of termination or (ii) the unexpired term 
of this Agreement at the time of the termination, determined as provided in 
Section 2 but assuming that there is no automatic extension of the Agreement 
term after the termination.

     F.   Employee may resign upon 60 days' prior written notice to Employer. 
In the event of a resignation under this Section 13.F., this Agreement shall
terminate and Employee shall be entitled to receive Employee's Base Salary
through the date of termination, any Bonus earned but not paid at the time of
termination and any other vested compensation or benefits called for under any
compensation plan or program of Employer.
     
     G.   Employee may retire (a) upon six months' prior written notice to
Employer at any time after Employee has attained age 55 and completed at least
ten years of service with Employer and its Affiliates or (b) on such earlier
date as may be approved by the President of Employer.  In the event of a
retirement under this Section 13.G., this Agreement shall terminate and Employee
shall be entitled to receive Employee's Base Salary through the date of
termination and any Bonus earned but not paid at the time of termination.  In
addition, Employee shall be entitled to receive any compensation or benefits
made available to retirees under Employer's standard policies and programs,
including retiree medical and life insurance benefits, a prorated Bonus for the
year of termination, and the right to exercise options after retirement.
     
     H.   Upon termination of this Agreement as a result of an event of
termination described in this Section 13 and except for Employer's payment of
the required payments under this Section 13 (including any Base Salary accrued
through the date of termination, any Bonus earned for the year preceding the
year in which the termination occurs and any nonforfeitable amounts payable
under any employee plan), all further compensation under this Agreement shall
terminate.

     I.   The termination of this Agreement shall not amend, alter or modify the
rights and obligations of the parties under Sections 7, 8, 9, 10, 11, and 12
hereof, the terms of which shall survive the termination of this Agreement.


                                       10

<PAGE>

14.  ASSIGNMENT.  As this is an agreement for personal services involving a 
relation of confidence and a trust between Employer and Employee, all rights 
and duties of Employee arising under this Agreement, and the Agreement 
itself, are non-assignable by Employee.

15.  NOTICES.  Any notice required or permitted to be given under this 
Agreement shall be sufficient, if in writing, and if delivered personally or 
by certified mail to Employee at Employee's place of residence as then 
recorded on the books of Employer or to Employer at its principal office.

16.  WAIVER.  No waiver or modification of this Agreement or the terms 
contained herein shall be valid unless in writing and duly executed by the 
party to be charged therewith.  The waiver by any party hereto of a breach of 
any provision of this Agreement by the other party shall not operate or be 
construed as a waiver of any subsequent breach by such party.

17.  GOVERNING LAW.  This agreement shall be governed by the laws of the 
State of Ohio.

18.  ENTIRE AGREEMENT.  This Agreement contains the entire agreement of the 
parties with respect to Employee's employment by Employer.  There are no 
other contracts, agreements or understandings, whether oral or written, 
existing between them except as contained or referred to in this Agreement.

19.  SEVERABILITY.  In case any one or more of the provisions of this 
Agreement is held to be invalid, illegal, or unenforceable in any respect, 
such invalidity, illegality, or other enforceability shall not affect any 
other provisions hereof, and this Agreement shall be construed as if such 
invalid, illegal, or unenforceable provisions have never been contained 
herein.

20.  SUCCESSORS AND ASSIGNS.  Subject to the requirements of Paragraph 14 
above, this Agreement shall be binding upon Employee, Employer and Employer's 
successors and assigns.

21.  CONFIDENTIALITY OF AGREEMENT TERMS.  The terms of this Agreement shall 
be held in strict confidence by Employee and shall not be disclosed by 
Employee to anyone other than Employee's spouse, Employee's legal counsel, 
and Employee's other advisors, unless required by law.  Further, except as 
provided in the preceding sentence, Employee shall not reveal the existence 
of this Agreement or discuss its terms with any person (including but not 
limited to any employee of Employer or its Affiliates) without the express 
authorization of the President of Employer.  To the extent that the terms of 
this Agreement have been disclosed by Employer, in a public filing or 
otherwise, the confidentiality requirements of this Section 21 shall no 
longer apply to such terms.


                                       11

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
duly executed as of the day and year first above written.

                    CINCINNATI BELL INC.

                    By:  ____________________________________
                              

                    JOHN F. CASSIDY

                    ________________________________________
                    
                              


                                       12

<PAGE>

                                                                   Attachment A



                                EMPLOYEE BENEFITS



<TABLE>

             <S>                                     <C>
------------------------------------------------------------------------------
             Automobile Allowance                    $850 per month
------------------------------------------------------------------------------
             Cellular Telephone                      Yes
------------------------------------------------------------------------------
             Executive Deferred Compensation Plan    Yes
------------------------------------------------------------------------------
             Group Accident Life                     $250,000
------------------------------------------------------------------------------
             Legal/Financial/Insurance Allowance     $3,500 per year
------------------------------------------------------------------------------
             Parking                                 Yes
------------------------------------------------------------------------------
             Annual Physical                         Yes
------------------------------------------------------------------------------
             Short Term Disability Supplement        Yes
------------------------------------------------------------------------------
             Travel Insurance (Spouse)               $50,000
------------------------------------------------------------------------------
             Vacation                                5 weeks per year
------------------------------------------------------------------------------
</TABLE>







<PAGE>


<TABLE>
<CAPTION>
                                 BROADWING INC.
 COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
                              (MILLIONS OF DOLLARS)


                                                                       1999          1998        1997        1996           1995
                                                                     -------------------------------------------------------------
<S>                                                                  <C>           <C>         <C>          <C>            <C> 
Pretax income from continuing operations before 
adjustment for minority interests in consolidated 
subsidiaries or income or loss from equity investees                 $  151.5      $  181.5    $  192.6     $  184.1       $  4.3
                                                                     -------------------------------------------------------------
FIXED CHARGES:
         Interest expense, etc.                                          65.5          24.2        30.1         27.9         45.4
         Appropriate portion of rentals                                   7.7           3.9         3.9          3.0          4.0
         Preferred stock dividends of majority 
         subsidiaries                                                     4.0             -          -            -            -
                                                                     -------------------------------------------------------------
         Total Fixed Charges                                             77.2          28.1        34.0         30.9         49.4
                                                                     -------------------------------------------------------------

         Pretax income (loss) from continuing operations
         before adjustment for minority interests in 
         consolidated subsidiaries or income or loss
         from equity investees plus fixed charges                    $  228.7      $  209.6    $  226.6     $   215.0      $ 53.7
                                                                     =============================================================
         Preferred dividend requirements                             $    2.1      $    -      $    -       $      -       $    -
         Total Fixed Charges                                             77.2          28.1        34.0          30.9        49.4
                                                                     -------------------------------------------------------------
         Total Fixed Charges and preferred dividends                 $   79.3      $   28.1    $   34.0     $    30.9      $ 49.4
                                                                     =============================================================
         Ratio of earnings to combined fixed charges
         and preferred dividends                                          1.9           6.5         5.7           6.0          -
                                                                     =============================================================

          Coverage Deficiency                                                                                              $ 45.1

</TABLE>






<PAGE>

                         Subsidiaries of the Registrant
                            (as of February 29, 2000)


<TABLE>
<CAPTION>
                                                                                    State of
Subsidiary                                                                       Incorporation
----------                                                                       -------------
<S>                                                                              <C>
Cincinnati Bell Telephone Company                                                    Ohio

Cincinnati Bell Telecommunications Services Inc.                                     Ohio

Cincinnati Bell Network Solutions Inc.                                               Ohio

EnterpriseWise IT Consulting LLC                                                     Ohio

Cincinnati Bell Long Distance Inc.                                                   Ohio

Cincinnati Bell Supply Company                                                       Ohio

Cincinnati Bell Directory Inc.                                                       Ohio

Cincinnati Bell Wireless Company                                                     Ohio

Cincinnati Bell Wireless LLC                                                         Ohio

ZoomTown.com Inc.                                                                    Ohio

Broadwing Holdings Inc.                                                              Delaware

Broadwing Communications Inc.                                                        Delaware
     (formerly IXC Communications, Inc.)

Broadwing Communications Services Inc.                                               Delaware
     (formerly IXC Communications Services, Inc.)

Broadwing Telecommunications Inc.                                                    Delaware
     (formerly Eclipse Telecommunications, Inc.)

Atlantic States Microwave Transmission Company                                       Nevada

Broadwing Communications Services of Virginia Inc.                                   Virginia
     (formerly IXC Communications Services of Virginia, Inc.)

Central States Microwave Transmission Company                                        Ohio



<PAGE>

                   Subsidiaries of the Registrant (continued)
                            (as of February 29, 2000)

Delaware Capital Provisioning, Inc.                                                  Delaware

DPNET, Inc.                                                                          Delaware

Eastern Telecom of Washington D.C., Inc.                                             Virginia


IXC Business Services LLC                                                            Delaware

IXC International, Inc.                                                              Delaware

IXC Internet Services, Inc.                                                          Delaware

IXC Leasing LLC                                                                      Delaware

IXC Merger Sub, Inc.                                                                 Delaware

Mutual Signal Corp.                                                                  New York

Mutual Signal Corporation of Michigan                                                New York

Mutual Signal Holding Corporation                                                    Delaware

Network Advanced Services, Inc.                                                      Louisiana

Network Evolutions, Inc.                                                             Virginia

Progress International, LLC                                                          Texas

Rio Grande Transmission, Inc.                                                        Delaware

Telecom Engineering, Inc.                                                            Texas

The Data Place, Inc.                                                                 Delaware

Tower Communication System Corp.                                                     Ohio

West Texas Microwave Company                                                         Texas

Western States Microwave Transmission Company                                        Nevada

Marca Tel S.A. de C.V.                                                               Mexico
</TABLE>




<PAGE>

                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration 
Statement on Form S-8 (File No. 33-29332), Form S-8 (File No. 33-60209), Form 
S-8 (File No. 33-1462), Form S-8 (File No. 33-1487), Form S-8 (File No. 
33-29331), Form S-8 (File No. 33-36381), Form S-8 (File No. 33-36380), Form 
S-14 (File No. 2-82253), Form S-8 (File No. 333-38743), Form S-8 (File No. 
333-28381), Form S-8 (File No. 333-38763), Form S-8 (File No. 333-28385), 
Form S-8 (File No. 333-77011), Form S-3 (File No. 333-90711), the 
post-effective Amendment No. 1 on Form S-8 to Form S-4 (File No. 333-86971) 
as filed on November 9, 1999 and the post-effective Amendment No. 2 on Form 
S-8 to Form S-4 (File No. 333-86971) as filed on November 30, 1999 relating 
to the financial statements and financial statement schedule, which appears 
in this Form 10-K.

PricewaterhouseCoopers LLP

Cincinnati, Ohio
March 17, 2000





<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN
 WITNESS WHEREOF, the undersigned has hereunto set his hand this
10th day of January, 2000.

                                            /s/ Richard D. Irwin
                                           ----------------------------------
                                           Richard D. Irwin
                                           Director

STATE OF CONNECTICUT       )
                           )  SS:
COUNTY OF  Fairfield       )
          -----------

         On the 10th day of February, 2000, personally appeared before me
Richard D. Irwin, to me known and known to me to be the person described in and
who executed the foregoing instrument, and he duly acknowledged to me that he
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of January, 2000.

                                              /s/ Barbara F. Sage
                                            ---------------------------------
                                            Notary Public

                                             My Commission Exp. July 31, 2003



<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.

                                                /s/ John M. Zrno
                                               ----------------------------
                                               John Zrno
                                               Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me John
Zrno, to me known and known to me to be the person described in and who executed
the foregoing instrument, and he duly acknowledged to me that he executed and
delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.

                                                /s/ Marie E. Casar
                                               --------------------------
                                               Notary Public

                                                       [SEAL]



<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 26
day of January, 2000.

                                            /s/ J. Taylor Crandall
                                           ------------------------------
                                           J. Taylor Crandall
                                           Director

STATE OF CALIFORNIA        )
                           )  SS:                     [SEAL]
COUNTY OF  SAN MATEO       )
          ------------

         On the 26 day of January, 2000, personally appeared before me J.
Taylor Crandall, to me known and known to me to be the person described in and
who executed the foregoing instrument, and he duly acknowledged to me that he
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 26 day of January, 2000.


                                            /s/ Tonia Baker
                                           --------------------------------
                                           Notary Public


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.

                                         /s/ David B. Sharrock
                                        ----------------------------------
                                        David B. Sharrock
                                        Director


STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me David
B. Sharrock, to me known and known to me to be the person described in and who
executed the foregoing instrument, and he duly acknowledged to me that he
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.


                                         /s/ Marie E. Casar
                                        --------------------------------
                                        Notary Public

                                                    [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, her attorneys for her and in her name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as she
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.


                                           /s/ Mary D. Nelson
                                          -------------------------------------
                                          Mary D. Nelson
                                          Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me Mary
D. Nelson, to me known and known to me to be the person described in and who
executed the foregoing instrument, and she duly acknowledged to me that she
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.


                                          /s/ Marie E. Casar
                                         --------------------------------
                                         Notary Public

                                                     [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.


                                            /s/ John T. LaMacchia
                                          ---------------------------------
                                          John T. LaMacchia
                                          Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me John
T. LaMacchia, to me known and known to me to be the person described in and who
executed the foregoing instrument, and he duly acknowledged to me that he
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.

                                            /s/ Marie E. Casar
                                          --------------------------------
                                          Notary Public

                                                     [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.

                                             /s/ Daniel J. Meyer
                                           --------------------------------
                                           Daniel J. Meyer
                                           Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me Daniel
J. Meyer, to me known and known to me to be the person described in and who
executed the foregoing instrument, and he duly acknowledged to me that he
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.

                                             /s/ Marie E. Casar
                                           --------------------------------
                                           Notary Public

                                                       [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, her attorneys for her and in her name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as she
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 10th
day of February, 2000.


                                            /s/ Karen M. Hoguet
                                           -------------------------------
                                           Karen M. Hoguet
                                           Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me Karen
M. Hoguet, to me known and known to me to be the person described in and who
executed the foregoing instrument, and she duly acknowledged to me that she
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.

                                            /s/ Marie E. Casar
                                           --------------------------------
                                           Notary Public

                                                     [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.

                                          /s/ William A. Friedlander
                                         ---------------------------------
                                         William A. Friedlander
                                         Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me
William A. Friedlander, to me known and known to me to be the person described
in and who executed the foregoing instrument, and he duly acknowledged to me
that he executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.


                                          /s/ Marie E. Casar
                                         --------------------------------
                                         Notary Public

                                                    [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is an officer and a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.

                                           /s/ Richard G. Ellenberger
                                          ----------------------------------
                                          Richard G. Ellenberger
                                          Officer and Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me
Richard G. Ellenberger, to me known and known to me to be the person described
in and who executed the foregoing instrument, and he duly acknowledged to me
that he executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.


                                            /s/ Marie E. Casar
                                          --------------------------------
                                          Notary Public

                                                  [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.

                                             /s/ Phillip R. Cox
                                            -------------------------------
                                            Phillip R. Cox
                                            Director

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me
Phillip R. Cox, to me known and known to me to be the person described in and
who executed the foregoing instrument, and he duly acknowledged to me that he
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.


                                              /s/ Marie E. Casar
                                            --------------------------------
                                            Notary Public

                                                        [SEAL]


<PAGE>

                                POWER OF ATTORNEY

         WHEREAS, Cincinnati Bell Inc. d/b/a Broadwing Inc., an Ohio corporation
(hereinafter referred to as the "Company"), proposes shortly to file with the
Securities and Exchange Commission under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, an
annual report on Form 10-K for the year ended December 31, 1999; and

         WHEREAS, the undersigned is a director of the Company;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints,
Richard G. Ellenberger, Kevin W. Mooney and Thomas E. Taylor, and each of them
singly, his attorneys for him and in his name, place and stead, and in his
office and capacity in the Company, to execute and file such annual report on
Form 10-K, and thereafter to execute and file any amendments or supplements
thereto, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of February, 2000.


                                       /s/ James D. Kiggen
                                      ---------------------------------
                                      James D. Kiggen
                                      Chairman of the Board of Directors

STATE OF TEXAS             )
                           )  SS:
COUNTY OF TRAVIS           )

         On the 10th day of February, 2000, personally appeared before me James
D. Kiggen, to me known and known to me to be the person described in and who
executed the foregoing instrument, and he duly acknowledged to me that he
executed and delivered the same for the purposes therein expressed.

         Witness my hand and official seal this 10th day of February, 2000.

                                       /s/ Marie E. Casar
                                      --------------------------------
                                      Notary Public

                                                 [SEAL]




<TABLE> <S> <C>


<PAGE>
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<PERIOD-START>                             JAN-01-1999
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<EPS-BASIC>                                        .20
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