<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, 2000

                                       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

                                 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:

                                                           Name of each exchange
Title of each class                                        on which registered
--------------------------------------------------------------------------------

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

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 28, 2001, there were 217,842,953 Common Shares outstanding.

    At February 28, 2001, the aggregate market value of the voting shares owned
by non-affiliates was $5,013,092,925.

----------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the registrant's definitive proxy statement dated March 30, 2001
issued in connection with the annual meeting of shareholders (Part III)



<PAGE>


                                TABLE OF CONTENTS



                                     PART I

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

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

Item 2.    Properties.......................................................................................... 10

Item 3.    Legal Proceedings................................................................................... 12

Item 4.    Submission of Matters to a Vote of Security Holders................................................. 12

Item 4A.   Executive Officers of the Registrant................................................................ 12



                                     PART II


Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters............................... 14

Item 6.    Selected Financial Data............................................................................. 15

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations............... 17

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.......................................... 42

Item 8.    Financial Statements and Supplementary Schedules.................................................... 44

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure................ 81



                                    PART III


Item 10.   Directors and Executive Officers of the Registrant.................................................. 82

Item 11.   Executive Compensation.............................................................................. 82

Item 12.   Security Ownership of Certain Beneficial Owners and Management...................................... 82

Item 13.   Certain Relationships and Related Transactions...................................................... 82



                                     PART IV


Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................... 82
           Signatures.......................................................................................... 87
</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

         This Form 10-K contains "forward-looking" statements, as defined in 
the Private Securities Litigation Reform Act of 1995, which are based on the 
Company's 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 the Company's 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 
optical 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; the 
ability of the Company to attract and retain highly qualified employees; the 
successful implementation of restructuring initiatives and the performance of 
marketable equity securities of other companies held within the Company's 
investment portfolio.


                                     PART I

ITEM 1.  BUSINESS

GENERAL

         Broadwing Inc. (together with its consolidated subsidiaries, the 
"Company") is a full-service, local and national provider of data and voice 
communications services, and a regional provider of wireless communications 
services. The Company seeks to provide world-class service on a national 
level by combining two sets of strengths: its nationwide optical network and 
Internet backbone and its well-regarded brand name and reputation for service 
in its local and regional franchise area. The Company has principal 
businesses in four industry segments: Broadband, Local Communications, 
Wireless and Other Communications.

         The Company completed its merger with the former IXC Communications, 
Inc. ("IXC", now "Broadwing Communications") on November 9, 1999 (the 
"Merger") and accounted for this transaction according to the purchase method 
of accounting. As such, Broadwing Communications' operating results are 
included in the Company's operating results prospectively from November 9, 
1999 and are referred to as the "as reported" results. The Company's "pro 
forma" results assume that the Merger took place on January 1, 1998 and 
combine the operating results of the historical Cincinnati Bell Inc. and the 
former IXC. The pro forma numbers are subject to certain assumptions and 
related adjustments, all of which pertain to the Merger.

         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).

    BROADBAND

    The Broadband segment was created as a result of the Merger and reflects 
the operations of the Company's Broadwing Communications subsidiary. 
Broadband revenues constituted 47% of consolidated Company revenues in 2000, 
or two percentage points higher than the 45% generated in the prior year on a 
pro forma basis.

    Broadwing Communications is a nationwide provider of data and voice 
communications services. These services are provided over more than 18,000 
route miles of fiber-optic transmission facilities. Revenues for the 
Broadband segment come chiefly from broadband transport and switched 
long-distance services, categories constituting 39% and 41%, respectively, of 
Broadband segment revenues. The remaining 20% of revenues are comprised of 
data and Internet services, information technology consulting and network 
construction services.


                                       1

<PAGE>

    Broadband transport services provided by this segment represent the 
long-haul transmission of data, voice and Internet traffic over dedicated 
circuits. Additionally, the broadband transport category includes revenues 
from IRU agreements. IRU agreements typically cover a fixed period of time 
and represent the lease of capacity or network fibers. The Company currently 
maintains sufficient network capacity such that it believes that the sale of 
IRU agreements will have no negative impact on its ability to carry traffic 
for its retail customers. The offering of IRU agreements is standard practice 
within the industry and among Broadwing Communications' competitors.

    Switched services represent billed minutes of use, primarily for the 
transmission of voice long distance services. These revenues have been 
decreasing as a percentage of total Broadband segment revenues as Broadwing 
Communications has focused its efforts on margin improvement and optimization 
of this revenue source. Switched services have provided 41%, 50% and 65% of 
Broadband segment pro forma revenues in 2000, 1999 and 1998, respectively.

    Data and Internet services represent the sale of high-speed data 
transport services such as frame relay, Internet access and web hosting. 
These services are growing as a percentage of segment revenues, doubling from 
3% in 1999 to more than 6% in 2000. 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.

    Other services consist primarily of information technology consulting 
services and network construction projects. For the year 2000, information 
technology consulting revenues were $66 million, or $52 million higher than 
in the prior year. In 2000, network construction projects provided $68 
million in revenue, compared to no such revenue in the prior year. The 
Company typically gains access to rights of way or additional fiber routes 
through its network construction activities. In 1999, the Company recorded 
$28 million in nonrecurring, residual revenues from a prior sale of dark 
fiber.

    The centerpiece of the Broadband segment is its next-generation network. 
This network is fully operational and includes an Internet backbone and 
represents the first commercially deployed, optically switched network.

    Since revenues from this segment are conditioned primarily on usage and 
the ratable recognition of contract revenues, the operations of the segment 
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 
Communications has entered into with respect to IRU agreements and network 
construction projects, approximately 2,700 route miles must still be 
constructed at an estimated cost of $88 million. Prices and rates for this 
segment's services offerings are primarily established through contractual 
agreements. Accordingly, they are influenced by competitive conditions such 
as the number of competitors, availability of comparable service offerings 
and the amount of fiber network capacity available from these competitors.

    Broadwing Communications faces significant competition from other 
fiber-based telecommunications companies such as AT&T, Worldcom, Sprint, 
Level 3 Communications, Qwest Communications International, Global Crossing 
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.

LOCAL COMMUNICATIONS

    The Local Communications segment provides local telephone service, 
network access, high-speed Internet access, data transport services and 
switched long distance, as well as other ancillary products and services to 

 
                                       2

<PAGE>

customers in southwestern Ohio, northern Kentucky and southeastern Indiana. 
This market consists of approximately 2,400 square miles located within a 
25-mile radius of Cincinnati, Ohio. Services are provided through the 
Company's Cincinnati Bell Telephone ("CBT") subsidiary.

    CBT's service offerings are generally classified into three major 
categories: local service, network access, and other services. On a pro forma 
basis, the Local Communications segment produced 37%, 44% and 47% of 
consolidated Company revenues in 2000, 1999 and 1998, respectively. 
Approximately 98% of CBT'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 such as 
custom-calling features. These services are provided to business and 
residential customers and represented 57% of CBT's revenues in 2000. Network 
access represented 25% of CBT's revenues in 2000 and came from interexchange 
carriers for access to CBT's local communications network and business 
customers for customized access arrangements. Other services provided the 
remaining 18% of CBT's revenues in 2000 and resulted from the sale and 
installation of telecommunications equipment, Internet access, inside wire 
installation and maintenance 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 state-of-the-art and are capable of handling new service 
offerings as they are developed. All of the network access lines subscribed 
to CBT are served by digital switches and have the ISDN and Signaling System 
7 capability necessary to support 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 synchronous optical network ("SONET") rings 
linking Cincinnati's downtown with 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 $152 million per year. CBT 
will still require a significant amount of capital spending in 2001 in order 
to facilitate widespread deployment of its high-speed digital subscriber line 
service (ZoomTown-SM-) and equip its entire network for the delivery of 
high-speed data transport services. However, CBT currently plans to spend 
less for capital expenditures than the $152 million spent in 2000.

    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 to operate. A 
significant portion of its revenues is 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, 2000, more than 50 companies were certified to offer 
telecommunications services in CBT's local franchise area and 39 of those 
companies have sought interconnection agreements with CBT. CBT seeks to 
maintain a competitive advantage over these carriers through its service 
quality, network capabilities, innovative products and services, creative 
bundling ideas for products and customer billing and value pricing. CBT has 
experienced only a 1% net loss in access lines in spite of an increased level 
of competition.

    CBT had approximately 1,049,000 network access lines in service on 
December 31, 2000, a 1% reduction in comparison to 1,055,000 access lines in 
service at December 31, 1999. Approximately 68% of CBT's network access lines 
serve residential customers and 32% serve business customers. In addition, 
voice-grade equivalents 


                                       3

<PAGE>

from digital services, a measure used to express the sale of higher-bandwidth 
services, increased 37% and 34% in 2000 and 1999, respectively.

WIRELESS

    The Wireless segment comprises the operations of Cincinnati Bell Wireless 
LLC ("CBW"), a venture with AT&T PCS, Inc. ("AT&T PCS") in which the Company 
owns 80.1% and AT&T PCS owns the remaining 19.9%. The Company acquired its 
80.1% ownership interest from AT&T PCS on December 31, 1998. CBW provides 
advanced digital personal communications to customers in its Greater 
Cincinnati and Dayton, Ohio operating areas. Services are provided over the 
Company's regional and AT&T PCS' national networks.

    Revenues for the Wireless segment come primarily from two sources: 
provision of wireless communications services to its subscribers and the sale 
of handsets and associated equipment. In 2000, approximately 93% of revenues 
for the segment were from services and the remaining 7% were from equipment 
sales. This compares to approximately 86% and 14%, respectively, of prior 
year revenues. In total, the Wireless segment contributed 9% of consolidated 
pro forma revenues and also supplied more than 23% of the growth in 
consolidated revenues for 2000. In 1999, the Wireless segment produced 5% of 
consolidated pro forma revenues and 70% of the growth in consolidated 
revenues.

    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 when subscribers of other wireless 
providers initiate calls while roaming in CBW's service area. However, 
significant expenses are also incurred by this segment when its own wireless 
subscribers use their handsets in the operating territory of other wireless 
providers.

    Approximately 90% of all service revenues were generated on a postpaid 
basis, whereby subscribers pay in arrears based on usage. The remaining 10% 
of service revenues were generated by the Company's new i-wireless-SM- 
prepaid service. In October 1999, the Company introduced this new service, 
allowing 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. Sales also take place in the retail stores of major 
electronic retailers pursuant to agency agreements. The Company sells 
handsets and equipment from a variety of vendors with the Nokia brand being 
the 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. In order to attract customers, handsets are 
typically sold by the Company for less than direct costs.

    The Wireless segment offers its services over a digital wireless network 
using Time Division Multiple Access ("TDMA") technology. The Company believes 
that TDMA technology will meet the existing needs of its customers and enable 
it to introduce new products and services as part of its business plan. As 
previously mentioned, this segment relies 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 CBW to attract and retain 
customers.

                                       4

<PAGE>

    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, brand name and customer service enable it to succeed 
in its current operating environment.

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

OTHER COMMUNICATIONS

    Other Communications combines the operations of the Cincinnati Bell Any 
Distance, Cincinnati Bell Directory, ZoomTown.com and Cincinnati Bell Public 
Communications segments. Revenues for the Other Communications segment 
constituted approximately 7% of consolidated Company revenues in 2000. The 
results of operations of the Company's former Cincinnati Bell Supply 
subsidiary are no longer reflected in this segment pursuant to the sale of 
this business in the second quarter of 2000.

Cincinnati Bell Any Distance (formerly Cincinnati Bell Long Distance)

    In 2000, Cincinnati Bell Any Distance ("CBAD") resold long distance 
services to small and medium-sized businesses and residential customers in 
the Greater Cincinnati area, producing $46 million in revenues for the Other 
Communications segment and representing approximately 2% of consolidated 
revenues. Customers of the former Cincinnati Bell Long Distance ("CBLD") 
outside of the Greater Cincinnati operating territory were serviced by 
Broadwing Communications, with the associated revenues and expenses being 
reported in the results of the Broadband segment. In January 2001, the 
Company officially established the new CBAD subsidiary to assume the 
Cincinnati-based marketing activities for the Any Distance service. The 
former CBLD was then merged into Broadwing Communications. Accordingly, 
revenues for the Any Distance Service in the Cincinnati area will continue to 
be reported as a component of the Other Communications segment while revenues 
and expenses associated with non-Cincinnati area customers will continue to 
be reported in the results of the Broadband segment.

Cincinnati Bell Directory ("CBD")

    CBD publishes Yellow Pages directories and sells directory advertising 
and informational services in Cincinnati Bell Telephone's local service 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. In 
2000, CBD produced $78 million in revenues, or approximately 4% of 
consolidated revenues.

ZoomTown.com ("ZoomTown")

    ZoomTown provides managed web hosting nationally, while all other 
operations are primarily directed to the Greater Cincinnati metropolitan 
area. In 2000, ZoomTown provided $5 million in revenues, less than 1% of 
consolidated revenues of the Company.

Cincinnati Bell Public Communications Inc. ("Public")


                                       5

<PAGE>

    Public provides public payphone services to customers in a regional area 
consisting of eight states. Public has approximately 8,400 stations in 
service and generated approximately $14 million in revenue in 2000, or 
approximately 1% of consolidated revenues.

BUSINESS OUTLOOK

    Evolving technology, the preferences of consumers, the legislative and 
regulatory initiatives of policy makers and the convergence of other 
industries with the communications 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 operating 
margins.

         Broadwing Communications faces significant competition from other 
fiber-based telecommunications companies such as AT&T, Worldcom, Sprint, 
Level 3 Communications, Qwest Communications International, Global Crossing 
and Williams Communications. These companies have enjoyed a competitive 
advantage over Broadwing Communications in the past. Broadwing IT Consulting, 
a subsidiary of Broadwing Communications, competes with Intranet hardware 
vendors, wiring vendors, and other information technology consulting 
businesses. In order to achieve competitive advantage, the Company intends to 
develop new products and services or blend products and services from other 
subsidiaries into the operations of Broadwing Communications as deemed 
necessary.

    Cincinnati Bell Telephone'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 1% of net access lines have been transferred since the advent 
of competition in CBT's service area.

    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.

    Cincinnati Bell Wireless is one of six active wireless service providers 
in the Cincinnati and Dayton, Ohio metropolitan market areas. Cincinnati Bell 
Directory's competitors are directory services companies, newspapers and 
other media advertising service providers in the Cincinnati metropolitan 
market area. CBD now competes with "Yellow Book" following the sale of 
Donnelley's Cincinnati operations to Yellow Book. This competition may affect 
CBD's ability to grow or maintain profits and revenues.

    Cincinnati Bell Any Distance has captured substantial market share in the 
Greater Cincinnati area since the introduction of its Any Distance offer in 
January 2000, but still faces intense competition from larger long distance 
providers and other resellers. As a matter of necessity, margins on long 
distance minutes continue to fall as providers attempt to hold on to their 
subscriber base. Furthermore, additional advertising and other start-up costs 
are necessary in order to capture and retain market share. ZoomTown.com 
enjoyed a successful launch in 2000, but competes with nationally known 
web-hosting providers such as Exodus Communications, Inc. and Digex, 
Incorporated.

    The Company believes that its reputation for quality service and 
innovative products can be successfully exported outside of its local 
franchise area. The Company has successfully blended its provisioning and 
marketing expertise with Broadwing Communications' next-generation optical 
network in order to introduce advanced calling and data transport services 
throughout the United States. The Company intends to retain 


                                       6

<PAGE>

market share with respect to its current service offerings and continue to 
pursue rapid growth in data transport and wireless communications services. 
The Company also intends to continue to leverage its investment in its local 
communications and its regional wireless networks and national partnership 
with AT&T PCS to provide new and incremental product and service offerings to 
its customers in the Greater Cincinnati and Dayton, Ohio markets.

RISK FACTORS

    INCREASED COMPETITION COULD AFFECT PROFITABILITY AND CASH FLOW

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

    Broadwing Communications 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 
a sustained ability to meet the price, quality and service expectations of 
its customers. From a national perspective, the Company faces competition 
from well-managed and well-financed companies such as AT&T, Worldcom, Sprint, 
Level 3 Communications, Qwest Communications International, Global Crossing, 
Williams Communications and several new emerging competitors.

    Competition from other national providers could also have another effect 
on the Company. The current and planned fiber-optic network capacity of these 
and other competitors could result in decreasing prices even as the demand 
for higher-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 current prices and profit margins. As with competition in 
the local arena, the Company's failure against these competitors would affect 
its ability to continue construction of its optical network, which would have 
a material adverse effect on its business, financial condition and results of 
operations.

    The Company's other subsidiaries operate in a largely local or regional 
area, and each of these subsidiaries faces significant competition. CBAD's 
competitors include large national interexchange carriers. CBD's competitors 
are other directory services companies such as "Yellow Book", newspapers and 
other media advertising services providers in the Cincinnati metropolitan 
market area. CBW 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. ZoomTown provides managed web-hosting and other 
Internet-based products and services and competes with other web hosting 
providers such as Exodus Communications, Inc. and Digex, Incorporated. Public 
competes with several other public payphone providers, some of which are 
national in scope and offer lower prices for coin-based local calling 
services. Public is also being adversely impacted by the growing popularity 
of wireless communications.

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


                                       7

<PAGE>


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

    Prior to the Merger, the Company was able to generate sufficient cash 
flow for its investing and financing needs as a result of mature businesses 
that benefited from a local telephone franchise, an embedded customer base 
and relative freedom from competition. However, increased demand for data, 
Internet-based and wireless communications has made it necessary and prudent 
for the Company to diversify into 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. To successfully compete in these markets, 
the Company expects to make $1.6 billion in aggregate capital expenditures 
over the next three years, with an increasing proportion of these 
expenditures resulting from projected growth.

    In order to provide for these cash requirements, the Company has obtained 
a $2.1 billion credit facility from a group of both banking and non-banking 
institutions. The Company increased its indebtedness in 2000 under this 
credit facility by approximately $900 million in order to fund its capital 
investment program and to refinance $404 million in existing debt. The 
Company anticipates a significant level of additional borrowings from this 
facility in 2001, though it expects these new borrowing requirements to be 
considerably less than in 2000. At the end of 2000, the Company had 
approximately $460 million in remaining borrowing capacity 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 optical network and other capital initiatives, 
current and potential customers could be lost to competitors, which would 
have a material adverse effect on its business, financial condition and 
results of operations. To date, the Company has maintained compliance with 
regard to all of its financial covenants.

    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. Although the Company 
expects to maintain and renew its existing agreements, the loss of a 
substantial number of existing rights and permits would have a material 
adverse effect on its business, financial condition and results of 
operations.   Furthermore, the Company may incur significant future 
expenditures in order to remove its facilities upon expiration of related 
rights-of-way agreements.

    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 optical 
network, the deployment of high-speed data transport services both nationally 
and in its local telephone franchise area and continued infrastructure 
development for its wireless business. These initiatives will require a 
significant amount of capital expenditures to complete and maintain.

    The Company's annual capital expenditures increased significantly in 2000 
and 1999 in support of these initiatives and as a result of the Merger. 
Capital expenditures of $144 million in 1998 more than doubled to $381 
million in 1999 and then again to $844 million in 2000 primarily as a result 
of the Merger. Of the $844 million in capital expenditures in 2000, 
approximately 70% and 10%, respectively, can be attributed to the Broadband 
and Wireless segments (see "Capital Additions" later in this Form 10-K for 
additional information as to capital expenditures). The Company's current 
plans call for $700 million in capital spending in 2001 and more than $900 
million over the succeeding two-year period, primarily related to continued 
expansion of the optical network.


                                       8

<PAGE>


    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 the Company's 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. This could potentially compromise the expansion of its national 
optical 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 of this Report on Form 
10-K, "Management's Discussion and Analysis of Financial Condition and 
Results of Operations."

    THE COMPANY MAINTAINS AN INVESTMENT IN THE EQUITY SECURITIES OF OTHER 
    COMPANIES

    As a result of the Merger and in the normal course of its operations, the 
Company has accumulated a portfolio of public and non-public equity 
securities, some of which are subject to certain restrictions as to exercise 
(further discussion of these securities can be found in Note 4 of the Notes 
to Financial Statements).

    The value of this portfolio is subject to considerable fluctuations in 
market value that, under certain circumstances, could require the Company to 
recognize a loss on investments that would affect its reported operating 
results and the carrying amount of the associated securities in the Company's 
balance sheet.

    THE COMPANY'S RECENTLY ANNOUNCED RESTRUCTURING INITIATIVE IS CRITICAL TO 
    ITS SUCCESS

    The Company announced a restructuring initiative on February 20, 2001 
that is intended to realign its Cincinnati-based operations and implement a 
new customer focus for these businesses. Successfully completing this 
initiative by executing the various business strategies that embody the 
initiative, retaining customers and maintaining employee morale and focus 
will be critical to the continued profitability of the Company's 
Cincinnati-based businesses. Failure to successfully implement this 
initiative could have an adverse effect on the Company's business, financial 
condition and results of operations.

ATTRACTING AND RETAINING HIGHLY QUALIFIED EMPLOYEES ARE NECESSARY FOR 
COMPETITIVE ADVANTAGE

    The Company seeks to achieve competitive advantage by hiring, and 
retaining, highly skilled senior management, sales and engineering personnel. 
The Company deems this to be of particular importance in an industry that 
depends on innovation and execution in order to attract and retain the 
customer. If the Company failed to attract or retain these skilled personnel, 
its financial condition and results of operations could be materially 
impacted.

THE COMPANY'S SUCCESS DEPENDS ON THE INTRODUCTION OF NEW PRODUCTS AND SERVICES

    The Company's success depends on being able to anticipate the needs of 
current and future enterprise customers, many of which are currently 
evolving. The Company seeks to meet these needs through new product 
introductions, service quality and technological superiority. If the Company 
failed to anticipate the needs of these customers and did not introduce the 
new products and services necessary to attract or retain these customers, its 
could have a material adverse impact on its business, financial condition and 
results of operations.


                                       9

<PAGE>

CAPITAL ADDITIONS

    The capital additions of the Company are primarily for its fiber-optic 
transmission facilities, telephone plant in its local service area, 
development of the infrastructure for its wireless business and construction 
of additional data centers to meet the demand for web hosting and data 
collocation services. 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 1996 through 2000
on an as-reported basis:


<TABLE>
<CAPTION>
                                                        DOLLARS IN MILLIONS
                                                        -------------------
               LOCAL TELEPHONE              FIBER-OPTIC                      WIRELESS                            TOTAL CAPITAL
                 OPERATIONS           TRANSMISSION FACILITIES            INFRASTRUCTURE            OTHER         ADDITIONS
               ---------------        -----------------------            --------------            -----         --------------
<S>            <C>                    <C>                                <C>                      <C>            <C>
    2000            $151.9                    $591.7                         $ 84.2               $16.1              $843.9

    1999            $152.1                    $166.1*                        $ 55.9               $ 7.1              $381.2

    1998            $134.9                      --                             $2.2               $ 6.3              $143.4

    1997            $140.0                      --                             --                 $18.4              $158.4

    1996            $101.4                      --                             --                 $ 4.9              $106.3
</TABLE>


    * Includes capital expenditures from the November 9, 1999 closing date of
    the Merger until the end of the year. On a pro forma basis in 1999, total
    capital expenditures were $819 million. The difference between pro forma and
    as-reported capital expenditures, or $438 million, is attributable to
    "fiber-optic transmission facilities" in the above table.

    EMPLOYEES

         At December 31, 2000, the Company and its subsidiaries had
    approximately 6,400 employees. CBT had approximately 2,100 employees covered
    under a collective bargaining agreement with the Communications Workers of
    America, which is affiliated with the AFL-CIO. This collective bargaining
    agreement expires in May 2002.

    BUSINESS SEGMENT INFORMATION

         The amounts of revenues, intersegment revenues, earnings before income
    taxes, depreciation and amortization ("EBITDA"), assets, capital additions
    and depreciation and amortization attributable to each of the Company's
    business segments for the year ended December 31, 2000 are set forth in Note
    14 of the Notes to Financial Statements that are contained in Item 8 of this
    Report on Form 10-K, "Financial Statements and Supplementary Schedules."


I
TEM 2.  PROPERTIES

    Broadwing Inc. and its subsidiaries own or maintain telecommunications
facilities in 37 states. Principal office locations are in Austin, TX;
Cincinnati, OH, Baton Rouge, LA; Minneapolis, MN and Indianapolis, IN. Data
Centers are located in Austin, TX; Cincinnati, OH; Chicago, IL; Newark, DE;
Boston, MA; New York, NY; Atlanta, GA; Dallas, TX; Santa Clara, CA; Salt Lake
City, UT and Los Angeles, CA.


                                      10

<PAGE>

    The property of the Company is principally composed of its nationwide 
optical transmission system, telephone plant in its local telephone franchise 
area (i.e., Greater Cincinnati), and the infrastructure associated with its 
wireless business in the Greater Cincinnati and Dayton, Ohio operating areas. 
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 property, plant and equipment, in millions of 
dollars, at December 31, 2000 and 1999 is comprised of the following:


<TABLE>
<CAPTION>
                                                                     2000             1999
                                                                     ----             ----
<S>                                                                 <C>               <C>
    Land and rights of way                                          $  157.6          $  155.9

    Buildings and leasehold improvements                               403.7             428.3

    Local telephone plant                                            1,839.7           1,697.2

    Fiber-optic transmission facilities                              1,587.4           1,183.2

    Furniture, fixtures, vehicles and other                            132.8             116.2

    Construction in process                                            509.1             232.0
                                                         -------------------------------------

         Total                                                      $4,630.3          $3,812.8
</TABLE>


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


<TABLE>
<CAPTION>
                                                                       2000               1999
                                                                       ----               ----
<S>                                                                    <C>               <C>
    Broadband                                                           51.8%             46.0%

    Local Communications                                                42.0%             48.7%

    Wireless                                                             5.5%              4.5%

    Other Communications                                                 0.7%              0.8%
                                                                      -------          --------

         Total                                                         100.0%            100.0%
                                                                       ======            ======
</TABLE>




                                       11

<PAGE>



ITEM 3.  LEGAL PROCEEDINGS

    The information required by this Item is included in Note 18 of the Notes 
to Financial Statements that are contained in Item 8 of this Report on Form 
10-K, "Financial Statements and Supplementary Data."


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

    None.


ITEM 4A.  EXECUTIVE OFFICERS OF THE REGISTRANT (DURING 2000)

The names, ages and positions of the executive officers of the Company as of
December 31, 2000 are as follows:


<TABLE>
<CAPTION>
                  NAME                                        AGE                              TITLE
                  ----                                        ---                              -----
<S>                                                           <C>                     <C>
James D. Kiggen (a)(b)                                         68                     Chairman of the Board

Richard G. Ellenberger (a)(b)                                  48                     President and Chief Executive Officer

Kevin W. Mooney                                                42                     Executive Vice President
                                                                                      and Chief Financial Officer

Thomas E. Taylor  (c)                                          54                     General Counsel and Secretary

Richard S. Pontin                                              47                     President and Chief Operating Officer
                                                                                      of Broadwing Communications Inc.

John F. Cassidy                                                46                     President and Chief Operating Officer
                                                                                      of the Cincinnati Bell Companies

Jeffrey C. Smith (d)                                           49                     General Counsel and Secretary
</TABLE>



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

(a)  Member of the Board of Directors

(b)  Member of the Executive Committee

(c)  Mr. Taylor retired from the Company on February 21, 2001. The Company
     appointed Jeffrey C. Smith to assume the duties of General Counsel and
     Secretary effective February 21, 2001. This change was further discussed in
     the Company's press release on this matter on February 21, 2001 and in a
     Report on Form 8-K filed with the Securities and Exchange Commission, date
     of report February 20, 2001.

(d)  Mr. Smith has been appointed by the Company to succeed Thomas E. Taylor as
     General Counsel and Secretary, effective February 21, 2001.

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


                                       12

<PAGE>

JAMES D. KIGGEN, Chairman of the Board of the Company since January 1, 1999; 
Chairman of the Board of Xtek, Inc. (manufacturer of engineered steel 
products for heavy industry) 1985-1999; Director of Xtek, Inc. 1999-2000; 
Chief Executive Officer of Xtek, Inc., 1981-1998; President of Xtek, Inc., 
1979-1995. Director of Fifth Third Bancorp and its subsidiary, The Fifth 
Third Bank, and The United States Playing Card Company. Chairman of the 
Executive Committee and Chairman of the Governance and Nominating Committee.

RICHARD G. ELLENBERGER, President and Chief Executive Officer of the Company 
since March 1, 1999; Chief Operating Officer of the Company from July 1, 1998 
to March 1, 1999; President and Chief Executive Officer of Cincinnati Bell 
Telephone Company from 1997-1998; Chief Executive Officer of Broadwing 
Communications Inc. since November 9, 1999; 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. Director of the Company since 1998; member of 
the Executive Committee.

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 Cincinnati Bell Telephone since January 1998; Vice President and 
Controller of the Company, 1996-1998; Vice President of Financial Planning 
and Analysis of the Company, 1994-1996; Director of Financial Planning and 
Analysis of the Company, 1990-1994.

THOMAS E. TAYLOR, General Counsel and Secretary of the Company from September 
1998 to February 2001; Senior Vice President and General Counsel of 
Cincinnati Bell Telephone from 1996 to February 2001; Partner at law firm of 
Frost & Jacobs from 1987 to 1996.

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, 1997-1999; 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 and Chief Operating Officer of the Cincinnati Bell 
Companies since May 2000; President of 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; Vice President, Sales and Marketing, Ericsson Mobile 
communications from 1990-1992; Vice President, Sales and Marketing, General 
Electric Company from 1988-1990.

JEFFREY C. SMITH, General Counsel and Corporate Secretary of the Company 
since February 2001; Chief Legal/Administrative Officer of the Company since 
November 1999; Senior Vice President of IXC Communications, Inc. from 
September 1997 until November 1999; Vice President, General Counsel and 
Secretary of IXC Communications, Inc. from January 1997 until September 1997; 
Vice President Planning and Development for Times Mirror Training, a 
subsidiary of Times Mirror, from August 1994 to December 1996. Served in a 
variety of legal capacities, including five years as General Counsel to the 
Baltimore Sun newspaper and Associate General Counsel and Assistant Secretary 
at Times Mirror from 1985 through August 1994. Prior to 1985, employed for 
seven years in private law practice as a trial and business attorney.


                                       13

<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 28, 2001, 
there were approximately 105,000 holders of record of the 217,842,953 
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>
2000     HIGH                               $  40.50      $  36.75              $29.94           $ 28.25
         LOW                                $  29.63      $  22.00              $23.69           $ 20.00


1999     High                               $ 23.44       $  26.50              $26.50           $ 37.88
         Low                                $ 16.06       $  19.63              $16.31           $ 18.75
         Dividend Declared                  $   .10       $    .10              $  --            $   --
</TABLE>


* 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% preferred shares, and began paying dividends in cash rather than shares 
of Broadwing Communications 12 1/2% preferred shares on February 15, 2000. 
Dividends on the 12 1/2% preferred shares are accounted for in the caption 
"Minority Interest Expense (Income)" in the Consolidated Statements of Income 
and Comprehensive Income (Loss).


                                       14

<PAGE>





ITEM 6.  SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS EXCEPT PER SHARE AMOUNTS                     2000             1999         1998           1997          1996
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>           <C>           <C>            <C>            <C>
RESULTS OF OPERATIONS
Revenues                                                         $2,050.1      $1,102.0      $ 861.4        $804.4         $761.1
Costs and expenses, less depreciation and amortization            1,552.1         771.5        576.4         516.1          495.5
                                                                  -------         -----        -----         -----          -----
  EBITDA (a)                                                        498.0         330.5        285.0         288.3          265.6
Depreciation and amortization                                       459.7         180.9        111.0         124.3          120.8
Restructuring and other charges (credits) (b)                         (.8)         10.9         (1.1)        (21.0)         (29.7)
                                                                 ---------         ----      --------     ---------        -------
Operating income                                                     39.1         138.7        175.1         185.0          174.5
Equity loss in unconsolidated entities (c)                           15.5          15.3         27.3          --             --
Minority interest expense (income) (d)                               44.1          (2.7)        --            --             --
Loss on investments (c)                                             356.3            --         --            --             --
Other expense (income), net                                           1.7          (1.4)         2.4           2.6           (0.4)
Interest expense (e)                                                163.6          61.6         24.1          30.1           28.1
                                                                    -----          ----        -----          ----           ----
Income (loss) from continuing operations before
   income taxes, extraordinary items and cumulative
   effect of change in accounting principle                        (542.1)         65.9        121.3         152.3          146.8
Income tax provision (benefit) (f)                                 (165.6)         31.3         42.5          54.1           51.2
                                                                   -------         ----         ----          ----           ----
Income (loss) from continuing operations before
   extraordinary items and cumulative effect of
   change in accounting principle                                  (376.5)         34.6         78.8          98.2           95.6
Income from discontinued operations, net of taxes (g)                  .2           3.4         72.1          95.4           89.4
Extraordinary item, net of taxes                                       --          (6.6)        (1.0)       (210.0)            --
Cumulative effect of change in accounting principle,
   net of taxes (h)                                                   (.8)         --           --            --               -- 
                                                                  --------        ------     ---------      --------         -----
Net income (loss)                                                  (377.1)         31.4        149.9         (16.4)         185.0
Dividends and accretion applicable
  to preferred stock                                                  8.1           2.1           --          --               -- 
                                                                 --------          ----       -------       --------       -------
Net income (loss) applicable to common
   shareholders                                                  $ (385.2)     $   29.3       $149.9        $(16.4)        $185.0
                                                                  --------        -----       ------        -------         ------
Basic earnings (loss) per common share:
  Income (loss) from continuing operations                       $  (1.82)     $     .23     $    .58       $   .72        $   .71
  Income from discontinued operations, net of taxes                    --            .02          .53           .71            .67
  Extraordinary items and cumulative effect of change
   in accounting principle, net of taxes                               --           (.05)        (.01)        (1.55)            --
                                                                    ------         -----      ------        ------         -------
Income (loss)                                                    $  (1.82)     $     .20     $   1.10       $  (.12)       $  1.38
                                                                 =========         =====      =======       ========       =======

Diluted earnings (loss) per common share:
  Income (loss) from continuing operations                       $  (1.82)     $     .22     $    .57       $   .71        $   .70
   Income from discontinued operations, net of taxes                   --            .02          .52           .70            .65
   Extraordinary items and cumulative effect of change
   in accounting principle, net of taxes                               --           (.04)        (.01)        (1.53)            --
                                                                    -------        -----       ------         -----           ----
   Income (loss)                                                 $  (1.82)     $     .20     $   1.08       $  (.12)       $  1.35
                                                                 ==========        =====       ======        =======       =======
Dividends declared per common share                                    --      $     .20     $    .40       $   .40        $   .40
Weighted average common shares (millions)
   Basic                                                           211.7          144.3        136.0         135.2          133.9
   Diluted                                                         211.7          150.7        138.2         137.7          137.2
</TABLE>


                                         15

<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA (CONTINUED)


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS EXCEPT PER SHARE AMOUNTS                     2000             1999         1998           1997          1996    
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>        <C>             <C>           <C>            <C>
FINANCIAL POSITION
Total assets (j) (g)                                             $6,477.6   $   6,505.4    $ 1,041.8     $ 1,273.8      $ 1,415.1
Long-term debt (e)                                               $2,507.0   $   2,136.0    $   366.8     $   268.0      $   271.2
Redeemable Preferred stock (i)                                   $   ---    $     228.6    $    --       $    --        $    --
Total debt (e)                                                   $2,521.0   $   2,145.2    $   553.0     $   399.5      $   409.0
Common shareowners' equity (j) (g)                               $2,021.5   $   2,132.8    $   142.1     $   579.7      $   634.4
Cash flow from continuing operations                             $  332.2   $     314.5    $   205.9     $   194.7      $   131.2
</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 income (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 4 of Notes to Financial Statements.
     (d) See Note 6 of Notes to Financial Statements.
     (e) See Note 5 of Notes to Financial Statements.
     (f) See Note 9 of Notes to Financial Statements.
     (g) See Note 12 of Notes to Financial Statements.
     (h) See Note 1 of Notes to Financial Statements.
     (i) See Note 7 of Notes to Financial Statements.
     (j) See Note 2 of Notes to Financial Statements.


        
                                      16

<PAGE>





ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF 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: Broadband, Local Communications, Wireless and 
Other Communications. A further discussion of these segments and their 
operating results is contained in Item 1, "Business", and in the individual 
segment discussions that begin on page 23 of this Report on Form 10-K.

    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.

RESULTS OF OPERATIONS

    On November 9, 1999, the Company completed its merger (the "Merger") with 
IXC Communications, Inc. ("IXC"; now "Broadwing Communications"), with the 
operations of Broadwing Communications now constituting the Broadband 
segment. The Merger constituted a major strategic initiative for the Company, 
which substantially increased the scope of the Company's businesses and the 
revenues of the Company.

    As a result of the Merger, the Company's operating results for periods 
prior to November 9, 1999 are not directly comparable to periods subsequent 
thereto. Therefore, management's discussion and analysis of results of 
operations has been presented both on an actual, historical basis and on a 
pro forma basis for 1999 and 1998, with the Company's historical results for 
these periods having been adjusted to give pro forma effect to the Merger as 
if it had occurred on January 1, 1998. The pro forma adjustments are based 
upon available information and certain assumptions that management believes 
are reasonable. The pro forma results of operations do not purport to 
represent what the Company's results of operations would actually have been 
if the Merger and related transactions had in fact occurred on January 1, 
1998. The pro forma results have been prepared on a basis comparable to the 
pro forma financial statements contained in the Company's Report on Form 8-K 
dated December 29, 1999.

    The pro forma results of operations presented below also give effect to 
discontinued operations and a change in operating segments effective in 2000, 
which change is described in the Company's Quarterly Reports on Form 10-Q for 
the first two fiscal quarters of 2000.

    A tabular presentation of the Company's "as reported" financial results 
can be found in Item 6, "Selected Financial Data" on page 15 and in the 
Consolidated Statements of Income and Comprehensive Income (Loss) on page 47 
of this Report on Form 10-K. A discussion of the Company's as-reported 
financial results can be found on Page 33 of this Report on Form 10-K.


                                        17

<PAGE>

BROADWING INC.
CONSOLIDATED STATEMENTS OF INCOME - PRO FORMA



<TABLE>
<CAPTION>      
(DOLLARS IN MILLIONS)                                                               PRO FORMA - YEAR ENDED DECEMBER 31,
                                                                    -------------------------------------------------------------
                                                                                               2000 VS.                  1999 VS.
                                                                                                 1999                      1998
                                                                    2000           1999        % CHANGE     1998        % CHANGE
                                                                    ----           ----        --------     ----        --------- 
<S>                                                              <C>             <C>          <C>         <C>           <C>

REVENUES:
Broadband                                                        $  999.7        $ 742.9          35      $ 729.6               2
Local Communications                                                793.9          739.9           7        718.4               3
Wireless                                                            180.0           91.4          97            -              --
Other Communications                                                142.2          109.3          30         90.7              21
Intersegment                                                        (65.7)         (13.2)        n/m         (8.7)            (52)
                                                                 ------------------------                  -------
   Total Revenues                                                 2,050.1        1,670.3          23      1,530.0               9

COSTS & EXPENSES:
Cost of Providing Services and Products Sold                        968.1          856.8          13        795.7               8
Selling, General & Administrative                                   584.0          491.9          19        358.6              37
                                                                 ------------------------                  -------
   EBITDA                                                           498.0          321.6          55        375.7             (14)

Depreciation                                                        346.2          285.2          21        203.3              40
Amortization                                                        113.5          113.3           0        109.4               4
Restructuring Charge (Credit)                                        (0.8)          30.6          --            -              --
Other Infrequent Costs                                                  -           37.8          --          7.9              --
                                                                 ------------------------                  -------          
   Operating Income (Loss)                                           39.1         (145.3)         --         55.1              --

Equity Loss in Unconsolidated Entities                               15.5           21.8        (29)         60.4             (64)
Minority Interest Expense (Income)                                   44.1           38.5          15         48.5             (21)
Loss on Investments                                                 356.3              -         n/m            -             n/m
Other Expense (Income), Net                                           1.7            2.1         (19)       (12.3)             --
Interest Expense                                                    163.6          113.7          44         82.8              37
                                                                 ------------------------                 --------
   Loss from Continuing Operations Before
   Income Taxes, Extraordinary Item and Cumulative
   Effect of Change in Accounting Principle                        (542.1)        (321.4)         69       (124.3)            159

Income Tax Provision (Benefit)                                     (165.6)          31.5         n/m         44.7             (30)
                                                                 ------------------------                 --------
   Loss from Continuing Operations Before
   Extraordinary Item and Cumulative Effect
   of Change in Accounting Principle                               (376.5)        (352.9)          7       (169.0)            109

Discontinued Operations, Net of Taxes                                 0.2            3.4         (94)        72.1             (95)
Extraordinary Item, Net of Taxes                                        -           (6.6)        n/m        (67.0)            (90)
Cumulative Effect of Change in Accounting Principle                  (0.8)             -         n/m            -              --
                                                                 ------------------------                 --------
   Net Loss                                                        (377.1)        (356.1)          6       (163.9)            117

Dividends and Accretion Applicable to Preferred Stock                 8.1            6.9          17          6.5               6
                                                                 ------------------------                 --------
   Net Loss Applicable to Common Shareowners                     $ (385.2)       $(363.0)          6      $(170.4)            113
                                                                 ========================                 ========
Basic and Diluted Loss Per Common Share                            ($1.82)        ($1.79)          2        ($.83)            116
</TABLE>



                                      18

<PAGE>



CONSOLIDATED OVERVIEW ON A PRO FORMA BASIS:

2000 COMPARED TO 1999

    The Company continued to produce revenue growth across all of its 
operating segments. Consolidated revenues of $2,050 million were $380 million 
higher than in the prior year, representing revenue growth of 23%. The 
Broadband segment, which encompasses the operations of the Company's 
Broadwing Communications subsidiary, produced more than two-thirds of the 
revenue growth in the current year. Broadband revenues of $1 billion were 
$257 million, or 35% higher than in the prior year with growth coming from 
all revenue categories in the segment. The Local Communications segment 
contributed an additional $54 million to consolidated revenue growth, 
representing 7% growth versus the prior year. The Wireless segment continued 
its significant growth, with its current year revenues of $180 million nearly 
doubling in comparison to $91 million in 1999. Revenues for the Other 
Communications segment were 30% higher in 2000, increasing $33 million.

    Costs of providing services and products sold were $968 million in the 
current year, a $111 million, or 13% increase in comparison to the prior 
year. Higher costs were incurred by the Wireless and Other Communications 
segments for customer care, maintenance of the optical network and material 
costs associated with wireless handsets and information technology consulting 
sales. Somewhat offsetting these increases were reduced access and 
transmission fees that result from a reduced reliance on other interexchange 
carriers as the Company expands and grooms its national network 
infrastructure. The 13% increase in costs of providing services and products 
sold compared favorably with 23% revenue growth. The Company's gross profit 
margin increased significantly as a result, rising four margin points to 
approximately 53%.

    Selling, general and administrative ("SG&A") expenses of $584 million 
represented a 19%, or $92 million increase over the prior year. The Broadband 
segment incurred the majority of the increase, or $47 million, primarily as a 
result of $17 million of advertising expense in order to introduce the new 
"Broadwing" brand. Also, the Company added more than 600 employees to support 
the expanded network and sales function. The Wireless segment reported a $23 
million increase in SG&A expense primarily for handset subsidies and selling 
expenses in response to significant growth in subscribership. Additional 
increases for the category were incurred primarily on behalf of the Other 
Communications segment and were the result of initial costs associated with 
the introduction of the Any Distance offering and expansion of web-hosting 
services.

    EBITDA of $498 million represented a 55% improvement over the $322 
million reported in the prior year. Higher EBITDA was contributed by the 
Broadband, Local Communications and Wireless segments. This was somewhat 
offset by the declining EBITDA of the Other Communications segment which was 
primarily attributable to advertising and other start-up costs associated 
with the Any Distance service. EBITDA margin expanded by five margin points, 
increasing to more than 24% in 2000.

    Depreciation expense of $346 million represented a $61 million increase 
over the prior year. This increase was incurred primarily by the Broadband 
segment and reflects the continued buildout of its national optical network. 
Higher depreciation expenses were also incurred by the Local Communications 
and Wireless segments as both continued construction of their regional 
network infrastructures. Amortization expense of $113 million pertains to 
purchased goodwill and other intangible assets and was virtually unchanged in 
comparison to 1999.

    The Company recorded approximately $1 million in net restructuring 
credits relating to the restructuring initiative that was undertaken in the 
fourth quarter of 1999 and further described in Note 3 of the Notes to 
Financial Statements. These credits consisted of $.7 million in additional 
severance expense, offset by a $1.5 million reduction related to lease 
terminations.


                                       19

<PAGE>

    Operating income of $39 million in 2000 improved significantly over the 
$145 million operating loss reported in 1999 as a result of the above, with 
increases being provided by the Broadband, Wireless and Local Communications 
segments.

    The Company recorded nearly $16 million in losses in 2000 on the Applied 
Theory investment that is accounted for under the equity method. This is 
approximately $6 million less than the $22 million recorded in the prior 
year, with approximately $5 million in increased losses on the Applied Theory 
investment being more than offset by $11 million in losses on the Unidial 
investment in 1999 that did not recur. These amounts are reported in the 
Consolidated Statements of Income and Comprehensive Income (Loss) under the 
caption "Equity Loss in Unconsolidated Entities".

    Minority interest expense for 2000 consists of $49 million in dividends 
and accretion on the 12 1/2% preferred stock of Broadwing Communications 
offset by approximately $5 million that is attributable to AT&T PCS' 19.9% 
minority interest in the operating loss of the Company's wireless business. 
Net minority interest expense of $44 million in 2000 represented a 15% 
increase in comparison to the prior year due to improved operating results of 
the CBW subsidiary in the current year.

    The Company incurred a $356 million net loss on investments in 2000. This 
was the result of $405 million in recognized losses on the PSINet, Applied 
Theory and ZeroPlus.com investments, net of $49 million in realized gains on 
the sale of the Company's investment in PurchasePro.com.

    Interest expense of $164 million in 2000 represented a 44% increase in 
comparison to the $114 million incurred on a pro forma basis in 1999. Of the 
$50 million increase in interest expense, $48 million was attributable to 
additional borrowings and $2 million was the result of higher average 
interest rates on floating-rate debt (see further discussion of indebtedness 
and interest expense in Note 5 of the Notes to Financial Statements).

    Other expense of $2 million in 2000 was unchanged in comparison to 1999.

    The income tax benefit of $166 million in 2000 represented a $197 million 
decrease in income tax expense versus the $31 million tax provision recorded 
in 1999. This resulted primarily from recognized losses on minority-owned 
investments, somewhat offset by the effect of certain non-deductible expenses 
such as goodwill amortization and preferred stock dividends treated as 
minority interest expense.

    Income from discontinued operations, comprising the operations of the 
Company's former Cincinnati Bell Supply subsidiary, contributed an additional 
$.2 million in income (net of tax) in 2000, or approximately $3 million less 
than in 1999. This was attributable to the fact that this business was sold 
in May 2000. The Company also recognized $0.8 million in expense from a 
cumulative effect adjustment that resulted from the adoption of Staff 
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" as 
required by the Securities and Exchange Commission on January 1, 2000 (see 
Note 1 of the Notes to Financial Statements).

    The Company reported a net loss of $377 million in 2000 as a result of 
the above, or $21 million higher than the $356 million pro forma loss 
reported in 1999. Dividends and accretion on preferred stock was $8 million 
in the current year, resulting in a net loss attributable to common 
shareholders of $385 million. The loss per share of $1.82 was 2% higher than 
in the prior year, but included a $1.00 per common share loss pertaining to 
investments. Excluding investment losses, the adjusted loss per share of $.82 
improved 54% in comparison to the pro forma loss per share of $1.79 in 1999.



                                       20

<PAGE>



1999 COMPARED TO 1998

    In 1999, the Company achieved revenue growth across all its segments in 
spite of the de-emphasis of a major revenue source within the Broadband 
segment and an increased level of competition within Cincinnati Bell 
Telephone's service area. Consolidated revenues of $1,670 million were $140 
million higher than in the prior year, representing revenue growth of 9%. The 
primary source of revenue growth for the Company in 1999 was the new 
Cincinnati Bell Wireless subsidiary, which provided more than $91 million in 
new revenues. The Broadband segment produced a $13 million increase in 
revenues, growing 2% to $743 million. The Local Communications segment 
contributed an additional $21 million to consolidated revenues, or 3% growth 
in comparison to the prior year. The Wireless segment provided an additional 
$91 million in revenues in 1999 during its first year of operations as a 
subsidiary of the Company.

    Costs of providing services and products sold were $857 million in 1999, 
a $61 million, or 8% increase, in comparison to the prior year. The Wireless 
segment incurred $59 million in its first year of operations, mainly for 
incollect expense, handset costs and network operations and facilities. The 
Other Communications segment incurred $18 million in additional costs of 
providing services, $13 million of which was attributable to the inclusion of 
public telephone operations in this segment in 1999. The Broadband segment 
incurred an additional $8 million that was primarily attributable to higher 
employee costs and hardware and material costs associated with the growth of 
Broadwing IT Consulting. The Local Communications segment reduced its 
expenses by $29 million, as lower employee costs and operating taxes were 
accompanied by transfer of public telephone operations to the Other 
Communications segment in 1999. Gross profit margin was approximately 48% in 
both years.

    SG&A expenses were 37% higher in 1999, increasing $133 million to $492 
million. The Broadband segment incurred the largest increase, with additional 
expenses of $114 million. This was primarily attributable to higher employee 
costs necessary to maintain, support, promote and sell services as Broadwing 
Communications adopted a direct sales model to complement its Carrier 
business. The Wireless segment incurred approximately $58 million in its 
first year of operations, consisting primarily of handset subsidies, 
promotional expenses, customer care and sales commissions. The Other 
Communications segment increased its SG&A expenses by approximately $1 
million, as lower employee costs were offset by the expenses of the public 
payphone operations. The Local Communications segment had significantly lower 
expenses in 1999, decreasing 13%, or $21 million. This was primarily 
attributable to an $11 million decrease in regulator-mandated costs due to 
the completion of the local number portability initiative in the prior year. 
Year-2000 computer programming expenses were also approximately $6 million 
lower, with the majority CBT's preparedness taking place prior to the 
beginning of 1999.

    EBITDA of $322 million represented a 14% decrease, or $54 million, versus 
the $376 million recorded in the prior year. This was primarily the result of 
Local Communications' improvement of $72 million being more than offset by a 
$109 million EBITDA decrease for the Broadband segment and a $25 million 
decrease associated with the launch of the Company's wireless communications 
business. As a result, EBITDA margin declined six margin points to slightly 
more than 19%.

    Depreciation and amortization expenses of $399 million represented an $86 
million increase over the prior year, nearly all of which was attributable to 
depreciation of network and other assets. This increase was incurred 
primarily by the Broadband segment, with an additional $65 million resulting 
from the continued buildout of its national optical network. Higher 
depreciation expenses were also incurred by the Wireless and Local 
Communications segments as both continued construction of their regional 
network infrastructures, amounting to approximately $10 million and $7 
million, respectively. Amortization expense was $4 million higher than in 
1998 due to the amortization of goodwill arising from the purchase of the 
Company's 80.1% ownership interest in the wireless business.


                                       21

<PAGE>
 
    In December 1999, the Company's management approved restructuring plans 
that included initiatives to integrate operations of the Company and 
Broadwing Communications to improve service delivery and reduce the Company's 
expense structure. Total restructuring costs and impairments of $19 million 
were recorded in the fourth quarter of 1999 related to these initiatives. The 
$19 million consisted of $8 million relating to Broadwing Communications 
(recorded as a component of the purchase price allocation) and $11 million 
relating to the Company (recorded as a cost of operations). The $11 million 
relating to the Company consisted of restructuring and other liabilities of 
approximately $10 million and related asset impairments of approximately $1 
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 
Communications employees and 84 other employees). As of December 31, 2000, 
all of the employee separations had been completed for a total cash 
expenditure of approximately $9 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 Statement of Financial Accounting Standard No. 121, "Accounting for the 
Impairment of Long-Lived Assets to be Disposed Of". Accordingly, the Company 
recorded a charge of approximately $1 million as an expense of operations, 
resulting from the abandonment and write-off of certain assets including 
duplicate network equipment. In total, the Company expects these 
restructuring-related activities to result in cash outlays of approximately 
$15 million and non-cash items of approximately $4 million. The Company now 
expects that nearly all restructuring actions will be completed by June 30, 
2001.

    The operating loss of $145 million represented a $200 million decrease in 
comparison to the $55 million in operating income recorded in the prior year, 
as significant improvements by the Local Communications segment were more 
than offset by the operating losses of the Broadband and Wireless segments.

    The Company recorded equity losses in unconsolidated entities in both 
years. These losses amounted to approximately $22 million in 1999, or $38 
million less than the $60 million recorded in the prior year. The majority of 
this difference was attributable to the $27 million wireless venture loss 
recorded in 1998. This loss resulted from the Company's agreement with AT&T 
PCS to fund its proposed share of wireless venture losses from inception to 
the close of the acquisition on December 31, 1998. The Company managed the 
joint venture during this period while awaiting regulatory approval of the 
acquisition. The operating results for this business from January 1, 1999 to 
the present are consolidated in Company operations.

    Minority interest expense of $39 million represented a 21% reduction 
versus the $49 million recorded in 1998. This difference is primarily 
attributable to AT&T PCS' minority share of the operating losses of the 
wireless business.

    Other expense of $2 million represented a $14 million decrease versus the 
$12 million in other income recorded in 1998. In 1998, Broadwing 
Communications earned $14 million in interest income on invested funds that 
resulted from a series of nonrecurring equity transactions such as the sale 
of preferred stock and corporate bonds.

    Interest expense increased $31 million in 1999, or 37%, as a result of 
higher average debt levels needed to fund expansion of the fiber-optic 
network and to acquire an 80.1% ownership interest in the wireless business. 
The Company also incurred additional interest expense due to the issuance of 
$400 million in 6 3/4% Notes in 

 
                                       22

<PAGE>

July 1999, and the amortization of debt issuance costs and bank commitment 
fees associated with the 6 3/4% Notes and the Company's $2.1 billion credit 
facility (obtained in 1999).

    Income taxes decreased $13 million in comparison to the prior year, or 
30%, as a function of lower pre-tax income, somewhat offset by the effect of 
nondeductible expenses such as goodwill amortization and preferred stock 
dividends treated as minority interest expense.

    The loss from continuing operations before extraordinary items was $353 
million, or 109% higher than the $169 million loss recorded in 1998. This was 
primarily due to the higher operating losses discussed above.

    Income from discontinued operations includes the results of the Company's 
former Cincinnati Bell Supply subsidiary in 1999 and 1998. In 1998, income 
from discontinued operations combines the results of Cincinnati Bell Supply 
and the Company's former Convergys subsidiary that the Company divested in a 
December 31, 1998 spin-off.

    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 charge 
of approximately $7 million, net of taxes. In 1998, the former IXC incurred a 
$67 million extraordinary charge, net of taxes, for the early extinguishment 
of the 12 1/2% Senior Subordinated Notes in April 1998.

    For the reasons noted above, the Company's net loss increased from $164 
million in 1998 to $356 million in 1999.

DISCUSSION OF OPERATING SEGMENT RESULTS:

     The following discussion of the operating results of the Broadband 
segment is being presented on a pro forma basis because it represents a 
better basis for comparison. The Local Communications, Wireless and Other 
Communications segments are discussed on an as-reported basis since there is 
no distinction between pro forma and as-reported results with respect to 
these segments.

BROADBAND 

     The Broadband segment utilizes its advanced optical network consisting 
of more than 18,000 route miles to provide broadband transport, Internet 
services and switched long distance. The Broadband segment also offers data 
collocation, information technology consulting, network construction and 
other services. This segment also provides network capacity and fibers in the 
form of IRU agreements. These services are offered nationally by the 
Company's Broadwing Communications subsidiary.

    Broadband transport services are comprised of the lease of dedicated 
circuits that customers use to transmit data and voice traffic. These 
services are sold on a circuit lease and indefeasible right-to-use basis. 
Switched services represent the transmission of long-distance switched 
traffic to retail business customers and resellers. Data and Internet 
services include providing ATM/frame relay, data collocation and web hosting. 
Other services are comprised of information technology consulting and network 
construction services, and, in 1999, residual revenues from a prior sale of 
dark fiber.

    The Broadband segment reflects the results of Broadwing Communications, 
which became a subsidiary of the Company on November 9, 1999 as a result of 
the Merger. The operations of Broadwing Communications are included in the 
Company's financial results prospectively from November 9, 1999. For purposes 
of comparability, the following discussion assumes the Broadband segment 
existed in its current form effective January 1, 1998 and refers to "pro 
forma" results. As a result, the numbers referred to in this discussion will 
be different from Broadband segment amounts included in the Consolidated 
Statements of Income and 


                                       23

<PAGE>

Comprehensive Income (Loss). The pro forma numbers also include the revenues 
and expenses associated with Broadwing IT Consulting and an agreement with 
Cincinnati Bell Long Distance to service its customers outside of the 
Cincinnati, Ohio area. This change was further described in the Company's 
Reports on Form 10-Q for the first two quarters of 2000.



<TABLE>
<CAPTION>
        
                                                                                                                    % Change
                                                                           % CHANGE                                PRO FORMA
                                                       PRO FORMA             2000 VS.            PRO FORMA           1999 VS.
($ IN MILLIONS)                           2000              1999          PRO FORMA 1999            1998            PRO FORMA 1998
----------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>               <C>                <C>                <C>                <C>
Revenues:
     Broadband Transport                 $393.2            $304.3               29               $225.4                35
     Switched Services                    408.6             373.5                9                475.4               (21)
     Data and Internet                     64.8              23.6              175                  9.0               162
     Other                                133.1              41.5              221                 19.8               110
                                        -------              ----                                ------
         Total                            999.7             742.9               35                729.6                 2
                                          -----             -----                                 -----

Cost and expenses:
Cost of providing services
     and products sold                    596.8             475.3               26                466.9                 2
Selling, general and
     administrative expense               321.5             274.5               17                160.6                71
                                          -----             -----                                 -----
         Total                            918.3             749.8               22                627.5                19

EBITDA                                  $  81.4            $ (6.9)             n/m               $102.1              (107)
EBITDA margin                               8.1%             (0.9)%             +9 pts             14.0%              -15 pts.
</TABLE>



2000 COMPARED TO 1999

REVENUES

    Revenues increased 35% to reach $1 billion in 2000, with all revenue 
categories contributing to the $257 million in growth. More than half of this 
increase, or $130 million, came from the broadband transport and data and 
Internet categories. The switched services category provided an additional 
$35 million as a result of higher volumes, with an additional $92 million in 
revenue growth resulting from information technology consulting and an 
increase in the number of network construction projects.

    In 2000, the broadband transport category contributed an additional $89 
million in revenues, increasing 29% to $393 million. Broadwing Communications 
continues to experience increased demand for higher-bandwidth services from 
its enterprise customers and also benefited from higher IRU revenues in the 
current year.

    Switched services revenue increased by $35 million or 9% in the current 
year, with $13 million and $22 million, respectively, in additional revenues 
being generated by the retail and wholesale components of this business. 
Switched wholesale revenues increased 14%, as higher volumes resulting from 
the service agreement with CBAD customers were further supplemented by an 
increase in international minutes carried. Switched retail revenues increased 
6%, as higher minutes of use were somewhat offset by a lower rate per minute. 
The retail and wholesale components also benefited from improved credit 
management procedures, resulting in lower uncollectible revenues.

    Data and Internet revenues nearly tripled in the current year, increasing 
175% or $41 million in comparison to the prior year. These revenues continue 
to grow on the strength of demand for Internet-based, ATM/frame relay, data 
collocation and web-hosting services. The Company is fulfilling demand for 
these services through 


                                       24

<PAGE>

the construction of new data centers in the current year, bringing the number 
of fully operational data centers maintained by the Broadband segment to ten 
nationwide.

    Other revenues more than tripled in the current year, increasing from $41 
million in 1999 to more than $133 million in the current year. The majority 
of this $92 million increase is attributable to the growth of the Broadwing 
IT Consulting division, which contributed $52 million in additional 
consulting revenues and related equipment sales. The remainder of the 
increase in this category, or approximately $40 million, was the result of 
network construction projects undertaken on behalf of Touch America Inc. and 
El Paso Energy Communications Company, somewhat offset by nonrecurring, 
residual revenues from a prior sale of dark fiber.

COSTS AND EXPENSES

    Costs of providing services and products sold consist primarily of access 
charges paid to local exchange carriers, transmission lease payments to other 
carriers, costs incurred for network construction projects and personnel and 
hardware costs in the information technology consulting arena. In 2000, costs 
of providing services and products sold amounted to $597 million, a 26% 
increase over the prior year. These increases were driven primarily by 
revenue growth, but were held to a minimum due to a decreased reliance on 
transmission and access charges from other carriers as the Company continues 
to expand and groom its own nationwide optical network. These costs decreased 
as a percentage of revenue in 2000, dropping four points to approximately 60% 
of revenue. Future costs of providing services and products sold is expected 
to continue to grow as a function of revenue, but decline somewhat as a 
percentage of revenue as more of the traffic is carried on the Company's 
network.

    Gross profit margin continues to improve, increasing four margin points 
to more than 40%. The Broadband segment's gross profit margin would have 
experienced a larger increase were it not for growth in lower-margin services 
such as network construction. The Company views network construction services 
as an important revenue source because it typically gains access to rights of 
way or additional fiber routes through its network construction activities.

    SG&A expenses were higher in the current year, increasing 17%, or $47 
million, to $321 million. This was primarily due to the addition of more than 
600 employees in support of new products and services and the information 
technology consulting business. Broadwing Communications also incurred 
significant advertising expenditures in early-2000 in order to introduce the 
new "Broadwing" brand. Of the $22 million increase in advertising expense in 
the current year, $17 million was attributable to the initial nationwide 
advertising campaign that ran in the first quarter of this year. Additional 
advertising expenditures were incurred in support of new and existing 
products and services. In the aggregate, SG&A expenses as a percentage of 
revenue decreased by two percentage points to slightly less than 33%.

    Despite the higher SG&A expenses noted above, the Broadband segment 
produced a significant improvement in EBITDA. EBITDA increased by more than 
$88 million from negative EBITDA of $7 million in 1999 to $81 million in 
positive EBITDA in 2000. EBITDA margin grew to slightly more than 8% in 2000, 
an improvement of nine margin points versus the -1% EBITDA margin reported in 
1999.

1999 COMPARED TO 1998

REVENUES

    Revenues increased only slightly in 1999, growing 2% to $743 million. 
This $13 million increase represented a mixed result, with a $101 million 
reduction in switched services revenue offset by increases in all other 
categories. The reduction in switched services revenue was the result of a 
decision by prior management to de-emphasize this business. Most significant 
was the 35% increase in broadband transport, which provided an additional $79 
million in revenues as a result of other carriers utilizing Broadwing 
Communication's next-


                                       25

<PAGE>

generation, optical network. Data and Internet revenues increased $15 
million, or 162%, as a result of higher demand for Internet access and 
web-hosting services in 1999. Other services grew by nearly $22 million, or 
110%, with $14 million being provided as a result of the growth and expansion 
of the Broadwing IT Consulting division. The remaining $8 million in revenue 
growth was attributable to residual revenues from a prior sale of dark fiber.

COSTS AND EXPENSES

    Costs and expenses of $750 million (excluding depreciation, amortization 
and special charges) were $122 million, or 19% greater than the prior year. 
Costs of providing services and products sold increased by over $8 million, 
or 2%, as lower access costs were offset by higher transmission, Internet 
expenses and material costs associated with the growth of Broadwing IT 
Consulting. The reduction in access costs 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. Gross margin was 36% in 1999 and 1998.

    SG&A expenses increased by $114 million, or 71% in comparison to the 
prior year. This increase was due in part to additional staffing required to 
support, sell and market the expanded fiber- optic network. During 1999, 
Broadwing Communications focused on migrating from network construction to 
sales and marketing as its own network increased from approximately 9,300 to 
15,700 fiber route miles. Headcount increased by approximately 600 in 1999 
versus 1998, with 60% of the new positions representing sales positions and 
the remaining 40% for network operations.

LOCAL COMMUNICATIONS 

    The Local Communications segment provides local telephone service, 
network access, data transport, high-speed Internet access, switched long 
distance and other ancillary products and services to customers in 
southwestern Ohio, northern Kentucky and southeastern Indiana. These services 
are provided by the Company's Cincinnati Bell Telephone ("CBT") subsidiary.



<TABLE>
<CAPTION>
                                                                            % CHANGE                           % CHANGE
($ IN MILLIONS)                           2000              1999            00 VS. 99          1998            99 VS. 98
------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>               <C>              <C>                <C>              <C>
Revenues:
     Local service                       $452.8            $427.0                6             $407.9               5
     Network access                       199.9             184.8                8              180.9               2
     Other services                       141.2             128.1               10              129.6              (1)
                                          -----             -----                               -----
         Total                            793.9             739.9                7              718.4               3

</TABLE>


                                       26

<PAGE>


<TABLE>
<S>                                     <C>               <C>              <C>                <C>              <C>
Costs and expenses:
     Cost of providing services
         and products sold                262.9             274.9               (4)             296.6              (7)
     Selling, general and
         administrative expense           138.5             140.8               (2)             152.4              (8)
     Y2K and regulator-mandated            --                 4.6              n/m               21.5             (79)
                                       ---------           ------                              --------              
     Total                                401.4             420.3               (4)             470.5             (11)

EBITDA                                   $392.5            $319.6               23             $247.9              29
EBITDA margin                              49.4%             43.2%              +6 pts           34.5%             +9 pts

Access lines (thousands)                  1,049             1,055               (1)             1,033               2
VGEs - digital (thousands)                  711               518               37                387              34
</TABLE>



2000 COMPARED TO 1999

REVENUES

    Revenues increased $54 million to $794 million as all revenue categories 
contributed to the 7% growth. Of this increase, 74% came from high-speed data 
and Internet services. CBT also continues to leverage the investment in its 
network assets through the sale of value-added services such as custom 
calling features. The sale of these and other value-added services were the 
primary drivers of the remaining revenue growth.

    The local service category provided consistent revenue growth and 
accounted for nearly half of the increase for the segment, growing 6% or $26 
million in the current year. Nearly 78,000 new subscribers were added for the 
Company's Complete Connections(R) calling service bundle during 2000, 
bringing total residential subscribership and penetration rates to 174,000 
and 25%, respectively. Of the 78,000 new Complete Connections subscribers, 
nearly 10,000 chose CBT's latest product bundling offer, Complete Connections 
Universal(R) (introduced May 1, 2000), which allows the customer to combine 
high-speed data transport, local service, custom-calling features, Internet 
access, wireless and long-distance services on one customer bill. Similar 
success has been achieved with regard to the Company's ZoomTown(SM) 
high-speed data transport service with subscribership now nearing 40,000, 
resulting in $8 million in additional revenues in 2000. CBT is now able to 
provision asynchronous digital subscriber line ("ADSL") service across the 
vast majority of its regional network infrastructure, with 80% of its access 
lines being loop-enabled for ADSL transport.

    Network access revenues of $200 million represented an 8%, or $15 
million, increase over the prior year. Voice-grade equivalents ("VGEs") from 
digital and optical services increased 37% and 59%, respectively, providing 
an additional $17 million of revenue growth for the segment. The Company also 
realized approximately $5 million in additional revenues due to the recovery 
of mandated telecommunications costs. In spite of a 6% increase in access 
minutes of use, current year switched access revenues were approximately $7 
million lower due to decreased per-minute rates as part of the optional 
incentive rate regulation instituted at the Federal level in July 1999.

    Other services revenue grew 10% in the current year, increasing $13 
million to $141 million. The Company's Internet access service (FUSE(R)) 
produced 26,000 new subscribers and $5 million in new revenues for the year, 
ending the year with 74,000 subscribers. Further increases in the other 
services category are 


                                       27

<PAGE>

attributable to equipment sales and related installation and maintenance ($6 
million) and inside wire installation and maintenance ($2 million).

COSTS AND EXPENSES

    Costs of providing services and products sold of $263 million in the 
current year was $12 million less than in the prior year, representing a 4% 
decrease. In 2000, CBT benefited from a $4 million reduction in salaries and 
wages, a $5 million reduction in post-retirement and post-employment benefits 
and a $7 million reduction in computer programming expense ($3 million of 
which was attributable to the completion of Year 2000 programming 
initiatives). This was partially offset by a $1 million increase in customer 
care expenses for the high-speed Internet access service and a $2 million 
increase in materials and supplies related to equipment sales. As a result of 
higher revenues and the aforementioned expense reductions, gross profit 
margin improved by four margin points to approximately 67% in the current 
year.

    SG&A expenses were $6 million lower than in the prior year due to a $5 
million reduction in Year 2000 programming expenses and a reduction in 
outsourced telemarketing expense. These reductions were somewhat offset by 
higher advertising expenses associated with new calling service bundles and 
the Company's ZoomTown(SM) ADSL service.

    As a result of the above, EBITDA grew to nearly $393 million in the 
current year, a $73 million, or 23%, increase over 1999. Similar improvement 
was achieved with regard to EBITDA margin, which expanded by six margin 
points to more than 49%.

    CBT's combination of revenue growth and focused cost management has now 
produced ten consecutive quarters of EBITDA margin expansion. CBT continues 
to improve its margins, EBITDA and profitability by leveraging the investment 
in its telecommunications network to offer new value-added products and 
services without significant incremental costs. Furthermore, CBT is able to 
offer a wide variety of telecommunications services at attractive prices with 
the added convenience of one customer bill and has maintained approximately 
99% of its access lines since the advent of competition in its operating area.

1999 COMPARED TO 1998

    The Local Communications segment posted a strong performance in 1999, 
with revenues and EBITDA increasing by 3% and 29% respectively. The 
combination of revenue growth and a focus on cost control efforts resulted in 
an EBITDA margin increase of nine margin points.

REVENUES

    Revenues of $740 million were 3% higher than the $718 million recorded in 
1998, primarily due to growth in local service and network access categories. 
The local service category increased 5% for the year, or $19 million. Within 
this category, growth came primarily from new product bundling offers (e.g., 
Complete Connections(R) added 110,000 subscribers within the year), 
high-speed data transport (e.g., the ZoomtownSM ADSL product launched late in 
1998 grew to 18,000 subscribers by December 31, 1999) and other services. 
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 approximately $4 million. VGEs 
from digital services 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 rate 
reductions initiated as part of the Company's Commitment 2000 program in Ohio 
and 



                                       28

<PAGE>

the optional incentive rate regulation instituted at the Federal level. These 
rate changes were sought by the Company in order to gain earnings freedom 
with regard to these services.

    Other services revenue decreased approximately $2 million in 1999, or 1%. 
This was the result of a $13 million decrease in public telephone revenues 
(now included in the Other Communications segment) being nearly offset by an 
additional $2 million in Internet access revenues, $6 million in rent and 
facilities collocation revenue and $3 million in other ancillary products and 
services.

COSTS AND EXPENSES

    Excluding depreciation, amortization and special charges, costs and 
expenses of $420 million were $50 million less than in 1998, representing an 
11% decrease.

    Costs of providing services decreased by nearly $22 million in 1999, $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 resulted in a 4% increase in access lines per 
employee during 1999. Remaining expense decreases are attributable to the 
public payphone operations that are no longer included in the Local 
Communications segment.

    SG&A expenses decreased by nearly $12 million in comparison to 1998. 
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 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 $15 million in 
increases related to materials and supplies, rent, reciprocal compensation 
due to Internet service providers and advertising expense in support of new 
calling service bundles and the Company's new ZoomTown-SM- ADSL service.

    Year-2000 programming expenses were approximately $6 million lower than 
in 1998, reflecting the progress previously made on critical systems and the 
conclusion of remediation efforts in 1999. No mandated telecommunications 
costs were incurred in 1999 for local number portability and interconnection 
requirements, whereas $11 million in such costs were incurred in 1998.

    As a result of the revenue increase and expense decrease detailed above, 
EBITDA grew from $248 million in 1998 to $320 million in 1999, a 29% 
increase. EBITDA margin expanded by nearly nine margin points to more than 
43%.

WIRELESS 

    The Wireless segment comprises the operations of Cincinnati Bell Wireless 
LLC, a venture in which the Company owns 80.1% and AT&T PCS owns the 
remaining 19.9%. This segment provides advanced digital personal 
communications services and sales of related communications equipment to 
customers in its Greater Cincinnati and Dayton, Ohio operating areas. 
Services are provided over the Company's regional and AT&T PCS' national 
wireless networks.

    The Company acquired its 80.1% ownership interest in this business on 
December 31, 1998. Accordingly, the operating results for the wireless 
business have been reflected in the operating results of the Company since 
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 
approximately $27 

 
                                       29

<PAGE>

million, which was recorded as an equity loss in unconsolidated entities. As 
a result, a detailed comparison of the operating results of 1999 to 1998 is 
not provided.


<TABLE>
<CAPTION>
                                                                                     % CHANGE
($ IN MILLIONS)                                    2000              1999            00 VS. 99
----------------------------------------------------------------------------------------------
<S>                                              <C>                <C>              <C>
Revenues
     Service                                      $167.1           $ 78.7              112
     Equipment                                      12.9             12.7                2
                                                    ----             ----
     Total                                        $180.0           $ 91.4               97

Costs and expenses:
  Cost of providing services and                    80.2             58.6               37
     products sold
  Selling, general and
     administrative expense                         81.3             58.4               39
                                                    ----             ----
  Total                                            161.5            117.0               38

EBITDA                                            $ 18.5           $(25.6)             172
EBITDA margin                                       10.3%           (28.0)%            +38 pts
</TABLE>



2000 COMPARED TO 1999

REVENUES

    Wireless segment revenues nearly doubled in 2000, growing 97% to $180 
million. Revenue growth of $89 million was the result of higher service 
revenues as equipment sales were virtually unchanged in comparison to 1999. 
Service revenues continue to grow on the basis of both postpaid and prepaid 
subscribership, increasing from $79 million in 1999 to $167 million in 2000 
as a result of relatively high average revenue per unit ("ARPU") and low 
customer churn.

    Approximately 177,000 net subscribers were added during the year, with 
growth coming almost equally from the postpaid and prepaid categories. Total 
subscribership now stands at approximately 340,000, a 110% increase versus 
the prior year. Subscribership of 340,000 represents approximately 10% of the 
licensed population of potential subscribers within the Greater Cincinnati 
and Dayton, Ohio metropolitan areas. ARPU from postpaid subscribers of $66 
remained relatively constant in comparison to 1999 due to pricing pressure 
from increasing competition. Average monthly customer churn remained low and 
was among the best in the industry at 1.42% for postpaid subscribers. 
Additionally, subscribership to the Company's i-wireless-SM- prepaid product 
grew from approximately 11,000 subscribers at the end of the prior year to 
more than 97,000 at the end of 2000. This is significant because 
i-wireless-SM- represents an efficient use of the Company's wireless network 
because these subscribers generally make use of the network during off-peak
periods. Additionally, the cost per gross addition ("CPGA") for i-wireless-SM- 
subscribers is approximately half that of postpaid subscribers.

COSTS AND EXPENSES

    Cost of providing services and products sold consists largely of 
incollect expense (whereby CBW incurs costs associated with its subscribers 
using their handsets while in the territories of other wireless service 
providers), network operations costs, interconnection expenses and cost of 
equipment sold. These costs were 45% of revenue during 2000, significantly 
less than the 64% incurred during the prior year. In total, costs of 
providing services and products sold increased 37% in the current year to $80 
million due primarily to increased subscribership and associated 
interconnection charges, incollect expense, customer care and operating 
taxes. Gross profit and gross profit margin also continued their rapid 
improvement, increasing to almost $100 million 


                                       30

<PAGE>

and 55%, respectively. Gross profit margin of 55% in 2000 represents nearly 
20 points in gross margin improvement versus 36% in 1999.

    SG&A expenses include the cost of customer acquisition, which consists 
primarily of the subsidy of customer handsets, advertising, distribution and 
promotional expenses. These costs increased by nearly $23 million in 2000, or 
39%, in support of significant growth in subscribership. In 2000, the CPGA 
for postpaid customers was $342, or 9% less than the $376 incurred in the 
prior year. SG&A expenses also dropped significantly as a percentage of total 
revenue, decreasing from 64% of revenues in 1999 to 45% in 2000.

    Significant EBITDA improvements have been achieved as the Company begins 
to leverage its network investment and benefit from an embedded customer 
base, low customer churn and previous promotional efforts. In the current 
year, EBITDA of nearly $19 million represented a $44 million improvement over 
the prior year. Also increasing was EBITDA margin, expanding to 10% in the 
current year, an improvement of more than 38 margin points versus the -28% 
EBITDA margin reported in the prior year.

1999 COMPARED TO 1998

    As indicated above, the Company did not have a controlling interest in 
the wireless business until completion of the acquisition of an 80.1% 
ownership in this business on December 31, 1998. As a result of its minority 
ownership in the venture during 1998, a $27 million loss was recorded as an 
equity loss in unconsolidated entities during that year.

OTHER COMMUNICATIONS SERVICES

    The Other Communications Services segment comprises the operations of the 
Company's Cincinnati Bell Any Distance ("CBAD"; formerly Cincinnati Bell Long 
Distance), and its Cincinnati Bell Directory ("CBD"), ZoomTown.com 
("ZoomTown") and Cincinnati Bell Public Communications ("Public") 
subsidiaries. The results of operations of Cincinnati Bell Supply are no 
longer reflected in this segment pursuant to the sale of this business in the 
second quarter of 2000.


<TABLE>
<CAPTION>
                                                                            % CHANGE                           % CHANGE
($ IN MILLIONS)                           2000              1999            00 VS. 99          1998            99 VS. 98
------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>               <C>              <C>                <C>             <C>
Revenues                                $142.2             $109.3              30             $ 90.7              21

Cost and expenses:
  Cost of providing services
     and products sold                     84.3              58.3              45               40.1              45
  Selling, general and
     administrative expense                54.3              26.6             104               25.4               5
                                      ---------           -------                           --------
  Total                                   138.6              84.9              63               65.5              30

EBITDA                                  $   3.6            $ 24.4             (85)            $ 25.2              (3)
EBITDA margin                               2.5%             22.3%            -20 pts           27.8%             -6 pts
</TABLE>



                                         31

<PAGE>

2000 COMPARED TO 1999

REVENUES

    Revenues of $142 million represented a 30%, or $33 million increase 
versus the prior year. Producing the vast majority of the revenue growth was 
CBAD, increasing $27 million in comparison to the prior year on the success 
of its new "Any Distance" service offering. This offer has been successful in 
capturing 365,000 subscribers in Cincinnati during its first year, 
representing residential and business market share of 60% and 29%, 
respectively. Accounting for more than half of the total revenues for this 
segment and 12% of its growth was CBD, producing $4 million in additional 
revenues versus the prior year on the strength of a successful sales 
campaign. ZoomTown's web hosting and content business provided approximately 
$5 million in additional revenues in its first full year of operation. 
Revenues from Public were approximately $2 million less than in the prior 
year, and was attributable to erosion caused by the steady growth in the use 
of wireless communications.

COSTS AND EXPENSES

    Costs of providing services and products sold were $84 million in the 
current year, a 45%, or $26 million increase versus the prior year. CBAD and 
Zoomtown incurred $18 million and $5 million increases, respectively, 
primarily for employee and customer care costs associated with the new Any 
Distance offering and the launch of ZoomTown's web hosting business. CBD also 
experienced a $2 million increase in direct costs resulting from higher sales 
commissions and printing costs for its directories. The remaining $1 million 
increase was incurred by Public and was primarily attributable to increased 
line charges.

    In 2000, gross profit margin for the segment decreased six margin points 
to approximately 41% as a result of the above. The gross profit margin 
remained relatively constant over the course of 2000, with improving gross 
profit margins at CBAD and ZoomTown being offset by a decreasing margin for 
Public. Gross profit margin improvement at CBAD and ZoomTown in the latter 
part of 2000 was the result of the Company beginning to leverage its initial 
expenditures for the Any Distance offering and the new web hosting operations.

    SG&A expenses more than doubled this year, increasing 104% to $54 
million. Of the $28 million increase, $23 million was attributable to the 
relatively high customer acquisition costs incurred by CBAD as part of the 
introduction of the Any Distance offering. The remaining $5 million was 
incurred by ZoomTown as a result of the launch of its web hosting business.

    EBITDA decreased to $4 million as a result of the above, an 85% reduction 
in comparison to the $24 million reported in the prior year. EBITDA margin 
experienced a similar decline, decreasing from 22% in 1999 to less than 3% in 
the current year. Because 2000 contained many start-up costs and advertising 
expenses associated with new product introductions, the Company anticipates 
higher EBITDA and EBITDA margin in 2001 as it begins to more fully realize 
the benefits of its initial investment in CBAD and its Any Distance service. 
The Company expects that significant expenditures will still be required in 
order to grow the web hosting business, but anticipates an increasing demand 
for these types of services.

                                       32

<PAGE>

1999 COMPARED TO 1998

REVENUES

     Revenues were $109 million in 1999, a 21% increase versus the $91 
million reported in 1998. Of the $18 million in additional revenues, $1 
million was contributed by CBAD as decreases in its then-existing voice 
products were offset by sales of new data and Internet services. CBD revenues 
were also slightly higher than in 1998, increasing $1 million to nearly $74 
million for the year. Lastly, the inclusion of Public in this segment in 1999 
resulted in an additional $16 million in revenues.

COSTS AND EXPENSES

    Costs and expenses increased 30%, or $19 million. Costs of providing 
services and products sold accounted for nearly all of this increase, or $18 
million. The majority of this increase, or $13 million, can be attributed to 
the inclusion of the Public in this segment in 1999. The remaining $6 million 
increase was incurred by CBAD in support of then-existing services and the 
introduction of new services such as Internet access and frame relay.

    SG&A expenses were approximately $1 million higher than in the prior 
year, as approximately $1 million in reduced employee-related costs at CBAD 
and CBD were offset by the inclusion of nearly $2 million in SG&A expense for 
the public telephone operations.

    EBITDA decreased to $24 million as a result of the above; a $1 million 
decrease versus the $25 million reported in 1998. EBITDA margin experienced a 
similar decline, dropping nearly six margin points to slightly more than 22%.

CONSOLIDATED OVERVIEW ON AN AS REPORTED BASIS:

    A tabular presentation of the "as reported" financial results for 2000, 
1999 and 1998 that are referred to in this discussion can be found in the 
Consolidated Statements of Income and Comprehensive Income (Loss) on page 47 
of this report on Form 10-K.

2000 COMPARED TO 1999

    Consolidated revenues of $2,050 million were $948 million higher than the 
$1,102 million reported in the prior year, representing growth of 86%. In 
addition to the reasons noted in the segment discussions, this significant 
increase was primarily the result of the Merger. This results from the fact 
that 2000 included a full year of the operating results of Broadwing 
Communications, whereas 1999 only included Broadwing Communications 
prospectively from the November 9, 1999 date of the Merger. This affects 
nearly all aspects of the following discussion, with the exception of the 
Local Communications, Wireless and Other Communications segments (see 
detailed discussion of the operating results of these segments within the 
individual segment discussions that begin on page 23 of this Report on Form 
10-K).

    Costs of providing services and products sold were $968 million in the 
current year, a $478 million, or 97% increase in comparison to the prior 
year. Nearly all of this increase was attributable to the operations of the 
Broadband segment, with an additional $487 million that resulted primarily 
from the Merger and volume-based expenditures associated with revenue growth 
and maintenance of the optical network. Higher costs were incurred by the 
Wireless and Other Communications segments primarily for customer care, 
material costs associated with wireless handsets and promotional expenses 
required to launch new products and services. Lower costs were incurred by 
the Local Communications segment, as a decrease in salaries and wages, 
post-retirement and post-employment and computer programming expenses were 
partially offset by an increase in 

                                       33

<PAGE>

customer care and materials and supplies relating to equipment sales. The 
Company's gross profit margin decreased two margin points to 53%, as the 
lower gross profit margin of the Other Communications segment was partially 
offset by improvement from all other segments.

    SG&A expenses of $584 million represented a $303 million, or 108%, 
increase over the prior year. The Broadband segment incurred the majority of 
the increase, or $258 million, primarily as a result of the Merger, $17 
million of advertising expense in order to introduce the new "Broadwing" 
brand and the addition of more than 600 employees to support the expanded 
network and sales function. The Wireless segment reported a $23 million 
increase in SG&A expense primarily for handset subsidies and selling expenses 
in response to significant growth in subscribership. An additional $28 
million was incurred by the Other Communications segment and resulted from 
initial costs associated with the introduction of the Any Distance offering 
and expansion of web-hosting services.

    EBITDA of $498 million represented a $168 million, or 51% improvement 
over the $330 million reported in the prior year. The Broadband segment 
contributed $80 million in additional EBITDA as a result of the Merger and 
operating improvements realized during 2000. The Local Communications and 
Wireless segments increases of $73 million and $44 million, respectively, as 
these segments begin to more fully leverage previous network investment and 
promotional efforts. This was somewhat offset by the declining EBITDA of the 
Other Communications segment which was primarily attributable to advertising 
and other start-up costs associated with the Any Distance service. EBITDA 
margin decreased by six margin points to 24%, as a significant decrease in 
the EBITDA margin of the Other Communications segment was partially offset by 
the improvements of the remaining segments.

    Depreciation expense of $346 million represented a $186 million, or 117%, 
increase over the prior year. This increase was incurred primarily by the 
Broadband segment as a result of the Merger and reflects the continued 
buildout of its national optical network. Higher depreciation expenses were 
also incurred by the Local Communications and Wireless segments as both 
continued construction of their regional network infrastructures. 
Amortization expense of $113 million pertains to purchased goodwill and other 
intangible assets and represented a $92 million increase over the prior year 
and due almost exclusively to the Merger.

    The Company recorded approximately $1 million in net restructuring 
credits relating to the restructuring initiative that was undertaken in the 
fourth quarter of 1999 and further described in Note 3 of the Notes to 
Financial Statements. These credits consisted of $0.7 million in additional 
severance expense, offset by a $1.5 million reduction related to lease 
terminations.

    Operating income of $39 million declined by nearly $100 million in 
comparison to the $139 million reported in the prior year. The operating 
income of the Broadband segment decreased significantly as a result of the 
Merger, while Other Communications also experienced a drop in operating 
income due to the introduction of new products and services. This was 
partially offset by the improvement of the Local Communications and Wireless 
segments.

    The Company recorded nearly $16 million in losses in 2000 on the Applied 
Theory investment that is accounted for under the equity method. This is 
approximately 1% more than the $15 million recorded in the prior year. Prior 
year losses were related to Applied Theory and a 13% share of 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. These amounts are 
reported in the Consolidated Statements of Income and Comprehensive Income 
(Loss) under the caption "Equity Loss in Unconsolidated Entities".

    Minority interest expense consists of $49 million in dividends and 
accretion on the 12 1/2% preferred stock of Broadwing Communications offset 
by approximately $5 million that is attributable to AT&T PCS' 19.9% minority 
interest in the operating loss of the Company's wireless business. Minority 
interest expense (net) of $44 million represented a significant increased 
expense of $47 million from minority interest income of $3 

 
                                       34

<PAGE>

million in the prior year. The increase is due to a full year of dividends 
and accretion on the 12 1/2% preferred stock in 2000 versus only two months 
of dividends and accretion in 1999, as the Merger took place on November 9, 
1999.

    The Company incurred a $356 million net loss on investments in 2000. This 
was the result of $405 million in recognized losses on the PSINet, Applied 
Theory and ZeroPlus.com investments, net of $49 million in realized gains on 
the sale of the Company's investment in PurchasePro.com. No such losses were 
incurred in the prior year.

    Other expense of $2 million was $3 million higher than other income of $1 
million in 1999.

    Interest expense increased to $164 million in 2000, a 165% or $102 
million increase over 1999. This was attributable to higher average debt 
levels necessary to fund expansion of the optical, wireless and local 
networks and higher interest rates in the current year. In addition, the 2000 
amounts reflect an entire year of interest expense related to the debt used 
to fund the Merger, versus only two months of interest expense related to 
such debt in 1999 (see further discussion of interest expense and 
indebtedness later in this discussion and in Note 5 of the Notes to Financial 
Statements).

    The income tax benefit of $166 million represented a $197 million 
decrease in income tax expense versus the $31 million tax provision recorded 
in the prior year. This resulted primarily from recognized losses on 
minority-owned investments, somewhat offset by the effect of certain 
non-deductible expenses such as goodwill amortization and preferred stock 
dividends treated as minority interest expense. The income tax provision for 
the 1999 period reflects a net expense due to not recognizing tax benefits in 
the pre-Merger environment.

    Income from discontinued operations, comprising the operations of the 
Company's former Cincinnati Bell Supply ("CBS") subsidiary, contributed an 
additional $.2 million in income (net of tax) in 2000, or approximately $3 
million less than in the prior year. This was attributable to the fact that 
this business was sold in May 2000. The Company also recognized $0.8 million 
in expense from a cumulative effect adjustment that resulted from the 
adoption of Staff Accounting Bulletin No. 101, "Revenue Recognition in 
Financial Statements" as required by the Securities and Exchange Commission 
on January 1, 2000 (see Note 1 of the Notes to Financial Statements).

    The Company reported a net loss of $377 million as a result of the above, 
or $408 million higher than the $31 million net income reported in 1999. 
Dividends and accretion on preferred stock was $8 million in the current 
year, resulting in a net loss attributable to common shareholders of $385 
million. The loss per share of $1.82 was $2.02 higher than in the prior year, 
but included a $1.00 per common share loss pertaining to investments. 
Excluding investment losses, the adjusted loss per share of $0.82 decreased 
$1.02 in comparison to the income per share of $0.20 in 1999. The decrease in 
both the net income and income per share is related to inclusion of a full 
year of results from Broadwing Communications versus only two months of 
results after the Merger in 1999.

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 is accounted for as a discontinued 
operation, and was solidified with the addition of the Broadwing 
Communications subsidiary and its high-speed, optical network and national 
presence. The acquisition of an 80.1% interest in the wireless business from 
AT&T PCS on December 31, 1998 also added significant growth to the Company's 
local and regional service offerings.

    The addition of Broadwing Communications subsidiary and the acquisition 
of the wireless business from AT&T PCS had a significant impact on 1999 
operating results. Of the $231 million in additional revenues in 


                                       35

<PAGE>

1999, more than 82% (or $190 million) came from these new businesses. The 
Company continued to expand its product and service offerings, as well as its 
geographic footprint, with all previously existing segments reporting 
improved results. Revenues from Local Communications increased 3%, or $21 
million, while Other Communications grew 21%, or $19 million. The growth in 
the Other Communications segment was primarily attributable to the inclusion 
of public payphone operations in the Other Communications segment (public 
payphone had previously been included in the Local Communications segment).

    Costs and expenses, excluding depreciation, amortization and special 
charges, were $772 million, up $195 million or 34%. Of this increase, $99 
million was due to the Merger and $116 million was due to the acquisition of 
Cincinnati Bell Wireless, which became a consolidated entity upon completion 
of the acquisition of this business from AT&T PCS on December 31, 1998. 
Excluding these two additions, operating expenses were down $20 million from 
the prior year. EBITDA margins excluding Broadwing Communications and 
Cincinnati Bell Wireless increased five margin points to 39%.

    Depreciation and amortization expense increased $70 million over 1998, 
with $47 million resulting from the Merger and $14 million attributable to 
the wireless business.

    In December 1999, the Company's management approved restructuring plans 
that included initiatives to integrate operations of the Company and 
Broadwing Communications to improve service delivery and reduce the Company's 
expense structure. Total restructuring costs and impairments of $19 million 
were recorded in the fourth quarter related to these initiatives. The $19 
million consisted of $8 million relating to Broadwing Communications 
(recorded as a component of the preliminary purchase price allocation) and 
$11 million relating to the Company (recorded as a cost of operations). The 
$11 million relating to the Company consisted of restructuring and other 
liabilities of approximately $10 million and related asset impairments of 
approximately $1 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, 2000, 346 
of the employee separations had been completed for a total cash expenditure 
of approximately $9 million (nearly $1 million of which was reflected as 
additional restructuring expense in 2000). 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 charge of approximately $1 
million as an expense of operations, resulting from the abandonment and 
write-off of certain assets including duplicate network equipment. In total, 
the Company expects these restructuring-related activities to result in cash 
outlays of approximately $15 million and non-cash items of approximately $4 
million. The Company expects that nearly all restructuring actions will be 
completed by June 30, 2001.

    Operating income decreased by $36 million from the prior year reflecting 
a $64 million improvement by the Local Communications segment that was offset 
by a $63 million decrease for the Broadband segment. The remaining decrease 
in operating income was attributable to the Wireless segment and the $11 
million for business restructuring described above. Excluding the operating 
losses resulting from acquisitions and restructuring, operating income 
increased by $60 million, or 34%, due primarily to the operations of the 
Local Communications segment.


                                       36

<PAGE>

    The Company recorded equity losses in unconsolidated entities in both 
years. In 1999, the Company recorded a 13% share of the operating losses of 
Broadwing Communications (formerly IXC), or $16 million, 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 million loss on its 
wireless venture with AT&T. This loss resulted from the Company's agreement 
with AT&T PCS to fund its proposed share of wireless venture losses from 
inception to the close of the acquisition on December 31, 1998. The Company 
managed the joint venture during this period while awaiting regulatory 
approval of the acquisition. The operating results for this business from 
January 1, 1999 to the present are consolidated in Company operations.

    Minority interest and other expense (income), resulted in income of $4 
million, a $6 million increase to income in comparison to the $2 million in 
expense incurred in 1998. The $6 million increase results from interest 
income earned on cash invested following the issuance of 6 3/4% Convertible 
Subordinated Notes (the "6 3/4% Notes") in July 1999 and $3 million of 
minority interest income recorded on AT&T PCS' 19.9% share in the losses of 
our wireless subsidiary.

    Interest expense increased significantly in 1999, owing to higher average 
debt levels associated with the Merger, the issuance of the 6 3/4% Notes and 
the amortization of debt issuance costs and bank commitment fees associated 
with the Company's $2.1 billion credit facility and the 6 3/4% Notes. Of the 
$38 million increase in interest expense, approximately $14 million was 
attributable to the operations of the Wireless business and $24 million was 
related to the Merger.

    Income taxes decreased $12 million, or 27% 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 charge 
of approximately $7 million, 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 million extraordinary charge, 
net of tax.

    Income from continuing operations decreased from $79 million in 1998 to 
$35 million in 1999 as a result of the above. Earnings per common share 
("EPS") from continuing operations decreased from $.58 in 1998 to $.23 in 
1999. Excluding the Merger, EPS from continuing operations would have been 
$.80, a 38% increase over 1998.

    Income from discontinued operations, net of taxes includes the results of 
the Company's former Cincinnati Bell Subsidiary that was sold in May 2000. 
From 1995 through 1998, discontinued operations also includes the results of 
Convergys Corporation ("Convergys"), the billing and customer management 
operations that were divested on December 31, 1998 through a tax free 
spin-off.

FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES

CAPITAL INVESTMENT, RESOURCES AND LIQUIDITY

    The Company's continued transformation from a local wireline voice 
communications provider to a nationwide provider of data, voice and Internet 
services and a regional provider of wireless services has resulted in 
significantly different financing requirements. Although the Company expects 
to continue to generate positive cash flow from operations in 2001, capital 
expenditures and other investing needs will continue to increase the 
Company's need for additional borrowings in the near term.


                                   37

<PAGE>

    In order to provide for these cash requirements and other general 
corporate purposes, the Company maintains a $2.1 billion credit facility with 
a group of lending institutions. The credit facility consists of $900 million 
in revolving credit, $750 million in term loans from banking institutions and 
$450 million in term loans from non-banking institutions. At December 31, 
2000, the Company had drawn approximately $1.64 billion from the credit 
facility in order to refinance its existing debt and debt assumed as part of 
the Merger and to provide for the Company's business needs. At December 31, 
2000, the Company had approximately $460 million in additional borrowing 
capacity from this facility. The Company believes that this will be 
sufficient to provide for its financing requirements in excess of amounts 
generated from its operations.

    The interest rates to be charged on borrowings from the credit facility 
can range from 100 to 225 basis points above the London Interbank Offering 
Rate ("LIBOR"), and are currently at 175 basis points as a result of the 
Company's credit rating. The Company incurs banking fees in association with 
this credit facility that range from 37.5 basis points to 75 basis points, 
applied to the unused amount of borrowings of the facility. During 2000, 
these fees amounted to approximately $3 million.

    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, debt to total capitalization, senior debt to 
EBITDA and interest coverage ratios. This facility also contains certain 
covenants which, among other things, may restrict the Company's ability to 
incur additional debt, pay dividends, repurchase Company common stock and 
sell assets or merge with another company.

    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 
---------------------------------------------------------------------------------------------------------------------------
<S>            <C>                          <C>                            <C>                            <C>
BRW            Corporate Credit Rating                  BB+                          BB+                         Ba2
CBT            Corporate Credit Rating                  BB+                          BBB+                        Baa3
</TABLE>


    The Company also has an ownership position in equity securities that were 
valued at approximately $252 million as of December 31, 2000, net of the $3 
million collateralized on the forward sale of PSINet common stock discussed 
in Note 5 of the Notes to Financial Statements. The market value of this 
portfolio decreased approximately $588 million in the year due to a decline 
in the market value of the Company's investments in PSINet, Applied Theory 
and ZeroPlus.com and the liquidation of the Company's investment in 
PurchasePro.com. This was partially offset by an increase in the market value 
of the Company's investment in Corvis Corporation (see Note 4 for a further 
discussion of these various investments).

    On April 6, 2000, the Company completed the redemption and conversion of 
its 7 1/4% convertible preferred stock, exchanging 9,466,000 shares of its 
common stock for 1,058,292 shares of the 7 1/4% preferred stock, based on a 
conversion factor of 8.9446 common shares for each of the preferred shares. 
Conversion of these preferred shares into common stock of the Company 
eliminated approximately $8 million per year in cash dividend payments.

    Capital expenditures to maintain and grow the nationwide optical network, 
complete the wireless network expansion, maintain the local Cincinnati 
network and grow the Company's web hosting and collocation business are 
expected to be approximately $700 million in 2001.


                                       38

<PAGE>

BALANCE SHEET

    The following comparisons are relative to December 31, 1999.

    The change in cash and cash equivalents, property, plant and equipment, 
investments in other entities, long-term debt, redeemable preferred stock and 
additional paid in capital is further explained in the preceding discussion 
and in the cash flow discussion below. The increase in accounts receivable 
was primarily the result of revenue growth, particularly for network 
construction projects, and a 12% increase in days sales outstanding. Goodwill 
and other intangibles decreased by $108 million due to recurring amortization 
of related amounts, offset by $32 million of adjustments to the purchase 
price allocation associated with the Merger (see Note 2).

    Accounts payable and accrued liabilities increased primarily as a result 
of additional materials necessary to support revenue growth and capital 
spending associated with construction of the optical network. Restructuring 
liabilities recorded in conjunction with the 1999 restructuring plan 
decreased primarily as a result of cash expenditures during the year. 
Net deferred taxes decreased by $312 million in total as the $186 million net 
deferred tax liability in the prior year became a $126 million net deferred 
tax asset in 2000. This was a result of the recognition of losses on 
minority-owned investments and net operating losses generated in the current 
year. Net assets of discontinued operations decreased approximately $7 
million in comparison to the prior year due to the collections on accounts 
and notes receivable and sale of inventory and fixed assets.

    Redeemable preferred stock decreased due to the conversion of 7 1/4% 
convertible preferred stock into common stock of the Company in April 2000, 
resulting in a corresponding increase to common stock outstanding and 
additional paid in capital. Further increases to common stock outstanding and 
additional paid in capital are due to stock option exercises during 2000. 
Accumulated other comprehensive income decreased in response to net 
unrealized changes in the market value of the Company's current equity 
investment portfolio (see additional description in subsequent paragraphs).

    The Company's investment in PSINet consists of 20.5 million common shares 
which had a market value of approximately $15 million and $632 million at 
December 31, 2000 and 1999, respectively. During most of 2000, the Company 
had adjusted this investment to fair market value at each balance sheet date 
by recording the unrealized holding gain or loss (net of tax) in 
comprehensive income in accordance with SFAS 115. During the fourth quarter 
of 2000, the Company recognized a $342 million net pre-tax loss on the PSINet 
investment and forward sale and recorded an additional $63 million loss on 
investments in Applied Theory and ZeroPlus.com that was partially offset by 
approximately $49 million in gains on the liquidation of the Company's 
position in PurchasePro.com. The PSINet, Applied Theory and ZeroPlus.com 
investments were written down to their respective market values at December 
31, 2000.

CASH FLOW

    In 2000, cash provided by operating activities was $332 million, $17 
million higher than the $315 million generated during 1999.

    The Company's significant investing activities were capital expenditures 
and equity investments. Capital expenditures in 2000 were approximately $844 
million, considerably higher than the $381 million spent in the prior year. 
The majority of this increase is attributable to the Merger in that prior 
year results only included approximately two months of expenditures on the 
fiber-optic network. Other increases in capital expenditures were primarily 
related to the expansion of the wireless and web hosting businesses. The 
Company made $80 


                                       39

<PAGE>

million in strategic investments in 2000, investing $44 million in equity 
instruments of Corvis and $36 million in various other companies. 
Approximately $58 million in cash was provided through the sale of the 
Company's investment in PurchasePro.com and ownership in a joint venture.

    In contrast to 1999 when $46 million in common stock dividends were paid 
to shareowners, no dividends were paid on common stock in 2000. However, 
approximately $12 million in preferred stock dividends were paid to holders 
of the 7 1/4% and 6 3/4% preferred stocks during 2000 (the 7 1/4% preferred 
stock was converted into common shares of the Company in April 2000). 
Additionally, the Company switched to cash payments of dividends on its 
12 1/2% preferred stock in February 2000 and approximately $49 million in 
dividends were paid on this preferred stock in the current year. This amount 
is included in the "Minority Interest Expense (Income)" caption in the 
Consolidated Statements of Income and Comprehensive Income (Loss).

    During 2000, the Company increased its net borrowings by $376 million. 
The increase in debt during 2000 is mainly comprised of $884 million in 
credit facility borrowings and $28 million in payment-in-kind interest on the 
6 3/4% Notes, offset by the retirement of $404 million of the 9% bonds 
originally issued by Broadwing Communications and $124 million reduction in 
the PSINet forward sale liability. Both the payment-in-kind and the PSINet 
loan adjustment were non-cash transactions. Additionally, the Company retired 
amounts remaining on the Coastal note in the fourth quarter of 2000. This 
required nearly $5 million in cash but reduced long-term debt by $8 million 
due to favorable settlement terms.

     Approximately $64 million in cash was generated through the issuance of 
common shares of the Company as a result of stock option exercises during 
2000.

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 - The TELRIC phase of CBT's alternative regulation case, which will 
establish the rates CBT can charge to competitive local exchange carriers for 
unbundled network elements, remains pending. The Public Utilities Commission 
of Ohio ("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. On March 17, 2000, CBT filed an appeal to the Ohio 
Supreme Court with respect to several issues. The appeal has been fully 
briefed and was argued on January 30, 2001, but no decision has been released 
at this time. Nevertheless, CBT has submitted new cost studies as required by 
the PUCO's orders and is awaiting comments. After a period for review of the 
studies and resolution of any disputes, CBT is to file a tariff implementing 
the resulting rates.

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.


                                       40

<PAGE>
 
    A total of twenty-six Equal Employment Opportunity Commission ("EEOC") 
charges were filed beginning in September 1999 by 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. After completing its internal 
investigation of the charges and cooperating fully with the EEOC, the Company 
and the complainants participated in a voluntary mediation proceeding 
conducted by the EEOC. Through the mediation process, the Company was able to 
reach settlement with all twenty-six complainants. The Company also entered 
into a Conciliation Agreement with the EEOC.

    In the course of closing the Company's merger with IXC, the Company 
became aware of IXC's possible non-compliance with certain requirements under 
state and federal environmental laws. Since the Company is committed to 
compliance with environmental laws, management decided to undertake a 
voluntary environmental compliance audit of the IXC facilities and operations 
and, by letter dated November 9, 1999, disclosed potential non-compliance at 
the IXC facilities to the U.S. Environmental Protection Agency ("EPA") under 
the Agency's Self-Policing Policy. The Company made similar voluntary 
disclosures to various state authorities. The EPA determined that IXC appears 
to have satisfied the "prompt disclosure" requirement of the Self-Policing 
Policy for the Company to complete its environmental audit of all IXC 
facilities and report any violations to the Agency. The Company has filed its 
preliminary environmental audit report with the EPA and is currently working 
with the EPA and several state environmental protection agencies to bring the 
Company into compliance with all applicable regulations, and to develop 
internal procedures to ensure future compliance.

RECENTLY ISSUED ACCOUNTING STANDARDS

    In December 1999, the Securities and Exchange Commission ("SEC") issued 
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial 
Statements" ("SAB 101"). In SAB 101, the SEC Staff expressed its views 
regarding the appropriate recognition of revenue with respect to a variety of 
circumstances, some of which are of particular relevance to the Company. As 
required, the Company adopted SAB 101 effective January 1, 2000 and modified 
its revenue recognition policies with respect to initial service activation 
fees.

    Following the guidance in SAB 101, the Company is now recognizing service 
activation revenues and associated direct incremental costs over their 
respective service lives. The adoption of this accounting change resulted in 
a one-time, non-cash, after-tax charge of $0.8 million, which had virtually 
no effect on earnings per share in the current year. However, at December 31, 
2000, the deferral process associated with the adoption of SAB 101 had the 
effect of increasing other current assets and other noncurrent assets by $15 
million each, while increasing other current liabilities and other long-term 
liabilities by $16 million and $15 million, respectively.

    In 2000, the Company recognized $14.1 million in additional revenues and 
$13.3 million in incremental direct expenses pertaining to amounts included 
in the cumulative effect adjustment for SAB 101 as of December 31, 1999. 
Offsetting these amounts were $17.0 million in current year revenues and 
$16.2 million in incremental direct expenses that are being deferred to 
future periods in accordance with SAB 101. This deferral process has 
virtually no effect on the Company's EBITDA or net income in the current 
year. The Company restated the first, second and third quarter 2000 operating 
results to reflect the adoption of SAB 101 as of January 1, 2000 (see Note 17 
of the Notes to Financial Statements).

    In June 1998, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standard No. 133, "Accounting for Derivative 
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes 
accounting and reporting standards requiring that a derivative instrument may 
need to be recorded in the balance sheet as either an asset or liability, 
measured at its fair value. SFAS 133 was subsequently amended through the 
release of SFAS 137, which provided 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 expects that the adoption of SFAS 133 and related amendments 
on January 1, 2001 will have an immaterial effect on the Company's results of 
operations, 

                                       41

<PAGE>

cash flows and financial position. The Company does not hold or issue 
derivative financial instruments for trading purposes or enter into interest 
rate transactions for speculative purposes.

BUSINESS DEVELOPMENT

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


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 derivative 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.

    The Company is, however, required by terms negotiated with its lenders to 
 engage in interest rate swaps once certain thresholds are exceeded with 
regard  to floating rate debt as a percentage of the Company's total debt. 
The Company  exceeded this threshold during 2000 and, accordingly, entered 
into a series of  interest rate swap agreements on notional amounts totaling 
$130 million. The  purpose of these agreements is to hedge against changes in 
market interest  rates to be charged on the Company's borrowings against the 
credit facility.

    These swap agreements involve the exchange of fixed and variable rate 
interest payments and do not represent an actual exchange of the notional 
amounts between the parties. Because these amounts are not exchanged, the 
notional amounts of these agreements are not indicative of the Company's 
exposure resulting from these derivatives. The amounts to be exchanged 
between the parties are primarily the result of the swap's notional amount 
and the fixed and floating rate percentages to be charged on the swap. 
Interest rate differentials associated with the Company's interest rate swaps 
are recorded as an adjustment to interest payable or receivable with the 
offset to interest expense over the life of the swap.

    Potential non-performance by counter-parties to the swap agreements 
exposes the Company to a certain amount of credit risk due to the possibility 
of counter-party default. Because the Company's only counter-parties in these 
transactions are financial institutions who are at least investment grade, it 
believes the risk of counter-party default is minimal.

    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.



                                       42


<PAGE>




    The following table sets forth the face amounts, maturity dates and average
interest rates for the fixed- and floating-rate debt held by the Company at
December 31, 2000 (excluding the PSINet forward sale and capital leases):



<TABLE>
<CAPTION>
($ IN MILLIONS)                      2002        2003        2004         2005      THEREAFTER       TOTAL         FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>         <C>          <C>       <C>              <C>           <C>
Fixed-rate debt:                        $20.0       $20.0  $       -         $20.0        $766.2         $826.2           $735.0
Average interest rate on
  fixed-rate debt                        4.4%        6.2%          -          6.3%          6.9%           6.8%               -

Floating-rate debt:
Average interest rate on          $     -      $     -       $1,189.0       $450.0  $        -         $1,639.0         $1,639.0
  floating-rate debt                                             8.6%         8.9%                         8.7%
                                        -            -                                       -                                -
</TABLE>














                                       43

<PAGE>





ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
Consolidated Financial Statements:

     Report of Management........................................................................................45

     Report of Independent Accountants...........................................................................46

     Consolidated Statements of Income and Comprehensive Income (Loss)...........................................47

     Consolidated Balance Sheets.................................................................................48

     Consolidated Statements of Cash Flows.......................................................................49

     Consolidated Statements of Shareowners' Equity..............................................................50

     Notes to Consolidated Financial Statements..................................................................51

Financial Statement Schedule:

     For each of the three years in the period ended December 31, 2000:

     II  - Valuation and Qualifying Accounts.....................................................................86
</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.


                                       44

<PAGE>




REPORTS OF MANAGEMENT AND INDEPENDENT ACCOUNTANTS                 BROADWING INC.

REPORT OF MANAGEMENT

    The management of 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 of America.

    The Audit and Finance Committee of the Board of Directors, which is 
composed of four 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.

    RICHARD G. ELLENBERGER
    PRESIDENT AND CHIEF EXECUTIVE OFFICER



    KEVIN W. MOONEY
    EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER


                                      45

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND THE
SHAREOWNERS OF BROADWING INC.


In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of
Broadwing Inc. ("the Company") and its subsidiaries at December 31, 2000 and
1999, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. 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 of America, 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 our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company
adopted SEC Staff Accounting Bulletin No. 101 in 2000 and AICPA Statement of
Position 98-1 in 1999 and changed its methods of accounting for certain revenues
and related costs and internal use software development costs, respectively.


/s/ PricewaterhouseCoopers LLP
------------------------------
Cincinnati, Ohio
March 7, 2001


                                       46

<PAGE>

<TABLE>
<CAPTION>
                        CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)                          BROADWING INC.

MILLIONS OF DOLLARS EXCEPT PER SHARE AMOUNTS              YEAR ENDED DECEMBER 31               2000           1999           1998
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>              <C>           <C>
REVENUES                                                                                    $2,050.1         $1,102.0       $861.4 
-----------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
     Costs of providing services and products sold                                             968.1            490.3        362.5
     Selling, general and administrative                                                       584.0            281.2        213.9
     Depreciation                                                                              346.2            159.7        110.4
     Amortization                                                                              113.5             21.2           .6
     Restructuring and other charges (credits)                                                  (0.8)            10.9         (1.1)
                                                                                           ----------            ----     ---------
OPERATING INCOME                                                                                39.1            138.7        175.1
Equity Loss in Unconsolidated Entities                                                          15.5             15.3         27.3
Minority Interest Expense (Income)                                                              44.1             (2.7)        --
Loss on Investments                                                                            356.3             --           --
Other Expense (Income), Net                                                                      1.7             (1.4)         2.4
Interest Expense                                                                               163.6             61.6         24.1  
                                                                                           ---------             ----         ------

Income (Loss) from Continuing Operations Before Income Taxes,
  Extraordinary Items and Cumulative Effect of Change
  in Accounting Principle                                                                     (542.1)            65.9        121.3
Income Tax Provision (Benefit)                                                                (165.6)            31.3         42.5
                                                                                              -------          ------     --------

Income (Loss) from Continuing Operations Before
  Extraordinary Items and Cumulative Effect of Change
  in Accounting Principle                                                                     (376.5)            34.6         78.8

Income from Discontinued Operations, Net of Taxes                                                0.2              3.4         72.1
Extraordinary Item, Net of Taxes                                                                --               (6.6)        (1.0)
Cumulative Effect of Change in Accounting Principle, Net of Taxes                               (0.8)            --           --   
                                                                                             --------       ----------   ----------
NET INCOME (LOSS)                                                                             (377.1)            31.4        149.9

Dividends and Accretion Applicable to Preferred Stock                                            8.1              2.1         --   
                                                                                             ---------    -----------    ----------
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS                                          $(385.2)       $    29.3      $ 149.9  
------------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                                                            $(377.1)       $    31.4      $ 149.9

Other Comprehensive Income (Loss), Net of Tax:
     Unrealized gain on investments                                                             85.9            170.0         --
     Reclassification adjustment-marketable equity securities                                 (170.0)            --           --
     Additional minimum pension liability adjustment                                             (.1)             3.6         (2.5)
     Currency translation adjustments                                                           --               --           (4.8)
                                                                                           ----------        ----------  ----------
Total other comprehensive income (loss)                                                        (84.2)           173.6         (7.3)
                                                                                               ------         -------    ----------
COMPREHENSIVE INCOME (LOSS)                                                                  $(461.3)          $205.0      $ 142.6  
------------------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS (LOSS) PER COMMON SHARE
     Income from Continuing Operations                                                     $    (1.82)    $     .23      $     .58
     Income from Discontinued Operations, Net of Taxes                                          --              .02            .53
     Extraordinary Items and Cumulative Effect of Change
       in Accounting Principle, Net of Taxes                                                    --             (.05)          (.01)
                                                                                           ----------     ----------     ----------
     Net Income (Loss)                                                                     $    (1.82)    $     .20      $    1.10 
                                                                                           -----------    -------------------------
DILUTED EARNINGS (LOSS) PER COMMON SHARE
     Income from Continuing Operations                                                     $    (1.82)     $    .22      $    .57
     Income from Discontinued Operations, Net of Taxes                                          --              .02           .52
     Extraordinary Items and Cumulative Effect of Change
       in Accounting Principle, Net of Taxes                                                    --             (.04)         (.01)
                                                                                           ----------      ---------     ---------
     Net Income (Loss)                                                                     $    (1.82)     $    .20      $   1.08
                                                                                           ----------      ---------     ---------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (MILLIONS)
     Basic                                                                                     211.7            144.3        136.0
     Diluted                                                                                   211.7            150.7        138.2
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

                                       47

<PAGE>


<TABLE>
<CAPTION>
                                         CONSOLIDATED BALANCE SHEETS                                           BROADWING INC.

MILLIONS OF DOLLARS                         AT DECEMBER 31                                              2000             1999
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                    <C>              <C>
ASSETS
Current Assets
     Cash and cash equivalents                                                                          $37.9            $ 80.8
     Receivables, less allowances of $49.0 and $53.4                                                    330.6             224.5
     Materials and supplies                                                                              34.1              25.7
     Deferred income tax benefits                                                                        16.6              35.7
     Prepaid expenses and other current assets                                                           43.5              36.3
                                                                                                    ---------         ---------
     Total current assets                                                                               462.7             403.0

Property, Plant and Equipment, Net                                                                    2,966.2           2,500.6
Goodwill and Other Intangibles, Net                                                                   2,572.2           2,679.8
Investments in Other Entities                                                                           254.9             843.3
Deferred Income Tax Benefits                                                                            109.1              --
Other Noncurrent Assets                                                                                 112.1              70.8
Net Assets from Discontinued Operations                                                                   0.4               7.9
                                                                                                   ----------        ----------
     TOTAL ASSETS                                                                                    $6,477.6          $6,505.4
-------------------------------------------------------------------------------------------------------------------------------
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND SHAREOWNERS' EQUITY
Current Liabilities
     Short-term debt                                                                                $    14.0         $     9.2
     Accounts payable                                                                                   244.4             178.2
     Current portion of unearned revenue and customer deposits                                           88.0              82.6
     Accrued taxes                                                                                       90.4              87.7
     Other current liabilities                                                                          290.5             207.3
                                                                                                        -----          --------
         Total current liabilities                                                                      727.3             565.0
Long-Term Debt, less current portion                                                                  2,507.0           2,136.0

Unearned Revenue, less current portion                                                                  611.0             633.5
Deferred Income Taxes                                                                                    --               221.8

Other Long-Term Liabilities                                                                             177.0             153.7
                                                                                                        -----          --------
     Total Liabilities                                                                                4,022.3           3,710.0

 Minority Interest                                                                                      433.8             434.0

7 1/4% Convertible Preferred Stock, redeemable, $.01 par value; authorized -
   5,000,000 shares of all classes of Preferred Stock; no shares and 1,058,380
   shares issued and outstanding at December 31, 2000 and 1999 (aggregate
   liquidation preference of $0 and $105.8 at December 31, 2000 and 1999,
   respectively)                                                                                       --                 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, 2000 and 1999                                                        129.4             129.4
Common shares, $.01 par value; 480,000,000 shares authorized;
     223,335,343 and 208,678,058 shares issued at December 31, 2000 and 1999                              2.1               2.1
Additional paid-in capital                                                                            2,329.5           1,979.5
Accumulated deficit                                                                                    (377.1)             --
Accumulated other comprehensive income                                                                   82.7             166.9
Common stock in treasury, at cost
     7,805,800 shares at December 31, 2000 and 1999                                                    (145.1)           (145.1)
                                                                                                       -------           -------
Total Shareowners' Equity                                                                             2,021.5           2,132.8 
                                                                                                      -------           --------
Total Liabilities, Redeemable Preferred Stock and Shareowners' Equity                                $6,477.6          $6,505.4
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

                                       48

<PAGE>


<TABLE>
<CAPTION>
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS                                          BROADWING INC.

MILLIONS OF DOLLARS                         YEAR ENDED DECEMBER 31                    2000              1999             1998       
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                                              $(377.1)            $31.4           $ 149.9
     Less: income from discontinued operations, net of taxes                           (0.2)             (3.4)            (72.1)
                                                                                   ---------           ------          ---------
     Net income (loss) from continuing operations                                    (377.3)             28.0              77.8
     Adjustments to reconcile income (loss) from continuing operations to net
     cash provided by (used in) operating activities:
         Depreciation                                                                 346.2             159.7             110.4
         Amortization                                                                 113.5              21.2               0.6
         Restructuring and related charges (credits)                                   --                10.9              (1.1)
         Provision for loss on receivables                                             73.6              28.2              15.8
         Extraordinary items, net of taxes                                             --                 6.6               1.0
         Non-cash interest expense                                                     38.7              15.8               1.9
         Minority interest                                                             44.1              (2.7)             --
         Equity loss in unconsolidated entities                                        15.5              15.3              27.3
         Loss on investments, net                                                     356.3              --                --
         Deferred income taxes                                                       (166.4)            (24.6)            (12.8)
         Tax benefits from employee stock option plans                                 40.2              13.9               2.5
         Other, Net                                                                    (9.1)             (0.3)             --
     Change in operating assets and liabilities net of effects from
     acquisitions:
         Decrease (increase) in receivables                                          (179.7)              0.3             (25.4)
         Decrease (increase) in prepaid expenses and other current assets               6.1             (15.7)              3.0
         Increase (decrease) in accounts payable                                       75.1             (16.6)             47.9
         Increase (decrease) in other current liabilities                              95.1              30.3             (16.5)
         Increase (decrease) in unearned revenues                                     (19.9)             75.0              --
         Decrease (increase) in other assets and liabilities, net                    (119.8)            (30.8)            (26.5)
                                                                                     -------           -------        ----------
            Net cash provided by operating activities of continuing
              operations                                                              332.2             314.5             205.9
                                                                                      -----             -----             -----
CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                                            (843.9)           (381.2)           (143.4)
     Payments for investments/acquisitions, net of cash acquired                      (36.5)           (247.0)           (165.6)
     Purchase of equity securities                                                    (44.0)            (12.8)             --
     Proceeds from sale of marketable equity securities                                58.5               --               --
     Other, net                                                                         2.5             --                --   
                                                                                      -----          ---------           ------
     Net cash used in investing activities of continuing operations                  (863.4)           (641.0)           (309.0)
                                                                                     -------           -------           -------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Issuance of long-term debt                                                       884.0           1,175.0             150.0
     Repayment of long-term debt                                                     (404.0)           (221.2)            (51.2)
     Short-term borrowings, net                                                        (1.9)           (371.4)             54.7
     Debt issuance costs                                                               --               (31.5)             --
     Issuance of common shares-exercise of stock options                               64.2              37.0               0.3
     Purchase of treasury shares                                                       --              (145.1)             --
     Dividends paid                                                                   (12.3)            (45.6)            (54.4)
     Minority interest dividends paid                                                 (49.4)           --                 --    
                                                                                      ------         --------           --------
     Net cash provided by financing activities of
        continuing operations                                                         480.6             397.2               99.4
--------------------------------------------------------------------------------------------------------------------------------
 
     Net cash provided by discontinued operations                                       7.7              --                 6.0
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                                 $(42.9)         $   70.7          $    2.3
Cash and cash equivalents at beginning of year                                         80.8              10.1               7.8
                                                                                       ----              ----         ---------
Cash and cash equivalents at end of year                                              $37.9          $   80.8           $  10.1 
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

 
                                      49

<PAGE>


<TABLE>
<CAPTION>
                                   CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY                                     BROADWING INC.

                                6 3/4% CUMULATIVE                                      
                              CONVERTIBLE PREFERRED                                                 RETAINED      ACCUMULATED 
                                      STOCK          COMMON STOCK   TREASURY STOCK      ADDITIONAL  EARNINGS/     OTHER     
-------------------------------------------------------------------------------------   PAID-IN     ACCUMULATED   COMPREHENSIVE
DOLLARS AND SHARES IN MILLIONS  SHARES    AMOUNT   SHARES   AMOUNT  SHARES    AMOUNT    CAPITAL     DEFICIT       INCOME      TOTAL
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>       <C>      <C>      <C>     <C>       <C>      <C>         <C>            <C>        <C>
BALANCE AT JANUARY 1, 1998       --        --       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
Shares issued under shareowner
     and employee plans          --        --         6.8    --     --       --         130.1         --           --         130.1
Net loss                         --        --        --      --     --       --          --         (377.1)        --        (377.1)
Additional minimum pension
     liability adjustment        --        --        --      --     --       --          --           --           (0.1)       (0.1)
Unrealized loss on
     investments, net of
     reclassification 
     adjustments--               --        --        --      --     --       --           --          --          (84.1)      (84.1)
Restricted stock amortization    --        --        --      --     --       --           3.6         --           --           3.6
Dividends on preferred shares    --        --        --      --     --       --         (12.3)        --           --         (12.3)
Redemption of 7 1/4%
Convertible preferred stock      --        --        --      --     --       --         228.6         --           --         228.6
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2000      0.2    $129.4     215.5    $2.1   (7.8) $(145.1)   $2,329.5      $(377.1)       $82.7    $2,021.5
</TABLE>


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



                                      50

<PAGE>


NOTES TO FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

    The Company provides diversified communications services through 
businesses in four material segments: Broadband, Local Communications, 
Wireless, and Other Communications. On November 9, 1999 the Company merged 
with IXC Communications, Inc. ("IXC") in a transaction accounted for as a 
purchase (the "Merger"). Accordingly, IXC's operations (since 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 Broadwing Inc. ("the Company"), and its majority 
owned subsidiaries in which the Company exercises control. Investments in 
which the Company has the ability to exercise significant influence, but 
which it does not control, 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. 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 -- The Company's inventory of materials and supplies 
are carried at the lower of average cost or market.

PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment is generally 
stated at cost. However, a significant portion of the property, plant and 
equipment of the Broadband segment was recorded at fair market value on the 
November 9, 1999 date of the Merger. The Company's provision for depreciation 
of telephone plant is determined on a straight-line basis using the whole 
life and remaining life methods. 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 and activation of 
customers are amortized on a straight-line basis over the average customer 
life. 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, with the vast majority of recorded goodwill being amortized 
over 30 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.


                                       51

<PAGE>

INVESTMENTS - Investments over which the Company does not exercise 
significant influence are reported at fair value. The Company reviews its 
investments for impairment whenever the fair value of the individual 
investment is less than its cost basis. An impairment loss is recognized if 
the decline in fair value is deemed to be "other than temporary".

REVENUE RECOGNITION -- As further discussed later in this footnote, the 
Company modified its revenue recognition policies on January 1, 2000 to be in 
conformity with the Securities and Exchange Commission's ("SEC") Staff 
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" 
("SAB 101"). Accordingly, service activation revenues are now deferred and 
recognized over the appropriate service life for the associated service. 
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. 
Construction revenues and estimated profits are recognized according to the 
percentage of completion method on a cost incurred to total costs estimated 
at completion basis. Revenues from product sales are generally recognized 
upon performance of contractual obligations, such as shipment, delivery, 
installation or customer acceptance. Indefeasible right-to-use agreements, or 
"IRUs", represent the lease of network capacity or dark fiber 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 broadband transport category 
for the Broadband segment). Directory publishing revenues and related 
directory costs are generally deferred and recognized over the life of the 
associated directory, normally twelve months.

ADVERTISING -- Costs related to advertising are expensed as incurred and 
amounted to $42 million, $22 million, and $11 million in 2000, 1999 and 1998, 
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 
approximately $19 million in 2000 and $3 million in 1999.

INCOME TAXES -- The income tax provision (or benefit) consists of an amount 
for taxes currently payable and a provision (or benefit) for tax consequences 
deferred to future periods.

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 in Note 11 of the 
Notes to Financial Statements.

DERIVATIVE FINANCIAL INSTRUMENTS -- In the normal course of business, the 
Company employs a small number of derivative financial instruments to manage 
its exposure to fluctuations in interest rates. The Company does not hold or 
issue derivative financial instruments for trading purposes. Interest rate 
differentials associated with the Company's interest rate swaps are recorded 
as an adjustment to interest payable or receivable with an offset to interest 
expense over the life of the swap. The forward sale of equity investments is 
accounted for by recording a current asset and current liability at the time 
of execution of the forward sale contract. Once the forward contract is 
settled, the gain or loss on the hedged investment is reclassified from other 
comprehensive income to a realized gain or loss and the current asset and 
current liability are removed from the Company's books.

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


                                       52

<PAGE>

RECENTLY ISSUED ACCOUNTING STANDARDS -- In December 1999, the SEC issued SAB 
101. In SAB 101, the SEC Staff expressed its views regarding the appropriate 
recognition of revenue with respect to a variety of circumstances, some of 
which are of particular relevance to the Company. As required, the Company 
adopted SAB 101 on January 1, 2000 and modified its revenue recognition 
policies with respect to initial service activation fees.

Following the guidance in SAB 101, the Company is now recognizing service 
activation revenues and associated direct incremental costs over their 
respective average customer lives. The adoption of this accounting change 
resulted in a one-time, non-cash, after-tax charge of $0.8 million, having 
virtually no effect on reported earnings per share in the current year.

In 2000, the Company recognized $14.1 million in additional revenues and 
$13.3 million in incremental direct expenses pertaining to amounts included 
in the cumulative effect adjustment for SAB 101 as of January 1, 2000. 
Offsetting these amounts were deferrals of $17.0 million in current year 
revenues and $16.2 million in incremental direct expenses deferred to future 
periods in accordance with SAB 101. This deferral process has virtually no 
effect on the Company's EBITDA or net income in the current year. However, at 
December 31, 2000, the deferral process associated with the adoption of SAB 
101 had the effect of increasing other current assets and other noncurrent 
assets by $15 million each, while increasing other current liabilities and 
other long-term liabilities by $16 million and $15 million, respectively. The 
Company restated the first, second, and third quarter 2000 income statements 
to reflect the adoption of SAB 101 as of January 1, 2000 (see Note 17 of the 
Notes to Financial Statements).

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"). SFAS 133 establishes 
accounting and reporting standards requiring that a derivative instrument may 
need to be recorded in the balance sheet as either an asset or liability, 
measured at its fair value. SFAS 133 was subsequently amended through the 
release of SFAS 137, which provided 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 and related amendments is not mandatory for the 
Company until January 1, 2001. The Company does not anticipate a material 
effect on its results of operations, cash flows and financial position 
resulting from the Company's adoption of this new standard on January 1, 
2001. The Company does not hold or issue derivative financial instruments for 
trading purposes or enter into interest rate transactions for speculative 
purposes.

On January 1, 1999, the Company adopted AICPA Statement of Position 98-1, 
"Accounting for the Costs of Computer Software Developed or Obtained for 
Internal Use" ("SOP 98-1"). 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 adoption of SOP 98-1 resulted in the 
capitalization of $60 million of internal use software development costs in 
2000 and $10 million in 1999. These costs are now being amortized over a 
three to five-year period.

2. ACQUISITIONS

IXC COMMUNICATIONS INC.:

    The Company completed its merger with IXC Communications, Inc. ("IXC") on 
November 9, 1999 ("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 approximately $3.2 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 69 
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; the 
assumption of $1.0 billion of 


                                       53

<PAGE>


IXC's indebtedness, 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 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 (since renamed 
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 allocated to the assets acquired and 
liabilities assumed according to their estimated fair values at the Merger 
date. During 2000, the Company adjusted the fair values of certain assets 
acquired and liabilities assumed based on the receipt of additional 
information which was outstanding at the date of the acquisition. These 
adjustments did not have a material impact on the preliminary purchase price 
allocation. The following table reflects the $3.5 billion fair value 
allocation, comprised of the $2.2 billion consideration paid, the assumption 
of $1.0 billion in indebtedness and the $.3 billion historical net deficit 
acquired:


<TABLE>
<CAPTION>
Millions of dollars:
-------------------------------------------------------------------------------------------
<S>                                                                               <C>
Property, Plant & Equipment                                                       $   124.0
Other Intangibles                                                                     423.0
Debt                                                                                 (174.0)
Deferred Tax Liabilities                                                              (33.0)
Other                                                                                  42.3
-------------------------------------------------------------------------------------------

Subtotal                                                                              382.3
-------------------------------------------------------------------------------------------

Goodwill                                                                            2,155.2

Assumption of Debt                                                                    963.7
-------------------------------------------------------------------------------------------

Total                                                                              $3,501.2
-------------------------------------------------------------------------------------------
</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 80.1% interest in the business known as 
Cincinnati Bell Wireless, including a PCS license and other assets and 
liabilities. The Company paid an additional $12 million towards this purchase 
during the first half of 1999 as a result of the determination of final 
purchase price. 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 the Merger and the Cincinnati Bell Wireless acquisition occurred on 
January 1, 1998:



<TABLE>
<CAPTION>
MILLIONS OF DOLLARS (EXCEPT PER SHARE AMOUNTS)             YEAR ENDED DECEMBER 31                      1999              1998       
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>              <C>
Revenues                                                                                            $1,670.3         $1,548.3
EBITDA                                                                                                 321.6            348.4
Loss from Continuing Operations                                                                       (352.9)          (174.0)

Net Loss                                                                                              (356.1)        $ (168.9)      
------------------------------------------------------------------------------------------------------------------------------------


                                       54

<PAGE>

Loss from Continuing Operations per Common Share                                                 $     (1.75)      $     (.88)
Loss per Common Share                                                                            $     (1.79)  $         (.86)     
------------------------------------------------------------------------------------------------------------------------------------
</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 
Cincinnati Bell Wireless acquisition occurred on January 1, 1998.

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 
Communications employees and 84 employees from other subsidiaries of the 
Company). As of December 31, 2000, all employee separations had been 
completed for a total cash expenditure of $8.9 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 Statement of Financial Accounting Standard No. 121, 
"Accounting for the Impairment of Long-Lived Assets to be Disposed of" ("SFAS 
121"). The Company recorded a $1.4 million charge as an expense of operations 
according to SFAS 121, resulting from the abandonment of certain assets 
including duplicate network equipment.


                                       55

<PAGE>




The following table illustrates activity in this reserve since December 31,
1999:


<TABLE>
<CAPTION>
                                                  BALANCE                                                       BALANCE
       TYPE OF COSTS (IN MILLIONS):          DECEMBER 31, 1999        UTILIZATIONS        ADJUSTMENTS      DECEMBER 31, 2000
       ----------------------------          -----------------        ------------        -----------      -----------------
<S>                                          <C>                      <C>                 <C>              <C>
          Employee separations                   $     7.8               $   (8.9)        $    1.2        $         0.1
          Facility closure costs                       4.4                   (0.7)            (1.5)                 2.2
          Relocation                                   0.2                      --            (0.2)                  --
          Other exit costs                             4.4                   (3.2)             0.3                  1.5
                                                 ---------               ---------        ---------           ---------

          Total                                  $    16.8               $  (12.8)        $   (0.2)       $         3.8
                                                 =========               =========        =========       =============
</TABLE>


    The Company incurred $0.4 million in employee separation expenditures in
1999.

    Net restructuring credits of $0.8 million recorded in operations during 
2000 consisted of $0.7 million in additional employee severance offset by a 
$1.5 million adjustment related to lease terminations. An offsetting 
reduction of $0.6 million in adjustments was recorded at Broadwing 
Communications and was applied to goodwill as part of the purchase allocation 
associated with the Merger. This consisted of $0.4 million in additional 
employee separations and $0.2 million in additional exit costs.

    In total, the Company expects these restructuring plans to result in cash 
outlays of $14.6 million and non-cash items of $3.3 million. Management 
believes that the remaining balance of $3.8 million at December 31, 2000 is 
adequate to complete the restructuring plan and that most of the related 
actions will be completed by June 30, 2001.

4. INVESTMENTS IN OTHER ENTITIES 

    INVESTMENTS IN EQUITY METHOD SECURITIES - The Company holds a 23.5% 
ownership investment in Applied Theory. The Company made the determination 
during the fourth quarter of 2000 that the impairment in the value of this 
investment was "other than temporary". Accordingly, the Company has written 
this investment down to its market value, resulting in a $53 million pre-tax 
charge to earnings in the fourth quarter of 2000. Also in 2000, the Company 
recognized approximately $15 million in losses pertaining to its equity share 
in the net losses of Applied Theory and amortization of implied goodwill 
resulting from this investment. This is reflected in the Consolidated 
Statements of Income and Comprehensive Income (Loss) under the caption 
"Equity Loss in Unconsolidated Entities". The book value and market value of 
this investment was approximately $12 million at December 31, 2000.

    INVESTMENTS IN MARKETABLE SECURITIES - At December 31, 2000, investments 
held in Corvis Corporation ("Corvis"), PSINet, and ZeroPlus.com were 
classified as "available-for-sale" securities under the provisions of 
Statement of Financial Accounting Standard No. 115, "Accounting for Certain 
Investments in Debt and Equity Securities" ("SFAS 115"). The Company reviews 
its portfolio of SFAS 115 investments and makes adjustments to the individual 
carrying values of these investments if an "other than temporary" impairment 
is determined to exist or if an investment is transferred between SFAS 115 
categories (e.g., from the "available for sale" to the "trading" category).

    The Company's investment in PSINet consists of 20.5 million common shares 
which had a market value of approximately $15 million and $632 million at 
December 31, 2000 and 1999, respectively. Additionally, the Company maintains 
an investment in 

                                       56

<PAGE>

approximately 1.9 million common shares of ZeroPlus.com having a market value 
of approximately $0.6 million and $24 million at December 31, 2000 and 1999, 
respectively.

    After considering all of the facts and circumstances surrounding the 
decrease in market value of these marketable securities at December 31, 2000, 
the Company made the determination that these impairments were "other than 
temporary". Accordingly, the Company recognized additional pre-tax losses of 
$342 million and $10 million, respectively, on the PSINet and ZeroPlus.com 
investments representing the difference between the market value and the 
Company's recorded basis in these investments at December 31, 2000. In 2000, 
the Company also recorded a pre-tax gain of $49 million that resulted from 
the liquidation of the Company's investment in PurchasePro.com. The sale of 
all of the Company's shares in PSINet was completed in the first quarter of 
2001 and the Company no longer owns any shares in PSINet.

    INVESTMENTS IN OTHER SECURITIES - The Company enters into certain equity 
investments for the promotion of business and strategic objectives. A portion 
of these investments is in securities which do not have readily determinable 
fair market values. These investments are recorded at cost based on specific 
identification. The carrying value of cost method investments was 
approximately $38 million and $4 million as of December 31, 2000 and 1999, 
respectively. Management reviews these investments on a regular basis using 
external valuations and discounted cash flows to determine the existence of 
an "other than temporary" impairment.

    5. DEBT 

Debt consists of the following:


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                         AT DECEMBER 31                            2000            1999                   
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>             <C>
Short-Term Debt:

     Capital lease obligations                                                       $  5.7              $5.9
     Current maturities of long-term debt                                               8.3               3.3
                                                                                    -------            ------
     Total short-term debt                                                            $14.0              $9.2                
-----------------------------------------------------------------------------------------------------------------------------

Long-Term Debt:
     Bank notes                                                                    $1,639.0            $755.0
     9.0% senior subordinated notes                                                    46.0             450.0
     6.75% convertible notes                                                          440.2             412.0

     Various Cincinnati Bell Telephone notes                                          290.0             290.0
     7.25% senior secured notes                                                        50.0              50.0
     PSINet forward sale                                                                3.0             133.9
     Capital lease obligations                                                         38.8              37.0
     Other                                                                             --                 8.1                
-----------------------------------------------------------------------------------------------------------------------------

     Total long-term debt                                                          $2,507.0          $2,136.0                
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       57

<PAGE>




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


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                                                                   2000              1999             1998       
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>               <C>
Average amounts of short-term debt
   outstanding during the year*                                                       $12.4            $190.0             $87.5

Maximum amounts of short-term debt
   at any month-end during the year                                                    17.8            $230.0            $185.5


Weighted average interest rate during the year**                                        8.4%              4.9%              5.6%
</TABLE>


* Amounts represent the average daily face amount of notes.

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

BANK NOTES

    In November 1999, the Company obtained a $2.1 billion credit facility 
from a group of 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, 2000, the Company had drawn approximately $1.64 billion from the 
credit facility in order to refinance its existing debt and debt assumed as 
part of the Merger. This amount included approximately $404 million borrowed 
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. 
At December 31, 2000, the Company had approximately $460 million in 
additional borrowing capacity under this facility.

     This facility's financial covenants require that the Company maintain 
certain debt to EBITDA, debt to total capitalization, senior debt to EBITDA 
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") and are currently at 175 basis points above LIBOR based on the 
Company's credit rating. 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. In 2000, these 
commitment fees amounted to approximately $3 million.

9% SENIOR SUBORDINATED NOTES

    In 1998, the former IXC issued $450 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 the Company's 
subsidiaries. The indenture related to the 9% notes requires the Company 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. Accordingly, $46 million of 
the 9% notes remain outstanding at December 31, 2000.


                                       58

<PAGE>

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, 2000, the Company has recorded approximately $40 million in cumulative 
interest expense ($28 million was recorded in the current year) and has 
adjusted the carrying amount of the debt accordingly.

CINCINNATI BELL TELEPHONE NOTES

Cincinnati Bell Telephone has $290 million in corporate bonds outstanding 
that are guaranteed by its parent company, Broadwing Inc. These bonds are not 
guaranteed by other subsidiaries of the Company, generally have maturity 
terms ranging from 30 to 40 years and were issued at various dates from 1962 
to 1998. Interest rates on this indebtedness ranges from 4.375% to 7.27%.

7.25% SENIOR SECURED NOTES

In 1993, the Company issued $50 million of 7.25% senior secured notes due 
2023 (the "7.25% notes"). The indenture related to these 7.25% notes does not 
subject the Company to restrictive financial covenants.

PSINET FORWARD SALE

    At December 31, 2000, the Company's total investment in PSINet (including 
six million shares collateralized by a forward sale agreement) consisted of 
20.5 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.

    Given the significant decline in the value of PSINet common stock during 
2000, this liability could be settled for approximately $3 million at 
December 31, 2000. Accordingly, the Company adjusted the carrying value of 
this liability to approximately $3 million during the fourth quarter of 2000. 
On January 25, 2001, the Company settled the forward sale liability for 
approximately 5.8 million shares of PSINet common stock. The difference 
between the six million shares collateralized and the 5.8 million shares 
required to settle the liability were sold in the open market on January 25, 
2001, generating a pre-tax gain of approximately $0.5 million.

CAPITAL LEASE OBLIGATIONS

The Company leases facilities and equipment used in its operations, some of 
which are required to be capitalized in accordance with Statement of 
Financial Accounting Standard No. 13, "Accounting for Leases" ("SFAS 13"). 
SFAS 13 requires the capitalization of leases meeting certain criteria, with 
the related asset being recorded in property, plant and equipment and an 
offsetting amount recorded as a liability. The Company had $44 million in 
total indebtedness relating to capitalized leases as of December 31, 2000, 
$39 million of which is considered long-term.


                                       59

<PAGE>




Annual maturities of long-term debt and minimum payments under capital leases 
for the five years subsequent to December 31, 2000 are as follows:


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                       AT DECEMBER 31                             2000                                    
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>
Debentures/Notes
Year of Maturity
2001                                                                                $   --
2002                                                                                  20.0
2003                                                                                  20.0
2004                                                                               1,189.0
2005                                                                                 470.0
THEREAFTER                                                                           766.2                                   
-----------------------------------------------------------------------------------------------------------------------------
     Subtotal                                                                      2,465.2
PSINet forward sale                                                                    3.0
Capital Leases and Other                                                              38.8                                   
-----------------------------------------------------------------------------------------------------------------------------
     TOTAL                                                                        $2,507.0                                   
</TABLE>


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


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                       YEAR ENDED DECEMBER 31                      2000              1999              1998
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                <C>                <C>
Interest expense:
     Long-term debt                                                                  $157.1             $55.8             $20.8
     Short-term debt                                                                    1.1               5.4               4.8
     Other                                                                              5.4               0.4              (1.5)    
------------------------------------------------------------------------------------------------------------------------------------
 
         Total                                                                       $163.6             $61.6            $ 24.1     
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    The increase in interest expense on long-term debt is a function of 
higher average debt levels resulting primarily from the funding of 
construction of the fiber-optic network and the issuance of $400 million in 
6.75% Convertible Notes. Interest on long-term debt is net of the 
capitalization of $25 million, $4 million and $2 million in interest expense 
in 2000, 1999 and 1998, respectively. Interest on short-term debt decreased 
in 2000 due to the retirement of the Company's commercial paper program in 
August 1999. Other interest expense pertains primarily to capitalized leases, 
which also increased as a result of the Merger.

    In 1999, costs related to the early extinguishment of Broadwing 
Communications' debt as a result of the Merger resulted in an extraordinary 
charge of approximately $7 million, 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 million extraordinary charge, 
net of tax.


                                       60

<PAGE>




6. MINORITY INTEREST


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                         AT DECEMBER 31                           2000              1999                  
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>               <C>
     Minority interest consists of:
     12.5% Exchangeable Preferred Stock                                              $421.0            $418.2
     Minority Interest in Cincinnati Bell
       Wireless held by AT&T PCS                                                       10.2              13.1
       Other                                                                            2.6               2.7                       
------------------------------------------------------------------------------------------------------------------------------------
         Total                                                                       $433.8            $434.0                       
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    Broadwing Communications has outstanding approximately 395,000 shares of 
12 1/2% Junior Exchangeable Preferred Stock ("12 1/2% Preferreds") that are 
carried on the Company's balance sheet at $421 million. The 12 1/2% 
Preferreds are mandatorily redeemable on August 15, 2009 at a price equal to 
their liquidation preference of $1,000 a share, plus accrued and unpaid 
dividends. Through November 15, 1999, dividends on the 12 1/2% Preferreds 
were being effected through additional shares of the 12 1/2% Preferreds. 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 (Income)" in the Consolidated Statements of Income and 
Comprehensive Income (Loss) and consisted of $49 million and $3 million in 
2000 and 1999, respectively. At the Merger date, and as part of purchase 
accounting, the 12 1/2% Preferreds were adjusted to a fair market value 
exceeding 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 LLC ("CBW") subsidiary. The balance is adjusted as a function of 
AT&T PCS' 19.9% share of the operating income (or loss) of CBW, with an 
offsetting amount being reflected in the Consolidated Statements of Income 
and Comprehensive Income (Loss) under the caption "Minority Interest Expense 
(Income)".

7. COMMON AND PREFERRED SHARES

COMMON SHARES

    The par value of the Company's common shares is $.01 per share. At 
December 31, 2000 and 1999, common shares outstanding were 215.5 million and 
200.9 million, respectively, including the issuance of 69.4 million shares in 
November 1999 in association with the Merger. In July 1999, the Company's 
Board of Directors approved a share repurchase program authorizing the 
repurchase of up to $200 million of common shares of the Company. As of 
December 31, 2000, common shares outstanding of 215.5 million are net of the 
repurchase of approximately 7.8 million shares of Company common stock 
accounted for as if retired. These shares were acquired by the Company 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.

 
                                       61

<PAGE>

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 at a par value of $1,000. These 
shares were subsequently converted into 3,105,000 depository shares bearing a 
par value of $50 per share. Shares of this preferred stock can be converted 
at any time at the option of the holder into common stock of the Company at a 
conversion rate of 1.44 shares of Company common stock per depository 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. Pursuant to the Company's March 21, 2000 redemption offer, these 
preferred shares were converted into common shares of the Company at a rate 
of 8.945 common shares for each preferred share, creating approximately 9.5 
million additional common shares on April 26, 2000. Approximately 100 
preferred shares were redeemed for an immaterial amount of cash in order to 
complete the Company's obligations related to this preferred stock.

8. EARNINGS (LOSS) PER COMMON SHARE

    Basic earnings (loss) per common share ("EPS") is based upon the weighted 
average number of common shares outstanding during the period. Diluted EPS 
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 EPS computations for income from 
continuing operations before extraordinary items and the cumulative effect of 
a change in accounting principle for the following periods:



<TABLE>
<CAPTION>
SHARES AND DOLLARS
IN MILLIONS (EXCEPT
PER SHARE AMOUNTS)                          YEAR ENDED DECEMBER 31                        2000           1999          1998
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>             <C>           <C>
Numerator:
     Income (loss) from continuing operations before
         extraordinary items and cumulative effect of change
         in accounting principle                                                        $(376.5)        $34.6         $78.8
     Preferred stock dividends                                                              8.1           2.1              --
                                                                                      ---------        ------       ---------
     Numerator for EPS and EPS assuming dilution - income
         applicable to common shareowners                                               $(384.6)        $32.5         $78.8         
   ---------------------------------------------------------------------------------------------------------------------------------
Denominator:
     Denominator for basic EPS - weighted average common shares                           211.7         144.3         136.0
     Potential dilution:
     Stock options                                                                         --             5.6           1.7
     Stock-based compensation                                                              --              .8            .5
     arrangements                                                                                                               
--------------------------------------------------------------------------------------------------------------------------------

                                                     62

<PAGE>

<S>                                                                                      <C>             <C>           <C>
     Denominator for diluted EPS per common share                                        211.7           150.7         138.2
------------------------------------------------------------------------------------------------------------------------------------
Basic EPS from continuing operations                                                     $(1.82)           $.23          $.58
------------------------------------------------------------------------------------------------------------------------------------
Diluted EPS from continuing operations                                                   $(1.82)           $.22          $.57
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    Weighted average common shares outstanding at December 31, 2000 includes 
a full year of the approximately 69 million shares issued in conjunction with 
the Merger and the conversion of approximately 1.1 million shares of 7 1/4% 
convertible preferred stock into approximately 9.5 million shares of the 
Company's common stock on April 6, 2000. These 9.5 million shares were added 
to the denominator of the EPS calculation during the second quarter of 2000.

    Because the effect of their inclusion in the EPS calculation would be 
anti-dilutive, approximately 7.4 million additional shares related to stock 
options, restricted stock and the assumed conversion of the Company's 6 3/4% 
convertible preferred stock and 6 3/4% convertible subordinated debentures 
are not included in the denominator of the EPS calculation. The total number 
of potential additional shares outstanding related to these securities is 
approximately 47 million if all stock options currently outstanding were 
exercised and all convertible securities were to convert.

9. INCOME TAX PROVISION (BENEFIT)

Income tax provision (benefit) consists of the following:


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                         YEAR ENDED DECEMBER 31                   2000              1999              1998
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>               <C>               <C>
Current:
     Federal                                                                           $0.3             $50.5             $48.9
     State and local                                                                    0.9               6.6               8.0
                                                                                        ---               ---               ---
     Total current                                                                      1.2              57.1              56.9
     Investment tax credits                                                            (0.4)             (1.2)             (1.6)

Deferred:
     Federal                                                                         (132.5)            (21.1)            (12.1)
     State and local                                                                  (33.9)             (3.5)             (0.7)
                                                                                      ------             -----             -----
     Total deferred                                                                  (166.4)            (24.6)            (12.8)
                                                                                     -------            ------            ------
         Total                                                                      $(165.6)            $31.3             $42.5  
     ----------------------------------------------------------------------------------------------------------------------------
</TABLE>


    Income taxes decreased $197 million in comparison to the prior year as a 
function of the pre-tax losses from continuing operations that were partially 
offset by the impact of certain nondeductible expenses such as goodwill 
amortization and preferred stock dividends treated as minority interest 
expense.

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

<TABLE>
<CAPTION>
                                                                                     2000              1999              1998
-----------------------------------------------------------------------------------------------------------------------------
<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                         4.0               3.4               3.9
Amortization of non-deductible intangible assets                                       (4.5)              4.9              --
Dividends on preferred stock                                                           (3.1)              3.5              --
Other differences, net                                                                 (0.8)              0.7              (3.9)
                                                                                       -----          -------            -------
EFFECTIVE RATE                                                                         30.6%             47.5%             35.0%    
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                        63

<PAGE>

     The income tax effects relating to other comprehensive income components 
were $55 million, $104 million and $0 in 2000, 1999 and 1998, respectively.

     The Company realized an income tax benefit from the exercise of certain 
stock options in 2000, 1999 and 1998 of $40 million, $14 million and $3 
million, respectively. This benefit resulted in a decrease in current income 
taxes payable and an increase in additional paid in capital.

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



<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                         AT DECEMBER 31                           2000              1999                  
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>              <C>
Deferred tax assets:
     Loss carryforwards                                                              $158.0            $126.2
     Unearned revenues                                                                189.2             193.9
     Investments                                                                       47.8             (90.0)
     Other                                                                            101.1              90.8
                                                                                      -----             -----
     Total deferred tax assets                                                        496.1             320.9
     Valuation allowance                                                               (8.8)             (0.6)
                                                                                       -----         --------
     Net deferred income tax assets                                                  $487.3            $320.3
                                                                                      -----            ------
Deferred tax liabilities:
     Depreciation and amortization                                                   $310.4            $400.8
     Unrealized gain on investments                                                    42.7             101.0
     Other                                                                              8.5               4.6
                                                                                        ---          --------
     Total deferred tax liabilities                                                  $361.6           $ 506.4
                                                                                      -----           -------
     Net deferred tax asset (liability)                                              $125.7           $(186.1)                      
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    The Company recorded a net decrease in its deferred tax liabilities of 
approximately $145 million in 2000 to account for the tax effect of certain 
purchase accounting adjustments resulting from the Merger, from the 
unrealized losses on investments (net) and from tax deductions originating 
from the exercise of employee stock options. The corresponding tax benefit 
associated with such adjustments was accounted for as a credit to goodwill, 
other comprehensive income, or additional-paid in capital, and not as a 
reduction of the deferred income tax provision for the current year.

    Tax loss carryforwards will generally expire between 2005 and 2020. 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.

    The Company has recorded a valuation allowance of $8.8 million related to 
certain tax loss carryforwards due to uncertainty of the ultimate realization 
of such future benefits in certain state and local taxing jurisdictions.

10. EMPLOYEE BENEFIT PLANS 

    PENSIONS AND POSTRETIREMENT 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-


                                       64

<PAGE>

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.

    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 approximately $47 million at December 
31, 2000.

    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.

    The following information relates to all Company non-contributory 
defined-benefit pension plans, post-retirement healthcare, and life insurance 
benefit plans. Pension and post-retirement benefit costs are as follows:


<TABLE>
<CAPTION>
                                                                                                       POSTRETIREMENT AND
                                                                   PENSION BENEFITS                     OTHER BENEFITS
                                                               ---------------------------         --------------------------
MILLIONS OF DOLLARS       YEAR ENDED DECEMBER 31               2000         1999      1998         2000       1999       1998   
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>       <C>          <C>        <C>        <C>
Service cost (benefits earned during the period)                $5.5        $6.0       $4.8         $1.2       $1.8       $1.5
Interest cost on projected
benefit obligation                                              32.0        30.3       18.1         15.4       14.4       15.3
Expected return on plan assets                                 (43.3)      (37.8)     (23.3)       (11.0)     (10.3)      (9.4)
Settlement gains                                                --          --         --           --         --         --
Curtailment loss                                                 0.1        --          1.4         --         --         --
Amortization of:
     Transition (asset)/obligation                              (2.4)       (2.4)      (1.3)         4.8        4.9        4.9
     Prior service cost                                          2.0         1.5        0.7          0.3        0.3        0.2
     Net (gain)/loss                                            (3.7)        0.3        0.3         (1.0)      (0.3)      (0.2) 
--------------------------------------------------------------------------------------------------------------------------------
Actuarial net pension cost (income)                            $(9.8)   $   (2.1)   $   0.7      $   9.7    $  10.8    $  12.3  
                                                               ------   ---------   ---------    --------   --------   ---------
</TABLE>


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

<TABLE>
<CAPTION>
                                                                                                          POSTRETIREMENT AND
                                                                   PENSION BENEFITS                         OTHER BENEFITS
                                                                  ---------------------                 ---------------------
MILLIONS OF DOLLARS       YEAR ENDED DECEMBER 31                  2000             1999                 2000             1999       
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                <C>                 <C>            <C>
Change in benefit obligation:
     Benefit obligation at January 1                             $434.7           $476.5               $201.2          $234.8
         Service cost                                               5.5              6.0                  1.2             1.8
         Interest cost                                             32.0             30.2                 15.4            14.4
         Amendments                                                 1.0              8.9                 --              (0.4)
         Actuarial  (gain) loss                                    14.5            (44.1)                 8.1           (34.1)
         Benefits paid                                            (48.1)           (42.8)               (15.9)          (15.3)
                                                                  ------           ------               -------       ---------
         Benefit obligation at December 31                       $439.6           $434.7               $210.0          $201.2
                                                                 ------           ------               ------          ------
                                         65

<PAGE>

<S>                                                             <C>                <C>                 <C>            <C>
Change in plan assets:
     Fair value of plan assets at January 1                      $666.2           $579.3               $135.3          $127.9
         Actual return on plan assets                             (11.4)           125.0                  1.8             9.3
         Employer contribution                                      4.4              4.7                  7.9            13.4
         Benefits paid                                            (48.1)           (42.8)               (15.9)          (15.3)
                                                                  ------           ------               ------         -------
         Fair value of plan assets at December 31                $611.1           $666.2               $129.1          $135.3
                                                                 ------           ------               ------          ------
Reconciliation to Balance Sheet:
     Funded status                                               $171.4           $231.5               $(80.9)         $(65.9)
     Unrecognized transition asset                                 (9.7)           (12.0)                58.1            62.9
     Unrecognized prior service cost                               25.5             26.6                  2.4             2.7
     Unrecognized net gain                                       (164.0)          (237.1)               (26.3)          (44.6)      
------------------------------------------------------------------------------------------------------------------------------------
              Net amount recognized                               $23.2             $9.0               $(46.7)         $(44.9)      
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



The combined net prepaid benefit expense consists of:


<TABLE>
<CAPTION>
                                                                                         PENSION BENEFITS
                                                                                         --------------------
MILLIONS OF DOLLARS                 YEAR ENDED DECEMBER 31                               2000            1999
-------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>              <C>
Prepaid benefit cost                                                                  $49.7             $42.0
Accrued benefit liability                                                             (32.6)            (39.1)
Intangible asset                                                                        1.1               1.3
Accumulated other comprehensive income                                                  5.0               4.8
                                                                                        ---               ---
     Net amount recognized                                                            $23.2           $   9.0
-------------------------------------------------------------------------------------------------------------
</TABLE>



    At December 31, 2000 and 1999, respectively, pension plan assets include $32
million and $51 million in Company common stock.

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


<TABLE>
<CAPTION>
                                                             PENSION BENEFITS                            OTHER BENEFITS
                                                     ------------------------------               ---------------------------
AT DECEMBER 31                                       2000          1999        1998               2000        1999       1998
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>           <C>         <C>               <C>         <C>         <C>
Discount rate - projected
     benefit obligation                             7.50%        7.75 %      6.50%               7.50%       7.75 %      6.50%
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%        4.50 %      4.00%               4.50%       4.50%       4.00%      
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    The assumed health care cost trend rate used to measure the 
post-retirement health benefit obligation at December 31, 2000, was 6.71% and 
is assumed to decrease gradually to 4.69% by the year 2005. 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>
MILLIONS OF DOLLARS                                                           1% INCREASE            1% DECREASE
----------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                    <C>
2000 service and interest costs                                                $ 0.5                   $ (0.5)
Post-retirement benefit obligation
     at December 31, 2000                                                      $ 7.1                   $ (6.2)

</TABLE>


                                              66


<PAGE>



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 $7.2 million, $4.5 million and $4.0 
million for 2000, 1999, and 1998, respectively. These amounts exclude $6.8 
million in 1998 related to the spin-off of Convergys.

11. STOCK-BASED COMPENSATION PLANS 

    During 2000 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, 2000. The number of shares authorized and available for grant 
under this plan were approximately 30 million and 4 million, respectively at 
December 31, 2000.

    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. 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 Statement of 
Financial Accounting Standard No. 123, "Accounting for Stock-Based 
Compensation" ("SFAS 123"), 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
EXCEPT PER SHARE AMOUNTS                YEAR ENDED DECEMBER 31                       2000            1999         1998
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>              <C>         <C>
Net income (loss):
     As reported                                                                    $(377.1)         $31.4       $149.9
     Pro forma compensation expense,
     net of tax benefits                                                              (17.8)          (7.8)        (2.1)
     Total pro forma                                                                $(394.9)         $23.6       $147.8
Diluted earnings (loss) per share:
     As reported                                                                      $(1.82)        $  .20       $ 1.08
     Pro forma                                                                        $(1.90)        $  .14       $ 1.06
</TABLE>


    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.


                                       67

<PAGE>

    The weighted average fair values at the date of grant for the Company 
options granted to employees during 2000 and 1999 were $12.75 and $8.40, 
respectively. Such amounts were estimated using the Black-Scholes 
option-pricing model with the following weighted average assumptions:


<TABLE>
<CAPTION>
                                                                                     2000              1999              1998       
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>              <C>
Expected dividend yield                                                                --            --                1.4%
Expected volatility                                                                  48.9%            48.0%           25.0%
Risk-free interest rate                                                               5.1%             6.4%            5.7%
Expected holding
period -- years                                                                       4                4               4     
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>


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


<TABLE>
<CAPTION>
                                                                                                    WEIGHTED AVERAGE
                                                                                     SHARES           EXERCISE PRICE       
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>              <C>
Company options held by
employees at January 1, 1998                                                        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
Options granted in Merger                                                          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
-------------------------------------------------------------------------------------------------------------------
Granted to employees                                                                6,409                    $30.84
Exercised                                                                          (4,745)                   $14.17
Forfeited/expired                                                                  (3,607)                   $22.74
-------------------------------------------------------------------------------------------------------------------
Company options held by
Employees at December 31, 2000                                                     26,759                    $18.54

</TABLE>



                                               68

<PAGE>



The following table summarizes the status of Company stock options outstanding
and exercisable at December 31, 2000:


<TABLE>
<CAPTION>
SHARES IN THOUSANDS                                    OPTIONS OUTSTANDING                             OPTIONS EXERCISABLE
                                           ---------------------------------------------        --------------------------------
                                             WEIGHTED AVERAGE
RANGE OF                                   REMAINING CONTRACTUAL        WEIGHTED AVERAGE
EXERCISE PRICES                  SHARES         LIFE IN YEARS             EXERCISE PRICE        SHARES            EXERCISE PRICE
--------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>       <C>                          <C>                     <C>               <C>
$1.440 to $12.981                  5,307             5.05                 $8.08                 4,497                $  7.49
$12.994 to $16.781                10,384             8.17                $16.19                 2,971                $ 15.50
$17.500 to $25.406                 6,299             8.61                $20.96                 1,946                $ 19.97
$25.450 to $38.406                 4,769             8.90                $32.10                   277                $ 28.53
                                   -----                                                        ------
     TOTAL                        26,759                                 $18.54                 9,691                $ 13.05
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


    Restricted stock awards during 2000, 1999 and 1998 were 362,184 shares, 
739,250 shares and 320,000 shares, respectively. The weighted average market 
value of the shares on the grant date were $25.54 in 2000, $17.37 in 1999 
and, on a pre-spin-off basis, $32.59, in 1998, respectively. Restricted stock 
awards generally vest within one to five years. Total compensation expense 
for restricted stock awards during 2000, 1999, and 1998 was $3.8 million, 
$5.7 million and, $0.6 million, respectively.

    On January 4, 1999, the Company announced stock option grants to each of 
its then existing employees (approximately 3,500). 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. This plan also includes a provision for option grants to 
employees hired after the January 4, 1999 grant date, in smaller amounts and 
at an exercise price based on the month of hire (e.g., employees hired during 
2000 receive options to purchase up to 400 common shares of the Company). 
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 May 23, 2000, the Company completed the sale of its Cincinnati Bell 
Supply ("CBS") subsidiary. Furthermore, 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 $521 million reduction in the Company's common 
shareowners' equity in 1998.

    For 2000 and all prior periods, the consolidated financial statements 
have been restated to reflect the sale of CBS and the disposition of 
Convergys as discontinued operations. Accordingly, the revenues, costs and 
expenses, assets and liabilities, and cash flows of CBS and Convergys have 
been reported as "discontinued operations" in the financial statements.



                                       69

<PAGE>




Summarized financial information for the discontinued operations is as follows:


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                         YEAR ENDED DECEMBER 31                   2000              1999              1998
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>               <C>              <C>
RESULTS OF OPERATIONS
Revenues                                                                            $ 13.1            $ 29.1           $1,411.0

Income (loss) before income taxes                                                     (0.9)              5.4              123.1
Income tax provision (benefit)                                                        (0.4)              2.0               51.0
                                                                                    ------            ------           --------
Income from operations                                                                (0.5)              3.4               72.1
Gain on sale of discontinued operations, net of tax                                    0.7              --                 --
                                                                                    ------            ------           --------
Net income                                                                          $  0.2            $  3.4           $   72.1
FINANCIAL POSITION
Current assets                                                                      $  0.5             $10.4           $  366.6
Total assets                                                                           0.5              11.0            1,457.3
Current liabilities                                                                    0.1               3.0              698.8
Total liabilities                                                                      0.1               3.1              931.1
Net assets of discontinued operations                                               $  0.4             $ 7.9           $  526.2
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    Income before income taxes includes allocated interest expense of $33.7 
million in 1998. 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 in 2000, 1999 and 1998 were 44%, 37% and 41%, 
respectively.

    The Company had revenues from Convergys of $10.1 million in 1998 
resulting from the provision of communications and other services. Revenues 
from CBS were immaterial in each of the three years ended December 31, 2000. 
The Company incurred costs for product purchases from CBS of $0.9 million, 
$7.9 million and $23.7 million in 2000, 1999 and 1998, respectively. The 
Company incurred costs of $49.8 million from Convergys in 1998 for billing 
and customer management services. No such costs were incurred from Convergys 
in 1999 and 2000 related to discontinued operations.

    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.


                                     70

<PAGE>




13. ADDITIONAL FINANCIAL INFORMATION  

BALANCE SHEET


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                YEAR ENDED DECEMBER 31                       2000             1999      DEPRECIABLE LIVES (YRS.)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>              <C>            <C>
PROPERTY PLANT AND EQUIPMENT, NET:
     Land and rights of way                                                $   157.6        $   155.9               0 - 30
     Buildings and leasehold improvements                                      403.7            428.3               5 - 40
     Telephone plant                                                         1,839.7          1,697.2               6 - 29
     Transmission system                                                     1,587.4          1,183.2               5 - 20
     Furniture, fixtures, vehicles, and other                                  132.8            116.2               8 - 15
     Construction in process                                                   509.1            232.0                   --    
------------------------------------------------------------------------------------------------------------------------------------
     Subtotal                                                                4,630.3          3,812.8
     Less: Accumulated depreciation                                         (1,664.1)        (1,312.2)                              
     -------------------------------------------------------------------------------------------------------------------------------
     Property Plant and Equipment, Net                                     $ 2,966.2        $ 2,500.6                               
------------------------------------------------------------------------------------------------------------------------------------

MILLIONS OF DOLLARS                YEAR ENDED DECEMBER 31                       2000             1999      AMORTIZATION LIVES (YRS.)
------------------------------------------------------------------------------------------------------------------------------------
GOODWILL AND OTHER INTANGIBLES:
Goodwill                                                                   $ 2,211.9        $ 2,240.1               5 - 40
Assembled workforce                                                             24.0             24.0               2 - 4
Installed customer base                                                        399.0            373.0               2 - 20
Other intangibles                                                               76.8             68.1               3 - 40
------------------------------------------------------------------------------------------------------------------------------------
                                                                             2,711.7          2,705.2
Less: Accumulated amortization                                                (139.5)           (25.4)                              
------------------------------------------------------------------------------------------------------------------------------------
  
Goodwill and Other Intangibles                                             $ 2,572.2        $ 2,679.8                               
------------------------------------------------------------------------------------------------------------------------------------

MILLIONS OF DOLLARS                YEAR ENDED DECEMBER 31                     2000             1999                          
------------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES:
Accrued payroll and benefits                                               $    48.9        $    48.9
Accrued interest                                                                21.2             18.8
Accrued restructuring costs                                                      6.5             30.2
Accrued cost of service                                                         67.6             47.7
Other current liabilities                                                      146.3             61.7
------------------------------------------------------------------------------------------------------------------------------------
     Total                                                                 $   290.5        $   207.3
------------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
     Unrealized gain on investments                                        $    85.9        $   170.0
     Additional minimum pension liability                                       (3.2)            (3.1)                              
------------------------------------------------------------------------------------------------------------------------------------
         Total                                                             $    82.7        $   166.9                               
------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
MILLIONS OF DOLLARS                 YEAR ENDED DECEMBER 31                    2000               1999                 1998 
---------------------------------------------------------------------------------------------------------------------------
CASH PAID FOR:
     Interest (net of amount capitalized)                                  $   124.9        $    53.8                $26.8
     Income taxes (net of refunds)                                         $   (36.6)       $    40.2                $81.4
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                                          $     4.1        $     2.4                  --
</TABLE>



                                       71

<PAGE>

14. 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 four business segments described below.

    The Broadband segment utilizes its advanced optical network consisting of 
more than 18,000 route miles to provide broadband transport, Internet 
services and switched long distance. The Broadband segment offers data 
collocation, information technology consulting, network construction and 
other services, as well as the leasing of network capacity in the form of IRU 
agreements. These services are offered nationally through the Company's 
Broadwing Communications subsidiary.

    The Local Communications segment comprises the operations of the CBT 
subsidiary which provides local telephone service, network access, data 
transport, high-speed Internet access, switched long distance and other 
ancillary products and services to customers in southwestern Ohio, northern 
Kentucky and southeastern Indiana.

    The Wireless segment comprises the operations of the CBW subsidiary, a 
venture in which the Company owns 80.1% and AT&T PCS Inc. owns the remaining 
19.9%. This segment provides advanced digital personal communications and 
sales of related communications equipment to customers in its Greater 
Cincinnati and Dayton, Ohio operating areas.

    The Other Communications segment combines the operations of Cincinnati 
Bell Any Distance (formerly Cincinnati Bell Long Distance, now "CBAD"), 
Cincinnati Bell Directory ("CBD"), ZoomTown.com ("ZoomTown") and Cincinnati 
Bell Public Communications Inc. ("Public"). CBAD resells voice long distance 
service, CBD publishes Yellow Pages directories, ZoomTown provides web 
hosting and Internet-based services and Public provides public payphone 
services.

    The Company evaluates performance of its segments 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.


                                       72

<PAGE>



<TABLE>
<CAPTION>
MILLIONS OF DOLLARS                 YEAR ENDED DECEMBER 31                     2000             1999                1998
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>             <C>                  <C>
REVENUES
     Broadband                                                              $  999.7        $   174.6            $   61.0
     Local Communications                                                      793.9            739.9               718.4
     Wireless                                                                  180.0             91.4                 --
     Other Communications                                                      142.2            109.3                90.7
     Intersegment                                                              (65.7)           (13.2)               (8.7) 
-------------------------------------------------------------------------------------------------------------------------
 
     Total                                                                  $2,050.1        $ 1,102.0            $  861.4
-------------------------------------------------------------------------------------------------------------------------
 
INTERSEGMENT REVENUES
     Broadband                                                              $   34.1        $    --              $    --
     Local Communications                                                       30.2             12.6                 8.0
     Wireless                                                                    1.0             --                   --
     Other Communications                                                        0.4              0.6                 0.7
-------------------------------------------------------------------------------------------------------------------------
 
     Total                                                                  $   65.7       $     13.2            $    8.7
-------------------------------------------------------------------------------------------------------------------------

EBITDA
     Broadband                                                              $   81.4      $       1.9            $   11.4
     Local Communications                                                      392.5            319.6               247.9
     Wireless                                                                   18.5            (25.6)               (0.8)
     Other Communications                                                        3.6             24.4                25.2
     Corporate and Eliminations                                                  2.0             10.2                 1.3        
-------------------------------------------------------------------------------------------------------------------------
 
     Total                                                                  $  498.0        $   330.5            $  285.0
-------------------------------------------------------------------------------------------------------------------------

ASSETS
     Broadband                                                              $5,000.3         $5,166.0            $     --
     Local Communications                                                      825.0            777.2               735.7
     Wireless                                                                  356.2            268.4               212.1
     Other Communications                                                       85.0             58.6                81.1
     Corporate and Eliminations                                                211.1            235.2                12.9
-------------------------------------------------------------------------------------------------------------------------
 
     Total                                                                  $6,477.6         $6,505.4            $1,041.8
-------------------------------------------------------------------------------------------------------------------------
 
CAPITAL ADDITIONS
     Broadband                                                              $  591.7        $   166.1            $    --
     Local Communications                                                      151.9            152.1               134.9
     Wireless                                                                   84.2             55.9                 2.2
     Other Communications                                                       14.9              7.1                 3.8
     Corporate                                                                   1.2             --                   2.5        
-------------------------------------------------------------------------------------------------------------------------
     
     Total                                                                  $  843.9        $   381.2            $  143.4
-------------------------------------------------------------------------------------------------------------------------

DEPRECIATION AND AMORTIZATION
     Broadband                                                              $  305.8       $     52.6            $    3.6
     Local Communications                                                      122.9            113.0               106.2
     Wireless                                                                   21.2             14.3                 --
     Other Communications                                                        9.6              1.0                 0.1
     Corporate                                                                   0.2             --                   1.1         
-------------------------------------------------------------------------------------------------------------------------
     Total                                                                  $  459.7        $   180.9            $  111.0
-------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                           73

<PAGE>

15. 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.

    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, 2000 and 1999 were $2,465 million and $1,957 million, 
respectively. The estimated fair values at December 31, 2000 and 1999 were 
$2,374 million and $1,805 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 adjusts the carrying amount of this 
liability based on its settlement value. The carrying amount of this 
obligation at December 31, 2000 and 1999 was $3 million and $134 million, 
respectively.

    Convertible preferred stock - the fair value of the 12 1/2% Exchangeable
Preferred Stock at December 31, 2000 and 1999, respectively, was $379 million
and $436 million, based on the trading value of this item on those dates.

    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, 2000,
approximately 34% of debt was long-term, fixed-rate debt and approximately 66%
were bank loans with variable interest rates. A further discussion of the
Company's interest rate risk management policies can be found in Item 7A,
"Qualitative and Quantitative Disclosures about Market Risk" on page 42 of this
Report on Form 10-K.

16. SUPPLEMENTAL GUARANTOR INFORMATION

    Cincinnati Bell Telephone ("CBT"), a wholly owned subsidiary of the 
Parent Company, has debt outstanding that is guaranteed by both CBT and the 
Parent Company. Substantially all of the Parent Company's income and cash 
flow is generated by its subsidiaries. Generally, funds necessary to meet the 
Parent Company's debt service obligations are provided by distributions or 
advances from its subsidiaries.

    The following information sets forth the condensed consolidating balance 
sheets of the Company as of December 31, 2000 and 1999 and the condensed 
consolidating statements of income and cash flows for the three years then 
ended:

                                       74

<PAGE>



<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENTS OF INCOME (LOSS)
(IN MILLIONS OF DOLLARS)
                                                                                FOR THE YEAR ENDED DECEMBER 31, 2000
                                                                 -------------------------------------------------------------------
                                                                    PARENT        CBT         OTHER      ELIMINATIONS     TOTAL
                                                                    ------        ---         -----      ------------     -----
<S>                                                                 <C>          <C>         <C>           <C>            <C>
Revenues                                                              $    -     $  793.9    $  1,321.9    $    (65.7)    $ 2,050.1
Operating costs and expenses                                            (1.4)       524.2       1,554.8         (66.6)      2,011.0
                                                                 -------------------------------------------------------------------
Operating income                                                         1.4        269.7        (232.9)          0.9          39.1
Interest expense                                                       153.7         22.0          92.8        (104.9)        163.6
Other expense (income), net                                            (57.8)         0.4         369.0         106.0         417.6
                                                                 -------------------------------------------------------------------
Income (loss) before income taxes,
  extraordinary items and cumulative effect of
  change in accounting principle                                       (94.5)       247.3        (694.7)         (0.2)       (542.1)
Income tax provision (benefit)                                         (13.8)        86.6        (238.4)            -        (165.6)
                                                                 -------------------------------------------------------------------
Income (loss) before
  extraordinary items and cumulative effect of 
  change in accounting principle                                       (80.7)       160.7        (456.3)         (0.2)       (376.5)
Income from discontinued operations, net                                   -           -             -            0.2           0.2
Extraordinary item, net of tax                                             -           -             -              -            -
Cumulative effect of a change in accounting 
  principle, net of tax                                                    -         (0.8)           -              -          (0.8)
                                                                 -------------------------------------------------------------------

  NET INCOME (LOSS)                                                   $(80.7)    $  159.9    $   (456.3)   $        -     $  (377.1)
                                                                 ===================================================================

<CAPTION>

                                                                                FOR THE YEAR ENDED DECEMBER 31, 1999
                                                                 -------------------------------------------------------------------
                                                                    PARENT        CBT         OTHER      ELIMINATIONS     TOTAL
                                                                    ------        ---         -----      ------------     -----
<S>                                                                 <C>          <C>         <C>          <C>            <C>
Revenues                                                            $       -    $  739.9      $  375.3    $    (13.2)      1,102.0
Operating costs and expenses                                             (5.6)      534.3         447.7         (13.1)        963.3
                                                                 -------------------------------------------------------------------
Operating income                                                          5.6       205.6         (72.4)         (0.1)        138.7
Interest expense                                                         35.8        22.8          22.0         (19.0)         61.6
Other expense (income), net                                               1.1        (1.0)         (8.2)         19.3          11.2
                                                                 -------------------------------------------------------------------
Income (loss) before income taxes,
  extraordinary items and cumulative effect of
  change in accounting principle                                        (31.3)      183.8         (86.2)         (0.4)         65.9
Income tax provision (benefit)                                           (7.6)       64.8         (25.9)              -        31.3
                                                                 -------------------------------------------------------------------

Income (loss) before
   extraordinary items and cumulative effect of
   change in accounting principle                                       (23.7)      119.0         (60.3)          (0.4)        34.6
Income from discontinued operations, net                                    -           -             -            3.4          3.4
Extraordinary item, net of tax                                              -           -          (6.6)             -         (6.6)
Cumulative effect of a change in accounting 
   principle, net of tax                                                    -           -             -              -            -
                                                                 -------------------------------------------------------------------
  NET INCOME (LOSS)                                                 $   (23.7)   $  119.0      $  (66.9)   $       3.0     $   31.4
                                                                 ===================================================================

<CAPTION>
                                                                                FOR THE YEAR ENDED DECEMBER 31, 1998
                                                                 ------------------------------------------------------------------
                                                                    PARENT        CBT         OTHER      ELIMINATIONS    TOTAL
                                                                    ------        ---         -----      ------------    -----
<S>                                                                 <C>          <C>         <C>         <C>             <C>
Revenues                                                               $   -     $  718.4     $   151.7     $     (8.7)       861.4
Operating costs and expenses                                           (10.8)       576.7         119.7            0.7        686.3
                                                                 ------------------------------------------------------------------
Operating income                                                        10.8        141.7          32.0           (9.4)       175.1
Interest expense                                                        42.8         19.6           1.3          (39.6)        24.1
Other expense (income), net                                            (95.6)         0.1          26.7           98.5         29.7
                                                                 ------------------------------------------------------------------

Income (loss) before income taxes,
  extraordinary items and cumulative
  effect of change in accounting principle                              63.6        122.0           4.0          (68.3)       121.3
Income tax provision (benefit)                                          29.9         40.3           1.6          (29.3)        42.5
                                                                 ------------------------------------------------------------------
Income (loss) before
  extraordinary items and cumulative effect of
  change in accounting principle                                        33.7         81.7           2.4          (39.0)        78.8
Income from discontinued operations, net                                   -            -             -           72.1         72.1
Extraordinary item, net of tax                                          (0.3)        (0.7)            -              -         (1.0)
Cumulative effect of a change in accounting
   principle, net of tax                                                   -            -             -              -           -
                                                                 ------------------------------------------------------------------

  NET INCOME (LOSS)                                                   $ 33.4     $   81.0     $     2.4      $    33.1     $  149.9
                                                                 ==================================================================

                                              75

<PAGE>

<CAPTION>
CONDENSED CONSOLIDATING BALANCE SHEETS
(IN MILLIONS OF DOLLARS)
                                                                                    DECEMBER 31, 2000
                                                        --------------------------------------------------------------------------
                                                          PARENT        CBT        OTHER     ELIMINATIONS          TOTAL
                                                          ------        ---        -----     ------------          -----
<S>                                                                 <C>          <C>         <C>          <C>            <C>
Cash and cash equivalents                                 $     5.8     $     -     $   32.1   $         -              $    37.9
Receivables, net                                                  -       101.4        229.2             -                  330.6
Other current assets                                            5.5        50.6         40.6          (2.5)                  94.2
Intercompany receivables                                    1,429.6           -            -      (1,429.6)                     -
                                                        --------------------------------------------------------------------------
  Total current assets                                      1,440.9       152.0        301.9      (1,432.1)                 462.7
Property, plant and equipment, net                              1.3       619.4      2,345.5             -                2,966.2
Goodwill and other intangibles, net                             1.1        12.8      2,558.3             -                2,572.2
Investments in subsidiaries and other entities              2,874.8           -        253.2      (2,873.1)                 254.9
Deferred charges and other assets                             102.9        40.8        155.8         (78.3)                 221.2
Net assets from discontinued operations                           -           -            -           0.4                    0.4
                                                        --------------------------------------------------------------------------
  TOTAL ASSETS                                            $ 4,421.0     $ 825.0     $5,614.7   $  (4,383.1)             $ 6,477.6
                                                        ==========================================================================

Short-term debt                                           $       -     $   5.7     $    8.3   $         -                $  14.0
Accounts payable                                                9.0        45.9        189.5             -                  244.4
Other current liabilities                                      42.0        91.3        323.5          12.1                  468.9
Intercompany payables                                             -        31.1      1,377.7      (1,408.8)                     -
                                                        --------------------------------------------------------------------------
  Total current liabilities                                    51.0       174.0      1,899.0      (1,396.7)                 727.3
Long-term debt, less current portion                        2,128.8       324.2         54.0             -                2,507.0
Other long-term liabilities                                    74.5        69.8        736.7         (93.0)                 788.0
                                                        --------------------------------------------------------------------------
  Total liabilities                                         2,254.3       568.0      2,689.7      (1,489.7)               4,022.3
Minority interest                                             423.6           -         10.2             -                  433.8
Mezzanine financing                                               -           -        423.6        (423.6)                     -
Shareowners' equity                                         1,743.1       257.0      2,491.2      (2,469.8)               2,021.5
                                                        --------------------------------------------------------------------------
  TOTAL LIABILITIES AND SHAREOWNERS' EQUITY               $ 4,421.0     $ 825.0     $5,614.7   $  (4,383.1)             $ 6,477.6
                                                        ==========================================================================

<CAPTION>

                                                                                    DECEMBER 31, 1999
                                                        --------------------------------------------------------------------------
                                                          PARENT        CBT        OTHER     ELIMINATIONS          TOTAL
                                                          ------        ---        -----     ------------          -----
<S>                                                       <C>           <C>        <C>       <C>                    <C>
Cash and cash equivalents                                  $   24.6       $   -       $ 56.2   $         -              $    80.8
Receivables, net                                                1.3       103.8        119.4             -                  224.5
Other current assets                                           10.3        40.7         46.7             -                   97.7
Intercompany receivables                                      694.3           -            -        (694.3)                     -
                                                        --------------------------------------------------------------------------
  Total current assets                                        730.5       144.5        222.3        (694.3)                 403.0
Property, plant and equipment, net                              0.1       606.9      1,893.6             -                2,500.6
Goodwill and other intangibles, net                             1.3        10.3      2,664.2           4.0                2,679.8
Investments in subsidiaries and other entities              2,877.5           -        836.5      (2,870.7)                 843.3
Deferred charges and other assets                              39.9        15.5          4.0          11.4                   70.8
Net assets from discontinued operations                           -           -            -           7.9                    7.9
                                                        --------------------------------------------------------------------------
  TOTAL ASSETS                                             $3,649.3     $ 777.2     $5,620.6   $  (3,541.7)             $ 6,505.4
                                                        ==========================================================================

Short-term debt                                            $      -  $      3.3     $    5.9    $        -               $    9.2
Accounts payable                                               16.4        53.2        108.6             -                  178.2
Other current liabilities                                       9.0        92.5        276.1             -                  377.6
Intercompany payables                                             -         8.4        721.0        (729.4)                     -
                                                        --------------------------------------------------------------------------
  Total current liabilities                                    25.4       157.4      1,111.6        (729.4)                 565.0
Long-term debt, less current portion                        1,216.6       322.0        597.4             -                2,136.0
Other long-term liabilities                                    28.4        45.1        924.1          11.4                1,009.0
                                                        --------------------------------------------------------------------------
  Total liabilities                                         1,270.4       524.5      2,633.1        (718.0)               3,710.0
Minority interest                                             418.2           -         15.8             -                  434.0
Mezzanine financing                                           228.6           -        412.2        (412.2)                 228.6
Shareowners' equity                                         1,732.1       252.7      2,559.5      (2,411.5)               2,132.8
                                                        --------------------------------------------------------------------------
  TOTAL LIABILITIES AND SHAREOWNERS' EQUITY                $3,649.3   $   777.2     $5,620.6     $(3,541.7)              $6,505.4
                                                        ==========================================================================
</TABLE>


                                            76

<PAGE>

<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(IN MILLIONS OF DOLLARS)
                                                                             FOR THE YEAR ENDED DECEMBER 31, 2000
                                                           ------------------------------------------------------------------------
                                                             PARENT        CBT           OTHER        ELIMINATIONS      TOTAL
                                                             ------        ---           -----        ------------      -----
<S>                                                          <C>          <C>            <C>          <C>               <C>
Cash Flows from operating activities                         $ (45.2)        $ 302.5        $   8.0          $  66.9       $ 332.2
                                                           ------------------------------------------------------------------------
Capital expenditures                                            (1.3)         (151.8)        (690.8)               -        (843.9)
Other investing activities                                       0.3               -          (19.8)               -         (19.5)
                                                           ------------------------------------------------------------------------
Cash Flows from investing activities                            (1.0)         (151.8)        (710.6)               -        (863.4)
                                                           ------------------------------------------------------------------------

Issuance of long-term debt/capital contributions               (33.9)         (150.7)       1,143.2            (74.6)        884.0
Repayment of long-term debt                                        -               -         (404.0)               -        (404.0)
Short-term borrowings, net                                       9.6               -          (11.5)               -          (1.9)
Other financing activities                                      51.7               -          (49.2)               -           2.5
                                                           ------------------------------------------------------------------------
Cash Flows from financing activities                            27.4          (150.7)         678.5            (74.6)        480.6
                                                           ------------------------------------------------------------------------

Cash Flows from discontinued operations                            -               -              -              7.7           7.7
                                                           ------------------------------------------------------------------------

         Increase (decrease) in cash and cash equivalents      (18.8)              -          (24.1)               -         (42.9)

         Beginning cash and cash equivalents                    24.6               -           56.2                -          80.8
                                                           ------------------------------------------------------------------------

         Ending cash and cash equivalents                    $   5.8         $     -        $  32.1          $     -       $  37.9
                                                           ========================================================================
<CAPTION>

                                                                             FOR THE YEAR ENDED DECEMBER 31, 1999
                                                           ------------------------------------------------------------------------
                                                             PARENT        CBT           OTHER        ELIMINATIONS      TOTAL
                                                             ------        ---           -----        ------------      -----
<S>                                                          <C>           <C>           <C>          <C>               <C>
Cash Flows from operating activities                         $ (75.2)        $ 240.7        $  64.3          $  84.7       $ 314.5
                                                           ------------------------------------------------------------------------
Capital expenditures                                               -          (152.2)        (229.0)               -        (381.2)
Other investing activities                                    (314.9)              -           55.1                -        (259.8)
                                                           ------------------------------------------------------------------------
Cash Flows from investing activities                          (314.9)         (152.2)        (173.9)               -        (641.0)
                                                           ------------------------------------------------------------------------

Issuance of long-term debt/capital contributions               962.7           (88.5)         551.4           (250.6)      1,175.0
Repayment of long-term debt                                        -               -         (387.1)           165.9        (221.2)
Short-term borrowings, net                                    (371.4)              -              -                -        (371.4)
Other financing activities                                    (185.2)              -              -                -        (185.2)
                                                           ------------------------------------------------------------------------
Cash Flows from financing activities                           406.1           (88.5)         164.3            (84.7)        397.2
                                                           ------------------------------------------------------------------------

Cash Flows from discontinued operations                            -               -              -                -             -
                                                           ------------------------------------------------------------------------

         Increase (decrease) in cash and cash equivalents       16.0               -           54.7                -          70.7

         Beginning cash and cash equivalents                     8.6               -            1.5                -          10.1
                                                           -----------------------------------------------------------------------

         Ending cash and cash equivalents                    $  24.6         $     -        $  56.2          $     -       $  80.8
                                                           =======================================================================
<CAPTION>

                                                                             FOR THE YEAR ENDED DECEMBER 31, 1998
                                                           ------------------------------------------------------------------------
                                                             PARENT        CBT           OTHER        ELIMINATIONS      TOTAL
                                                             ------        ---           -----        ------------      -----
<S>                                                          <C>           <C>           <C>          <C>               <C>
Cash Flows from operating activities                           $ 69.9         $206.5        $(176.1)       $   105.6       $ 205.9
                                                           ------------------------------------------------------------------------
Capital expenditures                                             (2.6)        (134.9)          (5.9)               -        (143.4)
Other investing activities                                     (164.2)          (1.4)             -                -        (165.6)
                                                           ------------------------------------------------------------------------
Cash Flows from investing activities                           (166.8)        (136.3)          (5.9)               -        (309.0)
                                                           ------------------------------------------------------------------------

Issuance of long-term debt/capital contributions                 97.1          (16.3)         183.5           (114.3)        150.0
Repayment of long-term debt                                         -          (53.9)             -              2.7         (51.2)
Short-term borrowings, net                                       54.7              -              -                -          54.7
Other financing activities                                      (54.1)             -              -                -         (54.1)
                                                           ------------------------------------------------------------------------
Cash Flows from financing activities                             97.7          (70.2)         183.5           (111.6)         99.4
                                                           ------------------------------------------------------------------------

Cash Flows from discontinued operations                             -              -              -              6.0           6.0
                                                           ------------------------------------------------------------------------

         Increase (decrease) in cash and cash equivalents         0.8              -            1.5                -           2.3

         Beginning cash and cash equivalents                      7.8              -              -                -           7.8
                                                                                                                   
                                                           ------------------------------------------------------------------------

         Ending cash and cash equivalents                      $  8.6          $   -         $  1.5          $     -       $  10.1
                                                           ========================================================================
</TABLE>


                                              77

<PAGE>

17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)


<TABLE>
<CAPTION>
MILLIONS OF DOLLARS EXCEPT
PER COMMON SHARE AMOUNTS                           1ST               2ND              3RD               4TH              TOTAL
------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>              <C>              <C>                <C>            <C>
2000
REVENUES                                          $ 460.2         $  497.8         $  531.2         $    560.9         $2,050.1
EBITDA                                               85.0            129.7            137.3              146.0            498.0
OPERATING INCOME                                    (25.6)            20.7             20.1               24.0             39.1
INCOME FROM:
     CONTINUING OPERATIONS BEFORE
       EXTRAORDINARY ITEM AND
      CUMULATIVE EFFECT OF CHANGE IN
       ACCOUNTING PRINCIPLE                         (55.6)           (29.5)           (23.4)            (267.8)          (376.5)
     DISCONTINUED OPERATIONS                          0.1              0.2              0.1               (0.3)             0.2
     EXTRAORDINARY ITEM AND CUMULATIVE
       EFFECT OF CHANGE IN ACCOUNTING
       PRINCIPLE                                     (0.8)             -                -                  -               (0.8)
NET INCOME                                        $ (56.3)        $  (29.3)        $  (23.3)        $   (268.1)        $ (377.1)
BASIC EARNINGS
     PER COMMON SHARE                             $ (0.28)        $  (0.15)        $  (0.12)        $    (1.26)        $  (1.82)
DILUTED EARNINGS
     PER COMMON SHARE                             $ (0.28)        $  (0.15)        $  (0.12)        $    (1.26)        $  (1.82)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                        78

<PAGE>



<TABLE>
<CAPTION>
MILLIONS OF DOLLARS EXCEPT
PER COMMON SHARE AMOUNTS                           1ST               2ND              3RD               4TH              TOTAL
------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>              <C>             <C>               <C>             <C>
1999
Revenues                                           $235.2           $247.1           $255.7            $ 364.0        $ 1,102.0
EBITDA                                               76.3             83.2             90.4               80.5            330.4
Operating Income                                     44.1             50.6             57.1              (13.1)           138.7
Income from:
   Continuing Operations Before
    Extraordinary Item and Cumulative
    Effect of Change in Accounting
    Principle                                        24.0             27.6             25.1              (42.1)            34.6
   Discontinued Operations                            0.7              0.7              0.7                1.3              3.4
   Extraordinary Item and Cumulative
    Effect of Change in Accounting
    Principle                                          -                -                -                (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 first quarter of 2000, the Company incurred a charge of $0.8 
million, net of tax, associated with the adoption of SAB 101 and presented as 
a cumulative effect of change in accounting principle (further described in 
Note 1). Revenues and expenses appearing in the above table have been 
restated to reflect the adoption of SAB 101 on January 1, 2000.

    In the fourth quarter of 2000, the Company incurred a pre-tax charge of 
$405 million in order to write down its portfolio of minority equity 
investments to market value at December 31, 2000. The Company also recognized 
approximately $17 million in pre-tax gains resulting from the liquidation of 
the Company's investment in PurchasePro.com. The net effect of these 
investment losses reduced earnings per share by $1.08 in the fourth quarter.

    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 approximately $7 million, or $.04 per common share, net of tax. 
Third quarter 1999 results were restated to reflect an equity share of IXC's 
losses as part of the step acquisition that began with the acquisition of 
five million shares of IXC common stock in August 1999 and was finalized on 
November 9, 1999.



                                       79

<PAGE>


18. COMMITMENTS AND CONTINGENCIES 

LEASE COMMITMENTS

    The Company leases certain facilities and equipment used in its operations.
Total rental expenses were approximately $32 million, $23 million and $12
million in 2000, 1999 and 1998, respectively.

    At December 31, 2000, the total minimum annual rental commitments under
noncancelable leases are as follows:


<TABLE>
<CAPTION>
                                                                  OPERATING                            CAPITAL
MILLIONS OF DOLLARS                                                 LEASES                             LEASES
-------------------------------------------------------------------------------------------------------------
<S>                                                               <C>                                 <C>
2001                                                                  $41.3                              $15.2
2002                                                                   23.7                               12.8
2003                                                                   20.5                                9.1
2004                                                                   17.2                                5.7
2005                                                                   12.5                                4.8
Thereafter                                                             52.3                               31.6
--------------------------------------------------------------------------------------------------------------
Total                                                                $167.5                              $79.2
Amount representing interest                                                                              30.6
--------------------------------------------------------------------------------------------------------------
Present value of net minimum lease payments                                                              $48.6
--------------------------------------------------------------------------------------------------------------
</TABLE>



COMMITMENTS

    In order to satisfy the contractual commitments that Broadwing has 
entered into with respect to IRU agreements and network construction 
projects, approximately 2,700 route miles must be constructed at an 
approximate cost of $88 million.

    Furthermore, the Company and its Broadwing Communications subsidiary have 
entered into a purchase commitment with Corvis Corporation, a Columbia, 
Maryland-based manufacturer of optical network equipment. The agreement 
specifies that the Company will purchase $200 million in optical network 
equipment from Corvis Corporation over a two-year period beginning in July 
2000. As of December 31, 2000, the Company had satisfied $89 million of this 
purchase commitment.

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.

    A total of twenty-six Equal Employment Opportunity Commission ("EEOC") 
charges were filed beginning in September 1999 by 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. After completing its internal 
investigation of the charges and cooperating fully with the EEOC, the Company 
and the complainants participated in a voluntary mediation proceeding 
conducted by the EEOC. Through the mediation process, the Company was able to 
reach settlement with all twenty-six complainants. The Company also entered 
into a Conciliation Agreement with the EEOC.


                                       80

<PAGE>




     In the course of closing the Company's Merger with IXC, the Company 
became aware of IXC's possible non-compliance with certain requirements under 
state and federal environmental laws. Since the Company is committed to 
compliance with environmental laws, management decided to undertake a 
voluntary environmental compliance audit of the IXC facilities and operations 
and, by letter dated November 9, 1999, disclosed potential non-compliance at 
the IXC facilities to the U.S. Environmental Protection Agency ("EPA") under 
the Agency's Self-Policing Policy. The Company made similar voluntary 
disclosures to various state authorities. The EPA determined that IXC appears 
to have satisfied the "prompt disclosure" requirement of the Self-Policing 
Policy for the Company to complete its environmental audit of all IXC 
facilities and report any violations to the Agency. The Company has filed its 
preliminary environmental audit report with the EPA and is currently working 
with the EPA and several state environmental protection agencies to bring the 
Company into compliance with all applicable regulations, and to develop 
internal procedures to ensure future compliance.

    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.

19. SUBSEQUENT EVENTS

    On February 20, 2001, the Company announced a reorganization of the 
activities of its Cincinnati, Ohio based subsidiaries, including CBT, CBW, 
CBAD and CBD. The reorganization is intended to create a unified presence for 
all Cincinnati Bell customers. The reorganization is expected to result in a 
non-recurring charge of approximately $10 million during the first quarter of 
2001.

    Although the Company is restricted as to the sale of its investment in 
Corvis Corporation, it entered into a forward sale agreement with a financial 
institution during the first quarter of 2001 in order to effectively hedge 
2.4 million shares of this investment. The forward sale will be settled 
during the third quarter of 2001, resulting in a pre-tax gain of 
approximately $25 million.


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.


                                      81

<PAGE>





                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information required by this Item regarding directors of Broadwing 
Inc. can be found in the Proxy Statement for the Company's 2001 Annual 
Meeting of Shareholders, dated March 30, 2001, 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 2001 Annual Meeting of Shareholders dated March 
30, 2001 and incorporated herein by reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Not Applicable.


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> 
(3)(a)              Amended Articles of Incorporation of Broadwing Inc. (Exhibit
                    (3)(a) to Form 10-Q for the three months ended June 30,
                    2000, File No. 1-8519).


                                         82

<PAGE>

(3)(b)              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 Exhibit (3)(a) hereto and such Amended Regulations filed 
                    as Exhibit (3)(b) 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).

(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, 1999, 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.


                                       83

<PAGE>

(10)(i)(1)          Credit Agreement dated as of November 9, 1999, and 
                    amended as of January 12, 2000, 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. (original agreement filed as 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 Broadwing Inc., as amended and
                    restated effective July 24, 2000. (Exhibit (10)(iii)(A)(1)
                    to Form 10-Q for the three months ended June 30, 2000, File
                    No. 1-8519).

(10)(iii)(A)(2)*    Broadwing Inc. Deferred Compensation Plan for Outside
                    Directors, as amended and restated effective July 24, 2000.
                    (Exhibit (10)(iii)(A)(3) to Form 10-Q for the three months
                    ended June 30, 2000, File No. 1-8519).

(10)(iii)(A)(3)(i)* Broadwing Inc. Pension Program, as amended and restated
                    effective July 24, 2000. (Exhibit (10)(iii)(A)(4) to Form
                    10-Q for the three months ended June 30, 2000, 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)*    Broadwing Inc. Executive Deferred Compensation Plan, as
                    amended and restated effective July 24, 2000. (Exhibit
                    (10)(iii)(A)(5) to Form 10-Q for the three months ended June
                    30, 2000, File No. 1-8519).

(10)(iii)(A)(5)*    Broadwing Inc. 1997 Long Term Incentive Plan, as amended and
                    restated effective July 24, 2000. (Exhibit (10)(iii)(A)(1)
                    to Form 10-Q for the three months ended June 30, 2000, File
                    No. 1-8519).

(10)(iii)(A)(6)*    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)(7)*    Cincinnati Bell Inc. 1989 Stock Option Plan. (Exhibit
                    (10)(iii)(A)(14) to Form 10-K for 1989, File No. 1-8519).

(10)(iii)(A)(8)*    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)(9)*    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)(10)*   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)(11)*   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)(12)*   Employment Agreement dated January 1, 1999 between the
                    Company and John F. Cassidy.

 
                                       84

<PAGE>


(12)+               Ratio of Earnings to Fixed Charges.

(21)+               Subsidiaries of the Registrant.

(23)+               Consent of Independent Accountants.

(24)+               Powers of Attorney.
</TABLE>

+    Filed herewith.

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

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

REPORTS ON FORM 8-K.

Form 8-K, date of report February 20, 2001, reporting that the Company has
reorganized the activities of its Cincinnati-based subsidiaries and would, as a
result, be recording a restructuring charge of approximately $10 million in the
first quarter of 2001. The Company also announced the appointment of Jeffrey C.
Smith as General Counsel and Corporate Secretary, effective immediately.

Form 8-K, date of report March 9, 2001, reporting that the Company's Board of 
Directors had approved amendments to the Company's insider trading policy to 
permit its officers, directors and other insiders to enter into trading plans 
or arrangements for systematic trading in the Company's securities.

                                    85

<PAGE>



    Schedule II

                                 BROADWING INC.
                        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 2000                                          $ 53.6             $ 67.3          $  1.1(a)         $ 73.0(b)        $ 49.0
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

RESERVES RELATED TO
BUSINESS RESTRUCTURING
Year 2000                                          $ 30.2             $   --          $      --         $ 23.7           $  6.5
Year 1999                                          $  0.5             $ 10.9          $ 33.9(c)         $ 15.1           $ 30.2
Year 1998                                          $  5.3             $   --          $      --         $  4.8           $  0.5

DEFERRED TAX
VALUATION ALLOWANCE
Year 2000                                          $  0.6             $   8.8         $     --          $  0.6(d)        $  8.8
Year 1999                                          $  0.6             $    --         $     --          $      --        $  0.6
Year 1998                                          $  0.6             $    --         $     --          $      --        $  0.6
</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 November 9, 1999 as part of the Merger.

    (b) Primarily includes amounts written off as uncollectible.

    (c) Includes amounts assumed as part of the Merger.

    (d) Includes amount reversed when benefit was realized.




                                       86

<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.


                                                     BROADWING INC.

March 7, 2001                                        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>
                              
RICHARD G. ELLENBERGER*       Principal Executive Officer;  
---------------------------   President, Chief Executive    
Richard G. Ellenberger        Officer and Director

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

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

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
</TABLE>



                                          87

<PAGE>


<TABLE>

<S>                           <C>                                           <C>
MARY D. NELSON*               Director
---------------------------
Mary D. Nelson

CARL REDFIELD*                Director
---------------------------
Carl Redfield

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

JOHN M. ZRNO*                 Director
---------------------------
John M. Zrno
</TABLE>



*By:   /s/ Kevin W. Mooney                                         March 7, 2001
       -------------------
         Kevin W. Mooney
         as attorney-in-fact and on his behalf
         as Chief Financial Officer



                                           88





<PAGE>

                                                                   Exhibit 12 to
                                                              Form 10-K for 2000

                                 Broadwing Inc.
           Computation of Ratio of Earnings to Combined Fixed Charges
                             and Preferred Dividends
                              (millions of dollars)


<TABLE>
<CAPTION>
                                                   2000         1999        1998        1997        1996    
                                                 --------     --------    --------    --------    --------  
<S>                                              <C>          <C>         <C>         <C>         <C>       
Pre-tax income from continuing
operations before adjustment
for minority interests in
consolidated subsidiaries or
income or loss from equity investees             $ (306.1)    $  146.1    $  186.8    $  201.7    $  181.0  
                                                 --------     --------    --------    --------    --------  
Fixed Charges:
  Interest expense, etc                             188.3         65.5        24.2        30.1        27.9  
  Appropriate portion of rentals                     10.7          7.7         3.9         3.9         3.0  
  Preferred stock dividends of majority
  subsidiaries                                       28.3          4.0        --          --          --    
                                                 --------     --------    --------    --------    --------  
   Total Fixed Charges                              227.3         77.2        28.1        34.0        30.9  
                                                 --------     --------    --------    --------    --------  
Pre-tax income (loss) from continuing
operations before adjustment for
minority interests in consolidated
subsidiaries or income or loss from
equity investees plus fixed charges              $  (78.8)    $  223.3    $  214.9    $  235.7    $  211.9  
                                                 ========     ========    ========    ========    ========  
Preferred dividend requirements                  $    8.1     $    2.1    $   --      $   --      $   --    

Total Fixed Charges                                 227.3         77.2        28.1        34.0        30.9  
                                                 --------     --------    --------    --------    --------  
Total Fixed Charges and preferred dividends      $  235.4     $   79.3    $   28.1    $   34.0    $   30.9  
                                                 ========     ========    ========    ========    ========  
Ratio of earnings to combined fixed charges
and preferred dividends                              (1.3)         1.8         6.6         5.9         5.9  
                                                 ========     ========    ========    ========    ========  
Coverage Deficiency                              $  541.5                                                   

</TABLE>







<PAGE>

                                                                  Exhibit 21 to
                                                             Form 10-K for 2000

                         Subsidiaries of the Registrant
                            (as of February 28, 2001)


<TABLE>
<CAPTION>
                                                           State of
Subsidiary Name                                          Incorporation
---------------                                          -------------
<S>                                                      <C>
Cincinnati Bell Directory, Inc.                            Ohio

Broadwing IT Consulting Inc.                               Ohio

Cincinnati Bell Telephone Company                          Ohio

Cincinnati Bell Wireless Company                           Ohio

CTI Long Lines Inc.                                        Michigan

ZoomTown.com Inc.                                          Ohio

Broadwing Holdings Inc.                                    Delaware

Broadwing Communications Inc.                              Delaware

Telcom Engineering, Inc.                                   Texas

West Texas Microwave Company                               Texas

Tower Communications Systems Corporation                   Ohio

Central States Microwave Transmission Company              Ohio

Western State Microwave Transmission Company               Nevada

Atlantic States Microwave Transmission Company             Nevada

Rio Grande Transmission, Inc.                              Delaware

Mutual Signal Holding Corporation                          Delaware

Mutual Signal Corporation                                  New York

Mutual Signal Corporation of Michigan                      New York

Broadwing Communication Services Inc.                      Delaware

IXC International, Inc.                                    Delaware

IXC Internet Services, Inc.                                Delaware

The Data Place, Inc.                                       Delaware

Broadwing Telecommunications Inc.                          Delaware

IXC Communications Services of VA, Inc.                    Virginia

Network Advanced Services, Inc.                            Louisiana

IXC Communications Services of Europe Limited              United
 Kingdom

Cincinnati Bell Public Communications Inc.                 Ohio

Broadwing Local Services Inc.                              Delaware

Eastern Telecom of Washington D.C., Inc.                   Virginia

Cincinnati Bell Telecommunications Services Inc.           Ohio

</TABLE>




<PAGE>

                                                                   Exhibit 23 to
                                                              Form 10-K for 2000


                       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. 33-1462), 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. 33-1487), Form S-8 (File No. 33-36831), Form S-8
(File No. 333-38763), Form S-8 (File No. 333-86971), Form S-8 (File No.
33-29331), Form S-3 (File No. 333-65581), Form S-8 (File No. 333-28385), Form
S-8 (File No. 333-28381), Form S-8 (File No. 33-60209), Form S-8 (File No.
333-77011), Form S-3 (File No. 333-90711) of Broadwing Inc. of our report dated
March 7, 2001 relating to the financial statements and financial statement
schedule, which appears in this Form 10-K.


/s/ PricewaterhouseCoopers LLP
------------------------------
Cincinnati, Ohio
March 7, 2001






<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ James D. Kiggen
                                       -------------------------------------
                                       James D. Kiggen
                                       Chairman of the Board of Directors



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ Phillip R. Cox
                                       -------------------------------------
                                       Phillip R. Cox
                                       Director



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ Richard G. Ellenberger
                                       -------------------------------------
                                       Richard G. Ellenberger
                                       Director



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ William A. Friedlander
                                       -------------------------------------
                                       William A. Friedlander
                                       Director



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 her 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 5th day
of February, 2001.


                                       /s/ Karen M. Hoguet
                                       -------------------------------------
                                       Karen M. Hoguet
                                       Director




STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ John T. LaMacchia
                                       -------------------------------------
                                       John T. LaMacchia
                                       Director




STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ Daniel J. Meyer
                                       -------------------------------------
                                       Daniel J. Meyer
                                       Director



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 her 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 5th day
of February, 2001.


                                       /s/ Mary D. Nelson
                                       -------------------------------------
                                       Mary D. Nelson
                                       Director



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ David B. Sharrock
                                       -------------------------------------
                                       David B. Sharrock
                                       Director




STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 1st day
of February, 2001.


                                       /s/ J. Taylor Crandall
                                       -------------------------------------
                                       J. Taylor Crandall
                                       Director



STATE OF CALIFORNIA        )
                           )  SS:
COUNTY OF SAN MATEO        )


     On the 1st day of February, 2001, 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 1st day of February, 2001.



                                       /s/ Tonia K. Baker
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ John M. Zrno
                                       -------------------------------------
                                       John M. Zrno
                                       Director



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, personally appeared before me John M.
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 5th day of February, 2001.



                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public

<PAGE>

                                POWER OF ATTORNEY


     WHEREAS, 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, 2000 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 5th day
of February, 2001.


                                       /s/ Carl Redfield
                                       -------------------------------------
                                       Carl Redfield
                                       Director



STATE OF OHIO              )
                           )  SS:
COUNTY OF HAMILTON         )


     On the 5th day of February, 2001, personally appeared before me Carl
Redfield, 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 5th day of February, 2001.


                                       /s/ Susan D. McClarnon
                                       -------------------------------------
                                       Notary Public